Document:

Exhibit 4.1

                                    INDENTURE

                            Dated as of June 28, 2002

                                     between

                           KRONOS INTERNATIONAL, INC.,

                                   as Issuer,

                                       and

                              THE BANK OF NEW YORK,

                                   as Trustee,

                      8 7/8 % Senior Secured Notes due 2009

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                             CROSS-REFERENCE TABLE*

 Trust Indenture Act Section                                  Indenture Section

   310 (a)(1)..............................................   7.10
       (a)(2)..............................................   7.10
       (a)(3)..............................................   N.A.
       (a)(4)..............................................   N.A.
       (a)(5)..............................................   7.10
       (b).................................................   7.3, 7.8, 7.10
       (c).................................................   N.A.
   311 (a).................................................   7.11
       (b).................................................   7.11
       (c).................................................   N.A.
   312 (a).................................................   2.5
       (b).................................................   13.2, 13.3
       (c).................................................   13.2, 13.3
   313 (a).................................................   7.6
       (b)(1)..............................................   7.6
       (b)(2)..............................................   7.6, 7.7
       (c).................................................   7.6, 13.2
       (d).................................................   7.6
   314 (a).................................................   4.3, 4.4, 13.5
       (b).................................................   11.2
       (c)(1)..............................................   4.4, 13.4
       (c)(2)..............................................   13.4
       (c)(3)..............................................   13.4
       (d).................................................   11.4, 11.6, 11.9
       (e).................................................   13.5
       (f).................................................   N.A.
   315 (a).................................................   7.1, 7.2
       (b).................................................   7.5
       (c).................................................   7.1
       (d).................................................   7.1
       (e).................................................   6.11
   316 (a)(last sentence)..................................   2.9
       (a)(1)(A)...........................................   6.5
       (a)(1)(B)...........................................   6.4
       (a)(2)..............................................   N.A.
       (b).................................................   6.7
       (c).................................................   2.12
   317 (a)(1)..............................................   6.8
       (a)(2)..............................................   6.9
       (b).................................................   2.4

* This Cross-Reference Table shall not, for any purpose, be deemed a part of the
Indenture.

<PAGE>

   318 (a).................................................   13.1
       (b).................................................   N.A.
       (c).................................................   13.1

N.A. means not applicable.

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                                TABLE OF CONTENTS

                                                                            Page

                               ARTICLE I.

               DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.1.   Definitions.................................................1
Section 1.2.   Other Definitions..........................................25
Section 1.3.   Incorporation by Reference of Trust Indenture Act..........26
Section 1.4.   Rules of Construction......................................26
Section 1.5.   Acts of Holders............................................27

                               ARTICLE II.

                                    THE NOTES

Section 2.1.   Form and Dating............................................28
Section 2.2.   Execution and Authentication...............................29
Section 2.3.   Registrar and Paying Agent.................................30
Section 2.4.   Paying Agents to Hold Money in Trust.......................30
Section 2.5.   Holder Lists...............................................31
Section 2.6.   Transfer and Exchange......................................31
Section 2.7.   Replacement Notes..........................................40
Section 2.8.   Outstanding Notes..........................................40
Section 2.9.   Treasury Notes.............................................41
Section 2.10.  Temporary Notes............................................41
Section 2.11.  Cancellation...............................................41
Section 2.12.  Defaulted Interest.........................................41
Section 2.13.  Persons Deemed Owners......................................42
Section 2.14.  "CUSIP", "ISIN" and "Common Code" Numbers..................42
Section 2.15.  Designation................................................42
Section 2.16.  Issuance of Additional Notes...............................42

                              ARTICLE III.

                             REDEMPTION AND PURCHASE

Section 3.1.   Notices to Trustee.........................................43
Section 3.2.   Selection of Notes.........................................44
Section 3.3.   Notice of Redemption or Purchase...........................44
Section 3.4.   Effect of Notice of Redemption or Purchase.................46
Section 3.5.   Deposit of Redemption Price or Purchase Price..............46
Section 3.6.   Notes Redeemed or Purchased in Part........................46

                                       -i-

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Section 3.7.   Optional Redemption........................................46
Section 3.8.   Special Redemption.........................................47
Section 3.9.   Redemption or Purchase upon Change of Control at
               the Option of the Company..................................47
Section 3.10.  Purchase upon Change of Control Offer......................47
Section 3.11.  Purchase upon Application of Excess Proceeds...............49

                               ARTICLE IV.

                                    COVENANTS

Section 4.1.   Payment of Principal and Interest..........................51
Section 4.2.   Maintenance of Office or Agency............................51
Section 4.3.   Reports to Holders.........................................52
Section 4.4.   Compliance Certificate.....................................53
Section 4.5.   Taxes......................................................53
Section 4.6.   Stay, Extension and Usury Laws.............................53
Section 4.7.   Limitation on Restricted Payments..........................53
Section 4.8.   Limitation on Dividend and Other Payment
               Restrictions Affecting Restricted Subsidiaries.............57
Section 4.9.   Limitation on Incurrence of Additional Indebtedness........58
Section 4.10.  Limitation on Asset Sales..................................59
Section 4.11.  Limitations on Transactions with Affiliates................61
Section 4.12.  Limitation on Liens........................................63
Section 4.13.  Conduct of Business........................................64
Section 4.14.  Maintenance of Properties and Insurance....................64
Section 4.15.  Offer to Purchase upon Change of Control...................65
Section 4.16.  Limitation of Guarantees by Restricted Subsidiaries........65
Section 4.17.  Provision of Security......................................66
Section 4.18.  Limitation on Preferred Stock of Restricted Subsidiaries...66
Section 4.19.  Payments to the Collateral Agent...........................67
Section 4.20.  Corporate Existence........................................67
Section 4.21.  Compliance with Laws.......................................67

                               ARTICLE V.

                                   SUCCESSORS

Section 5.1.   Merger, Consolidation and Sale of Assets...................68
Section 5.2.   Successor Corporation Substituted..........................70

                                       -ii-

<PAGE>

                               ARTICLE VI.

                              DEFAULTS AND REMEDIES

Section 6.1.   Events of Default..........................................70
Section 6.2.   Acceleration...............................................72
Section 6.3.   Other Remedies.............................................72
Section 6.4.   Waiver of Past Defaults....................................73
Section 6.5.   Control by Majority........................................73
Section 6.6.   Limitation on Suits........................................73
Section 6.7.   Rights of Holders of Notes to Receive Payment..............74
Section 6.8.   Collection Suit by Trustee.................................74
Section 6.9.   Trustee May File Proofs of Claim...........................74
Section 6.10.  Priorities.................................................75
Section 6.11.  Undertaking for Costs......................................75

                              ARTICLE VII.

                                     TRUSTEE

Section 7.1.   Duties of Trustee..........................................76
Section 7.2.   Rights of Trustee..........................................77
Section 7.3.   Individual Rights of Trustee...............................78
Section 7.4.   Trustee's Disclaimer.......................................78
Section 7.5.   Notice of Defaults.........................................78
Section 7.6.   Reports by Trustee to Holders of the Notes.................79
Section 7.7.   Compensation, Reimbursement and Indemnity..................79
Section 7.8.   Replacement of Trustee.....................................80
Section 7.9.   Successor Trustee by Merger, Etc...........................81
Section 7.10.  Eligibility; Disqualification..............................81
Section 7.11.  Preferential Collection of Claims Against Company..........81
Section 7.12.  Concerning the Trustee and the Collateral..................82
Section 7.13.  Appointment of Co-Trustee..................................82
Section 7.14.  Trustee Not Liable for Losses or Damages...................83

                              ARTICLE VIII.

                LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.1.   Option to Effect Legal Defeasance or Covenant
               Defeasance.................................................84
Section 8.2.   Legal Defeasance and Discharge.............................84
Section 8.3.   Covenant Defeasance........................................85
Section 8.4.   Conditions to Legal or Covenant Defeasance.................85

                                       -iii-

<PAGE>

Section 8.5.   Deposited Money and Government Securities to Be
               Held in Trust; Other Miscellaneous Provisions..............87
Section 8.6.   Repayment to the Company...................................87
Section 8.7.   Reinstatement..............................................88

                               ARTICLE IX.

                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.1.   Without Consent of Holders of Notes........................88
Section 9.2.   With Consent of Holders of Notes...........................89
Section 9.3.   Compliance with Trust Indenture Act........................90
Section 9.4.   Revocation and Effect of Consents..........................91
Section 9.5.   Notation on or Exchange of Notes...........................91
Section 9.6.   Trustee to Sign Amendment, Etc.............................91

                               ARTICLE X.

                           SATISFACTION AND DISCHARGE

Section 10.1.  Satisfaction and Discharge.................................91
Section 10.2.  Application of Trust Money.................................92

                               ARTICLE XI.

                             COLLATERAL AND SECURITY

Section 11.1.  Security Documents.........................................93
Section 11.2.  Recording, etc.............................................93
Section 11.3.  Release of Collateral......................................94
Section 11.4.  Satisfaction and Discharge; Defeasance.....................95
Section 11.5.  Additional Collateral......................................95
Section 11.6.  Trust Indenture Act Requirements...........................96
Section 11.7.  Authorization of Actions to be Taken by the
               Trustee or the Collateral Agent Under the Security
               Documents..................................................96
Section 11.8.  Release Upon Termination of the Company's
               Obligations................................................97
Section 11.9.  Intercreditor Agreement....................................97
Section 11.10. Limitation on Duty of Trustee and Collateral Agent
               of Collateral; Indemnification.............................97

                              ARTICLE XII.

                           APPLICATION OF TRUST MONIES

Section 12.1.  Collateral Account.........................................98

                                       -iv-

<PAGE>

Section 12.2.  Investment of Trust Monies.................................98

                              ARTICLE XIII.

                                  MISCELLANEOUS

Section 13.1.  Trust Indenture Act Controls...............................99
Section 13.2.  Notices....................................................99
Section 13.3.  Communication by Holders of Notes with Other
               Holders of Notes..........................................100
Section 13.4.  Certificate and Opinion as to Conditions Precedent........101
Section 13.5.  Statements Required in Certificate or Opinion.............101
Section 13.6.  Rules by Trustee and Agents...............................101
Section 13.7.  No Personal Liability of Directors, Officers,
               Employees and Stockholders................................101
Section 13.8.  Governing Law; Submission to Jurisdiction; Waiver
               of Jury Trial.............................................102
Section 13.9.  No Adverse Interpretation of Other Agreements.............102
Section 13.10. Judgment Currency.........................................103
Section 13.11. Successors................................................103
Section 13.12. Severability..............................................103
Section 13.13. Counterpart Originals.....................................103
Section 13.14. Table of Contents, Headings, Etc..........................103
Section 13.15. Qualification of Indenture................................103

                                    EXHIBITS

Exhibit A      Form of Series A Note
Exhibit B      Form of Series B Note
Exhibit C(1)   Form of Regulation S Certification
Exhibit C(2)   Form of Certificate to Be Delivered upon Exchange or
               Registration of Transfer of Notes
Exhibit D      Form of Certificate to Be Delivered in Connection with
               Transfers to Non QIB Accredited Investors
Exhibit E      Form of Certificate to Be Delivered in Connection with
               Transfers Pursuant to Regulation S

                                       -v-

<PAGE>

                                    INDENTURE

            INDENTURE  dated as of June 28, 2002 between  Kronos  International,
Inc., a Delaware  corporation (the  "Company"),  and The Bank of New York, a New
York banking corporation, as trustee (the "Trustee").

            Each party  agrees as follows for the benefit of the other party and
for the equal  and  ratable  benefit  of the  holders  (the  "Holders"  ) of the
Company's 8 7/8 % Senior Secured Notes due 2009:

                               ARTICLE I.

               DEFINITIONS AND INCORPORATION BY REFERENCE

Section 1.1.      Definitions.

            "Acquired Indebtedness" means Indebtedness of a Person or any of its
Subsidiaries existing at the time such Person becomes a Restricted Subsidiary of
the Company or at the time it merges or consolidates with or into the Company or
any of its Restricted Subsidiaries or assumed in connection with the acquisition
of assets  from such  Person  and in each case not  incurred  by such  Person in
connection with, or in anticipation or contemplation  of, such Person becoming a
Restricted   Subsidiary   of  the  Company  or  such   acquisition,   merger  or
consolidation,  except for  Indebtedness of a Person or any of its  Subsidiaries
that is repaid at the time such Person  becomes a Restricted  Subsidiary  of the
Company  or at the  time  it  merges  with  or into  the  Company  or any of its
Restricted  Subsidiaries other than from the assets of the Company and its other
Restricted Subsidiaries.

            "Additional  Interest"  means all  additional  interest  then  owing
pursuant to Section 4 of the  Registration  Rights  Agreement or the  comparable
section of any registration rights agreement entered into in connection with the
issuance of any Additional Notes.

            "Additional Notes" means Notes having substantially  identical terms
and  conditions  as the  (euro)285,000,000  aggregate  principal  amount  of the
Company's 8 7/8% Senior Secured Notes issued on the Issue Date,  issued pursuant
to Article II and in compliance with Section 4.9 of this Indenture.

            "Adjusted Bund Rate" means, with respect to any Redemption Date, the
mid-market  yield,  under the  heading  which  represents  the  average  for the
immediately prior week,  appearing on Reuters page AABBUND01,  or its successor,
for the maturity  corresponding  to June 30, 2009 (if no maturity date is within
three  months  before  or after  June 30,  2009,  yields  for the two  published
maturities most closely  corresponding  to June 30, 2009 shall be determined and
the Bund yield  shall be  interpolated  or  extrapolated  from such  yields on a
straight line basis,  rounding to the nearest month),  plus 0.50%. The bund rate
shall be calculated on the third Business Day preceding such Redemption Date.

<PAGE>
                                      -2-

            "Affiliate"  means, with respect to any specified Person,  any other
Person who directly or indirectly through one or more  intermediaries  controls,
or is controlled by, or is under common control with, such specified Person. The
term "control"  means the  possession,  directly or indirectly,  of the power to
direct  or cause the  direction  of the  management  and  policies  of a Person,
whether  through the ownership of voting  securities,  by contract or otherwise;
and the terms  "controlling" and "controlled"  have meanings  correlative of the
foregoing.

            "Agent" means any Registrar, Paying Agent or co-registrar.

            "Applicable Premium" means, with respect to a Note at any Redemption
Date, the greater of (i) 1.0% of the principal  amount of such Note and (ii) the
excess of (A) the present value at such  Redemption  Date of (1) the  redemption
price of such Note on  December  30,  2005  (such  redemption  price  being that
described  in Section 3.7) plus (2) all required  remaining  scheduled  interest
payments due on such Note through  December 30, 2005,  computed using a discount
rate equal to the Adjusted Bund Rate, over (B) the principal amount of such Note
on such Redemption Date.  Calculation of the Applicable  Premium will be made by
the  Company or on behalf of the  Company by such  Person as the  Company  shall
designate;  provided,  however,  that  such  calculation  shall not be a duty or
obligation of the Trustee.

            "Asset  Acquisition"  means (1) an  Investment by the Company or any
Restricted  Subsidiary of the Company in any other Person pursuant to which such
Person shall become a Restricted  Subsidiary of the Company or of any Restricted
Subsidiary  of the  Company,  or shall be merged with or into the Company or any
Restricted  Subsidiary of the Company,  or (2) the acquisition by the Company or
any Restricted Subsidiary of the Company of the assets of any Person (other than
a Restricted  Subsidiary of the Company) which  constitute all or  substantially
all of the assets of such Person or comprise any division or line of business of
such Person or any other  properties  or assets of such Person other than in the
ordinary course of business.

            "Asset   Sale"  means  any  direct  or  indirect   sale,   issuance,
conveyance,  transfer,  lease (other than  operating  leases entered into in the
ordinary  course of  business),  assignment  or other  transfer for value by the
Company or any of its Restricted  Subsidiaries (including any Sale and Leaseback
Transaction)  to any Person other than the Company or a Wholly Owned  Restricted
Subsidiary of the Company of: (1) any Capital Stock of any Restricted Subsidiary
of the  Company;  or (2) any other  property  or assets  of the  Company  or any
Restricted  Subsidiary  of the  Company  other  than in the  ordinary  course of
business;  provided,  however,  that asset sales or other dispositions shall not
include:  (a) a  transaction  or series of  related  transactions  for which the
Company or its Restricted  Subsidiaries receive aggregate  consideration of less
than $2 million; (b) the sale, lease, conveyance,  disposition or other transfer
of all or  substantially  all of the assets of the  Company as  permitted  under
Section 5.1; (c) sales or grants of licenses to use the patents,  trade secrets,
know-how and other intellectual property of the Company or any of its Restricted
Subsidiaries  to the extent that any such  license does not prohibit the Company
or any of its  Restricted  Subsidiaries  from  using any  material  technologies
licensed  or require the Company or any of its  Restricted  Subsidiaries  to pay
fees (other than de minimis fees) for use of any material technologies;  (d) the
sale or discount,  in each case without recourse, of accounts receivable arising
in the ordinary  course of business,  but only in connection with the compromise

<PAGE>
                                      -3-

or collection  thereof;  (e) disposals or replacements  of obsolete,  surplus or
unused equipment in the ordinary course of business;  (f) any Restricted Payment
not prohibited by Section 4.7 or that  constitutes a Permitted  Investment;  (g)
the sale, lease, conveyance,  disposition or other transfer of assets or Capital
Stock of Kronos  Invest A/S or Capital  Stock of Tinfoss Titan & Iron A/S to the
extent the aggregate  consideration  therefrom is less than $10 million; and (h)
Permitted Affiliate Transactions.

            "Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or
state law for the relief of debtors or any  analogous law of any other nation or
legal  jurisdiction  or any  political  subdivision  thereof  for the  relief of
debtors.

            "Board of Directors" means, as to any Person, the board of directors
of such Person or any duly authorized committee thereof.

            "Board  Resolution"  means,  with respect to any Person, a copy of a
resolution  certified by the Secretary or an Assistant  Secretary of such 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.

            "Business Day" means any day excluding Saturday,  Sunday and any day
which is a legal holiday under the laws of New York, London, England, Germany or
Luxembourg  or is a day  on  which  banking  institutions  therein  located  are
authorized or required by law or other governmental action to close.

            "Capital Stock" means:

            (1) with  respect to any Person that is a  corporation,  any and all
      shares, interests, participations or other equivalents (however designated
      and whether or not voting) of  corporate  stock,  including  each class of
      Common Stock and Preferred Stock of such Person, and all options, warrants
      or other rights to purchase or acquire any of the foregoing; and

            (2) with  respect to any Person that is not a  corporation,  any and
      all partnership,  membership or other equity interests of such Person, and
      all  options,  warrants or other  rights to purchase or acquire any of the
      foregoing.

            "Capitalized   Lease  Obligation"  means,  as  to  any  Person,  the
obligations  of such Person under a lease that are required to be classified and
accounted for as capital lease  obligations under GAAP and, for purposes of this
definition,  the amount of such obligations at any date shall be the capitalized
amount of such obligations at such date, determined in accordance with GAAP.

            "Cash Equivalents" means:

            (1)  marketable  direct  obligations  issued by, or  unconditionally
      guaranteed  by, the  government of any member of the European Union on the
      Issue Date or the  Kingdom of Norway or the United  States  government  or

<PAGE>

                                      -4-

      issued by any agency of any of the foregoing governments and backed by the
      full  faith and  credit of any such  member of the  European  Union on the
      Issue Date or Norway or the United  States,  in each case maturing  within
      one year from the date of acquisition thereof;

            (2)  marketable  direct  obligations  issued  by any  member  of the
      European  Union on the Issue Date or the Kingdom of Norway or any state of
      the United  States of America or the District of Columbia or any political
      subdivision  of any such state or District  or any public  instrumentality
      thereof maturing within one year from the date of acquisition thereof and,
      at  the  time  of  acquisition,  having  one of the  two  highest  ratings
      obtainable from either S&P or Moody's;

            (3) commercial paper maturing no more than one year from the date of
      creation  thereof and, at the time of  acquisition,  having a rating of at
      least A-1 from S&P or at least P-1 from Moody's;

            (4) certificates of deposit or bankers'  acceptances maturing within
      one year from the date of acquisition  thereof and having,  at the time of
      acquisition,  a  rating  of at least  A-1  from  S&P or at least  P-1 from
      Moody's and issued by any bank  organized  under the laws of any member of
      the  European  Union on the  Issue  Date or the  Kingdom  of Norway or the
      United  States of America or any state thereof or the District of Columbia
      or any U.S.  branch of a foreign  bank  having at the date of  acquisition
      thereof combined capital and surplus of not less than $250 million;

            (5) repurchase  obligations  with a term of not more than seven days
      for  underlying  securities  of the types  described  in clause  (1) above
      entered into with any bank meeting the qualifications  specified in clause
      (4) above; and

            (6) Investments in money market funds which invest substantially all
      their assets in securities  of the types  described in clauses (1) through
      (5) above.

            "Change  of  Control"  means  the  occurrence  of one or more of the
following events:

            (1) any sale, lease,  exchange or other transfer (in one transaction
      or a series of related  transactions) of all or  substantially  all of the
      assets of the  Company to any Person or group of  related  Persons  (other
      than the Permitted  Holders) for purposes of Section 13(d) of the Exchange
      Act (a "Group"),  together  with any  Affiliates  thereof  (whether or not
      otherwise in compliance with the provisions of this Indenture);

            (2) the  approval by the holders of Capital  Stock of the Company of
      any plan or proposal for the  liquidation  or  dissolution  of the Company
      (whether  or not  otherwise  in  compliance  with the  provisions  of this
      Indenture);

            (3) any Person or Group  (other than the  Permitted  Holders)  shall
      become the owner,  directly or indirectly,  beneficially or of record,  of

<PAGE>

                                      -5-

      shares  representing more than 50% of the aggregate  ordinary voting power
      represented by the issued and outstanding Capital Stock of the Company; or

            (4) the  replacement  of a majority of the Board of Directors of the
      Company over a two-year  period from the  directors  who  constituted  the
      Board of  Directors of the Company at the  beginning  of such period,  and
      such replacement  shall not have been (A) approved by a vote of at least a
      majority of the Board of Directors of the Company then still in office who
      either were members of such Board of  Directors  at the  beginning of such
      period  or whose  election  as a member  of such  Board of  Directors  was
      previously so approved or (B) approved by the Permitted Holders so long as
      the  Permitted  Holders  then  beneficially  own a majority of the Capital
      Stock of the Company.

            "Clearstream"  shall  mean  Clearstream  Banking,  Societe  Anonyme,
Luxembourg.

            "Collateral" means, collectively, all of the property pledged to the
Trustee  or the  Collateral  Agent for their  respective  benefit  as Trustee or
Collateral  Agent or for the benefit of the Holders,  together with all property
that is from time to time  subject  to the  Security  Interest  of the  Security
Documents.

            "Collateral Agency Agreement" means the collateral agency agreement,
dated June 28,  2002,  among The Bank of New York,  as Trustee,  the Company and
U.S. Bank, N.A., as Collateral Agent, as such shall be amended,  supplemented or
replaced from time to time.

            "Collateral Agent" means U.S. Bank, N.A., together with any
successors and assigns.

            "Commission" means the Securities and Exchange Commission.

            "Commodity   Agreements"   means  any  commodity  futures  contract,
commodity option or other similar  agreement or arrangement  entered into by the
Company or any of its  Restricted  Subsidiaries  and  designed  to  protect  the
Company or any of its Restricted  Subsidiaries against fluctuations in the price
of commodities  actually at that time used in the ordinary course of business of
the Company or its Restricted Subsidiaries.

            "Common  Depository"  means  initially The Bank of New York,  London
Branch (or its nominee) or such other common  depository for a Depositary as may
be appointed by such Depositary from time to time.

            "Common Stock" of any Person means any and all shares,  interests or
other  participations in, and other equivalents  (however designated and whether
voting or non-voting) of such Person's common stock,  whether outstanding on the
Issue Date or issued after the Issue Date, and includes, without limitation, all
series and classes of such common stock.

            "Company" means Kronos International,  Inc., a Delaware corporation,
until a  successor  Person  shall have become  such  pursuant to the  applicable
provisions of this Indenture, and thereafter means such successor Person.

<PAGE>
                                      -6-

            "Consolidated  EBITDA"  means,  with respect to any Person,  for any
period, the sum (without duplication) of:

            (1) Consolidated Net Income; and

            (2) to the extent Consolidated Net Income has been reduced thereby:

                  (a) all  income  taxes  of  such  Person  and  its  Restricted
            Subsidiaries  paid or  accrued  in  accordance  with  GAAP  for such
            period;

                  (b) Consolidated Interest Expense; and

                  (c) Consolidated Non-cash Charges,

all as determined  on a  consolidated  basis for such Person and its  Restricted
Subsidiaries in accordance with GAAP.

            "Consolidated  Fixed Charge Coverage  Ratio" means,  with respect to
any Person, the ratio of Consolidated EBITDA of such Person during the four full
fiscal  quarters  (the "Four  Quarter  Period")  ending prior to the date of the
transaction  giving rise to the need to calculate the Consolidated  Fixed Charge
Coverage Ratio for which  financial  statements are available (the  "Transaction
Date") to Consolidated Fixed Charges of such Person for the Four Quarter Period.
In addition to and without  limitation  of the  foregoing,  for purposes of this
definition,  "Consolidated  EBITDA" and  "Consolidated  Fixed  Charges" shall be
calculated  after  giving  effect  on a pro forma  basis for the  period of such
calculation to:

            (1) the incurrence or repayment of any  Indebtedness  of such Person
      or any of its Restricted Subsidiaries (and the application of the proceeds
      thereof)  giving  rise  to the  need  to  make  such  calculation  and any
      incurrence or repayment of other  Indebtedness (and the application of the
      proceeds thereof),  other than the incurrence or repayment of Indebtedness
      in the ordinary course of business for working capital  purposes  pursuant
      to working capital facilities, occurring during the Four Quarter Period or
      at any time  subsequent to the last day of the Four Quarter  Period and on
      or prior to the Transaction  Date, as if such incurrence or repayment,  as
      the case may be (and the application of the proceeds thereof), occurred on
      the first day of the Four Quarter Period; and

            (2) any  asset  sales  (other  than  disposals  or  replacements  of
      obsolete or unused  equipment in the ordinary course of business) or other
      dispositions or Asset Acquisitions  (including,  without  limitation,  any
      Asset  Acquisition  giving rise to the need to make such  calculation as a
      result of such Person or one of its Restricted Subsidiaries (including any
      Person  who  becomes  a  Restricted  Subsidiary  as a result  of the Asset
      Acquisition)  incurring,  assuming or otherwise  being liable for Acquired
      Indebtedness and also including any Consolidated EBITDA (including any pro
      forma expense and cost  reductions  calculated on a basis  consistent with
      Regulation  S-X under the Exchange Act)  attributable  to the assets which
      are  the  subject  of  the  Asset  Acquisition  or  asset  sale  or  other
      disposition  during the Four  Quarter  Period)  occurring  during the Four
      Quarter  Period  or at any  time  subsequent  to the  last day of the Four
      Quarter Period and on or prior to the  Transaction  Date, as if such asset

<PAGE>
                                      -7-

      sale or other disposition or Asset Acquisition  (including the incurrence,
      assumption or liability for any such  Acquired  Indebtedness)  occurred on
      the first day of the Four  Quarter  Period.  If such  Person or any of its
      Restricted  Subsidiaries directly or indirectly guarantees Indebtedness of
      a third Person, the preceding sentence shall give effect to the incurrence
      of such  guaranteed  Indebtedness  as if  such  Person  or any  Restricted
      Subsidiary of such Person had directly  incurred or otherwise assumed such
      guaranteed Indebtedness.

            Furthermore,   in  calculating   "Consolidated  Fixed  Charges"  for
purposes  of  determining  the  denominator  (but  not  the  numerator)  of this
"Consolidated Fixed Charge Coverage Ratio":

            (1) interest on outstanding Indebtedness determined on a fluctuating
      basis  as of  the  Transaction  Date  and  which  will  continue  to be so
      determined  thereafter shall be deemed to have accrued at a fixed rate per
      annum equal to the rate of interest on such  Indebtedness in effect on the
      Transaction Date; and

            (2)  notwithstanding  clause (1)  above,  interest  on  Indebtedness
      determined on a fluctuating  basis, to the extent such interest is covered
      by agreements  relating to Interest Swap  Obligations,  shall be deemed to
      accrue  at the  rate  per  annum  resulting  after  giving  effect  to the
      operation of such agreements.

            "Consolidated  Fixed Charges" means,  with respect to any Person for
any period, the sum, without duplication, of:

            (1) Consolidated Interest Expense; plus

            (2) the  product of (x) the amount of all  dividend  payments on any
      series of Preferred  Stock of such Person  (other than  dividends  paid in
      Qualified Capital Stock) paid,  accrued or scheduled to be paid or accrued
      during such period times (y) a fraction, the numerator of which is one and
      the  denominator  of  which  is  one  minus  the  then  current  effective
      consolidated  federal,  state and local  income  tax rate of such  Person,
      expressed as a decimal.

            "Consolidated  Interest  Expense" means,  with respect to any Person
for any period, the sum of, without duplication:

            (1) the  aggregate  of the  interest  expense of such Person and its
      Restricted Subsidiaries for such period determined on a consolidated basis
      in  accordance  with  GAAP,   including   without   limitation:   (a)  any
      amortization  of debt discount and  amortization  or write-off of deferred
      financing costs;  (b) the net cash costs under Interest Swap  Obligations;
      (c) all capitalized interest; and (d) the interest portion of any deferred
      payment obligation; and

            (2) the interest  component of Capitalized  Lease  Obligations paid,
      accrued  and/or  scheduled  to be paid or accrued  by such  Person and its
      Restricted Subsidiaries during such period as determined on a consolidated
      basis in accordance with GAAP.

<PAGE>
                                      -8-

            "Consolidated Net Income" means, with respect to any Person, for any
period,  the  aggregate  net income (or loss) of such Person and its  Restricted
Subsidiaries for such period on a consolidated  basis,  determined in accordance
with GAAP; provided that there shall be excluded therefrom:

            (1)  after-tax  gains from  Asset  Sales  (without  regard to the $2
      million limitation set forth in the definition thereof) or abandonments or
      reserves relating thereto;

            (2) after-tax items classified as extraordinary  gains in accordance
      with GAAP;

            (3)  the  net  income  of  any  Person  acquired  in a  "pooling  of
      interests"  transaction  accrued prior to the date it becomes a Restricted
      Subsidiary of the referent  Person or is merged or  consolidated  with the
      referent Person or any Restricted Subsidiary of the referent Person;

            (4) the net income (but not loss) of any  Restricted  Subsidiary  of
      the  referent  Person to the extent that the  declaration  of dividends or
      similar  distributions  by that  Restricted  Subsidiary  of that income is
      restricted  by a  contract,  operation  of  law  or  otherwise;  provided,
      however,  that if the  Restricted  Subsidiary  is able  despite  any  such
      restriction  to  distribute  income  or  otherwise  transfer  cash  to the
      referent  Person by way of an  intercompany  loan or otherwise,  then such
      income or cash,  to the  extent  of such  ability,  shall not be  excluded
      pursuant to this clause (4);

            (5) the net income of any Person, other than a Restricted Subsidiary
      of the  referent  Person,  except  to the  extent  of  cash  dividends  or
      distributions  paid to the referent Person or to a Wholly Owned Restricted
      Subsidiary of the referent Person by such Person;

            (6)  income  or  loss   attributable  to   discontinued   operations
      (including, without limitation,  operations disposed of during such period
      whether or not such operations were classified as discontinued); provided,
      however,  that such income or loss shall be included in  Consolidated  Net
      Income  for the  purpose  of  calculating  Consolidated  Net Income of the
      Company for Section 4.7(1)(iii)(v);

            (7)  in  the  case  of  a  successor  to  the  referent   Person  by
      consolidation  or  merger  or as a  transferee  of the  referent  Person's
      assets,   any  earnings  of  the  successor   corporation  prior  to  such
      consolidation, merger or transfer of assets;

            (8) non-cash charges relating to compensation  expense in connection
      with benefits provided under employee stock option plans, restricted stock
      option plans and other employee stock purchase or stock  incentive  plans;
      and

            (9) income or loss  attributable  solely to fluctuations in currency
      values  and  related  tax  effects,  in either  case  related to notes and
      accounts  payable existing prior to or as of the Issue Date and payable to
      Affiliates of the Company.

<PAGE>
                                      -9-

            "Consolidated  Net  Worth"  of any  Person  means  the  consolidated
stockholders'  equity of such  Person,  determined  on a  consolidated  basis in
accordance  with  GAAP,  less  (without  duplication)  amounts  attributable  to
Disqualified Capital Stock of such Person.

            "Consolidated  Non-cash  Charges" means, with respect to any Person,
for any period,  the aggregate  depreciation,  amortization  and other  non-cash
expenses of such Person and its Restricted  Subsidiaries  reducing  Consolidated
Net  Income of such  Person and its  Restricted  Subsidiaries  for such  period,
determined on a consolidated  basis in accordance  with GAAP (excluding any such
charges  constituting  an  extraordinary  item or loss or any such charge  which
requires an accrual of or a reserve for cash charges for any future period).

            "Corporate  Trust Office of the Trustee"  shall be at the address of
the Trustee specified in Section 13.2 of this Indenture or such other address as
to which the Trustee may give notice to the Company.

            "Credit  Agreement"  means the Credit  Agreement dated June 25, 2002
among Kronos Titan GmbH & Co. OHG.,  Kronos Europe  S.A./N.V.,  Kronos Titan A/S
and  Titania  A/S,  the lenders  party  thereto in their  capacities  as lenders
thereunder,  and Deutsche Bank AG, as mandated Lead Arranger,  and Deutsche Bank
Luxembourg  S.A.,  as Agent  and  Security  Agent,  together  with  the  related
documents thereto (including,  without limitation,  any guarantee agreements and
security  documents),  in each case as such agreements may be amended (including
any amendment and restatement thereof),  supplemented or otherwise modified from
time to time,  including any agreement  extending the maturity of,  refinancing,
replacing  or  otherwise  restructuring  (including  increasing  the  amount  of
available  borrowings  thereunder  (provided that such increase in borrowings is
permitted by Section 4.9 of this Indenture) or adding Restricted Subsidiaries of
the Company as additional borrowers or guarantors thereunder) all or any portion
of the  Indebtedness  under  such  agreement  or any  successor  or  replacement
agreement  and  whether  by the  same or any  other  agent,  lender  or group of
lenders.

            "Currency  Agreement" means any foreign exchange contract,  currency
swap agreement or other similar agreement or arrangement designed to protect the
Company or any  Restricted  Subsidiary of the Company  against  fluctuations  in
currency values.

            "Default" means an event or condition the occurrence of which is, or
with the lapse of time or the  giving  of  notice or both  would be, an Event of
Default.

            "Depositary"  means Euroclear or Clearstream or a successor clearing
agency to either or both of them.

            "Disqualified Capital Stock" means that portion of any Capital Stock
which,  by  its  terms  (or by  the  terms  of any  security  into  which  it is
convertible or for which it is exchangeable, in either case at the option of the
holder  thereof),  or upon the happening of any event (other than an event which
would  constitute a Change of Control),  matures or is  mandatorily  redeemable,
pursuant to a sinking fund obligation or otherwise, or is redeemable at the sole
option of the holder  thereof  (except,  in each case,  upon the occurrence of a
Change of Control) on or prior to the final maturity date of the Notes.

<PAGE>
                                      -10-

            "Euro" or "(euro)" means the currency introduced at the start of the
third  stage of  economic  and  monetary  union  pursuant  to the Treaty of Rome
establishing the European Community, as amended by the Treaty on European Union,
signed at Maastricht on February 7, 1992.

            "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, or any successor statute or statutes thereto.

            "Exchange  Offer"  means the offer that shall be made by the Company
pursuant to the Registration Rights Agreement to exchange the Series A Notes for
the Series B Notes.

            "fair market  value"  means,  with respect to any asset or property,
the price which could be negotiated in an arm's-length, free market transaction,
for cash, between a willing seller and a willing and able buyer, neither of whom
is under undue pressure or compulsion to complete the  transaction.  Fair market
value  shall be  determined  by the Board of  Directors  of the  Company  acting
reasonably and in good faith and shall be evidenced by a Board Resolution of the
Board of Directors of the Company delivered to the Trustee.

            "Final   Memorandum"   shall  mean  the  Company's   final  offering
memorandum dated June 19, 2002 in respect of the Notes.

            "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 may be approved by a  significant  segment of
the accounting  profession of the United  States,  which are in effect as of the
Issue Date.

            "Government  Securities"  means  securities  issued or directly  and
fully  guaranteed  or insured by the  government  of any member of the  European
Union or the Kingdom of Norway on the Issue Date rated AAA or above.

            "Guarantee"  means the guarantee of any Guarantor of the obligations
of the  Company  under this  Indenture  and the Notes that may be in effect from
time to time.

            "Guarantor" means each of the Company's Restricted Subsidiaries that
in the  future  executes  a  supplemental  indenture  in which  such  Restricted
Subsidiary  agrees to be bound by the terms of this  Indenture  as a  Guarantor;
provided that any Person constituting a Guarantor as described above shall cease
to  constitute  a  Guarantor  when  its  respective  Guarantee  is  released  in
accordance with the terms of this Indenture.

            "Holder" means a Person in whose name a Note is registered.

<PAGE>
                                      -11-

            "Indebtedness"   means   with   respect  to  any   Person,   without
      duplication:

            (1) all Obligations of such Person for borrowed money;

            (2) all Obligations of such Person  evidenced by bonds,  debentures,
      notes or other similar instruments;

            (3) all Capitalized Lease Obligations of such Person;

            (4) all Obligations of such Person issued or assumed as the deferred
      purchase  price of property,  all  conditional  sale  obligations  and all
      Obligations under any title retention agreement (but excluding from all of
      the foregoing trade accounts payable and other accrued liabilities arising
      in the ordinary course of business);

            (5) all  Obligations  for the  reimbursement  of any  obligor on any
      letter of credit, banker's acceptance or similar credit transaction;

            (6)  guarantees  and other  contingent  obligations  in  respect  of
      Indebtedness  referred  to in clauses (1) through (5) above and clause (8)
      below;

            (7) all  Obligations  of any other Person of the type referred to in
      clauses (1)  through (6) which are secured by any Lien on any  property or
      asset of such Person, the amount of such Obligation being deemed to be the
      lesser of the fair market value of such property or asset or the amount of
      the Obligation so secured;

            (8)  all  Obligations  under  Currency  Agreements,   Interest  Swap
      Obligations of such Person and Commodity Agreements; and

            (9) all  Disqualified  Capital  Stock issued by such Person with the
      amount of  Indebtedness  represented  by such  Disqualified  Capital Stock
      being equal to the greater of its  voluntary  or  involuntary  liquidation
      preference and its maximum fixed repurchase  price, but excluding  accrued
      dividends, if any.

            For purposes  hereof,  the "maximum fixed  repurchase  price" of any
Disqualified Capital Stock which does not have a fixed repurchase price shall be
calculated in accordance with the terms of such Disqualified Capital Stock as if
such Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Indenture, and if such price
is based  upon,  or  measured  by, the fair  market  value of such  Disqualified
Capital Stock, such fair market value shall be determined reasonably and in good
faith by the  Board of  Directors  of the  issuer of such  Disqualified  Capital
Stock.

            "Indenture"  means this Indenture,  as amended or supplemented  from
time to time.

            "Independent  Financial  Advisor"  means a firm: (1) which does not,
and whose directors,  officers and employees or Affiliates do not, have a direct

<PAGE>
                                      -12-

or indirect financial interest in the Company; and (2) which, in the judgment of
the Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.

            "Initial Purchasers" means Deutsche Bank AG London, Dresdner Bank AG
London Branch and Commerzbank Aktiengesellschaft, London Branch.

            "Interest  Swap  Obligations"  means the  obligations  of any Person
pursuant  to  any  arrangement  with  any  other  Person  whereby,  directly  or
indirectly,  such  Person is  entitled  to  receive  from time to time  periodic
payments calculated by applying either a floating or a fixed rate of interest on
a stated  notional  amount in exchange for periodic  payments made by such other
Person calculated by applying a fixed or a floating rate of interest on the same
notional  amount and shall  include,  without  limitation,  interest rate swaps,
caps, floors, collars and similar agreements.

            "Investment"  means,  with  respect  to any  Person,  any  direct or
indirect loan or other extension of credit  (including,  without  limitation,  a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment  for  property or services  for the account or
use of others),  or any  purchase or  acquisition  by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any Person. "Investment" shall exclude (i) extensions of trade credit
by the Company and its Restricted  Subsidiaries on commercially reasonable terms
in  accordance  with normal trade  practices  of the Company or such  Restricted
Subsidiary,  as the case may be,  provided  that  nothing in this  clause  shall
prevent  the  Company  or  any   Restricted   Subsidiary   from  providing  such
concessionary  trade terms as management deems reasonable in the  circumstances;
and (ii) loans or extensions of credit which  otherwise are Permitted  Affiliate
Transactions.  If the Company or any Restricted  Subsidiary of the Company sells
or otherwise  disposes of any Common Stock of any direct or indirect  Restricted
Subsidiary  of the Company such that,  after  giving  effect to any such sale or
disposition, the Company no longer owns, directly or indirectly, at least 50% of
the outstanding Common Stock of such Restricted Subsidiary, the Company shall be
deemed to have made an  Investment  on the date of any such sale or  disposition
equal to the fair market value of the Common Stock of such Restricted Subsidiary
not sold or disposed of.

            "Issue Date" means the date of original issuance of the Notes.

            "Kronos" means Kronos, Inc., a Delaware corporation, and
its successors.

            "Lien" means any lien,  mortgage,  deed of trust,  pledge,  security
interest,  charge or encumbrance of any kind (including any conditional  sale or
other  title  retention  agreement,  any  lease in the  nature  thereof  and any
agreement to give any security interest).

            "Material  Adverse  Effect"  means,  in the  aggregate,  a  material
adverse effect on the business, condition (financial or otherwise) or results of
operations of the Company and its Restricted Subsidiaries taken as a whole.

            "Moody's" means Moody's Investors Service, Inc. or any
successor rating agency.

<PAGE>
                                      -13-

            "Net Cash  Proceeds"  means,  with  respect to any Asset  Sale,  the
proceeds in the form of cash or Cash Equivalents  including  payments in respect
of  deferred  payment  obligations  when  received  in the  form of cash or Cash
Equivalents  (other than the portion of any such deferred  payment  constituting
interest)  received by the Company or any of its  Restricted  Subsidiaries  from
such Asset Sale net of:

            (1)  reasonable  out-of-pocket  expenses  and fees  relating to such
      Asset  Sale  (including,   without  limitation,   legal,   accounting  and
      investment banking fees and sales commissions);

            (2) taxes paid or payable or  reasonably  reserved  for after taking
      into account any reduction in consolidated  tax liability due to available
      tax credits or deductions and any tax sharing arrangements;

            (3)  repayment  of  Indebtedness  that is secured by the property or
      assets that are the subject of such Asset Sale; and

            (4)  appropriate  amounts  to be  provided  by  the  Company  or any
      Restricted  Subsidiary,  as the case may be, as a reserve,  in  accordance
      with GAAP,  against any  liabilities  associated  with such Asset Sale and
      retained by the Company or any Restricted Subsidiary,  as the case may be,
      after such Asset Sale,  including,  without limitation,  pension and other
      post-employment benefit liabilities,  liabilities related to environmental
      matters and liabilities under any indemnification  obligations  associated
      with such Asset Sale.

            "NL Industries" means NL Industries, Inc., a New Jersey
corporation, and its successors.

            "Notes"  means the  Series A Notes and the  Series B Notes,  if any,
that are issued under this Indenture,  as amended or  supplemented  from time to
time.

            "Obligations"   means  all  obligations   for  principal,   premium,
interest, penalties, fees, indemnifications,  reimbursements,  damages and other
liabilities payable under the documentation governing any Indebtedness.

            "Officer"   means,  (a)  with  respect  to  any  Person  that  is  a
corporation,  the  Chairman  of the  Board,  the Chief  Executive  Officer,  the
President,  the Chief  Operating  Officer,  the  Chief  Financial  Officer,  the
Treasurer,  an  Assistant  Treasurer,  the  Controller,  the  Secretary  or  any
Vice-President  of such  Person and (b) with  respect to any other  Person,  the
individuals selected by such Person to perform functions similar to those of the
officers listed in clause (a) of this definition.

            "Officers'  Certificate" means a certificate signed on behalf of the
Company by two Officers of the Company,  one of whom must be the Chief Executive
Officer,  the Chief Financial Officer, the Treasurer or the principal accounting
officer of the Company, that meets the requirements of Sections 13.4 and 13.5 of
this Indenture.

<PAGE>
                                      -14-

            "Opinion  of  Counsel"  means an opinion  from legal  counsel who is
reasonably  acceptable to the Trustee,  that meets the  requirements of Sections
13.4 and 13.5 of this Indenture. The counsel may be an employee of or counsel to
the Company or any Subsidiary of the Company.

            "Permitted  Holder(s)" means (1) Harold C. Simmons ("Simmons"),  (2)
any trust  established  primarily  for the  benefit of Simmons or members of his
family  (including  his  spouse  and/or  his  descendants  (whether  natural  or
adopted)) or both ("Simmons Trust"), (3) trustees,  acting in such capacity,  or
beneficiaries  of a  Simmons  Trust to the  extent  of the  beneficial  interest
therein and for so long as such Simmons Trust exists ("Simmons Beneficiaries and
Trustees")  , (4) NL  Industries,  (5) any  employee  plan or pension fund of NL
Industries,  the Company or any of their  Subsidiaries,  (6) any Person  holding
Capital  Stock for or pursuant to the terms of any such plan or fund and (7) any
Person  controlled  by, or any group made up of, any one or more of the  Persons
specified in (1) through (6) above.

            "Permitted  Indebtedness" means,  without  duplication,  each of the
following:

            (1)  Indebtedness  under the Notes  (other  than  Additional  Notes)
      issued in the  Offering  in an  aggregate  principal  amount not to exceed
      (euro)285 million and Guarantees in respect thereof;

            (2)  Indebtedness  incurred  pursuant to the Credit  Agreement in an
      aggregate  principal amount at any time outstanding not to exceed (euro)80
      million  less the amount of any  principal  payments  made by the  Company
      under the Credit  Agreement  with the Net Cash  Proceeds of any Asset Sale
      (which are accompanied by a corresponding  permanent commitment reduction)
      pursuant to Section 4.10(1)(c)(i) or under clause (3) of the definition of
      Net Cash Proceeds;

            (3)  other   Indebtedness   of  the  Company   and  its   Restricted
      Subsidiaries outstanding on the Issue Date;

            (4)  Interest  Swap  Obligations  of the  Company or any  Restricted
      Subsidiary of the Company  covering  Indebtedness of the Company or any of
      its Restricted  Subsidiaries;  provided,  however, that such Interest Swap
      Obligations  are entered  into to protect  the Company and its  Restricted
      Subsidiaries  from  fluctuations  in  interest  rates  on its  outstanding
      Indebtedness to the extent the notional  principal amount of such Interest
      Swap  Obligation does not, at the time of the incurrence  thereof,  exceed
      the  principal  amount of the  Indebtedness  to which such  Interest  Swap
      Obligation relates;

            (5) Indebtedness under Commodity Agreements and Currency Agreements;
      provided  that  in  the  case  of  Currency  Agreements  which  relate  to
      Indebtedness, such Currency Agreements do not increase the Indebtedness or
      trade  payables  (as   applicable)  of  the  Company  and  its  Restricted
      Subsidiaries outstanding other than as a result of fluctuations in foreign
      currency exchange rates or by reason of fees, indemnities and compensation
      payable thereunder;
<PAGE>
                                      -15-

            (6)  Indebtedness  of a Restricted  Subsidiary of the Company to the
      Company or to a Restricted  Subsidiary  of the Company for so long as such
      Indebtedness  is held by the  Company or a  Restricted  Subsidiary  of the
      Company,  in each case  subject to no Lien held by a Person other than the
      Company or a Restricted Subsidiary of the Company or lenders in respect of
      the Credit Agreement or other Permitted Indebtedness;  provided that if as
      of any date any Person other than the Company or a  Restricted  Subsidiary
      of the Company  owns or holds any such  Indebtedness  or any Person  other
      than the Company or a Restricted  Subsidiary  of the Company or lenders in
      respect of the Credit  Agreement or other Permitted  Indebtedness  holds a
      Lien in  respect  of such  Indebtedness,  such date  shall be  deemed  the
      incurrence of Indebtedness not constituting  Permitted Indebtedness by the
      issuer of such Indebtedness pursuant to this clause (6);

            (7)  Indebtedness  of the Company to a Restricted  Subsidiary of the
      Company  for  so  long  as  such  Indebtedness  is  held  by a  Restricted
      Subsidiary  of the  Company,  in each case subject to no Lien other than a
      Lien of the lenders in respect of the Credit  Agreement or other Permitted
      Indebtedness  of such  Restricted  Subsidiary;  provided that if as of any
      date any Person other than a Restricted  Subsidiary of the Company owns or
      holds any such  Indebtedness  or any  Person  other  than the  lenders  in
      respect of the Credit  Agreement or other  Permitted  Indebtedness of such
      Restricted  Subsidiary holds a Lien in respect of such Indebtedness,  such
      date shall be deemed  the  incurrence  of  Indebtedness  not  constituting
      Permitted Indebtedness by the Company pursuant to this clause (7);

            (8)  Indebtedness  arising  from  the  honoring  by a bank or  other
      financial   institution   of  a  check,   draft  or   similar   instrument
      inadvertently  (except in the case of daylight  overdrafts)  drawn against
      insufficient funds in the ordinary course of business;  provided, however,
      that  such  Indebtedness  is  extinguished  within  two  Business  Days of
      incurrence;

            (9)   Indebtedness   of  the  Company  or  any  of  its   Restricted
      Subsidiaries  in respect of bid,  payment or performance  bonds,  bankers'
      acceptances, workers' compensation claims, surety or appeal bonds, payment
      obligations in connection with self-insurance or similar obligations,  and
      bank overdrafts (and letters of credit in respect  thereof) and commercial
      letters of credit, in all such cases in the ordinary course of business;

            (10) Refinancing Indebtedness;

            (11)  additional   Indebtedness  of  the  Company  in  an  aggregate
      principal amount not to exceed $20 million at any one time outstanding;

            (12) additional  Indebtedness of one or more Restricted Subsidiaries
      of the Company in an aggregate  principal amount not to exceed $20 million
      at any one time  outstanding  (which amount may, but need not, be incurred
      in whole or in part under the Credit Agreement);

<PAGE>
                                      -16-

            (13) Indebtedness of the Company or any Restricted Subsidiary of the
      Company consisting of guarantees, indemnities or obligations in respect of
      customary purchase price adjustments in connection with the acquisition or
      disposition of assets; and

            (14)  Indebtedness  represented by Capitalized Lease Obligations and
      Purchase Money Indebtedness of the Company and its Restricted Subsidiaries
      incurred in the  ordinary  course of business not to exceed $15 million at
      any one time outstanding.

            For  purposes of  determining  compliance  with  Section 4.9 of this
Indenture,  in the event that an item of Indebtedness meets the criteria of more
than one of the  categories of Permitted  Indebtedness  described in clauses (1)
through  (14) above or is entitled to be incurred  pursuant to the  Consolidated
Fixed Charge  Coverage Ratio  provisions of Section 4.9 of this  Indenture,  the
Company shall, in its sole discretion,  classify (or later reclassify) such item
of  Indebtedness in any manner that complies with Section 4.9 of this Indenture.
Accrual of interest,  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 payment of dividends on Disqualified  Capital Stock in
the form of additional  shares of the same class of Disqualified  Capital Stock,
and changes in the amount  outstanding  due solely to  fluctuations  in currency
exchange  rates,  will not be deemed to be an incurrence of  Indebtedness  or an
issuance  of  Disqualified  Capital  Stock for  purposes  of Section 4.9 of this
Indenture.

            "Permitted Investments" means, without duplication:

            (1)  Investments by the Company or any Restricted  Subsidiary of the
      Company  in any  Person  that is or will  become  immediately  after  such
      Investment  a Restricted  Subsidiary  of the Company or that will merge or
      consolidate into the Company or a Restricted Subsidiary of the Company;

            (2)  Investments in the Company by any Restricted  Subsidiary of the
      Company;

            (3) Investments in cash and Cash Equivalents;

            (4) loans and advances to employees  and officers of the Company and
      its Restricted  Subsidiaries  in the ordinary  course of business for bona
      fide business purposes;

            (5)  Commodity  Agreements,  Currency  Agreements  and Interest Swap
      Obligations  entered into in the ordinary  course of the  Company's or its
      Restricted  Subsidiaries' businesses and otherwise in compliance with this
      Indenture;

            (6) additional Investments not to exceed $20 million at any one time
      outstanding;

            (7) Investments existing on the Issue Date;

            (8)  Investments   resulting  from  settlements  or  compromises  of
      accounts  receivable or trade payables in the ordinary course of business,
      Investments  in  securities  of  trade  creditors  or  customers  received

<PAGE>
                                      -17-

      pursuant to any plan of  reorganization  or similar  arrangement  upon the
      bankruptcy or  insolvency of such trade  creditors or customers or in good
      faith  settlements of delinquent  obligations  of such trade  creditors or
      customers;

            (9) Investments  made by the Company or its Restricted  Subsidiaries
      as a result  of  consideration  received  or  investments  deemed  made in
      connection with an Asset Sale made in compliance with Section 4.10 of this
      Indenture;

            (10)  Investments  represented  by  guarantees  that  are  otherwise
      permitted under this Indenture;

            (11) Investments the payment for which is Qualified Capital Stock of
      the Company; and

            (12)  Investments by the Company  consisting of loans to one or more
      officers,  directors  or  other  employees  of the  Company  or any of its
      Subsidiaries in connection  with such officers',  directors' or employees'
      acquisition  of shares of Capital Stock of the Company or its  Affiliates,
      pursuant to the  exercise  of stock  options or in  connection  with other
      equity-based compensation.

            "Permitted Liens" means the following types of Liens:

            (1) Liens for taxes,  assessments or governmental  charges or claims
      either (a) not  delinquent or (b)  contested in good faith by  appropriate
      proceedings  and as to which the  Company or its  Restricted  Subsidiaries
      shall  have set  aside  on its  books  such  reserves  as may be  required
      pursuant to GAAP;

            (2)   statutory   Liens  of   landlords   and  Liens  of   carriers,
      warehousemen, mechanics, suppliers, materialmen, repairmen and other Liens
      imposed by law  incurred in the  ordinary  course of business for sums not
      yet delinquent or being  contested in good faith, if such reserve or other
      appropriate  provision,  if any,  as shall be  required by GAAP shall have
      been made in respect thereof;

            (3)  Liens  incurred  or  deposits  made in the  ordinary  course of
      business in connection with workers' compensation,  unemployment insurance
      and other types of social security, including any Lien securing letters of
      credit  issued in the  ordinary  course of business  consistent  with past
      practice in connection therewith, or to secure the performance of tenders,
      statutory  obligations,  surety and appeal bonds, bids, performance bonds,
      leases,  government  contracts,  performance and return-of-money bonds and
      other similar  obligations  (exclusive of  obligations  for the payment of
      borrowed  money),  or to secure letters of credit,  bankers'  acceptances,
      payment   obligations  in  connection  with   self-insurance   or  similar
      obligations  and  bank  overdrafts  (and  letters  of  credit  in  respect
      thereof), in each case in the ordinary course of business;

            (4) judgment Liens not giving rise to an Event of Default so long as
      such Lien is adequately bonded and any appropriate legal proceedings which

<PAGE>
                                      -18-

      may have been duly  initiated  for the review of such  judgment  shall not
      have been finally  terminated or the period within which such  proceedings
      may be initiated shall not have expired;

            (5) easements,  rights-of-way, zoning restrictions and other similar
      charges or encumbrances in respect of real property not interfering in any
      material  respect with the ordinary conduct of the business of the Company
      or any of its Restricted Subsidiaries;

            (6) any  interest or title of a lessor under any  Capitalized  Lease
      Obligation;  provided  that such  Liens do not extend to any  property  or
      assets  which is not leased  property  subject to such  Capitalized  Lease
      Obligation;

            (7) purchase money Liens to finance the  construction,  acquisition,
      repair  of or  improvements  or  additions  to  property  or assets of the
      Company or any Restricted  Subsidiary of the Company,  in each case in the
      ordinary  course of  business;  provided,  however,  that (a) the  related
      purchase money  Indebtedness shall not exceed the cost of such property or
      assets and shall not be secured by any  property  or assets of the Company
      or any  Restricted  Subsidiary  of the Company other than the property and
      assets so acquired and (b) the Lien  securing such  Indebtedness  shall be
      created  within  90  days  of  such  construction,   acquisition,  repair,
      improvement  or addition;

            (8)  Liens  upon  specific  items of  inventory  or other  goods and
      proceeds of any Person  securing such Person's  obligations  in respect of
      bankers'  acceptances  issued or created for the account of such Person to
      facilitate  the purchase,  shipment or storage of such  inventory or other
      goods;

            (9)  Liens  securing  reimbursement   obligations  with  respect  to
      commercial  letters of credit which encumber  documents and other property
      relating to such letters of credit in the ordinary  course of business and
      products and proceeds thereof;

            (10) Liens encumbering  deposits made to secure obligations  arising
      from statutory,  regulatory,  contractual, or warranty requirements of the
      Company or any of its Restricted Subsidiaries,  including rights of offset
      and set-off;

            (11)  Liens  securing  Interest  Swap  Obligations  that  relate  to
      Indebtedness that is otherwise permitted under this Indenture;

            (12) Liens  securing  Indebtedness  under  Commodity  Agreements  or
      Currency Agreements;

            (13) Liens  securing  Acquired  Indebtedness  incurred in accordance
      with Section 4.9 of this Indenture; provided that:

            (a)   such Liens secured such Acquired  Indebtedness  at the time of
                  and prior to the incurrence of such Acquired  Indebtedness  by
                  the Company or a Restricted Subsidiary of the Company and were

<PAGE>
                                      -19-

                  not granted in  connection  with, or in  anticipation  of, the
                  incurrence of such Acquired  Indebtedness  by the Company or a
                  Restricted Subsidiary of the Company; and

            (b)   such Liens do not extend to or cover any property or assets of
                  the  Company or of any of its  Restricted  Subsidiaries  other
                  than  the   property  or  assets  that  secured  the  Acquired
                  Indebtedness  prior  to  the  time  such  Indebtedness  became
                  Acquired   Indebtedness   of  the  Company  or  a   Restricted
                  Subsidiary of the Company;

            (14) leases,  subleases,  licenses and sublicenses granted to others
      that do not materially  interfere with the ordinary  course of business of
      the Company and its Restricted Subsidiaries;

            (15) banker's Liens, rights of setoff and similar Liens with respect
      to cash and Cash  Equivalents  on deposit in one or more bank  accounts in
      the ordinary course of business;

            (16) Liens arising from filing  Uniform  Commercial  Code  financing
      statements (or similar or equivalent  notice-type filings in jurisdictions
      in which the Uniform  Commercial  Code has not been  adopted or adopted in
      substantial part) regarding leases;

            (17) Liens in favor of customs and revenue  authorities arising as a
      matter of law to secure payment of customs  duties in connection  with the
      importation of goods;

            (18) Liens in favor of the Company securing Indebtedness owed to the
      Company by one or more of its Subsidiaries;

            (19) rights of customers with respect to inventory  which arise from
      deposits and progress  payments  made in the ordinary  course of business;
      and

            (20) escrow  agreements  and similar  arrangements  with  respect to
      Indebtedness  permitted  to be incurred  by the Company or its  Restricted
      Subsidiaries  pursuant  to  clause  (13) of the  definition  of  Permitted
      Indebtedness.

            "Person"  means an  individual,  partnership,  corporation,  limited
liability company,  unincorporated  organization,  trust or joint venture,  or a
governmental agency or political subdivision thereof.

            "Preferred  Stock" of any  Person  means any  Capital  Stock of such
Person that has  preferential  rights to any other  Capital Stock of such Person
with respect to dividends or redemptions or upon liquidation.

            "Primary Obligations" means, for the purpose of Section 4.19 of this
Indenture, any sums owed by the Company to a Holder, the Trustee, the Collateral
Agent and all other agents under the Notes and this Indenture.

<PAGE>
                                      -20-

            "Public Equity  Offering" means an  underwritten  public offering of
Qualified  Capital Stock of the Company,  Kronos or NL Industries  pursuant to a
registration  statement  filed  with  the  Commission  in  accordance  with  the
Securities Act (or pursuant to a similar or reasonably equivalent process in the
European  Union or in any one or more states  that are  members of the  European
Union as of the  Issue  Date or in  Norway);  provided  that,  in the event of a
Public  Equity  Offering by Kronos or NL  Industries,  such  issuer  directly or
indirectly  contributes  to the equity capital of the Company the portion of the
net cash proceeds of such Public Equity Offering  necessary to pay the aggregate
redemption  price (plus accrued interest to the date of redemption) of the Notes
to be redeemed pursuant to Section 3.8 of this Indenture.

            "Purchase Date" means, with respect to any Note to be purchased, the
date fixed for such purchase by or pursuant to this Indenture.

            "Purchase Money  Indebtedness" means Indebtedness of the Company and
its  Restricted  Subsidiaries  incurred in the normal course of business for the
purpose  of  financing  all or any part of the  purchase  price,  or the cost of
installation, construction or improvement, of property or equipment.

            "Purchase  Price"  means the amount  payable for the purchase of any
Note on a Purchase Date, exclusive of accrued and unpaid interest and Additional
Interest (if any) thereon to the Purchase Date,  unless  otherwise  specifically
provided.

            "QIB" means a qualified  institutional buyer as defined in Rule 144A
under the Securities Act.

            "Qualified  Capital  Stock"  means  any  Capital  Stock  that is not
Disqualified Capital Stock.

            "Redemption  Date"  means,  with respect to any Note to be redeemed,
the date fixed for such redemption by or pursuant to this Indenture.

            "Redemption  Price" means the amount  payable for the  redemption of
any Note on a  Redemption  Date,  exclusive  of accrued and unpaid  interest and
Additional  Interest (if any) thereon to the Redemption  Date,  unless otherwise
specifically provided.

            "Refinance"  means, in respect of any security or  Indebtedness,  to
refinance,  extend, renew, refund, repay, prepay,  redeem, defease or retire, or
to issue a security  or  Indebtedness  in  exchange  or  replacement  for,  such
security or Indebtedness  in whole or in part.  "Refinanced"  and  "Refinancing"
shall have correlative meanings.

            "Refinancing  Indebtedness"  means any Refinancing by the Company or
any Restricted  Subsidiary of the Company of Indebtedness  existing on the Issue
Date or incurred in accordance  with Section 4.9 of this  Indenture  (other than
pursuant to clause (2), (4), (5), (6), (7), (8), (9), (11),  (12),  (13) or (14)
of the definition of Permitted Indebtedness), in each case that does not:

<PAGE>
                                      -21-

            (1)  result in an  increase  in the  aggregate  principal  amount of
      Indebtedness  of such Person as of the date of such  proposed  Refinancing
      (plus the amount of any premium required to be paid under the terms of the
      instrument  governing such  Indebtedness and plus the amount of reasonable
      expenses incurred by the Company in connection with such Refinancing); or

            (2)  create  Indebtedness  with:  (a) a  Weighted  Average  Life  to
      Maturity  that is less than the  Weighted  Average Life to Maturity of the
      Indebtedness  being  Refinanced;  or (b) a final maturity earlier than the
      final maturity of the Indebtedness being Refinanced;  provided that (x) if
      such  Indebtedness  being Refinanced is Indebtedness of the Company,  then
      such Refinancing  Indebtedness shall be Indebtedness solely of the Company
      and (y) if such Indebtedness  being Refinanced is subordinate or junior to
      the Notes, then such Refinancing  Indebtedness shall be subordinate to the
      Notes  at  least  to  the  same  extent  and  in the  same  manner  as the
      Indebtedness being Refinanced.

            "Registration   Rights  Agreement"  means  the  registration  rights
agreement  dated  as of the  Issue  Date  among  the  Company  and  the  Initial
Purchasers.

            "Regulation  S"  means   Regulation  S  as  promulgated   under  the
Securities Act.

            "Responsible  Officer" means, when used with respect to the Trustee,
any officer within the corporate trust department of the Trustee,  including any
vice  president,   assistant  vice  president,  assistant  secretary,  assistant
treasurer,  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 shall have direct  responsibility for administration
of this Indenture.

            "Restricted  Subsidiary"  of any Person means any Subsidiary of such
Person which at the time of determination is not an Unrestricted Subsidiary.

            "Rule 144A" means Rule 144A promulgated under the Securities Act.

            "S&P" means Standard & Poor's Rating Group, a division of
McGraw Hill, Inc., or any successor rating agency.

            "Sale  and  Leaseback  Transaction"  means any  direct  or  indirect
arrangement  with any Person or to which any such  Person is a party,  providing
for the leasing to the Company or a Restricted  Subsidiary of the Company of any
property,  whether  owned by the  Company or any  Restricted  Subsidiary  of the
Company at the Issue Date or later acquired,  which has been or is to be sold or
transferred by the Company or such Restricted  Subsidiary of the Company to such
Person or to any other Person from whom funds have been or are to be advanced by
such Person on the security of such Property.

<PAGE>
                                      -22-

            "Security Documents" means, collectively,  the pledge agreements and
all other security agreements or instruments evidencing or creating any security
interests in favor of the Collateral  Agent or the Trustee for their  respective
benefit as Collateral  Agent or Trustee or for the benefit of the Holders in all
or any  portion  of the  Collateral,  in each  case,  as  amended,  amended  and
restated,  extended,  renewed,  supplemented or otherwise  modified from time to
time, in accordance with the terms thereof and this Indenture.

            "Security Interest" means the Liens on the Collateral created by the
Security  Documents in favor of the Collateral  Agent or the Trustee,  for their
respective benefit or for the benefit of the Holders.

            "Securities  Act" means the Securities  Act of 1933, as amended,  or
any successor statute or statutes thereto.

            "Series A Notes"  means (i)  (euro)285,000,000  aggregate  principal
amount of 8 7/8%  Senior  Secured  Notes due 2009,  issued on the Issue Date and
(ii)  Additional  Notes,  if any, issued from time to time in the form of 8 7/8%
Senior  Secured  Notes due 2009 in a  transaction  exempt from the  registration
requirements  of the Securities Act, in each case  substantially  in the form of
Exhibit A and containing a Private Placement Legend.

            "Series B Notes"  means (i) notes  issued by the  Company  hereunder
containing  terms  identical  to the Series A Notes  (except  that (A)  interest
thereon shall accrue from the last date on which interest was paid on the Series
A Notes  or,  if no such  interest  has been  paid,  from  the date of  original
issuance,  (B) the  legend or  legends  relating  to  transferability  and other
related   matters  set  forth  on  the  Series  A  Notes  shall  be  removed  or
appropriately  altered, and (C) as otherwise set forth herein), to be offered to
Holders of Series A Notes in exchange therefor pursuant to the Exchange Offer or
any exchange offer specified in any registration  rights  agreement  relating to
the Additional Notes and (ii) Additional Notes, if any, issued from time to time
in the form of 8 7/8% Senior Secured Notes due 2009 in a transaction  subject to
the registration  requirements of the Securities Act, in each case substantially
in the form of Exhibit B.

            "Significant  Subsidiary",  with  respect to any  Person,  means any
Restricted  Subsidiary  of  such  Person  that  satisfies  the  criteria  for  a
"significant  subsidiary"  set forth in Rule 1.02(w) of Regulation S-X under the
Exchange Act.

            "Subsidiary", with respect to any Person, means:

            (1) any corporation of which the outstanding Capital Stock having at
      least a  majority  of the votes  entitled  to be cast in the  election  of
      directors  under  ordinary  circumstances  shall  at the  time  be  owned,
      directly or indirectly, by such Person; or

            (2) any other  Person  of which at least a  majority  of the  voting
      interest  under  ordinary  circumstances  is  at  the  time,  directly  or
      indirectly, owned by such Person.

<PAGE>
                                      -23-

            "TIA"  means the Trust  Indenture  Act of 1939 (15  U.S.C.  Sections
77aaa-77bbbb)  as in effect on the date on which  this  Indenture  is  qualified
under the TIA;  provided  that in the event the Trust  Indenture  Act of 1939 is
amended  after such  date,  "TIA"  means,  to the  extent  required  by any such
amendment, the Trust Indenture Act of 1939 as so amended.

            "Transfer  Restricted  Security"  means a Note that is a  restricted
security as defined in Rule 144(a)(3) under the Securities Act.

            "Trustee"  means the party  named as such  above  until a  successor
replaces it in accordance with the applicable provisions of this Indenture,  and
thereafter means the successor serving hereunder.

            "Trust Monies" means all cash and Cash  Equivalents  received by the
Trustee or a Collateral Agent:

            (1) pursuant to the Security Documents;

            (2) as proceeds of any sale or other  disposition of all or any part
      of the Collateral by or on behalf of the Trustee or the  Collateral  Agent
      or any collection,  recovery, receipt,  appropriation or other realization
      of or from all or any part of the Collateral pursuant to this Indenture or
      any of the Security Documents or otherwise; or

            (3) for  application as provided in the relevant  provisions of this
      Indenture or any Security Documents for which disposition is not otherwise
      specifically provided for in this Indenture or in any Security Document;

provided,  however,  that Trust  Monies  shall in no event  include any property
deposited  with the Trustee for any  redemption,  legal  defeasance  or covenant
defeasance of Notes,  for the satisfaction and discharge of this Indenture or to
pay the purchase  price of Notes  pursuant to a Change of Control Offer or Asset
Sale Offer.

            "Unrestricted Subsidiary" of any Person means:

            (1) any Subsidiary of such Person that at the time of  determination
      shall be or continue to be  designated an  Unrestricted  Subsidiary by the
      Board of Directors of such Person in the manner provided below; and

            (2) any Subsidiary of an Unrestricted Subsidiary.

            The Board of Directors of the Company may designate  any  Subsidiary
(including any newly  acquired or newly formed  Subsidiary of the Company) to be
an  Unrestricted  Subsidiary  of the  Company  unless such  Subsidiary  owns any
Capital  Stock of, or owns or holds any Lien on any  property of, the Company or
any Restricted Subsidiary of the Company; provided that:

<PAGE>
                                      -24-

            (1) the  Company  certifies  to the  Trustee  that such  designation
      complies with Section 4.7 of this Indenture; and

            (2) each  Subsidiary of the Company to be so designated  and each of
      its  Subsidiaries  has  not at the  time  of  designation,  and  does  not
      thereafter,  create,  incur, issue, assume,  guarantee or otherwise become
      directly or indirectly liable with respect to any Indebtedness pursuant to
      which the lender has  recourse  to any of the assets of the Company or any
      of its Restricted Subsidiaries.

            The Board of Directors of the Company may designate any Unrestricted
Subsidiary of the Company to be a Restricted Subsidiary of the Company only if:

            (1) immediately after giving effect to such designation, the Company
      is able to incur at least  $1.00 of  additional  Indebtedness  (other than
      Permitted  Indebtedness) in compliance with Section 4.9 of this Indenture;
      and

            (2) immediately  before and immediately  after giving effect to such
      designation,  no Default or Event of Default  shall have  occurred  and be
      continuing.  Any  such  designation  by the  Board of  Directors  shall be
      evidenced to the Trustee by promptly filing with the Trustee a copy of the
      Board  Resolution  giving  effect  to such  designation  and an  Officers'
      Certificate  certifying that such designation  complied with the foregoing
      provisions.

            "U.S. Person" means any U.S. Person as defined in Regulation S.

            "Weighted  Average  Life to  Maturity"  means,  when  applied to any
Indebtedness  at any date, the number of years obtained by dividing (a) the then
outstanding  aggregate principal amount of such Indebtedness into (b) the sum of
the total of the products  obtained by  multiplying  (i) the amount of each then
remaining  installment,  sinking fund, serial maturity or other required payment
of principal,  including payment at final maturity,  in respect thereof, by (ii)
the number of years  (calculated to the nearest  one-twelfth)  which will elapse
between such date and the making of such payment.

            "Wholly Owned Restricted  Subsidiary" of any Person means any Wholly
Owned  Subsidiary  of  such  Person  which  at the  time of  determination  is a
Restricted Subsidiary of such Person.

            "Wholly Owned Subsidiary" of any Person means any Subsidiary of such
Person of which all the outstanding voting securities (other than in the case of
a foreign  Subsidiary,  directors'  qualifying shares or an immaterial amount of
shares  required to be owned by other Persons  pursuant to  applicable  law) are
owned by such Person or any Wholly Owned  Subsidiary  of such Person;  provided,
however, that each of Societe Industrielle du Titane and Kronos Titan-GmbH & Co.
OHG shall be deemed  to be a Wholly  Owned  Subsidiary  of the  Company  for all
purposes  of this  Indenture  so long as the  ownership  of  outstanding  voting
securities of each such  Subsidiary  by the Permitted  Holders does not decrease

<PAGE>
                                      -25-

after the Issue Date (other than in respect of directors'  qualifying  shares or
in  respect  of an  immaterial  amount of shares  required  to be owned by other
Persons pursuant to applicable law).

Section 1.2.      Other Definitions.

            Term                                   Defined in Section
            ----                                   ------------------
            "Act"                                         1.5
            "Affiliate Transaction"............           4.11
            "Agent Members"....................           2.6
            "Certificated Notes"...............           2.1
            "Change of Control Offer"..........           4.15
            "Change of Control Payment Date"...           3.10
            "Covenant Defeasance"..............           8.3
            "Collateral Account"...............           12.1
            "Event of Default".................           6.1
            "Foreign Collateral"...............           7.12
            "Foreign Person"...................           2.6
            "Global Notes".....................           2.1
            "Guarantee"........................           10.1
            "incur"............................           4.9
            "Institutional Accredited Investors"          2.1
            "Judgment Currency"................          13.10
            "Legal Defeasance".................           8.2
            "Luxembourg Paying Agent"..........           2.3
            "Net Proceeds Offer"...............           4.10
            "Net Proceeds Offer Amount"........           4.10
            "Net Proceeds Offer Trigger Date"..           4.10
            "Offshore Certificated Notes"......           2.1
            "Parallel Obligations".............           4.19
            "Paying Agent".....................           2.3
            "Permanent Regulation S Global Note"          2.1
            "Permitted Affiliate Transaction"..           4.11
            "Private Placement Legend".........           2.6
            "Reference Date"...................           4.7
            "Registrar"........................           2.3
            "Regulation S Global Note".........           2.1
            "Released Collateral"..............           11.3
            "Replacement Assets"...............           4.10
            "Restricted Payment"...............           4.7
            "Rule 144A Global Note"............           2.1
            "Special Redemption"...............           3.8
            "Surviving Entity".................           5.1
            "Temporary Regulation S Global Note"          2.1
            "U.S. Certificated Notes"..........           2.1

<PAGE>
                                      -26-

Section 1.3.      Incorporation by Reference of Trust Indenture Act.

            Whenever  this  Indenture  refers  to a  provision  of the TIA,  the
provision is incorporated by reference in and made a part of this Indenture.

            The  following TIA terms used in this  Indenture  have the following
meanings:

            "indenture securities" means the Notes;

            "indenture security holder" means a Holder;

            "indenture to be qualified" means this Indenture;

            "indenture trustee" or "institutional trustee" means the Trustee;

            "obligor" on the Notes means the Company and any successor
obligor upon the Notes.

            All other terms used in this  Indenture that are defined by the TIA,
defined by TIA reference to another  statute or defined by Commission rule under
the TIA have the meanings so assigned to them.

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 in the United States;

            (3)   "or" is not exclusive;

            (4) words in the  singular  include  the  plural,  and in the plural
      include the singular;

            (5) provisions apply to successive events and transactions; and

            (6) references to sections of or rules under the Securities Act, the
      Exchange  Act  and  the  TIA  shall  be  deemed  to  include   substitute,
      replacement and successor sections or rules adopted by the Commission from
      time to time.

<PAGE>
                                      -27-

Section 1.5.      Acts of Holders.

            (1)   Any  request,  demand,   authorization,   direction,   notice,
consent,  waiver or other action provided by this Indenture to be given or taken
by Holders  may be  embodied  in and  evidenced  by one or more  instruments  of
substantially similar tenor signed by such Holders in person or by an agent duly
appointed in writing;  and, except as herein otherwise expressly provided,  such
action shall become  effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required,  to the Company. Such
instrument  or  instruments  (and the  action  embodied  therein  and  evidenced
thereby)  are herein  sometimes  referred to as the "Act" of Holders  signing or
bound  by such  instrument  or  instruments.  Proof  of  execution  of any  such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this  Indenture  and (subject to Section 7.1)  conclusive in favor of
the Trustee and the Company, if made in the manner provided in this Section.

            (2)   The  fact and date of the  execution by any Person of any such
instrument  or  writing  may be proved  by the  affidavit  of a witness  of such
execution or by the certificate of any notary public or other officer authorized
by law to take acknowledgments of deeds,  certifying that the individual signing
such  instrument or writing  acknowledged  to him or her the execution  thereof.
Where  such  execution  is by an  officer  of a  corporation  or a  member  of a
partnership,  on behalf of such corporation or partnership,  such certificate or
affidavit shall also constitute sufficient proof of his or her authority.

            (3)   The  ownership  of  Notes  shall  be  proved  by the  register
maintained by the Registrar.

            (4)   Any  request,  demand,   authorization,   direction,   notice,
consent,  waiver or other Act of the Holder of any Note shall bind every  future
Holder  of the  same  Note  and  the  holder  of  every  Note  issued  upon  the
registration of transfer  thereof or in exchange  therefor or in lieu thereof in
respect of anything done or suffered to be done by the Trustee or the Company in
reliance thereon, whether or not notation of such action is made upon such Note.

            (5)   If  the Company  shall  solicit  from the Holders any request,
demand,  authorization,  direction,  notice,  consent,  waiver or other Act, the
Company may, at its sole option,  by or pursuant to a Board  Resolution,  fix in
advance a record  date for the  determination  of Holders  entitled to give such
request, demand, authorization, direction, notice, consent, waiver or other Act,
but the  Company  shall have no  obligation  to do so. If such a record  date is
fixed, such request, demand,  authorization,  direction, notice, consent, waiver
or other Act may be given before or after such record date, but only the Holders
of record at the close of  business  on such  record  date shall be deemed to be
Holders  for the  purposes  of  determining  whether  Holders  of the  requisite
proportion of outstanding  securities  have authorized or agreed or consented to
such request, demand, authorization, direction, notice, consent, waiver or other
Act, and for that  purpose the  outstanding  securities  shall be computed as of
such record date.

<PAGE>
                                      -28-

                               ARTICLE II.

                                    THE NOTES

Section 2.1.      Form and Dating.

            The Series A Notes and the Trustee's  certificate of  authentication
shall be  substantially  in the form of  Exhibit  A  hereto.  The Notes may have
notations, legends or endorsements required by law, stock exchange rule or usage
in addition to those set forth in Exhibit A hereto.  The Series B Notes shall be
substantially in the form of Exhibit B hereto. Each Note shall be dated the date
of  its  authentication.   The  Notes  shall  be  in  minimum  denominations  of
(euro)1,000 and integral multiples thereof.

            The terms and provisions contained in the Notes and Guarantees shall
constitute,  and are hereby  expressly  made, a part of this  Indenture  and the
Company, the Guarantors and the Trustee, by their execution and delivery of this
Indenture, expressly agree to such terms and provisions and to be bound thereby.

            Notes  offered  and sold in  reliance  on Rule 144A  shall be issued
initially  in the form of a single  permanent  global Note in  registered  form,
substantially  in the form set forth in Exhibit A (the "Rule 144A Global Note"),
deposited  with the Common  Depository,  as custodian  for the  Depositary,  and
registered in the name of the Common Depository or its nominee, duly executed by
the  Company  and  authenticated  by the Trustee as  hereinafter  provided.  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  Common
Depository,  as custodian  for the  Depositary  or its nominee,  as  hereinafter
provided.

            Notes  offered  and sold in  offshore  transactions  in  reliance on
Regulation S shall be issued  initially in the form of a single temporary global
Note in registered  form  substantially  in the form set forth in Exhibit A (the
"Temporary Regulation S Global Note"), deposited with the Common Depository,  as
custodian for the Depositary, registered in the name of the Common Depository or
its nominee for the accounts of Euroclear and Clearstream,  duly executed by the
Company and  authenticated by the Trustee as hereinafter  provided.  At any time
following  40 days after the later of the  commencement  of the  offering of the
Notes and the Issue Date,  upon receipt by the Trustee and the Company of a duly
executed certificate  substantially in the form of Exhibit C(1) hereto, a single
permanent Global Note in registered form  substantially in the form set forth in
Exhibit A (the  "Permanent  Regulation  S Global  Note," and  together  with the
Temporary  Regulation  S Global  Note,  the  "Regulation  S Global  Note")  duly
executed  by the  Company  and  authenticated  by the  Trustee,  as  hereinafter
provided  shall be deposited  with the Common  Depository,  as custodian for the
Depositary,  and the  Registrar  shall reflect on its books and records the date
and a decrease in the  principal  amount of the  Regulation  S Global Note in an
amount  equal  to  the  principal  amount  of  the  beneficial  interest  in the
Regulation S Global Note transferred.

<PAGE>
                                      -29-

            Notes  offered and sold to  institutional  accredited  investors (as
defined  in  Rule  501(a)(1),   (2),  (3)  or  (7)  under  the  Securities  Act)
("Institutional  Accredited Investors") shall be issued in the form of permanent
U.S.  Certificated  Notes in registered form in substantially the form set forth
in Exhibit A (the "U.S.  Certificated  Notes").  Securities  issued  pursuant to
Section  2.6 in  exchange  for  interests  in the Rule 144A  Global  Note or the
Regulation S Global Note shall be in the form of permanent Certificated Notes in
registered form  substantially in the form set forth in Exhibit A (the "Offshore
Certificated Notes").

            The  Offshore  Certificated  Notes and U.S.  Certificated  Notes are
sometimes  collectively herein referred to as the "Certificated Notes." The Rule
144A Global Note and the  Regulation  S Global  Note are  sometimes  referred to
herein as the "Global Notes."

            The provisions of the "Operating Procedures of the Euroclear System"
and "Terms and  Conditions  Governing Use of Euroclear"  and "General  Terms and
Conditions of Clearstream" and the "Customer  Handbook" of Clearstream  shall be
applicable  to interests in the Global Notes that are held through  participants
through Euroclear or Clearstream.

Section 2.2.      Execution and Authentication.

            Two Officers of the Company  shall sign the Notes for the Company by
manual or facsimile  signature.  The seal of the Company  shall be reproduced on
the Notes and may be in facsimile form.

            If an  Officer  whose  signature  is on a Note no longer  holds that
office  at the time a Note is  authenticated,  the Note  shall  nevertheless  be
valid.

            A Note  shall  not  be  valid  until  authenticated  by  the  manual
signature of the Trustee.  The signature  shall be conclusive  evidence that the
Note has been authenticated under this Indenture.

            The  Trustee,  upon a  written  order of the  Company  signed by two
Officers of the Company,  together with the other documents required by Sections
13.4 and 13.5 of this  Indenture,  shall  authenticate  (i)  Series A Notes  for
original issue on the Issue Date in the aggregate principal amount not to exceed
(euro)285,000,000 and (ii) subject to Section 4.9, Additional Notes which may be
issued from time to time  pursuant to Section  2.16.  The Trustee,  upon written
order of the Company  signed by two Officers of the Company,  together  with the
other documents required by Sections 13.4 and 13.5, shall authenticate  Series B
Notes;  provided  that such Series B Notes shall be issuable only upon the valid
surrender  for  cancellation  of  Series A Notes of a like  aggregate  principal
amount in accordance  with the Exchange Offer or an exchange offer  specified in
any registration rights agreement relating to the Additional Notes. Such written
order of the Company shall specify the amount of Notes to be  authenticated  and
the date on which the original issue of Notes is to be authenticated and, in the
case of Additional  Notes issued  pursuant to Section  2.16,  such written order
shall  certify that such  issuance is not  prohibited  under Section 4.9 of this
Indenture.  Any  Additional  Notes  shall be part of the same issue as the Notes
being  issued on the Issue  Date and will vote on all  matters as one class with
the Notes  being  issued  on the  Issue  Date,  including,  without  limitation,

<PAGE>
                                      -30-

waivers,  amendments,  redemptions,  Change of Control  Offers and Net  Proceeds
Offers. For the purposes of this Indenture,  except for Section 4.9,  references
to the Notes include Additional Notes, if any.

            The Trustee may appoint an  authenticating  agent  acceptable to the
Company to authenticate  Notes. An authenticating  agent may authenticate  Notes
whenever  the  Trustee  may  do  so.  Each   reference  in  this   Indenture  to
authentication  by  the  Trustee  includes  authentication  by  such  agent.  An
authenticating agent has the same rights as an Agent to deal with the Company or
an Affiliate of the Company.

Section 2.3.      Registrar and Paying Agent.

            The  Company  shall  maintain  an office or agency in the Borough of
Manhattan,  The City of New York,  in London,  England and, so long as the Notes
are listed on the Luxembourg Stock Exchange and the rules of such stock exchange
so require,  in Luxembourg  where (a) Notes may be presented for registration of
transfer  or for  exchange  ("Registrar")  and (b)  Notes may be  presented  for
payment ("Paying  Agent").  The Registrar shall keep a register of the Notes and
of their  transfer  and  exchange.  At the  option of the  Company,  payment  of
interest and  Additional  Interest may be made by check mailed to the Holders at
their  addresses set forth in the register of Holders,  provided that payment by
wire transfer of  immediately  available  funds will be required with respect to
principal,  Redemption  Price and Purchase Price of, and interest and Additional
Interest  (if any) on, all Global Notes and all other Notes the Holders of which
shall have  provided  wire  transfer  instructions  to the Trustee or the Paying
Agent.  The  Company  may  appoint  one or  more  co-registrars  and one or more
additional paying agents. The term "Registrar" includes any co-registrar and the
term "Paying Agent" includes any additional paying agent. The Company may change
any Paying Agent or Registrar  without  notice to any Holder.  The Company shall
notify the Trustee in writing of the name and address of any Paying  Agent not a
party to this  Indenture.  If the Company  fails to appoint or maintain  another
entity as Registrar or Paying Agent,  the Trustee shall act as such. The Company
may act as Paying Agent or Registrar.  The Depositary  shall, by acceptance of a
Global Note,  agree that  transfers of beneficial  interests in such Global Note
may be effected only through a book-entry  system  maintained by the  Depositary
(or its agent).

            The Company  initially  appoints the Trustee as Registrar (acting as
the  Company's  agent for this  purpose)  and  Paying  Agent in the  Borough  of
Manhattan,  The City of New York,  the Trustee as Registrar  and Paying Agent in
London,  England  and so long as the Notes are  listed on the  Luxembourg  Stock
Exchange and so long as the rules of the  Luxembourg  Stock Exchange so require,
the Company will maintain a Paying Agent and Transfer  Agent in Luxembourg  (the
"Luxembourg  Paying  Agent").  The Company  also  appoints the Trustee to act as
Common Depository with respect to the Global Notes and the Registrar as Transfer
Agent in the event the Notes are issued in definitive registered form.

Section 2.4.      Paying Agents to Hold Money in Trust.

            The Company  shall  require each Paying Agent other than the Trustee
to agree in writing  that the Paying Agent will hold in trust for the benefit of
Holders or the  Trustee  all money held by the Paying  Agent for the  payment of

<PAGE>
                                      -31-

principal and of any premium, if any, interest and Additional Interest,  if any,
on the Notes,  and will  notify the  Trustee  of any  default by the  Company in
making any such  payment.  While any such  default  continues,  the  Trustee may
require a Paying Agent to pay all money held by it to the  Trustee.  The Company
at any  time may  require  a Paying  Agent  to pay all  money  held by it to the
Trustee and account for all monies disbursed.  Upon payment over to the Trustee,
the Paying Agent (if other than the Company) shall have no further liability for
the money. If the Company acts as Paying Agent, it shall segregate and hold in a
separate  trust  fund for the  benefit  of the  Holders  all money held by it as
Paying Agent. Upon any bankruptcy or reorganization  proceedings relating to the
Company, 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
all Holders and shall otherwise  comply with TIA Section 312(a).  If the Trustee
is not the  Registrar,  the Company  shall  furnish (or cause the  Registrar  to
furnish) to the  Trustee at least five (5)  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 the Holders of Notes, and the Company shall otherwise
comply with TIA Section 312(a).

Section 2.6.      Transfer and Exchange.

            (1)   Transfer and Exchange Generally;  Book Entry Provisions.  Upon
surrender  for  registration  of  transfer  of any  Note to the  Registrar,  and
satisfaction  of the  requirements  for such  transfer set forth in this Section
2.6, the Company shall execute,  and the Trustee shall authenticate and deliver,
in the name of the designated  transferee or transferees,  one or more new Notes
of any authorized  denominations  and of a like aggregate  principal  amount and
bearing such restrictive legends as may be required by this Indenture.

            Notes  may  be   exchanged   for  other  Notes  of  any   authorized
denominations and of a like aggregate  principal  amount,  upon surrender of the
Notes to be  exchanged  at any such office or agency  maintained  by the Company
pursuant to Section 4.2 of this Indenture. Whenever any Notes are so surrendered
for exchange,  the Company shall execute, and the Trustee shall authenticate and
deliver,  the Notes which the Holder  making the exchange is entitled to receive
bearing registration numbers not contemporaneously outstanding.

            All Notes presented or surrendered  for  registration of transfer or
exchange  shall be duly endorsed,  or be accompanied by a written  instrument or
instruments of transfer in form  satisfactory  to the Company and the Registrar,
and the Notes shall be duly executed by the Holder  thereof or his attorney duly
authorized in writing.  Except as otherwise  provided in this Indenture,  and in
addition  to the  requirements  set forth in the legend  referred  to in Section
2.6(8)(a)  below,  in  connection  with  any  transfer  of  Transfer  Restricted
Securities any request for transfer shall be accompanied by a  certification  to
the Trustee relating to the manner of such transfer substantially in the form of
Exhibit D(2) hereto.

<PAGE>
                                      -32-

            (2)   Book-Entry  Provisions  for the  Global  Notes.  The Rule 144A
Global Note and  Regulation S Global Note  initially  shall (i) be registered in
the name of the Depositary or the nominee of such Depositary,  (ii) be delivered
to the Trustee as  custodian  for the  Depositary  and (iii) bear legends as set
forth in Section 2.6(8) of this Indenture.

            Members of, or  participants  in, the Depositary  ("Agent  Members")
shall have no rights under this  Indenture  with respect to any Rule 144A Global
Note or  Regulation S Global  Note,  as the case may be, held on their behalf by
the Depositary,  or the Trustee as its custodian,  or under the Rule 144A Global
Note or Regulation S Global Note, as the case may be, and the  Depositary may be
treated by the Company,  the Trustee and any agent of the Company or the Trustee
as the absolute  owner of Rule 144A Global Note or  Regulation S Global Note, as
the case may be, for all purposes  whatsoever.  Notwithstanding  the  foregoing,
nothing  herein  shall  prevent  the  Company,  the  Trustee or any agent of the
Company or the Trustee, from giving effect to any written  certification,  proxy
or other  authorization  furnished by the  Depositary or impair,  as between the
Depositary and its Agent Members, the operation of customary practices governing
the exercise of the rights of a Holder of any Note.

            Transfers  of the Rule 144A Global Note and the  Regulation S Global
Note shall be limited to transfers of such Rule 144A Global Note or Regulation S
Global Note in whole,  but not in part,  to the  Depositary,  its  successors or
their respective nominees. Beneficial interests in the Rule 144A Global Note and
the  Regulation  S  Global  Note  may be  transferred  in  accordance  with  the
applicable  rules and  procedures of the  Depositary  and the provisions of this
Section 2.6. The  registration of transfer and exchange of beneficial  interests
in the Global Note, which does not involve the issuance of a Certificated  Note,
shall be effected  through the  Depositary,  in accordance  with this  Indenture
(including the  restrictions on transfer set forth herein) and the procedures of
the Common  Depository  therefor.  The Trustee shall have no  responsibility  or
liability for any act or omission of the Depositary.

            At any time at the request of the  beneficial  holder of an interest
in the Rule 144A Global Note or  Permanent  Regulation S Global Note to obtain a
Certificated  Note,  such  beneficial  holder  shall  be  entitled  to  obtain a
Certificated  Note upon written request to the Trustee and the Common Depository
in accordance with the standing instructions and procedures existing between the
Common Depository and Depositary for the issuance  thereof.  Upon receipt of any
such request,  the Common Depository will cause, in accordance with the standing
instructions   and  procedures   existing  between  the  Depositary  and  Common
Depository,  the  aggregate  principal  amount of the Rule 144A  Global  Note or
Permanent  Regulation  S Global  Note,  as  appropriate,  to be  reduced  by the
principal  amount of the  Certificated  Note  issued  upon such  request to such
beneficial  holder and,  following such reduction,  the Company will execute and
the Trustee  will  authenticate  and deliver to such  beneficial  holder (or its
nominee) a Certificated Note or Certificated Notes in the appropriate  aggregate
principal  amount in the name of such  beneficial  holder (or its  nominee)  and
bearing such restrictive legends as may be required by this Indenture.

            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

<PAGE>
                                      -33-

in any 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  of
this Indenture.

                  (3) Transfers to Non-QIB  Institutional  Accredited Investors.
The following  provisions  shall apply with respect to the  registration  of any
proposed  transfer  of a  Transfer  Restricted  Security  to  any  Institutional
Accredited  Investor that is not a QIB (other than any Person that is not a U.S.
Person as defined under Regulation S, a "Foreign Person"):

            (a) The Registrar  shall register the transfer of any Note,  whether
      or not such  Note  bears  the  Private  Placement  Legend,  if (x) (A) the
      requested  transfer is at least two (2) years after the later of the Issue
      Date of the Notes and (B) the  proposed  transferee  has  certified to the
      Registrar that the requested  transfer is at least two (2) years after the
      last date on which such Note was held by an Affiliate  of the Company,  or
      (y)  the  proposed  transferee  has  delivered  to  the  Registrar  (A)  a
      certificate  substantially  in the form of  Exhibit D hereto  and (B) such
      certifications,  legal  opinions and other  information as the Trustee and
      the Company may reasonably  request to confirm that such transaction is in
      compliance with the Securities Act; and

            (b)  If  the  proposed  transferor  is an  Agent  Member  holding  a
      beneficial  interest in the Global Note,  upon receipt by the Registrar of
      (x) the  documents,  if any,  required by clause (i) and (y)  instructions
      given in accordance with the Depositary's and the Registrar's  procedures,
      the  Registrar  shall  reflect  on its  books and  records  the date and a
      decrease in the principal  amount of the Global Note in an amount equal to
      the principal  amount of the beneficial  interest in the Global Note to be
      transferred,  and  the  Company  shall  execute,  and  the  Trustee  shall
      authenticate and deliver, one or more Certificated Notes of like tenor and
      amount.

            (4)   Transfers  to QIBs. The following  provisions shall apply with
respect to the  registration of any proposed  transfer of a Transfer  Restricted
Security to a QIB (other than Foreign Persons):

            (a) if the Note to be transferred  consists of Certificated Notes or
      an interest in the Regulation S Global Note, the Registrar  shall register
      the transfer if such transfer is being made by a proposed  transferor  who
      has checked the box provided  for on a  certificate  substantially  in the
      form of Exhibit C(2) stating, or has otherwise advised the Company and the
      Registrar in writing,  that the sale has been made in compliance  with the
      provisions of Rule 144A to a transferee who is a QIB within the meaning of
      Rule 144A and is aware  that the sale to it is being made in  reliance  on
      Rule 144A; and

            (b) if the proposed  transferee is an Agent Member,  and the Note to
      be  transferred  consists  of  Certificated  Notes or an  interest  in the
      Regulation S Global Note,  upon receipt by the  Registrar of the documents
      referred to in Section 2.6(4)(a) and instructions given in accordance with

<PAGE>
                                      -34-

      the  Depositary's  and the  Registrar's  procedures,  the Registrar  shall
      reflect on its books and records the date and an increase in the principal
      amount of the Rule 144A  Global Note in an amount  equal to the  principal
      amount of the  Certificated  Notes or the  interest  in the  Regulation  S
      Global Note, as the case may be, to be transferred,  and the Trustee shall
      cancel the  Certificated  Notes or decrease the amount of the Regulation S
      Global Note so transferred.

            (5)   Transfers  of Interests in the  Temporary  Regulation S Global
Note. The following  provisions  shall apply with respect to the registration of
any proposed transfer of interests in the Temporary Regulation S Global Note:

            (a) The Registrar  shall register the transfer of an interest in the
      Temporary  Regulation S Global Certificate if (x) the proposed  transferor
      has delivered to the Registrar a certificate  substantially in the form of
      Exhibit E hereto stating, among other things, that the proposed transferee
      is a  Foreign  Person  or (y)  the  proposed  transferee  is a QIB and the
      proposed  transferor  has checked the box  provided  for on a  certificate
      substantially  in the  form of  Exhibit  C(2)  stating,  or has  otherwise
      advised the Company and the  Registrar in writing,  that the sale has been
      made in compliance with the provisions of Rule 144A to a transferee who is
      a QIB within the meaning of Rule 144A, and is aware that the sale to it is
      being made in reliance on Rule 144A; and

            (b) if the proposed  transferee is an Agent Member,  upon receipt by
      the Registrar of the  documents  referred to in Section  2.6(5)(a)(y)  and
      instructions given in accordance with the Depositary's and the Registrar's
      procedures,  the Registrar shall reflect on its books and records the date
      and an increase in the principal amount of the Rule 144A Global Note in an
      amount equal to the principal amount of the Temporary  Regulation S Global
      Note to be transferred,  and the Common  Depository,  as custodian,  shall
      decrease the amount of the Temporary Regulation S Global Note.

            (6)   Transfers to Foreign Persons.  The following  provisions shall
apply  with  respect to any  transfer  of a Transfer  Restricted  Security  to a
Foreign Person:

            (a) the Registrar shall register any proposed  transfer of a Note to
      a Foreign Person upon receipt of a certificate  substantially  in the form
      of Exhibit E hereto from the proposed transferor and such  certifications,
      legal  opinions  and other  information  as the Trustee or the Company may
      reasonably request; and

            (b) (i) If the  proposed  transferor  is an Agent  Member  holding a
      beneficial  interest  in the  Rule  144A  Global  Note  or the  Note to be
      transferred  consists of Certificated Notes, upon receipt by the Registrar
      of (x) the  documents,  if any,  required  by  Section  2.6(6)(a)  and (y)
      instructions  in  accordance  with the  Depositary's  and the  Registrar's
      procedures,  the Registrar shall reflect on its books and records the date
      and a decrease in the principal  amount of the Rule 144A Global Note in an
      amount equal to the  principal  amount of the  beneficial  interest in the
      Rule 144A Global Note or cancel the  Certificated  Notes,  as the case may
      be, to be  transferred,  and (ii) if the proposed  transferee  is an Agent

<PAGE>
                                      -35-

      Member,  upon receipt by the Registrar of instructions given in accordance
      with the Depositary's and the Registrar's procedures,  the Registrar shall
      reflect on its books and records the date and an increase in the principal
      amount of the Regulation S Global Note in an amount equal to the principal
      amount of the Certificated Notes to be transferred,  and the Trustee shall
      decrease the amount of the Rule 144A Global Note.

            (7)   The  Depositary.  The  Depositary  shall be a clearing  agency
registered under the Exchange Act. The Company initially  appoints Euroclear and
Clearstream to act as Depositary with respect to the Global Note. Initially, the
Rule 144A  Global Note and the  Regulation  S Global Note shall be issued to the
Common  Depository,  registered  in the name of The Bank of New York  Depository
(Nominees) Limited, as the nominee of the Common Depository,  and deposited with
the Common Depository.

            Notes in Certificated form issued in exchange for all or a part of a
Global Note  pursuant to this Section 2.6 shall be  registered in such names and
in such authorized  denominations  as the  Depositary,  pursuant to instructions
from its direct or  indirect  participants  or  otherwise,  shall  instruct  the
Trustee.  Upon  execution  and  authentication,  the Trustee  shall deliver such
Certificated Notes in Certificated form to the persons in whose names such Notes
in Certificated form are so registered.

            Beneficial owners shall be entitled to receive Certificated Notes in
exchange  for their  beneficial  interests  in the Rule 144A  Global Note or the
Permanent Regulation S Global Note, as the case may be, if at any time:

            (a)   Euroclear or Clearstream notifies the Company that
      Euroclear or Clearstream, as the case may be, is unwilling or
      unable to continue as a clearing agency;

            (b) the  Common  Depository  notifies  the  Company  that the Common
      Depository is unwilling or unable to continue as Common  Depository  and a
      successor  Common  Depository  is not  appointed  within  120 days of such
      notice; or

            (c) in the case of any Note, an Event of Default has occurred and is
      continuing with respect to such Note,

and the  Company  shall  execute,  and the  Trustee  shall,  upon  receipt of an
authentication   order  in  accordance  with  Section  2.2  of  this  Indenture,
authenticate  and deliver  Certificated  Notes in an aggregate  principal amount
equal to the  principal  amount of the Rule 144A  Global  Note or the  Permanent
Regulation S Global Note, as the case may be, in exchange for such Global Notes.

            (8)   Legends.

            (a) Except as permitted  by Sections  2.6(8)(b)  and (c),  each Note
      certificate  evidencing Global Notes and Certificated Notes (and all Notes
      issued in exchange therefor or substitution  thereof) shall (x) be subject
      to the  restrictions  on transfer set forth in this Section 2.6 (including
      those set forth in the legend below) unless such  restrictions on transfer
      shall be waived by written consent of the Company,  and the holder of each

<PAGE>
                                      -36-

      Transfer Restricted Security, by such Holder's acceptance thereof,  agrees
      to be bound by all such  restrictions  on transfer and (y) bear the legend
      set forth below (the "Private Placement Legend"):

      THIS SECURITY HAS NOT BEEN  REGISTERED  UNDER THE U.S.  SECURITIES  ACT OF
      1933, AS AMENDED (THE  "SECURITIES  ACT"),  AND,  ACCORDINGLY,  MAY NOT BE
      OFFERED  OR SOLD  WITHIN THE  UNITED  STATES OR TO, OR FOR THE  ACCOUNT OR
      BENEFIT OF, U.S.  PERSONS  EXCEPT AS SET FORTH BELOW.  BY ITS  ACQUISITION
      HEREOF,   THE  HOLDER  (1)   REPRESENTS   THAT  (A)  IT  IS  A  "QUALIFIED
      INSTITUTIONAL  BUYER" (AS DEFINED IN RULE 144A UNDER THE SECURITIES  ACT),
      (B) IT IS NOT A U.S.  PERSON AND IS ACQUIRING THIS SECURITY IN AN OFFSHORE
      TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT OR (C) IT
      IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1),  (2), (3), OR (7)
      UNDER THE SECURITIES ACT (AN  "ACCREDITED  INVESTOR"),  (2) AGREES THAT IT
      WILL NOT WITHIN TWO YEARS AFTER THE  ORIGINAL  ISSUANCE  OF THIS  SECURITY
      RESELL  OR  OTHERWISE   TRANSFER  THIS  SECURITY   EXCEPT  (A)  TO  KRONOS
      INTERNATIONAL,  INC.  OR ANY  SUBSIDIARY  THEREOF,  (B)  INSIDE THE UNITED
      STATES TO A QUALIFIED  INSTITUTIONAL  BUYER IN  COMPLIANCE  WITH RULE 144A
      UNDER THE  SECURITIES  ACT, (C) INSIDE THE UNITED  STATES TO AN ACCREDITED
      INVESTOR THAT, PRIOR TO SUCH TRANSFER,  FURNISHES (OR HAS FURNISHED ON ITS
      BEHALF BY A U.S.  BROKER-DEALER) TO THE TRUSTEE A SIGNED LETTER CONTAINING
      CERTAIN  REPRESENTATIONS  AND AGREEMENTS  RELATING TO THE  RESTRICTIONS ON
      TRANSFER OF THIS  SECURITY  (THE FORM OF WHICH LETTER CAN BE OBTAINED FROM
      THE  TRUSTEE  FOR THIS  SECURITY),  (D)  OUTSIDE  THE UNITED  STATES IN AN
      OFFSHORE  TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT
      (IF AVAILABLE),  (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION  PROVIDED
      BY RULE 144 UNDER THE  SECURITIES  ACT (IF  AVAILABLE),  (F) IN ACCORDANCE
      WITH  ANOTHER   EXEMPTION  FROM  THE  REGISTRATION   REQUIREMENTS  OF  THE
      SECURITIES   ACT  (AND   BASED  UPON  AN  OPINION  OF  COUNSEL  IF  KRONOS
      INTERNATIONAL,  INC.  SO  REQUESTS),  OR  (G)  PURSUANT  TO  AN  EFFECTIVE
      REGISTRATION  STATEMENT  UNDER THE  SECURITIES  ACT AND (3) AGREES THAT IT
      WILL GIVE TO EACH  PERSON TO WHOM THIS  SECURITY IS  TRANSFERRED  A NOTICE
      SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND IN ADVANCE OF SUCH TRANSFER. IN
      CONNECTION  WITH ANY TRANSFER OF THIS SECURITY  WITHIN TWO YEARS AFTER THE
      ORIGINAL  ISSUANCE OF THIS  SECURITY,  IF THE  PROPOSED  TRANSFEREE  IS AN
      ACCREDITED INVESTOR,  THE HOLDER MUST, PRIOR TO SUCH TRANSFER,  FURNISH TO
      THE TRUSTEE AND KRONOS  INTERNATIONAL,  INC.  SUCH  CERTIFICATIONS,  LEGAL
      OPINIONS OR OTHER INFORMATION AS EITHER OF THEM MAY REASONABLY  REQUIRE TO

<PAGE>
                                      -37-

      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. AS USED HEREIN, THE TERMS "OFFSHORE  TRANSACTION," "UNITED
      STATES" AND "U.S.  PERSON" HAVE THE MEANING  GIVEN TO THEM BY REGULATION S
      UNDER THE SECURITIES ACT.

            (b) Upon any sale or  transfer  of a  Transfer  Restricted  Security
      (including any Transfer Restricted Security  represented by a Global Note)
      pursuant to Rule 144 under the  Securities Act or pursuant to an effective
      registration statement under the Securities Act:

                        (i) in the case of any Transfer Restricted Security that
            is a  Certificated  Note,  the  Registrar  shall  permit  the Holder
            thereof  to  exchange  such  Transfer   Restricted  Security  for  a
            Certificated Note that does not bear the legend set forth in Section
            2.6(8)(a)  and  rescind  any  restriction  on the  transfer  of such
            Transfer Restricted Security; and

                        (ii) in the  case of any  Transfer  Restricted  Security
            represented  by a Global Note,  such  Transfer  Restricted  Security
            shall  not be  required  to bear the  legend  set  forth in  Section
            2.6(8)(a),  but shall  continue to be subject to the  provisions  of
            Section 2.6(2); provided,  however, that with respect to any request
            for  an  exchange  of  a  Transfer   Restricted   Security  that  is
            represented by a Global Note for a  Certificated  Note that does not
            bear the  legend set forth in (i)  above,  which  request is made in
            reliance upon Rule 144, the Holder  thereof shall certify in writing
            to the  Registrar  that such request is being made  pursuant to Rule
            144 (such  certifications to be substantially in the form of Exhibit
            C(2) hereto).

            (c) Notwithstanding the foregoing, upon consummation of the Exchange
      Offer,  the Company  shall issue and,  upon  receipt of an  authentication
      order in accordance with Section 2.2 of this Indenture,  the Trustee shall
      authenticate  Series B Notes in exchange  for Series A Notes  accepted for
      exchange in the  Exchange  Offer,  which Series B Notes shall not bear the
      legend  set  forth in (a)  above,  and the  Registrar  shall  rescind  any
      restriction  on the  transfer of such Series A Notes,  in each case unless
      the Company has notified the  Registrar in writing that the Holder of such
      Series A Notes is either (i) a broker-dealer,  (ii) a Person participating
      in the  distribution  of the  Series A Notes  or (iii) a Person  who is an
      affiliate (as defined in Rule 144A) of the Company.

            (d)   Each  Global  Note,  whether  or  not  a  Transfer  Restricted
Security, shall also bear the following legend on the face thereof:

      THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
      REFERRED TO AND IS  REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF
      A DEPOSITARY OR A SUCCESSOR DEPOSITARY.  THIS NOTE IS NOT EXCHANGEABLE FOR

<PAGE>
                                      -38-

      NOTES  REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS
      NOMINEE  EXCEPT IN THE LIMITED  CIRCUMSTANCES  DESCRIBED IN THE INDENTURE,
      AND NO TRANSFER OF THIS  SECURITY  (OTHER THAN A TRANSFER OF THIS SECURITY
      AS A WHOLE  BY THE  DEPOSITARY  TO A  NOMINEE  OF THE  DEPOSITARY  OR BY A
      NOMINEE OF THE  DEPOSITARY  TO THE  DEPOSITARY  OR ANOTHER  NOMINEE OF THE
      DEPOSITARY)  MAY  BE  REGISTERED  EXCEPT  IN  THE  LIMITED   CIRCUMSTANCES
      DESCRIBED IN THE INDENTURE.

      THIS  GLOBAL  NOTE IS HELD BY THE  COMMON  DEPOSITORY  (AS  DEFINED IN THE
      INDENTURE  GOVERNING  THIS  NOTE)  IN  CUSTODY  FOR  THE  BENEFIT  OF  THE
      BENEFICIAL OWNERS HEREOF,  AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY
      CIRCUMSTANCES  EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS  HEREON
      AS MAY BE REQUIRED  PURSUANT TO SECTIONS 2.1, 2.6, 2.7, 3.3, 4.10 AND 4.15
      OF THE INDENTURE,  (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT
      IN PART PURSUANT TO SECTION 2.6 OF THE  INDENTURE,  (III) THIS GLOBAL NOTE
      MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION  PURSUANT TO SECTION 2.11
      OF THE  INDENTURE  AND  (IV)  THIS  GLOBAL  NOTE MAY BE  TRANSFERRED  TO A
      SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF THE COMPANY.

            (e)   Any  Global Note may be endorsed with or have  incorporated in
the text thereof such legends or recitals or changes not  inconsistent  with the
provisions of this Indenture as may be required by the Common  Depository or the
Depositary in order for the Notes to be tradable on Euroclear or  Clearstream or
as may be required  for the Notes to be tradable on any other  market  developed
for  trading  of  securities  pursuant  to Rule 144A or  Regulation  S under the
Securities  Act or required to comply with any  applicable law or any regulation
thereunder  or with the rules and  regulations  of any  securities  exchange  or
automated  quotation  system  upon which the Notes may be listed or traded or to
conform  with any  usage  with  respect  thereto,  or to  indicate  any  special
limitations or restrictions to which any particular Notes are subject.

            (9)   Cancellation  and/or  Adjustment of Global Notes. At such time
as all beneficial interests in Global Notes have been exchanged for Certificated
Notes, redeemed, purchased or canceled, all Global Notes shall be returned to or
retained  and  canceled by the Trustee in  accordance  with Section 2.11 of this
Indenture. At any time prior to such cancellation, if any beneficial interest in
a Global Note is  exchanged  for  Certificated  Notes,  redeemed,  purchased  or
canceled,  the principal amount of Notes  represented by such Global Notes shall
be reduced  accordingly and an endorsement  shall be made on such Global Note by
the  Trustee or the Common  Depository,  at the  direction  of the  Trustee,  to
reflect such reduction.  In the event of any transfer of any beneficial interest
between the Rule 144A Global Note and the Regulation S Global Note in accordance
with the standing  procedures  and  instructions  between the Depositary and the
Common Depository and the transfer  restrictions set forth herein, the aggregate

<PAGE>
                                      -39-

principal  amount  of each of the Rule 144A  Global  Note and the  Regulation  S
Global Note shall be appropriately  increased or decreased,  as the case may be,
and an  endorsement  shall be made on each of the Rule 144A  Global Note and the
Regulation  S  Global  Note by the  Trustee  or the  Common  Depository,  at the
direction of the Trustee, to reflect such reduction or increase.

            (10)  General Provisions Relating to Transfers and Exchanges.

            (a) To permit registrations of transfers and exchanges,  the Company
      shall execute and the Trustee shall  authenticate  Certificated  Notes and
      Global Notes at the Registrar's request.

            (b) No service charge shall be made to a Holder for any registration
      of transfer  or  exchange,  but the  Company may require  payment of a sum
      sufficient  to cover  any  transfer  tax or  similar  governmental  charge
      payable in connection  therewith  (other than any such  transfer  taxes or
      similar  governmental charge payable upon exchange or transfer pursuant to
      Sections 3.6 and 9.5 of this Indenture).

            (c) The Registrar  shall not be required to register the transfer of
      or exchange any Note selected for  redemption in whole or in part,  except
      the unredeemed portion of any Note being redeemed in part.

            (d)  All  Certificated  Notes  and  Global  Notes  issued  upon  any
      registration of transfer or exchange of Certificated Notes or Global Notes
      shall be the valid  obligations of the Company,  evidencing the same debt,
      and  entitled  to  the  same  benefits  under  this   Indenture,   as  the
      Certificated  Notes or Global Notes  surrendered upon such registration of
      transfer or exchange.

            (e)   The Company shall not be required:

                        (i) to issue, to register the transfer of or to exchange
            Notes  during a period  beginning at the opening of business 15 days
            before the day of any selection of Notes for  redemption or purchase
            under  Section  3.2 of this  Indenture  and  ending  at the close of
            business on the day of selection; or

                        (ii) to register the transfer of or to exchange any Note
            so  selected  for  redemption  in  whole  or  in  part,  except  the
            unredeemed portion of any Note being redeemed in part; or

                        (iii) to register  the transfer of or to exchange a Note
            between a record date and the next succeeding interest payment date.

            (f) Prior to due  presentment of the  registration  of a transfer of
      any Note,  the  Trustee,  any Agent and the Company may deem and treat the
      Person in whose name any Note is registered as the absolute  owner of such
      Note for the  purpose of all  payments  with  respect to such  Notes,  and
      neither the Trustee, any Agent nor the Company shall be affected by notice
      to the contrary.

<PAGE>
                                      -40-

            (g) The Trustee  shall  authenticate  Certificated  Notes and Global
      Notes in accordance with the provisions of Section 2.2 of this Indenture.

Section 2.7.      Replacement Notes.

            If any mutilated  Note is  surrendered  to the Trustee or either the
Company or the Trustee receives evidence to its satisfaction of the destruction,
loss or theft of any Note, the Company shall issue and the Trustee, upon receipt
of an  authentication  order in accordance  with Section 2.2 of this  Indenture,
shall  authenticate  a  replacement  Note  if  the  Trustee's  requirements  for
replacement  of Notes are met. If required  by the  Trustee or the  Company,  an
indemnity bond must be supplied by the Holder that is sufficient in the judgment
of the Trustee and the Company to protect the Company,  the  Trustee,  any Agent
and any authenticating agent from any loss that any of them may suffer if a Note
is  replaced.  The  Trustee  and the  Company  may  charge  the Holder for their
expenses in replacing a Note.

            Every  replacement  Note is an additional  obligation of the Company
and shall be  entitled  to all of the  benefits  of this  Indenture  equally and
proportionately with all other Notes duly issued hereunder.

Section 2.8.      Outstanding Notes.

            The Notes outstanding at any time are all the Notes authenticated by
the  Trustee  except  for  those  canceled  by  it,  those  delivered  to it for
cancellation,  those reductions in the interest in a Global Note effected by the
Trustee or the Common Depository in accordance with the provisions  hereof,  and
those described in this Section 2.8 as not  outstanding.  Except as set forth in
Section 2.9 of this Indenture,  a Note does not cease to be outstanding  because
the Company or an Affiliate of the Company holds the Note.

            If a Note is replaced pursuant to Section 2.7 of this Indenture,  it
shall cease to be outstanding  unless the Trustee receives proof satisfactory to
it that the replaced Note is held by a bona fide purchaser for value.

            If the principal amount of any Note is considered paid under Section
4.1 of this Indenture,  it ceases to be outstanding and interest on it ceases to
accrue.

            If the Paying  Agent (other than the  Company,  a  Subsidiary  or an
Affiliate of any thereof) holds,  on a redemption  date or maturity date,  money
sufficient to pay Notes  payable on that date,  then on and after that date such
Notes  shall be  deemed to be no longer  outstanding  and shall  cease to accrue
interest.

            If Notes, or portions thereof, for whose payment or redemption money
or Government Obligations in the necessary amount, including accrued interest to
the  Redemption  Date,  has been  theretofore  deposited with the Trustee or any
Paying  Agent  (other than the  Company) in trust for the Holders of such Notes;

<PAGE>
                                      -41-

provided,  that if such Notes are to be redeemed,  notice of such redemption has
been duly given pursuant to this Indenture or provision therefor satisfactory to
the  Trustee  has  been  made,  such  Notes  shall  be  deemed  to be no  longer
outstanding under this Indenture.

Section 2.9.      Treasury Notes.

            In determining  whether the Holders of the required principal amount
of Notes have concurred in any direction,  waiver or consent, Notes owned by the
Company,  the  Guarantors  or by any  Affiliate  thereof  shall be considered as
though not outstanding,  except that for the purposes of determining whether the
Trustee shall be protected in relying on any such direction,  waiver of consent,
only Notes that a Responsible Officer of the Trustee knows are so owned shall be
so disregarded. The Company agrees to notify the Trustee of the existence of any
such  treasury  Notes or Notes owned by the Company or any Guarantor or any such
Notes of which the Company is aware owned by any other Affiliate thereof.

Section 2.10.     Temporary Notes.

            Until  Certificated  Notes are ready for  delivery,  the Company may
prepare and the Trustee,  upon receipt of an authentication  order in accordance
with  Section  2.2  of  this  Indenture,  shall  authenticate  temporary  Notes.
Temporary Notes shall be  substantially  in the form of Certificated  Notes, but
may have such  variations  as the Company  considers  appropriate  for temporary
Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable
delay, the Company shall prepare and the Trustee shall authenticate Certificated
Notes in exchange for temporary Notes.

            Holders of temporary  Notes shall be entitled to all of the benefits
of this Indenture.

Section 2.11.     Cancellation.

            The  Company  at any  time may  deliver  Notes  to the  Trustee  for
cancellation.  The  Registrar  and 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,  replacement or cancellation and shall destroy all
canceled Notes in accordance  with the Trustee's usual  procedures.  The Trustee
shall dispose of such Notes as it may reasonably determine.  The Company may not
issue new Notes to replace Notes that have been paid or that have been delivered
to the Trustee for cancellation.

Section 2.12.     Defaulted Interest.

            If the Company  defaults in a payment of interest on the Notes,  the
Company  shall pay the  defaulted  interest in any lawful  manner  plus,  to the
extent lawful,  interest payable on the defaulted  interest,  to the Persons who
are  Holders  on a  subsequent  special  record  date,  in each case at the rate
provided in the Notes and in Section 4.1 of this  Indenture.  The Company  shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment. The Company shall fix or
cause to be fixed each such special record date and payment date,  provided that
no such  special  record  date shall be less than 10 days  prior to the  related
payment date for such  defaulted  interest.  At least 15 days before the special

<PAGE>
                                      -42-

record date,  the Company  (or,  upon the written  request of the  Company,  the
Trustee in the name and at the expense of the Company) shall mail or cause to be
mailed to Holders a notice  that  states the special  record  date,  the related
payment date and the amount of such interest to be paid.

Section 2.13.     Persons Deemed Owners.

            Prior to due presentment of a Note for  registration of transfer and
subject to Section 2.12 of this Indenture,  the Company, the Trustee, any Paying
Agent, any co-registrar and any Registrar may deem and treat the person in whose
name any Note  shall  be  registered  upon  the  register  of Notes  kept by the
Registrar as the absolute  owner of such Note (whether or not such Note shall be
overdue and  notwithstanding  any  notation of the  ownership  or other  writing
thereon  made  by  anyone  other  than  the  Company,  any  co-registrar  or any
Registrar)  for the purpose of receiving  all payments with respect to such Note
and for all other  purposes,  and none of the Company,  the Trustee,  any Paying
Agent,  any co-registrar or any Registrar shall be affected by any notice to the
contrary.

Section 2.14.     "CUSIP", "ISIN" and "Common Code" Numbers.

            The  Company  in issuing  the Notes  shall use  "CUSIP",  "ISIN" and
"Common  Code"  number(s)  and the  Trustee  shall use the  "CUSIP",  "ISIN" and
"Common Code" number(s) in notices of redemption or exchange as a convenience to
Holders;  provided  that  neither the  Company  nor the  Trustee  shall have any
responsibility  for any defect in the  "CUSIP",  "ISIN" or "Common  Code" number
that appears on any Note, check, advice or payment or redemption notice, and any
such notice may state that no  representation  is made as to the  correctness or
accuracy of the  "CUSIP",  "ISIN" and  "Common  Code"  number(s)  printed in the
notice  or on the  Notes,  and that  reliance  may be  placed  only on the other
identification  numbers printed on the Notes and any such redemption or exchange
shall not be  affected  by any  defect in or  omission  of such  number(s).  The
Company shall promptly  notify the Trustee of any changes in "CUSIP",  "ISIN" or
"Common Code" numbers.

Section 2.15.     Designation.

            The Indebtedness evidenced by the Notes and the Guarantees is hereby
irrevocably  designated  as "senior  indebtedness"  or such other term  denoting
seniority  for the  purposes  of any  future  Indebtedness  of the  Company or a
Guarantor  which the  Company or a  Guarantor  makes  subordinate  to any senior
indebtedness or such other term denoting seniority.

Section 2.16.     Issuance of Additional Notes.

            The Company shall be entitled to issue  Additional  Notes under this
Indenture which shall have substantially  identical terms as the Series A Notes,
other than with respect to the date of issuance, issue price, amount of interest
payable on the first payment date  applicable  thereto (and, if such  Additional
Notes shall be issued pursuant to a registration  statement under the Securities
Act,  other than with  respect to transfer  restrictions  or if such  Additional
Notes shall be required to be registered  under the  Securities  Act pursuant to
the terms of a registration  rights or similar agreement,  such Additional Notes
shall be  exchangeable  for and the Company  shall  issue and the Trustee  shall
authenticate Notes  substantially in the form of Exhibit B hereto, but without a

<PAGE>
                                      -43-

Private  Placement  Legend,  to be  delivered  in exchange  for such  Additional
Notes); provided that any issuance is not prohibited by Section 4.9.

            With respect to any Additional Notes, the Company shall set forth in
a resolution of its Board of Directors (or a duly appointed  committee  thereof)
and in an Officers'  Certificate,  a copy of each of which shall be delivered to
the Trustee, the following information:

            (1) the aggregate  principal  amount of such Additional  Notes to be
      authenticated and delivered pursuant to this Indenture;

            (2) the issue price and the issue date of such Additional Notes, the
      amount of interest  payable on the first payment date  applicable  thereto
      and the CUSIP,  ISIN or Common Code for such  Additional  Notes;  provided
      that no  Additional  Notes may be issued at a price that would  cause such
      Additional  Notes to have "original issue discount"  within the meaning of
      Section 1273 of the Internal Revenue Code of 1986, as amended; and

            (3) whether  such  Additional  Notes  shall be  Transfer  Restricted
      Securities  and  issued  in the form of  Series  A Notes  as set  forth in
      Exhibit A hereto, or shall be registered securities.

                              ARTICLE III.

                             REDEMPTION AND PURCHASE

Section 3.1.      Notices to Trustee.

            If the Company  elects to redeem Notes pursuant to the provisions of
Section 3.7, 3.8 or 3.9 of this Indenture,  it shall furnish to the Trustee,  at
least 45 days but not more than 60 days before the Redemption Date, an Officers'
Certificate  setting forth the Section of this  Indenture  pursuant to which the
redemption shall occur, the Redemption Date, the principal amount of Notes to be
redeemed and the Redemption Price.

            If the Company is required  to offer to purchase  Notes  pursuant to
the  provisions of Section 4.10 or 4.15 of this  Indenture,  it shall notify the
Trustee  in  writing,  at least 30 days but not  more  than 60 days  before  the
Purchase Date, of the Section of this  Indenture  pursuant to which the purchase
shall occur,  the Purchase  Date,  the principal  amount of Notes required to be
purchased  and the Purchase  Price and shall furnish to the Trustee an Officers'
Certificate to the effect that (a) the Company is required to make or has made a
Net Proceeds Offer or a Change of Control Offer, as the case may be, and (b) the
conditions set forth in Section 4.10 or 4.15 of this Indenture,  as the case may
be, have been satisfied.

            If the Registrar is not the Trustee, the Company shall, concurrently
with each notice of  redemption  or purchase,  cause the Registrar to deliver to
the Trustee a  certificate  (upon which the Trustee may rely)  setting forth the
principal amounts of Notes held by each Holder.

<PAGE>
                                      -44-

Section 3.2.      Selection of Notes.

            Except as set forth  below,  if less than all of the Notes are to be
redeemed or  purchased  other than  pursuant to Section 3.7 or 3.8,  the Trustee
shall  select the Notes or  portions  thereof to be  redeemed  or  purchased  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 then listed on a
national securities  exchange,  on a pro rata basis, by lot or by such method as
the Trustee shall deem fair and appropriate.  In the event of partial redemption
or purchase by lot, the particular  Notes or portions  thereof to be redeemed or
purchased shall be selected,  unless otherwise provided herein, not less than 30
nor more  than 60 days  prior to the  Redemption  Date or  Purchase  Date by the
Trustee from the  outstanding  Notes not  previously  called for  redemption  or
purchase.

            If less than all of the Notes tendered are to be purchased  pursuant
to the  provisions of Section 4.10 of this  Indenture,  the Trustee shall select
the Notes or portions  thereof to be purchased in compliance  with Section 4.10.
In the event of  partial  purchase  by lot,  the  particular  Notes or  portions
thereof to be  purchased  shall be selected at the close of business of the last
Business Day prior to the Purchase  Date. If less than all of the Notes tendered
are to be  redeemed  pursuant  to the  provisions  of Section 3.7 or 3.8 of this
Indenture,  the Trustee shall select the Notes only on a pro rata basis or on as
nearly a pro rata basis as is practicable  (subject to Euroclear and Clearstream
procedures), unless such method is otherwise prohibited.

            The  Trustee  shall  promptly  notify the  Company in writing of the
Notes or portions  thereof  selected for redemption or purchase and, in the case
of any Note selected for partial  redemption or purchase,  the principal  amount
thereof to be redeemed or purchased.  Notes and portions  thereof selected shall
be in amounts of (euro)1,000 or integral  multiples of (euro)1,000;  except that
if all of the Notes of a Holder  are to be  redeemed  or  purchased,  the entire
outstanding  amount of Notes  held by such  Holder,  even if not a  multiple  of
(euro)1,000, shall be redeemed. No Notes of a principal amount of (euro)1,000 or
less shall be redeemed or purchased in part.

Section 3.3.      Notice of Redemption or Purchase.

            (1)   In the event Notes are to be redeemed or purchased pursuant to
Section 3.7, 3.8 or 3.9 of this Indenture, at least 30 days but not more than 60
days  before  the  Redemption  Date or  Purchase  Date,  as the case may be, the
Company shall mail a notice of redemption or purchase to each Holder whose Notes
are to be redeemed or purchased in whole or in part, with a copy to the Trustee.
So long as the Series B Notes are listed on the Luxembourg Stock Exchange and it
is required by the rules of the Luxembourg  Stock Exchange,  publication of such
notice  to the  holders  of the  Notes  shall be made in  English  in a  leading
newspaper having general  circulation in Luxembourg (which is expected to be the
Luxemburger  Wort)  or, if such  publication  is not  practicable,  in one other
leading  English  language daily  newspaper with general  circulation in Europe,
such newspaper being published on each business day in morning editions, whether
or not it shall be published on Saturday, Sunday or holiday editions.

<PAGE>
                                      -45-

            (2)   The  notice shall identify the Notes or portions thereof to be
redeemed or purchased and shall state:

            (a)   the Redemption Date or Purchase Date, as the case may be;

            (b)   the Redemption Price or Purchase Price, as the case may be;

            (c) if any Note is being  redeemed or purchased in part, the portion
      of the principal amount of such Note to be redeemed or purchased and that,
      after the  Redemption  Date or  Purchase  Date.  as the case may be,  upon
      surrender of such Note,  a new Note or Notes in principal  amount equal to
      the unredeemed or unpurchased portion will be issued;

            (d)   the name and address of the Paying Agent;

            (e) that Notes called for redemption or purchase must be surrendered
      to the Paying Agent to collect the Redemption  Price or Purchase Price, as
      the case may be, Additional  Interest,  if any, and, unless the Redemption
      Date or Purchase  Date,  as the case may be, is after a record date and on
      or before the succeeding  interest payment date,  accrued interest thereon
      to the Redemption Date or Purchase Date, as the case may be;

            (f) that,  unless the Company  defaults in making the  redemption or
      purchase payment, interest and any Additional Interest on Notes called for
      redemption  or purchase  will cease to accrue on and after the  Redemption
      Date or Purchase Date, as the case may be, and the only remaining right of
      the Holders of such Notes is to receive payment of the Redemption Price or
      Purchase  Price,  as the case may be, any Additional  Interest and, unless
      the  Redemption  Date or  Purchase  Date,  as the case may be,  is after a
      record date and on or before the succeeding interest payment date, accrued
      interest  thereon to the Redemption Date or Purchase Date, as the case may
      be, upon surrender to the Paying Agent of the Notes redeemed or purchased;

            (g) if fewer than all the Notes are to be redeemed or purchased, the
      identification  of  the  particular  Notes  (or  portions  thereof)  to be
      redeemed or purchased,  as well as the aggregate  principal  amount of the
      Notes to be redeemed or purchased  and the aggregate  principal  amount of
      Notes to be outstanding after such partial redemption or purchase;

            (h) the  paragraph  of the Notes  pursuant to which the Notes called
      for redemption or purchase are being redeemed or purchased; and

            (i) "Cusip," "ISIN," "Common Code" or other identifying number.

            (3)   At the Company's request, the Trustee shall give the notice of
redemption or purchase in the Company's  name and at its expense;  provided that
the  Company  shall  deliver  to the  Trustee,  at  least  40 days  prior to the
Redemption  Date or Purchase Date, as the case may be, an Officers'  Certificate
requesting  that the Trustee give such notice and setting forth the  information
to be stated in such notice as provided in Section 3.3(2).

<PAGE>
                                      -46-

Section 3.4.      Effect of Notice of Redemption or Purchase.

      Once notice of redemption or purchase is mailed, Notes or portions thereof
called for redemption or purchase  become due and payable on the Redemption Date
or Purchase Date, as the case may be, at the Redemption Price or Purchase Price,
as the case may be. Upon  surrender to any Paying Agent,  such Notes or portions
thereof shall be paid at the Redemption Price or Purchase Price, as the case may
be, plus  Additional  Interest,  if any, and accrued and unpaid  interest to the
Redemption Date or Purchase Date, as the case may be;  provided,  however,  that
installments of interest which are due and payable on or prior to the Redemption
Date or Purchase  Date,  as the case may be,  shall be payable to the Holders of
such Notes,  registered as such, at the close of business on the relevant record
date for the payment of such installment of interest.

Section 3.5.      Deposit of Redemption Price or Purchase Price.

            (1)   On or before each  Redemption  Date or Purchase  Date,  as the
case may be, the Company shall irrevocably  deposit with the Trustee or with the
Paying Agent money sufficient to pay the aggregate amount due on all Notes to be
redeemed or purchased on that date, including without limitation any accrued and
unpaid  interest and  Additional  Interest,  if any, to the  Redemption  Date or
Purchase  Date,  as the case may be.  The  Trustee  or the  Paying  Agent  shall
promptly  return to the Company any money not required for that purpose upon the
Company's request.

            (2)   Unless the Company  defaults in making such payment,  interest
and any Additional  Interest on the Notes to be redeemed or purchased will cease
to accrue on the  applicable  Redemption  Date or Purchase Date, as the case may
be, whether or not such Notes are presented for payment.  If any Note called for
redemption  or  purchase  shall not be so paid  upon  surrender  because  of the
failure of the Company to comply with Section  3.5(1),  interest will be paid on
the unpaid principal,  from the applicable  Redemption Date or Purchase Date, as
the case may be, until such  principal is paid,  and on any interest not paid on
such  unpaid  principal,  in each case at the rate  provided in the Notes and in
Section 4.1 of this Indenture.

Section 3.6.      Notes Redeemed or Purchased in Part.

            Upon  surrender of a Note that is redeemed or purchased in part, the
Company  shall issue and the Trustee  shall  authenticate  for the Holder at the
expense of the  Company a new Note equal in  principal  amount to portion of the
Note surrendered that is not to be redeemed or purchased.

Section 3.7.      Optional Redemption.

            Except as set forth  below,  the  Notes  are not  redeemable  before
December 30, 2005. The Company may redeem any or all of the Notes at any time on
or after December 30, 2005 at the Redemption  Prices set forth in the Notes.  In
addition, the Company must pay accrued and unpaid interest (including Additional
Interest, if any) on the Notes redeemed. Any redemption pursuant to this Section
3.7 shall be made pursuant to the provisions of Sections 3.1 through 3.6 of this
Indenture.

<PAGE>
                                      -47-

Section 3.8.      Special Redemption.

            At any time, or from time to time,  on or before June 30, 2005,  the
Company,  at its option,  may use the net cash  proceeds from one or more Public
Equity  Offerings  to  redeem  up to 35% of the  principal  amount  of the Notes
(including the original  principal  amount of any Additional  Notes) (a "Special
Redemption") at a Redemption  Price of 108.875% of the principal amount thereof,
together with accrued and unpaid  interest and Additional  Interest,  if any, to
the date of redemption,  provided,  however,  that at least 65% of the principal
amount of the Notes  (including the original  principal amount of any Additional
Notes)  issued  will  remain  outstanding  immediately  after  any such  Special
Redemption;  and provided,  further,  that such Special  Redemption  shall occur
within 90 days after the date of the  closing of the  applicable  Public  Equity
Offering.  Any redemption pursuant to this Section 3.8 shall be made pursuant to
the provisions of Sections 3.1 through 3.6 of this Indenture.

Section 3.9.      Redemption  or Purchase  upon Change of  Control at the Option
of the Company.

            At any time on or prior to December 30, 2005,  the Notes may also be
redeemed or purchased  (by the Company or any other  Person) in whole but not in
part, at the Company's option,  upon the occurrence of a Change of Control, at a
price equal to 100% of the principal amount thereof plus the Applicable  Premium
as of, and accrued  but unpaid  interest,  if any,  to, the  Redemption  Date or
Purchase  Date, as the case may be (subject to the right of Holders of record on
the  relevant  record  date to receive  interest  due on the  relevant  interest
payment date).

            Such  redemption  or  purchase  may be made  upon  notice  mailed by
first-class mail to each Holder's registered address,  not less than 30 nor more
than 60 days prior to the  Redemption  Date or Purchase Date, as the case may be
(but in no event  shall  such  notice  be mailed  more  than 180 days  after the
occurrence  of such Change of  Control).  The Company may provide in such notice
that payment of such price and  performance  of the Company's  obligations  with
respect to such redemption or purchase may be performed by another  Person.  Any
such  notice  may be given  prior to the  occurrence  of the  related  Change of
Control,  and any such  redemption,  purchase or notice  may,  at the  Company's
discretion,  be subject to the satisfaction of one or more conditions precedent,
including but not limited to the  occurrence  of the related  Change of Control.
Any  redemption or purchase  pursuant to this Section 3.9 shall be made pursuant
to the provisions of Sections 3.1 through 3.6 of this Indenture.

Section 3.10.     Purchase upon Change of Control Offer.

            (1)   In the event that, pursuant to Section 4.15 of this Indenture,
the Company  shall be required to commence a Change of Control  Offer,  it shall
follow the procedures specified below.

            (2)   The  Change of Control  Offer  shall  remain open for a period
from the date of the  mailing  of the  notice  of the  Change of  Control  Offer
described in Section  3.10(3) until a date determined by the Company which is at
least 30 but no more than 45 days from the date of mailing of such notice and no
longer,  except to the extent that a longer period is required by applicable law
(the "Change of Control Payment  Date").  On the Change of Control Payment Date,

<PAGE>
                                      -48-

the Company shall purchase the principal  amount of Notes  properly  tendered in
response  to the Change of Control  Offer.  Payment  for any Notes so  purchased
shall be made in the same manner as interest payments are made.

            (3)   Within  60 days  following any Change of Control,  the Company
shall send,  by first class mail, a notice to each of the Holders with a copy to
the Trustee.  The notice shall contain all instructions and materials reasonably
necessary  to enable  such  Holders to tender  Notes  pursuant  to the Change of
Control  Offer.  The Change of Control  Offer shall be made to all Holders.  The
notice,  which  shall  govern the terms of the Change of  Control  Offer,  shall
state:

            (a) the  transaction or  transactions  that constitute the Change of
      Control,   providing  information,   to  the  extent  publicly  available,
      regarding the Person or Persons  acquiring  control,  and stating that the
      Change of Control  Offer is being made  pursuant to this  Section 3.10 and
      Section 4.15 of this Indenture and that, to the extent  lawful,  all Notes
      tendered will be accepted for payment;

            (b) the Purchase Price and the Change of Control Payment Date;

            (c) that any Note not properly  tendered or  otherwise  not accepted
      for purchase will continue to accrue interest and Additional Interest,  if
      any;

            (d) that,  unless the Company  defaults in the payment of the amount
      due on the Change of Control  Payment Date, all Notes or portions  thereof
      accepted for purchase  pursuant to the Change of Control Offer shall cease
      to accrue  interest and Additional  Interest,  if any, after the Change of
      Control Payment Date;

            (e) that Holders  electing to have any Notes  purchased  pursuant to
      the Change of Control Offer will be required to tender the Notes, with the
      form  entitled  Option of Holder To Elect  Purchase  on the reverse of the
      Notes completed,  or transfer by book-entry  transfer,  to the Company,  a
      Depositary,  if appointed by the Company, or a Paying Agent at the address
      specified in the notice not later than the third  Business  Day  preceding
      the Change of Control Payment Date;

            (f) that Holders will be entitled to withdraw  their election if the
      Company, the Depositary or the Paying Agent, as the case may be, receives,
      not later than the close of  business  on the  Change of  Control  Payment
      Date, a telegram,  facsimile transmission or letter setting forth the name
      of the Holder, the principal amount of Notes delivered for purchase, and a
      statement that such Holder is  withdrawing  his election to have the Notes
      purchased in whole or in part; and

            (g) that Holders whose Notes are being  purchased  only in part will
      be issued new Notes equal in principal  amount to the portion of the Notes
      tendered  (or  transferred  by  book  entry  transfer)  that  is not to be
      purchased,  which portion must be equal to (euro)1,000 in principal amount
      or an integral multiple thereof.

<PAGE>
                                      -49-

            (4)...On or before the Change of Control  Payment Date,  the Company
shall to the extent lawful, (i) accept for payment all Notes or portions thereof
properly tendered pursuant to the Change of Control Offer, (ii) deposit with the
Paying Agent an amount equal to the Purchase  Price,  together  with accrued and
unpaid  interest  and  Additional  Interest,  if any,  thereon  to the Change of
Control Payment Date in respect of all Notes or portions thereof so tendered and
accepted for purchase and (iii)  deliver or cause to be delivered to the Trustee
the  Notes so  accepted  together  with an  Officers'  Certificate  stating  the
aggregate  principal  amount of Notes or portions thereof being purchased by the
Company.  The Paying Agent shall  promptly  (but in any case not later than five
days after the Change of Control  Payment  Date) mail to each Holder of Notes so
purchased  the amount due in connection  with such Notes,  and the Company shall
promptly  issue a new Note,  and the  Trustee,  upon  written  request  from the
Company in the form of an Officers' Certificate,  shall authenticate and mail or
deliver (or cause to transfer by book entry) to each relevant Holder a new Note,
in a principal amount equal to any unpurchased  portion of the Notes surrendered
to the Holder thereof;  provided that each such new Note shall be in a principal
amount of  (euro)1,000  or an  integral  multiple  thereof.  The  Company  shall
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 Additional  Interest,  if any, in each case to the Change of
Control  Payment  Date,  shall be paid to the  Person  in  whose  name a Note is
registered  at the close of  business  on such record  date,  and no  additional
interest shall be payable to Holders pursuant to the Change of Control Offer.

Section 3.11.     Purchase upon Application of Excess Proceeds.

            In the event that,  pursuant to Section 4.10 of this Indenture,  the
Company shall be required to commence a Net Proceeds  Offer, it shall follow the
procedures specified below.

            The notice shall contain all instructions  and materials  reasonably
necessary to enable such  Holders to tender  Notes  pursuant to the Net Proceeds
Offer.  The Net Proceeds  Offer shall be made to all Holders.  Each Net Proceeds
Offer will be mailed to the record  Holders as shown on the  register of Holders
within 25 days following the Net Proceeds Offer Trigger Date, with a copy to the
Trustee, and shall comply with the procedures set forth in this Indenture.  Upon
receiving  notice of the Net Proceeds  Offer,  Holders may elect to tender their
Notes in whole or in part in integral  multiples of  (euro)1,000 in exchange for
cash. A Net Proceeds Offer shall remain open for a period of 20 Business Days or
such longer period as may be required by law. The notice, which shall govern the
terms of the Net Proceeds Offer, shall state:

            (1) that the Net  Proceeds  Offer is  being  made  pursuant  to this
      Section 3.11 and Section 4.10 of this Indenture;

            (2) the Net  Proceeds  Offer  Amount,  the  Purchase  Price  and the
      Purchase Date;

            (3) that any Note not properly  tendered or  otherwise  not accepted
      for purchase shall continue to accrue interest and Additional Interest, if
      any;

<PAGE>
                                      -50-

            (4) that,  unless the Company  defaults in the payment of the amount
      due on the  Purchase  Date,  all Notes or portions  thereof  accepted  for
      purchase pursuant to the Net Proceeds Offer shall cease to accrue interest
      and Additional Interest, if any, after the Purchase Date;

            (5) that Holders  electing to have any Notes  purchased  pursuant to
      any Net  Proceeds  Offer shall be  required to tender the Notes,  with the
      form  entitled  Option of Holder To Elect  Purchase  on the reverse of the
      Notes completed,  or transfer by book-entry  transfer,  to the Company,  a
      Depositary,  if appointed by the Company, or a Paying Agent at the address
      specified  in the  notice  prior to the  close of  business  on the  third
      Business Day preceding the Purchase Date;

            (6) that Holders will be entitled to withdraw  their election if the
      Company, the Depositary or the Paying Agent, as the case may be, receives,
      not later than the Purchase Date, a telegram,  facsimile  transmission  or
      letter setting forth the name of the Holder,  the principal  amount of the
      Notes  delivered  for  purchase  and  a  statement  that  such  Holder  is
      withdrawing his election to have such Notes purchased in whole or in part;
      and
            (7) that, to the extent Holders  properly  tender Notes in an amount
      exceeding  the Net  Proceeds  Offer  Amount,  the  tendered  Notes will be
      purchased  on a pro rata  basis  based on the  aggregate  amounts of Notes
      tendered  (and the Trustee  shall select the  tendered  Notes of tendering
      Holders on a pro rata basis based on the amount of Notes tendered).

            On or before the  Purchase  Date,  the  Company  shall to the extent
lawful,  (i) accept for  payment,  on a pro rata basis in  accordance  with this
Indenture to the extent  necessary,  the Net  Proceeds  Offer Amount of Notes or
portions  thereof  properly  tendered  pursuant to the Net Proceeds Offer, or if
less than the Net Proceeds  Offer Amount has been  tendered,  all Notes properly
tendered,  (ii)  deposit  with the Paying  Agent an amount equal to the Purchase
Price, plus accrued and unpaid interest and Additional Interest, if any, thereon
to the Purchase Date in respect of all Notes or portions thereof so tendered and
accepted for purchase and (iii)  deliver or cause to be delivered to the Trustee
the  Notes so  accepted  together  with an  Officers'  Certificate  stating  the
aggregate  principal  amount of Notes or portions thereof being purchased by the
Company.  The Paying Agent shall  promptly  (but in any case not later than five
(5) days after the Purchase  Date) mail to each Holder of Notes so purchased the
amount due in connection with such Notes, and the Company shall promptly issue a
new Note, and the Trustee,  upon written request from the Company in the form of
an Officers' Certificate shall authenticate and mail or deliver such new Note to
such  Holder,  in a principal  amount  equal to any  unpurchased  portion to the
Holder thereof;  provided that each such new Note shall be in a principal amount
of  (euro)1,000  or an integral  multiple  thereof.  The Company shall  publicly
announce  the  results of the Net  Proceeds  Offer on or as soon as  practicable
after the Purchase Date.

            If the Purchase  Date is on or after an interest  record date and on
or before the related interest payment date, any accrued and unpaid interest and
Additional Interest, if any, in each case to the Purchase Date, shall be paid to
the Person in whose name a Note is  registered  at the close of business on such

<PAGE>
                                      -51-

record date, and no additional  interest shall be payable to Holders pursuant to
the Net Proceeds Offer.

                               ARTICLE IV.

                                    COVENANTS

Section 4.1.      Payment of Principal and Interest.

            The Company shall pay or cause to be paid the principal,  Redemption
Price and  Purchase  Price of, and  interest  on the Notes on the dates,  in the
amounts  and  in the  manner  provided  herein  and  in  the  Notes.  Principal,
Redemption  Price,  Purchase Price and interest shall be considered  paid on the
date due if the Paying Agent, if other than the Company, as of 12:00 noon in the
place of such Paying  Agent's office on the due date,  holds money  deposited by
the Company in immediately  available funds and designated for and sufficient to
pay the  aggregate  amount  then  due.  The  Company  shall  pay all  Additional
Interest,  if any,  on the dates,  in the amounts and in the manner set forth in
the Registration Rights Agreement.

            The Company shall pay interest (including  post-petition interest in
any proceeding under any Bankruptcy Law) on overdue principal,  Redemption Price
and  Purchase  Price at the rate  equal to 1% per  annum in  excess  of the then
applicable  interest  rate on the  Notes to the  extent  lawful;  it  shall  pay
interest  (including   post-petition   interest  in  any  proceeding  under  any
Bankruptcy  Law) on overdue  installments  of interest and  Additional  Interest
(without  regard to any applicable  grace period) at the same rate to the extent
lawful.

Section 4.2.      Maintenance of Office or Agency.

            The Company shall maintain in the Borough of Manhattan,  the City of
New York,  in  London,  England  and,  so long as the  Notes  are  listed on the
Luxembourg  Stock Exchange and the rules of such stock  exchange so require,  in
Luxembourg  an office or agency  (which  may be an office of the  Trustee  or an
affiliate  of  the  Trustee,  Registrar  or  co-registrar)  where  Notes  may be
surrendered  for  registration of transfer or for exchange and where notices and
demands to or upon the Company in respect of the Notes and this Indenture may be
served.  The  Company  shall give  prompt  written  notice to the Trustee of the
location,  and any change in the location,  of such office or agency.  If at any
time the Company  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 Office of
the Trustee.

            The Company may also from time to time  designate  one or more other
offices or agencies where the Notes may be presented or  surrendered  for any or
all such purposes and may from time to time rescind such designations; provided,
however,  that no such designation or rescission shall in any manner relieve the
Company of its  obligations  to  maintain  an office or agency in the Borough of
Manhattan,  the City of New York,  in London,  England and, so long as the Notes
are listed on the Luxembourg Stock Exchange and the rules of such stock exchange

<PAGE>
                                      -52-

so require,  in  Luxembourg,  for such  purposes.  The Company shall give prompt
written  notice to the Trustee of any such  designation or rescission and of any
change in the location of any such other office or agency.

            The Company  hereby  designates  the Corporate  Trust Offices of the
Trustee in the Borough of Manhattan,  the City of New York,  in London,  England
and in Luxembourg and the office of the Luxembourg  Paying Agent as such offices
or agencies of the  Company in  accordance  with  Section  2.3.  The Trustee may
resign such agency at any time by giving  written notice to the Company no later
than 30 days prior to the effective date of such resignation.

Section 4.3.      Reports to Holders.

            Whether  or  not  required  by  the  rules  and  regulations  of the
Commission,  so long as any Notes are outstanding,  the Company will furnish the
Holders of Notes (or make publicly available through the Commission's electronic
data gathering and retrieval ("EDGAR") database):

(1)   all quarterly and annual  financial  information that would be required to
      be contained in a filing with the Commission on Forms 10-Q and 10-K if the
      Company  were  required  to file such  Forms,  including  a  "Management's
      Discussion and Analysis of Financial  Condition and Results of Operations"
      that  describes the  financial  condition and results of operations of the
      Company and its consolidated  Subsidiaries  (showing in reasonable detail,
      either on the face of the financial statements or in the footnotes thereto
      and in  Management's  Discussion  and Analysis of Financial  Condition and
      Results of Operations,  the financial  condition and results of operations
      of the Company and its Restricted Subsidiaries separate from the financial
      condition and results of operations of the  Unrestricted  Subsidiaries  of
      the Company,  if any) and, with respect to the annual  information only, a
      report thereon by the Company's certified independent accountants; and

(2)   all current reports that would be required to be filed with the Commission
      on Form 8-K if the Company  were  required to file such  reports,  in each
      case  within the time  periods  specified  in the  Commission's  rules and
      regulations.

            In addition,  following  the  consummation  of the  Exchange  Offer,
whether or not  required by the rules and  regulations  of the  Commission,  the
Company will file a copy of all such information and reports 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
make such information available to securities analysts and prospective investors
upon request.  So long as the Notes are listed on the Luxembourg Stock Exchange,
copies of such reports shall be available at the specified  office of the Paying
Agent and Transfer  Agent in Luxembourg.  In addition,  for so long as any Notes
remain  outstanding,  the Company will furnish to the Holders and to  securities
analysts and prospective investors, upon their request, the information required
to be delivered pursuant to Rule 144A(d)(4) under the Securities Act.

<PAGE>
                                      -53-

Section 4.4.      Compliance Certificate.

            The Company and each Guarantor shall deliver to the Trustee,  within
120 days after the end of each fiscal  year,  an Officers'  Certificate  further
stating  that a review of the  activities  of the Company  and its  Subsidiaries
during the  preceding  fiscal  year has been made under the  supervision  of the
signing  Officers  with a view to  determining  whether  the  Company  has kept,
observed,  performed and fulfilled its  obligations  under this Indenture in all
material  respects,  and further  stating,  as to each such Officer signing such
certificate,  that to the best of his or her  knowledge  the  Company  has kept,
observed,  performed and  fulfilled  each and every  covenant  contained in this
Indenture in all material  respects and is not in Default in the  performance or
observance of any of the terms,  provisions  and  conditions  of this  Indenture
(and, if a Default or Event of Default shall have occurred,  describing all such
Defaults or Events of Default) of which he or she may have knowledge.

            The  Company  shall,  so long as any of the Notes  are  outstanding,
deliver to the Trustee,  promptly upon any Officer of the Company becoming aware
of any  Default or Event of Default an  Officers'  Certificate  specifying  such
Default or Event of Default.

Section 4.5.      Taxes.

            The  Company  shall pay or  discharge,  and shall  cause each of its
Subsidiaries  to pay or discharge,  prior to  delinquency,  all material  taxes,
assessments,  and governmental levies except such as are contested in good faith
and by appropriate proceedings or where the failure to effect such payment would
not reasonably be expected to have a Material Adverse Effect.

Section 4.6.      Stay, Extension and Usury Laws.

            The Company  covenants  (to the extent  that it may  lawfully do so)
that it shall 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
wherever  enacted,  now or at any time  hereafter in force,  that may affect the
covenants or the performance of this  Indenture;  and the Company (to the extent
that it may lawfully do so) hereby  expressly waives all benefit or advantage of
any such law, and  covenants  that (to the extent that it lawfully may do so) it
shall not, by resort to any such law,  hinder,  delay or impede the execution of
any power  herein  granted  to the  Trustee,  but shall  suffer  and  permit the
execution of every such power as though such law has not been enacted.

Section 4.7.      Limitation on Restricted Payments.

            (1)   The  Company will not, and will not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly:

            (a) declare or pay any dividend or make any distribution (other than
      dividends  or  distributions  payable in  Qualified  Capital  Stock of the
      Company)  on or in respect  of shares of the  Company's  Capital  Stock to
      holders of such Capital Stock;

<PAGE>
                                      -54-

            (b)  purchase,  redeem or otherwise  acquire or retire for value any
      Capital  Stock of the  Company  or any  warrants,  rights  or  options  to
      purchase or acquire shares of any class of such Capital Stock;

            (c)  make any  principal  payment  on,  purchase,  defease,  redeem,
      prepay,  decrease or otherwise  acquire or retire for value,  prior to any
      scheduled final maturity,  scheduled  repayment or scheduled  sinking fund
      payment,  any Indebtedness of the Company that is subordinate or junior in
      right of payment to the Notes; or

            (d) make any Investment (other than Permitted Investments);

(each of the foregoing  actions set forth in clauses (a), (b), (c) and (d) being
referred to as a "Restricted Payment") if at the time of such Restricted Payment
or immediately after giving effect thereto,

(i)   a Default or an Event of Default shall have occurred and be
      continuing; or

(ii)  the Company is not able to incur at least $1.00 of additional Indebtedness
      (other than Permitted Indebtedness) in compliance with Section 4.9 of this
      Indenture;  provided,  however, that for purposes of this clause (ii), the
      Consolidated  Fixed Charge  Coverage  Ratio of the  Company,  after giving
      effect to such Restricted Payment, must be greater than 3.0 to 1.0; or

(iii) the  aggregate  amount of  Restricted  Payments  (including  such proposed
      Restricted Payment) made subsequent to the Issue Date (the amount expended
      for such purposes,  if other than in cash,  being the fair market value of
      such property as determined in good faith by the Board of Directors of the
      Company) shall exceed the sum of:

                  (v)  75% of the  cumulative  Consolidated  Net  Income  (or if
            cumulative  Consolidated  Net Income shall be a loss,  minus 100% of
            such loss) of the Company earned subsequent to the Issue Date and on
            or prior to the date the Restricted  Payment occurs (the  "Reference
            Date") (treating such period as a single accounting period); plus

                  (w) 100% of the aggregate  net cash  proceeds  received by the
            Company from any Person  (other than a Restricted  Subsidiary of the
            Company) from the issuance and sale subsequent to the Issue Date and
            on or prior to the Reference Date of Qualified  Capital Stock of the
            Company or warrants,  options or other  rights to acquire  Qualified
            Capital  Stock of the Company (but  excluding any debt security that
            is convertible into, or exchangeable for,  Qualified Capital Stock);
            plus

                  (x) without  duplication  of any  amounts  included in Section
            4.7(1)(iii)(w) above, 100% of the aggregate net cash proceeds of any
            equity  contribution  received by the  Company  from a holder of the
            Company's  Capital  Stock   (excluding,   in  the  case  of  Section
            4.7(1)(iii)(w)  and  this  Section  4.7(1)(iii)(x),   any  net  cash

<PAGE>
                                      -55-

            proceeds from a Public Equity  Offering to the extent used to redeem
            the Notes in compliance  with the provisions set forth under Section
            3.8 of this Indenture); plus

                  (y)   without duplication, the sum of:

                  (1) the aggregate  amount  returned in cash on or with respect
                  to  Investments   (other  than  Permitted   Investments)  made
                  subsequent  to  the  Issue  Date  whether   through   interest
                  payments, principal payments, dividends or other distributions
                  or payments;

                  (2) the net cash  proceeds  received  by the Company or any of
                  its Restricted Subsidiaries from the disposition of all or any
                  portion of Investments (other than Permitted Investments) made
                  subsequent  to the  Issue  Date  other  than  to a  Restricted
                  Subsidiary of the Company; and

                  (3) upon  redesignation  of an  Unrestricted  Subsidiary  as a
                  Restricted   Subsidiary,   the  fair  market   value  of  such
                  Subsidiary;   provided,  however,  that  the  sum  of  amounts
                  governed  by clauses  (y)(1) and (y)(2)  above and this clause
                  (y)(3)   shall   first  be   included   under   this   Section
                  4.7(1)(iii)(y)  and,  to the  extent  that the sum of  clauses
                  (y)(1) and (y)(2)  above and this  clause  (y)(3)  exceeds the
                  aggregate  amount of all  Investments  (other  than  Permitted
                  Investments)  made  subsequent  to the  Issue  Date,  shall be
                  included   under   Section   4.7(1)(iii)(v)   as  included  in
                  Consolidated Net Income; plus

                  (z)   $25 million.

            (2)  Notwithstanding  the foregoing,  the provisions of this Section
4.7 do not prohibit:

            (a) the  payment  of any  dividend  within 60 days after the date of
      declaration  of such dividend if the dividend would have been permitted on
      the date of declaration;

            (b) the  acquisition or redemption of any shares of Capital Stock of
      the Company, either (i) solely in exchange for shares of Qualified Capital
      Stock of the Company or (ii) through the  application of net proceeds of a
      substantially  concurrent  sale  for  cash  (other  than  to a  Restricted
      Subsidiary  of the  Company) of shares of Qualified  Capital  Stock of the
      Company;

            (c) the acquisition or redemption of any Indebtedness of the Company
      that is  subordinate or junior in right of payment to the Notes either (i)
      solely in exchange for shares of Qualified Capital Stock of the Company or
      (ii)  through  the  application  of net  proceeds  of (a) a  substantially
      concurrent  sale for cash (other than to a  Restricted  Subsidiary  of the
      Company) of shares of Qualified  Capital Stock of the Company or (b) if no
      Default  or  Event of  Default  shall  have  occurred  and be  continuing,
      Refinancing Indebtedness;

<PAGE>
                                      -56-

            (d) so long as no Default or Event of  Default  shall have  occurred
      and be  continuing,  repurchases  by the  Company  of Common  Stock of the
      Company  (or options or  warrants  to  purchase  such  Common  Stock) from
      directors,   officers  and   employees  of  the  Company  or  any  of  its
      Subsidiaries  or  their   authorized   representatives   upon  the  death,
      disability,  retirement or  termination  of employment of such  directors,
      officers and employees, in an aggregate amount not to exceed $3 million in
      any calendar year;

            (e) on or before  200 days  after the Issue  Date,  the  partial  or
      complete  redemption  of any one or more  of (i)  the  738  shares  of the
      Company's  outstanding  Series A Preferred Stock, $100 par value, (ii) the
      647 shares of the Company's outstanding Series B Preferred Stock, $100 par
      value, and (iii) the 5,500,000 shares of the Company's  outstanding Profit
      Participation  Certificates,  DM100 par value,  in each case including any
      accrued and unpaid dividends thereon, using as consideration the Company's
      notes or loans receivable from its Affiliates and existing as of the Issue
      Date (including accrued and unpaid interest thereon);

            (f) on or before  200 days  from the  Issue  Date,  the  partial  or
      complete conversion into Qualified Capital Stock of the Company of any one
      or more of (i)  the 738  shares  of the  Company's  outstanding  Series  A
      Preferred  Stock,  $100 par value,  (ii) the 647  shares of the  Company's
      outstanding  Series B  Preferred  Stock,  $100 par  value,  and  (iii) the
      5,500,000  shares  of  the  Company's   outstanding  Profit  Participation
      Certificates,  DM100 par value,  in each case  including  any  accrued and
      unpaid dividends thereon;

            (g) on or before 200 days from the Issue Date, the dividend or other
      transfer  by the  Company to Kronos of all or a portion  of the  Company's
      notes or loans receivable from its Affiliates and existing as of the Issue
      Date (including accrued and unpaid interest thereon);

            (h) on or before 200 days from the Issue Date, the redemption of any
      Qualified  Capital Stock of the Company,  using as consideration  all or a
      portion of the Company's notes  receivable from Affiliates and existing as
      of the Issue Date (including accrued and unpaid interest thereon); and

            (i) one or more  Restricted  Payments of the net  proceeds  from the
      issuance and sale of the Notes, on or promptly after the Issue Date as set
      forth in, and for the purposes  described under,  "Use of Proceeds" in the
      Final  Memorandum  and, if any net proceeds  remain after such  Restricted
      Payment(s),  additional  Restricted  Payment(s),  promptly after the Issue
      Date,  in an  aggregate  amount  up to the  amount of such  remaining  net
      proceeds from such issuance and sale.

            In  determining  the aggregate  amount of  Restricted  Payments made
subsequent  to the Issue Date in  accordance  with  Section  4.7(1)(iii)  above,
amounts expended pursuant to Section  4.7(2)(a),  Section  4.7(2)(b)(ii) (to the
extent   included  in  the   calculation   of  net  cash   proceeds  in  Section
4.7(1)(iii)(w)),  Section  4.7(2)(c)(ii)(a)  (to  the  extent  included  in  the
calculation of net cash proceeds in Section  4.7(1)(iii)(w)) and 4.7(2)(d) shall
be  included  in such  calculation  and  amounts  expended  pursuant  to Section
4.7(2)(b)(i),   Section  4.7(2)(b)(ii)  (to  the  extent  not  included  in  the

<PAGE>
                                      -57-

calculation  of net cash  proceeds  in Section  4.7(1)(iii)(w)  above),  Section
4.7(2)(c)(i),  Section  4.7(2)(c)(ii)(a)  (to the  extent  not  included  in the
calculation   of  net  cash   proceeds  in  Section   4.7(1)(iii)(w)),   Section
4.7(2)(c)(ii)(b),  Section  4.7(2)(e),  Section  4.7(2)(f),  Section  4.7(2)(g),
Section 4.7(2)(h) and Section 4.7(2)(i) shall be excluded from such calculation,
in each case without duplication.

Section 4.8.      Limitation on Dividend and Other Payment Restrictions
                  Affecting Restricted Subsidiaries.

            The  Company  will  not,  and will not  cause or  permit  any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit  to exist or become  effective  any  encumbrance  or  restriction  on the
ability of any such Restricted Subsidiary of the Company to:

      (1) pay dividends or make any other  distributions on or in respect of its
      Capital Stock;

      (2) make loans or advances or to pay any  Indebtedness or other obligation
      owed to the Company or any other Restricted Subsidiary of the Company; or

      (3) transfer  any of its  property  or assets  to the Company or any other
      Restricted Subsidiary of the Company,

      except, in each case, for such encumbrances or restrictions existing under
      or by reason of:

                  (a) applicable law;

                  (b) the Notes or this Indenture;

                  (c) customary non-assignment provisions of any contract or any
            lease governing a leasehold interest of any Restricted Subsidiary of
            the Company;

                  (d) any  instrument  governing  Acquired  Indebtedness,  which
            encumbrance  or  restriction  is not  applicable  to  properties  or
            assets, other than the properties or assets so acquired;

                  (e) agreements existing on the Issue Date to the extent and in
            the manner such  agreements  are in effect on the Issue Date and any
            amendments,  extensions,  renewals or substitutions thereof provided
            that  the  terms  of  such  amendments,   extensions,   renewals  or
            substitutions  are not materially more  restrictive in the aggregate
            as  determined  by the Board of Directors of the Company in its good
            faith judgment;

                  (f) customary  restrictions  in the Credit  Agreement,  to the
            extent  and in the  manner in  effect  on the date of  effectiveness
            thereof,  and customary  restrictions in other agreements  governing
            Permitted  Indebtedness  to the extent such  restrictions  would not
            reasonably  be expected to have an adverse  effect on the ability of
            the Company to timely pay the principal and interest on the Notes;

<PAGE>
                                      -58-

                  (g) customary  restrictions  on the transfer of assets subject
            to any Lien permitted under this Indenture  imposed by the holder of
            such Lien;

                  (h)  customary  restrictions  imposed by any agreement to sell
            assets or Capital Stock permitted under this Indenture to any Person
            pending the closing of such sale;

                  (i)  restrictions  on  cash or  other  deposits  or net  worth
            imposed by customers  under  contracts  entered into in the ordinary
            course of business;

                  (j) in the case of a joint venture or similar entity 50% owned
            by the Company or a Restricted Subsidiary of the Company,  customary
            provisions in joint venture  agreements and other similar agreements
            (in each case  relating  solely to the  respective  joint venture or
            similar entity or the equity interests  therein) entered into in the
            ordinary course of business; or

                  (k) an agreement governing  Indebtedness incurred to Refinance
            the  Indebtedness  issued,   assumed  or  incurred  pursuant  to  an
            agreement  referred  to in  clause  (b),  (d),  (e)  or  (f)  above;
            provided,  however, that the provisions relating to such encumbrance
            or restriction contained in any such Indebtedness are not materially
            more  restrictive  in the  aggregate as  determined  by the Board of
            Directors  of the  Company  in its  good  faith  judgment  than  the
            provisions relating to such encumbrance or restriction  contained in
            agreements referred to in such clause (b), (d), (e) or (f).

Section 4.9.      Limitation on Incurrence of Additional Indebtedness.

            (1)   The  Company  will  not,  and  will  not  permit  any  of  its
Restricted  Subsidiaries  to,  directly or indirectly,  create,  incur,  assume,
guarantee,  acquire, become liable,  contingently or otherwise, with respect to,
or  otherwise  become  responsible  for payment of  (collectively,  "incur") any
Indebtedness (other than Permitted Indebtedness);  provided, however, that if no
Default or Event of Default shall have occurred and be continuing at the time of
or as a consequence of the incurrence of any such  Indebtedness,  the Company or
any of its Restricted  Subsidiaries that is or, upon such incurrence,  becomes a
Guarantor  may  incur  Indebtedness  (including,  without  limitation,  Acquired
Indebtedness)  and any Restricted  Subsidiary of the Company that is not or will
not, upon such incurrence,  become a Guarantor may incur Acquired  Indebtedness,
in each case if on the date of the incurrence of such Indebtedness, after giving
effect to the incurrence  thereof,  the Consolidated Fixed Charge Coverage Ratio
of the Company is greater than 2.5 to 1.0.

            (2)   The Company and any Restricted  Subsidiary that is a Guarantor
will not incur any  Indebtedness  that is expressly  subordinated  to any senior
Indebtedness  of the Company or any such Guarantor  unless such  Indebtedness is
also  expressly  subordinated  on the  same  basis  to  the  Notes  or any  such
Guarantees.

<PAGE>
                                      -59-

Section 4.10.     Limitation on Asset Sales.

            (1)...The  Company  will  not,  and  will  not  permit  any  of  its
Restricted Subsidiaries to, consummate an Asset Sale unless:

            (a) the Company or the applicable Restricted Subsidiary, as the case
      may be,  receives  consideration  at the time of such  Asset Sale at least
      equal to the fair market value of the assets sold or otherwise disposed of
      as determined in good faith by the Company's Board of Directors;

            (b) at least 75% of the consideration received by the Company or the
      Restricted  Subsidiary,  as the case may be, from such Asset Sale shall be
      in the form of cash or Cash  Equivalents  and is  received  at the time of
      such disposition; provided, however, that for the purposes of this Section
      4.10,  the amount of any liability  that would be shown on a  consolidated
      balance sheet of the Company or such  Restricted  Subsidiary,  as the case
      may be, in accordance with GAAP and immediately  prior to the time of such
      Asset  Sale,  other than  liabilities  that are by their  terms  expressly
      subordinated to the Notes,  that are assumed by the transferee of any such
      Asset Sale, will be deemed to be cash; and

            (c) upon the consummation of an Asset Sale, the Company shall apply,
      or cause  such  Restricted  Subsidiary  to  apply,  the Net Cash  Proceeds
      relating to such Asset Sale within 365 days of receipt thereof either:

                  (i) to prepay any secured senior  Indebtedness  of the Company
            or senior  Indebtedness of a Restricted  Subsidiary and, in the case
            of any such senior Indebtedness under any revolving credit facility,
            effect  a  permanent   reduction  in  the  availability  under  such
            revolving credit facility;

                 (ii) to acquire or otherwise make an investment or enter into a
            binding  commitment  to acquire or otherwise  make an  investment in
            properties  and assets  (including  Capital  Stock) that replace the
            properties  and  assets  (including  Capital  Stock)  that  were the
            subject of such Asset Sale or in  properties  and assets  (including
            Capital  Stock) that will be used in the business of the Company and
            its  Restricted  Subsidiaries  as  existing  on the Issue Date or in
            businesses reasonably related thereto ("Replacement Assets"); and/or

                  (iii) a combination of prepayment and investment  permitted by
            the foregoing Sections 4.10(1)(c)(i) and (c)(ii).

            (2)   On the 366th day after an Asset Sale or such earlier  date, if
any, as the Board of Directors of the Company or of such  Restricted  Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in  Sections  4.10(1)(c)(i),  (1)(c)(ii)  and  (1)(c)(iii)  (each,  a "Net
Proceeds Offer Trigger Date"),  the aggregate  amount of Net Cash Proceeds which
have not been  applied on or before  such Net  Proceeds  Offer  Trigger  Date as
permitted in Sections  4.10(1)(c)(i),  (1)(c)(ii) and  (1)(c)(iii)  (each a "Net
Proceeds  Offer  Amount")  shall be  applied by the  Company or such  Restricted

<PAGE>
                                      -60-

Subsidiary to make an offer to purchase (the "Net Proceeds  Offer")  pursuant to
Section 3.11 and this Section 4.10 to all Holders on a date not less than 30 nor
more than 45 days following the applicable Net Proceeds Offer Trigger Date, from
all Holders on a pro rata basis,  that amount of Notes equal to the Net Proceeds
Offer Amount at a price equal to 100% of the principal amount of the Notes to be
purchased,  plus accrued and unpaid  interest  thereon,  if any, to the Purchase
Date; provided, however, that if at any time any non-cash consideration received
by the Company or any Restricted  Subsidiary of the Company, as the case may be,
in  connection  with  any  Asset  Sale is  converted  into or sold or  otherwise
disposed of for cash  (other than  interest  received  with  respect to any such
non-cash consideration),  then such conversion or disposition shall be deemed to
constitute an Asset Sale  hereunder  and the Net Cash Proceeds  thereof shall be
applied in accordance with this Section 4.10.

            (3)   Notwithstanding  paragraphs  (1) and (2) of this Section 4.10,
the Company and its Restricted Subsidiaries may consummate an Asset Sale without
complying with such paragraphs to the extent that:

            (a)  at  least  80%  of  the   consideration  for  such  Asset  Sale
      constitutes Replacement Assets; and

            (b) such  Asset Sale is for fair  market  value;  provided  that any
      consideration that does not constitute Replacement Assets that is received
      by the Company or any of its Restricted  Subsidiaries  in connection  with
      any Asset Sale  permitted  under this  paragraph (3) shall  constitute Net
      Cash Proceeds and shall be subject to the provisions of paragraphs (1) and
      (2) of this Section 4.10.

            (4)   The  Company or such  Restricted  Subsidiary may defer the Net
Proceeds Offer until there is an aggregate  unutilized Net Proceeds Offer Amount
equal to or in excess of $20 million  resulting from one or more Asset Sales (at
which time, the entire  unutilized  Net Proceeds Offer Amount,  and not just the
amount in excess of $20 million,  shall be applied as required  pursuant to this
Section 4.10).

            (5)   In  the event of the  transfer of  substantially  all (but not
all) of the property and assets of the Company and its  Restricted  Subsidiaries
as an entirety to a Person in a transaction  permitted under Section 5.1 of this
Indenture,  which  transaction  does not  constitute  a Change of  Control,  the
successor  corporation shall be deemed to have sold the properties and assets of
the Company and its Restricted  Subsidiaries  not so transferred for purposes of
this Section  4.10,  and shall comply with the  provisions  of this Section 4.10
with respect to such deemed sale as if it were an Asset Sale.  In addition,  the
fair market value of such properties and assets of the Company or its Restricted
Subsidiaries  deemed  to be sold  shall be deemed  to be Net Cash  Proceeds  for
purposes of this Section 4.10.

            (6)   The  Company will comply with the  requirements  of Rule 14e-1
under the Exchange Act and any other securities laws and regulations  thereunder
to the extent such laws and  regulations  are applicable in connection  with the
purchase  of Notes  pursuant  to a Net  Proceeds  Offer.  To the extent that the
provisions  of any  securities  laws or  regulations  conflict with this Section
4.10,  the  Company  shall  comply  with  the  applicable  securities  laws  and

<PAGE>
                                      -61-

regulations and shall not be deemed to have breached its obligations  under this
Section 4.10 by virtue thereof.

            (7)   After  consummation  of  any  Net  Proceeds  Offers,  any  Net
Proceeds  Offer  Amount  not  applied  to any such  purchase  may be used by the
Company for any purpose permitted by the other provisions of this Indenture.

            (8)   To the extent that any or all of the Net Cash Proceeds related
to an Asset  Sale of a  Restricted  Subsidiary  are  prohibited  or  delayed  by
applicable  law  from  being  repatriated  (in the form of  dividends,  loans or
otherwise)  to the  Company,  the portion of such Net Cash  Proceeds so affected
shall not be required to be applied at the time  provided by this Section  4.10,
but may be retained by the applicable Restricted Subsidiary so long, but only so
long, as such  applicable law will not permit  repatriation  to the Company (the
Company having agreed to cause the applicable  Restricted Subsidiary to promptly
take all actions  required by the applicable  law to permit such  repatriation).
After such  repatriation  of any such  affected  Net Cash  Proceeds is permitted
under such applicable law, such repatriation  shall be immediately  effected and
such  repatriated  Net Cash Proceeds will be applied in a manner as described in
this Section 4.10.

Section 4.11.     Limitations on Transactions with Affiliates.

            (1)   The  Company  will  not,  and  will  not  permit  any  of  its
Restricted  Subsidiaries  to,  directly or  indirectly,  enter into or permit to
exist any  transaction  or series of related  transactions  (including,  without
limitation,  the  purchase,  sale,  lease or  exchange  of any  property  or the
rendering of any  service)  with,  or for the benefit of, any of its  Affiliates
(each an "Affiliate  Transaction"),  other than Affiliate  Transactions on terms
that are no less favorable than those that might  reasonably  have been obtained
in a comparable  transaction at such time on an arm's-length basis from a Person
that is not an Affiliate of the Company or such Restricted Subsidiary.

            (2)   All  Affiliate   Transactions  (and  each  series  of  related
Affiliate  Transactions  which are similar or part of a common  plan)  involving
aggregate  payments or other  property  with a fair market value in excess of $2
million  shall be  approved  by the Board of  Directors  of the  Company or such
Restricted  Subsidiary,  as the case may be, such  approval to be evidenced by a
Board  Resolution  stating that such Board of Directors has determined that such
transaction  complies  with the  foregoing  provisions.  If the  Company  or any
Restricted  Subsidiary of the Company enters into an Affiliate Transaction (or a
series of related Affiliate Transactions related to a common plan) that involves
an aggregate fair market value of more than $12.5  million,  the Company or such
Restricted  Subsidiary,  as the case may be,  shall,  prior to the  consummation
thereof,  obtain a favorable  opinion as to the fairness of such  transaction or
series  of  related  transactions  to the  Company  or the  relevant  Restricted
Subsidiary,  as the  case  may be,  from a  financial  point  of  view,  from an
Independent Financial Advisor and file the same with the Trustee.

            (3)   The  restrictions  set forth in Section  4.11(1)  and  4.11(2)
shall not apply to, and the term "Affiliate  Transaction" shall not include, any
of  the  following  (each  of  the  following   being  a  "Permitted   Affiliate
Transaction"):

<PAGE>
                                      -62-

            (a) reasonable fees and compensation paid to and indemnity  provided
      on behalf of officers, directors,  employees or consultants of the Company
      or any Restricted Subsidiary of the Company as determined in good faith by
      the Company's Board of Directors or senior management;

            (b)  transactions  to the  extent  exclusively  between or among the
      Company  and  any  of  its  Restricted   Subsidiaries  or  to  the  extent
      exclusively between or among such Restricted  Subsidiaries,  provided such
      transactions are not otherwise prohibited by this Indenture;

            (c) arrangements  under the Company's  transfer pricing  guidelines,
      the  Services  Agreement,  dated as of January 1, 1995 (and  amended as of
      April 1, 2002) among NL Industries, Kronos (US), Inc. and the Company, the
      Tax  Agreement,  dated as of May 28, 2002,  by and between  Kronos and the
      Company,  the United  States Sales  Agreement,  effective as of January 1,
      1995, among Kronos (US), Inc., Rheox,  Inc., the Company,  Kronos Limited,
      Societe  Industrielle du Titane,  S.A., Kronos Titan-GmbH,  Kronos Canada,
      Inc.,  Kronos B.V.,  Kronos  Europe  S.A./N.V.,  Kronos  Titan A/S,  Rheox
      Limited,  Rheox GmbH,  Abbey Chemicals  Limited,  Bentone-Chemie  GmbH and
      Rheox  Canada,  a  division  of  Rheox,  Inc.,  the  United  States  Sales
      Agreement,  effective  as of January 1, 1995,  among  Kronos  (US),  Inc.,
      Rheox, Inc., the Company,  Kronos Europe S.A./N.V.,  Kronos Canada,  Inc.,
      Kronos  Titan GmbH,  Rheox  Limited,  Rheox GmbH and Kronos Titan A/S, the
      Assignment and Assumption  Agreement,  dated as of January 1, 1999, by and
      between  Kronos  (US),  Inc.  and the  Company,  the Amended and  Restated
      Technology  Transfer  and  License  Agreement,  dated as of May 30,  1990,
      between Kronos and Kronos Titan-GmbH, the Amended and Restated Technology,
      Patent and Trademark License  Agreement,  dated as of May 30, 1990, by and
      between  Kronos (US),  Inc. and Kronos Europe  S.A./N.V.,  the Amended and
      Restated Technology,  the Patent and Trademark License Agreement, dated as
      of May 30, 1990,  by and between  Kronos  (USA),  Inc. and Kronos  Canada,
      Inc.,  the Cross License  Agreement,  effective  January 1, 1999,  between
      Kronos Inc. (formerly known as Kronos (USA), Inc.) and the Company and the
      Trademark Use Agreement,  dated as of May 30, 1990,  between Kronos,  Inc.
      (now Kronos (US),  Inc.),  Kronos (USA), Inc. (now Kronos,  Inc.),  Kronos
      Titan-GmbH  and Kronos  Titan A/S and amended  effective as of October 16,
      1993 and  January 1, 1999,  in each case as in effect as of the Issue Date
      or  any  amendment  thereto  or  any  transaction   contemplated   thereby
      (including pursuant to any amendment thereto) in any replacement agreement
      thereto so long as any such amendment or replacement agreement is not more
      disadvantageous  to the Holders in any material  respect than the original
      agreement  as in  effect  on  the  Issue  Date  or is  required  by law or
      regulatory authority;

            (d)  purchases  and sales of product  and raw  materials,  insurance
      arrangements and payments,  all of the foregoing in the ordinary course of
      business  consistent  with  past  practice  or  as  may  be  necessary  to
      accommodate  legal,  regulatory  or other  changes in the  business of the
      Company and its Restricted Subsidiaries; and

<PAGE>
                                      -63-

            (e)  Restricted  Payments  (or  Permitted  Investments  set forth in
      clauses (4), (7) and (12) of the definition  thereof  contained in Section
      1.1) permitted by this Indenture.

Section 4.12.     Limitation on Liens.

            The  Company  will  not,  and will not  cause or  permit  any of its
Restricted  Subsidiaries to, directly or indirectly,  create,  incur,  assume or
permit or suffer to exist any Liens of any kind  against or upon any property or
assets of the Company or any of its Restricted Subsidiaries whether owned on the
Issue Date or  acquired  after the Issue Date,  or any  proceeds  therefrom,  or
assign or  otherwise  convey any right to receive  income or profits  therefrom,
unless:

      (1)   in the  case  of  Liens  securing  Indebtedness  that  is  expressly
            subordinate  or junior in right of payment  to the Notes,  the Notes
            are secured by a Lien on such  property,  assets or proceeds that is
            senior in priority to such Liens; and

      (2)   in all other  cases,  the Notes are  equally  and  ratably  secured,
            except for:

            (a) Liens  existing  as of the Issue  Date to the  extent and in the
      manner  such  Liens are in effect  on the Issue  Date and any  amendments,
      extensions,  renewals or substitutions  thereof provided that the property
      subject to such Liens as amended,  extended, renewed or substituted is not
      materially  different  from  that  initially  subject  to  such  Liens  as
      determined  by the Board of  Directors  of the Company in their good faith
      judgment;

            (b) Liens securing Indebtedness under the Credit Agreement;

            (c) Liens securing senior Indebtedness  incurred pursuant to clauses
      (11) or (12) of the  definition of Permitted  Indebtedness,  as defined in
      Section 1.1;

            (d) Liens securing the Notes and any Guarantees;

            (e) Liens of the Company or a Wholly Owned Restricted  Subsidiary of
      the Company on assets of any Restricted Subsidiary of the Company;

            (f)  Liens   securing   Indebtedness   incurred  to  Refinance   any
      Indebtedness  which  has  been  secured  by a Lien  permitted  under  this
      Indenture and which has been incurred without violation of this Indenture;
      provided,  however, that such Liens do not extend to or cover any property
      or  assets  of the  Company  or any of  its  Restricted  Subsidiaries  not
      securing the Indebtedness so Refinanced; and

            (g) Permitted Liens.

            In the event that any Lien the  existence  of which  gives rise to a
Lien securing the Notes  pursuant to the  provisions of this Section 4.12 ceases
to exist,  the Lien  securing  the Notes  required  by this  Section  4.12 shall

<PAGE>
                                      -64-

automatically   be  released   and  the  Trustee   shall   execute   appropriate
documentation.

Section 4.13.     Conduct of Business.

            The Company and its Restricted  Subsidiaries  will not engage in any
businesses  which  are not the  same,  similar  or  reasonably  related  to,  or
ancillary  or  complementary  to, the  businesses  in which the  Company and its
Restricted Subsidiaries are engaged on the Issue Date.

Section 4.14.     Maintenance of Properties and Insurance.

            (1)   The  Company shall cause all material  properties  owned by or
leased by it or any of the  Restricted  Subsidiaries  used in the conduct of its
business or the business of any of the Restricted  Subsidiaries to be maintained
and kept in normal condition, repair and working order (reasonable wear and tear
excepted)  and  shall  cause  to  be  made  all  necessary  repairs,   renewals,
replacements,  betterments and improvements  thereof,  all as, and to the extent
that,  in its judgment  may be  necessary,  so that the  business  carried on in
connection  therewith may be properly and  advantageously  conducted;  provided,
however,  that nothing in this Section  4.14(1) shall prevent the Company or any
of  the  Restricted  Subsidiaries  from  discontinuing  the  use,  operation  or
maintenance  of any of such  properties,  or disposing  of any of them,  if such
discontinuance  or disposal is, in the judgment of the Board of Directors of the
Company or of the Board of  Directors  of any  Restricted  Subsidiary,  or of an
officer  (or other agent  employed  by the  Company or of any of the  Restricted
Subsidiaries)  of the  Company  or any of  its  Restricted  Subsidiaries  having
managerial responsibility for any such property, desirable in the conduct of the
business of the Company or any Restricted Subsidiary, and if such discontinuance
or disposal would not reasonably be expected to have a Material Adverse Effect.

            (2)   The  Company shall  maintain,  and shall cause the  Restricted
Subsidiaries to maintain, insurance with responsible carriers against such risks
and in such amounts, and with such deductibles, retentions, self-insured amounts
and co-insurance provisions, as are customarily carried by similar businesses of
similar size,  including property and casualty loss,  workers'  compensation and
interruption  of business  insurance  to the extent  available  on  commercially
reasonable terms; provided,  however, that nothing in this Section 4.14(2) shall
prevent the Company or any of the Restricted Subsidiaries from discontinuing any
insurance, or modifying any such deductibles,  retentions,  self-insured amounts
or co-insurance  provisions,  if such  discontinuance or modification is, in the
judgment of the Board of  Directors  of the Company or of the Board of Directors
of any Restricted  Subsidiary,  or of an officer (or other agent employed by the
Company or of any of the Restricted  Subsidiaries)  of the Company or any of its
Restricted Subsidiaries having managerial responsibility for any such insurance,
desirable  in the  conduct of the  business  of the  Company  or any  Restricted
Subsidiary,  and if such  discontinuance or modification would not reasonably be
expected to have a Material Adverse Effect.

<PAGE>
                                      -65-

Section 4.15.     Offer to Purchase upon Change of Control.

            Upon the  occurrence  of a Change of  Control,  each Holder of Notes
shall  have the right to  require  that the  Company  purchase  all or a portion
(equal to (euro)1,000 or an integral multiple thereof) of such Holder's Notes (a
"Change of Control  Offer") at a Purchase  Price equal to 101% of the  aggregate
principal  amount  thereof,  together  with  accrued  and  unpaid  interest  and
Additional Interest, if any, thereon to the Purchase Date. The Change of Control
Offer shall be made in compliance  with the  applicable  procedures set forth in
Article III of this Indenture and shall include all  instructions  and materials
reasonably necessary to enable Holders to tender their Notes.

            The Company  will not be required to make a Change of Control  Offer
upon a Change of Control if a third party  makes the Change of Control  Offer in
the manner,  at the times and otherwise in compliance with the  requirements set
forth in this  Indenture  applicable  to a Change of  Control  Offer made by the
Company,  and purchases all Notes validly  tendered and not withdrawn under such
Change of Control Offer.

            The Company  will comply with the  requirements  of Rule 14e-1 under
the Exchange Act and any other securities laws and regulations thereunder to the
extent such laws and  regulations are applicable in connection with the purchase
of  Notes  pursuant  to a  Change  of  Control  Offer.  To the  extent  that the
provisions  of any  securities  laws or  regulations  conflict with this Section
4.15,  the  Company  shall  comply  with  the  applicable  securities  laws  and
regulations and shall not be deemed to have breached its obligations  under this
Section 4.15 by virtue of such compliance.

Section 4.16.     Limitation of Guarantees by Restricted Subsidiaries.

            (1)   The   Company   will  not   permit   any  of  its   Restricted
Subsidiaries,  directly or indirectly,  by way of the pledge of any intercompany
note or  otherwise,  to assume,  guarantee or in any other manner  become liable
with  respect  to any  Indebtedness  of the  Company  or  any  other  Restricted
Subsidiary of the Company (other than: (i)  Indebtedness  and other  obligations
under  the  Credit  Agreement;  (ii)  Permitted  Indebtedness  of  a  Restricted
Subsidiary  of the Company;  (iii)  Indebtedness  under  Currency  Agreements or
Commodity  Agreements  in reliance on clause (5) of the  definition of Permitted
Indebtedness;  or (iv) Interest Swap Obligations  incurred in reliance on clause
(4) of the definition of Permitted Indebtedness), unless, in any such case:

            (a) such Restricted  Subsidiary executes and delivers a supplemental
      indenture to this Indenture, providing a guarantee of payment of the Notes
      by such Restricted Subsidiary; and

            (b) if  such  assumption,  guarantee  or  other  liability  of  such
      Restricted  Subsidiary  is  provided  in respect of  Indebtedness  that is
      expressly  subordinated  to the Notes (or a Guarantee  of the Notes),  the
      guarantee or other  instrument  provided by such Restricted  Subsidiary in
      respect of such  subordinated  Indebtedness  shall be  subordinated to the
      Guarantee  pursuant to  subordination  provisions no less favorable to the
      Holders of the Notes than those contained in such other Indebtedness.

<PAGE>
                                      -66-

            (2)   Notwithstanding   the  foregoing,  any  such  Guarantee  by  a
Restricted Subsidiary of the Notes shall (and shall provide by its terms that it
shall) be automatically and unconditionally released and discharged, without any
further action required on the part of the Trustee or any Holder, upon:

            (a) the unconditional release of such Restricted Subsidiary from its
      assumption, guarantee or other liability in respect of the Indebtedness in
      connection  with which such Guarantee was executed and delivered  pursuant
      to Section 4.16(1); or

            (b) any sale or other  disposition  (by merger or  otherwise) to any
      Person which is not a Restricted  Subsidiary  of the Company of all of the
      Capital  Stock in, or all or  substantially  all of the  assets  of,  such
      Restricted Subsidiary;  provided that (i) such sale or disposition of such
      Capital Stock or assets is otherwise in compliance  with the terms of this
      Indenture and (ii) such  assumption,  guarantee or other liability of such
      Restricted  Subsidiary  has been  released  by the  holders  of the  other
      Indebtedness so guaranteed.

Section 4.17.     Provision of Security.

            The Company will not form, acquire or maintain any direct Restricted
Subsidiary (other than Kronos Chemie-GmbH and Kronos World Services,  S.A./N.V.,
so long as each such  company  shall have  gross  assets of less than $3 million
(net of  assets  contributed  thereto  for the  express  purposes  of  expunging
contingent liabilities), and any other direct Restricted Subsidiary having gross
assets  of less  than $1  million),  unless,  concurrently  with the  formation,
acquisition  or maintenance  of such  Subsidiary,  the Company shall execute and
deliver, or cause to be executed and delivered, to the Trustee or the Collateral
Agent for their  respective  benefit as Trustee or  Collateral  Agent or for the
benefit  of  Holders,  one or more  pledge  agreements,  in form  and  substance
reasonably  satisfactory  to the  Trustee  or the  Collateral  Agent  for  their
respective  benefit  as Trustee or  Collateral  Agent or for the  benefit of the
Holders,  pursuant  to which  not less  than  65% of the  Capital  Stock of such
Subsidiary  is  pledged  to  the  Trustee  or the  Collateral  Agent  for  their
respective  benefit  as Trustee or  Collateral  Agent or for the  benefit of the
Holders and the Company shall,  concurrently therewith,  execute and deliver all
documents,   instruments  and  agreements  in  form  and  substance   reasonably
satisfactory to the Trustee or the Collateral Agent for their respective benefit
as Trustee or  Collateral  Agent or for the  benefit of the  Holders  reasonably
necessary  in the  opinion  of the  Trustee  or the  Collateral  Agent for their
respective  benefit  as Trustee or  Collateral  Agent or for the  benefit of the
Holders to grant and maintain at all times a fully perfected  senior Lien on the
collateral pledged pursuant to such pledge agreements.

Section 4.18.     Limitation on Preferred Stock of Restricted Subsidiaries.

            The Company will not permit any of its  Restricted  Subsidiaries  to
issue any  Preferred  Stock  (other  than to the  Company  or to a Wholly  Owned
Restricted  Subsidiary  of the  Company)  or permit any Person  (other  than the
Company or a Wholly  Owned  Restricted  Subsidiary  of the  Company)  to own any
Preferred Stock of any Restricted Subsidiary of the Company.

<PAGE>
                                      -67-

Section 4.19.     Payments to the Collateral Agent.

            Notwithstanding  any other provision of this Indenture or the Notes,
the Company irrevocably and unconditionally  undertakes to pay to the Collateral
Agent,  as a  creditor  in its  own  right  and not as a  representative  of the
Holders,  sums equal to and in the currency of, its Primary  Obligations as when
the same fall due for payment under this  Indenture or the Notes (the  "Parallel
Obligations").

            The  rights  of the  Holders  to  receive  payment  of  the  Primary
Obligations are several and separate and independent from, without prejudice to,
the  rights  of  the  Collateral  Agent  to  receive  payment  of  the  Parallel
Obligations. The Collateral Agent shall have its own independent right to demand
payment of the Parallel Obligations.

            The amounts due and payable by the Company  under this  Section 4.19
shall be  decreased  to the extent  that the Company has paid any amounts to (i)
any Holder in respect of the Primary Obligations or (ii) to the Collateral Agent
in respect of the Parallel Obligations.

Section 4.20.     Corporate Existence.

            Except as otherwise  permitted by Article V, the Company shall do or
cause to be done all things  necessary  to  preserve  and keep in full force and
effect its corporate existence and the corporate, partnership or other existence
of each  of the  Restricted  Subsidiaries  in  accordance  with  the  respective
organizational  documents  of each  Restricted  Subsidiary  (as the  same may be
amended from time to time);  provided,  however,  that the Company  shall not be
required to preserve any such  corporate,  partnership or other existence of any
Restricted  Subsidiary 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 Company and its Restricted  Subsidiaries,  taken as a whole, and
that the loss  thereof  would not  reasonably  be  expected  to have a  Material
Adverse Effect.

Section 4.21.     Compliance with Laws.

            The Company  shall  comply,  and shall cause each of the  Restricted
Subsidiaries to comply, with all applicable statutes, rules, regulations, orders
and  restrictions  of the  European  Union,  any  state  that is a member of the
European  Union on the Issue Date, the United States,  any states  thereof,  the
District  of  Columbia  or  the  Kingdom  of  Norway  and  of  any  governmental
department,   commission,   board,  regulatory  authority,  bureau,  agency  and
instrumentality of the foregoing,  each to the extent applicable,  in respect of
the conduct of their respective businesses and the ownership of their respective
properties,  except  for  such  noncompliances  as  would  not in the  aggregate
reasonably be expected to have a Material Adverse Effect.

<PAGE>
                                      -68-

                               ARTICLE V.

                                   SUCCESSORS

Section 5.1.      Merger, Consolidation and Sale of Assets.

            (1)   The  Company  will not, in a single  transaction  or series of
related  transactions,  consolidate  or merge with or into any Person,  or sell,
assign, transfer,  lease, convey or otherwise dispose of (or cause or permit any
Restricted Subsidiary of the Company to sell, assign, transfer, lease, convey or
otherwise  dispose  of)  all  or  substantially  all  of  the  Company's  assets
(determined on a consolidated basis for the Company and the Company's Restricted
Subsidiaries)  whether as an  entirety  or  substantially  as an entirety to any
Person unless:

            (a)   either:

                  (i)  the  Company   shall  be  the   surviving  or  continuing
            corporation; or

                  (ii) the  Person (if other  than the  Company)  formed by such
            consolidation  or into  which the  Company  is merged or the  Person
            which acquires by sale, assignment,  transfer,  lease, conveyance or
            other  disposition  the  properties and assets of the Company and of
            the Company's Restricted  Subsidiaries  substantially as an entirety
            (the "Surviving Entity"):

                        (A)  shall  be  a  corporation   organized  and  validly
                  existing  under  the  laws of the  United  States,  any  state
                  thereof or the District of Columbia; and

                        (B) shall expressly  assume,  by supplemental  indenture
                  (in form and substance satisfactory to the Trustee),  executed
                  and delivered to the Trustee,  the due and punctual payment of
                  the principal of, and premium,  if any, and interest on all of
                  the Notes and the  performance of every covenant of the Notes,
                  this Indenture and the  Registration  Rights  Agreement on the
                  part of the Company to be performed or observed;

            (b)  immediately  after giving  effect to such  transaction  and the
      assumption  contemplated  by Section  5.1(1)(a)(ii)(B)  (including  giving
      effect  to  any  Indebtedness  and  Acquired   Indebtedness   incurred  or
      anticipated  to be  incurred  in  connection  with or in  respect  of such
      transaction),  the Company or such Surviving  Entity,  as the case may be,
      (a) shall  have a  Consolidated  Net Worth  equal to or  greater  than the
      Consolidated  Net  Worth  of  the  Company   immediately   prior  to  such
      transaction  and (b) shall be able to incur at least  $1.00 of  additional
      Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.9;

            (c) immediately  before and immediately  after giving effect to such
      transaction and the assumption  contemplated  by Section  5.1(1)(a)(ii)(B)
      (including,  without  limitation,  giving effect to any  Indebtedness  and

<PAGE>
                                      -69-

      Acquired  Indebtedness incurred or anticipated to be incurred and any Lien
      granted in connection with or in respect of the  transaction),  no Default
      or Event of Default shall have occurred or be continuing; and

            (d) the Company or the Surviving  Entity shall have delivered to the
      Trustee an Officers'  Certificate and an Opinion of Counsel,  each stating
      that  such  consolidation,  merger,  sale,  assignment,  transfer,  lease,
      conveyance  or other  disposition  and,  if a  supplemental  indenture  is
      required in connection with such transaction,  such supplemental indenture
      comply  with the  applicable  provisions  of this  Indenture  and that all
      conditions  precedent in this Indenture  relating to such transaction have
      been satisfied.

            (2)   For  purposes  of  the  foregoing,  the  transfer  (by  lease,
assignment,   sale  or  otherwise,   in  a  single   transaction  or  series  of
transactions) of all or substantially  all of the properties or assets of one or
more  Restricted  Subsidiaries  of the  Company,  the  Capital  Stock  of  which
constitutes  all or  substantially  all  of the  properties  and  assets  of the
Company,  shall be deemed to be the transfer of all or substantially  all of the
properties and assets of the Company.

            (3)   Without  limiting any of the activities and transactions  that
Kronos  Titan-GmbH  & Co.  OHG,  a  partnership,  may  engage  in  or  undertake
consistent  with this  Indenture,  Kronos  Titan-GmbH  & Co.  OHG may  through a
merger,  consolidation  or other business  combination  transaction  continue or
succeed as a corporation  incorporated under the laws of Germany;  provided that
such  transaction  does not  adversely  affect the Lien on the Capital  Stock of
Kronos  Titan-GmbH & Co. OHG for the benefit of the Collateral  Agent,  as agent
for the  Holders  pursuant  to the terms of this  Indenture  and the  Collateral
Agency Agreement.

            (4)   Notwithstanding  the  foregoing,  neither  the Company nor any
Subsidiary will consolidate or merge with NL Industries.

            (5) .Each Guarantor  (other than any Guarantor whose Guarantee is to
be released in accordance  with the terms of the Guarantee and this Indenture in
connection with any transaction complying with the provisions of Section 4.10 of
this Indenture) will not, and the Company will not cause or permit any Guarantor
to,  consolidate with or merge with or into any Person other than the Company or
any other Guarantor unless:

            (a) the entity  formed by or  surviving  any such  consolidation  or
      merger  (if  other  than the  Guarantor)  or to which  such  sale,  lease,
      conveyance  or other  disposition  shall  have been made is a  corporation
      organized  and existing  under the laws of the European  Union,  any state
      that is a member of the  European  Union on the  Issue  Date,  the  United
      States,  any State  thereof,  the  District  of Columbia or the Kingdom of
      Norway;

            (b)  such  entity  assumes  by  supplemental  indenture  all  of the
      obligations of the Guarantor on the Guarantee;

            (c) immediately after giving effect to such transaction,  no Default
      or Event of Default shall have occurred and be continuing; and

<PAGE>
                                      -70-

            (d) immediately  after giving effect to such transaction and the use
      of any net proceeds  therefrom on a pro forma basis, the Company (i) shall
      have a  Consolidated  Net Worth equal to or greater than the  Consolidated
      Net Worth of the Company  immediately  prior to such  transaction and (ii)
      shall be able to incur at least $1.00 of  additional  Indebtedness  (other
      than Permitted Indebtedness) pursuant to Section 4.9 of this Indenture.

            (6)   Any  merger or  consolidation of a Guarantor with and into the
Company (with the Company being the surviving  entity) or another Guarantor need
only comply with Section 5.1(1)(d).

Section 5.2.      Successor Corporation Substituted.

            Upon any consolidation, combination or merger or any transfer of all
or  substantially  all of the assets of the Company in  accordance  with Section
5.1,  in which the  Company is not the  continuing  corporation,  the  successor
Person  formed by such  consolidation  or into which the Company is merged or to
which  such  conveyance,  lease or  transfer  is made shall  succeed  to, and be
substituted  for, and may exercise  every right and power of, the Company  under
this  Indenture and the Notes with the same effect as if such  surviving  entity
had been named as such.

                               ARTICLE VI.

                              DEFAULTS AND REMEDIES

Section 6.1.      Events of Default.

            Each of the following constitutes an "Event of Default":

            (1) the failure to pay  interest  on any Note when the same  becomes
      due and payable and the default continues for a period of 30 days;

            (2)  the  failure  to pay  the  principal  of any  Note,  when  such
      principal  becomes  due and  payable,  at  maturity,  upon  redemption  or
      otherwise  (including  the  failure  to make a payment to  purchase  Notes
      tendered pursuant to a Change of Control Offer or a Net Proceeds Offer);

            (3) a default in the observance or performance of any other covenant
      or agreement  contained in this  Indenture or any Security  Document which
      default  continues  for a period  of 45 days  after the  Company  receives
      written notice  specifying the default (and demanding that such default be
      remedied)  from  the  Trustee  or  the  Holders  of at  least  25%  of the
      outstanding principal amount of the Notes (except in the case of a default
      with respect to Section 5.1 of this  Indenture,  which will  constitute an
      Event of Default with such notice  requirement but without such passage of
      time requirement);

            (4) the failure to pay at final maturity (after giving effect to any
      applicable grace periods and any extensions  thereof) the principal amount
      of any Indebtedness of the Company or any Restricted Subsidiary of the

<PAGE>
                                      -71-

      Company,  or the  acceleration  of the final  stated  maturity of any such
      Indebtedness (which  acceleration is not rescinded,  annulled or otherwise
      cured  within  20 days  of  receipt  by the  Company  or  such  Restricted
      Subsidiary of notice of any such acceleration), if the aggregate principal
      amount of such  Indebtedness,  together with the  principal  amount of any
      other such  Indebtedness  in default for failure to pay principal at final
      maturity or which has been accelerated (in each case with respect to which
      the 20-day period described above has elapsed),  aggregates $20 million or
      more at any time;

            (5) the repudiation by the Company of any of its  obligations  under
      any Security Document,  or the  unenforceability  of any Security Document
      against the Company, if such unenforceability reasonably would be expected
      to result in a material adverse effect on the Liens granted by the Company
      pursuant to such Security Documents;

            (6) one or more  judgments in an  aggregate  amount in excess of $20
      million  shall  have  been  rendered  against  the  Company  or any of its
      Restricted Subsidiaries and such judgments remain undischarged,  unpaid or
      unstayed for a period of 60 days after such  judgment or judgments  become
      final and non-appealable;

            (7)   the Company or any Significant Subsidiary of the
      Company:

                  (a)   commences a voluntary case under any Bankruptcy
            Law,

                  (b)   consents to the entry of an order for relief
            against it in an involuntary case,

                  (c)   consents to the appointment of a custodian or
            receiver of it or for all or substantially all of its
            property,

                  (d)   makes a general assignment for the benefit of
            its creditors, or

                  (e)   admits in writing its inability to pay its
            debts as they become due; or

            (8) a court of  competent  jurisdiction  enters  an order or  decree
      under any Bankruptcy Law that:

                  (a)   is for relief in an involuntary case against
            the Company or any Significant Subsidiary of the Company;

                  (b)   appoints a custodian or receiver of the Company
            or any Significant Subsidiary or for all or substantially
            all of the property of any of the foregoing; or

                  (c)   orders the liquidation of the Company or any of
            its Significant Subsidiaries;

      and the order or decree remains unstayed and in effect for 60
consecutive days.

<PAGE>
                                      -72-

Section 6.2.      Acceleration.

            If any Event of Default (other than an Event of Default specified in
clause (7) or (8) of Section 6.1 of this  Indenture with respect to the Company)
shall  occur and be  continuing,  the  Trustee or the Holders of at least 25% in
principal amount of the then outstanding  Notes by written notice to the Company
(and the  Trustee,  if such  notice is given by such  Holders)  may  declare the
principal of and accrued and unpaid  interest on the Notes to be due and payable
immediately,  which notice shall  specify the  respective  Events of Default and
that it is a "Notice of  Acceleration".  Upon any such  declaration,  the entire
principal amount of, and accrued and unpaid interest and Additional Interest, if
any, on the Notes shall become immediately due and payable.

            Notwithstanding  the foregoing,  if an Event of Default specified in
clause (7) or (8) of Section 6.1 of this  Indenture  with respect to the Company
occurs and is continuing, then all unpaid principal of, and premium, if any, and
accrued  and unpaid  interest on all of the  outstanding  Notes shall ipso facto
become and be immediately  due and payable  without any declaration or other act
on the part of the Trustee or any Holder.

            The  Holders  of  a  majority  in  principal   amount  of  the  then
outstanding  Notes by written  notice to the  Company  and the  Trustee  may, on
behalf of the Holders of all of the Notes,  rescind and cancel such  declaration
and its consequences:

            (1) if the  rescission  would  not  conflict  with any  judgment  or
            decree;

            (2) if all  existing  Events of  Default  have been  cured or waived
            except  nonpayment  of  principal  or  interest  that has become due
            solely because of the acceleration;

            (3) to the extent the payment of such  interest is lawful,  interest
            on overdue installments of interest and overdue principal, which has
            become due otherwise than by such declaration of  acceleration,  has
            been paid;

            (4) if the Company has paid the Trustee its reasonable  compensation
            and  reimbursed  the Trustee  for its  expenses,  disbursements  and
            advances; and

            (5) in the event of the cure or waiver of an Event of Default of the
            type  described  in Section  6.1(6) of this  Indenture,  the Trustee
            shall  have  received  an  Officers'  Certificate  and an Opinion of
            Counsel that such Event of Default has been cured or waived.

            No such rescission  shall affect any subsequent  Default or Event of
Default or impair any right consequent thereto.

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,  premium,  if
any,  interest or  Additional  Interest,  if any, on the Notes or to enforce the
performance of any provision of the Notes or this Indenture.

<PAGE>
                                      -73-

            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,  and any
recovery or judgment  shall,  after  provision for the payment of the reasonable
compensation,  expenses,  disbursements and advances of the Trustee,  its agents
and counsel,  be for the ratable benefit of the Holders of the Notes. 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.  All remedies are cumulative
to the extent permitted by law.

Section 6.4.      Waiver of Past Defaults.

            The Holders of a majority in principal amount of the Notes may waive
any existing or past Default or Event of Default under this  Indenture,  and its
consequences, except a default in the payment of the principal of or interest on
any Notes.  Upon any such  waiver,  such Default  shall cease to exist,  and any
Event of Default arising  therefrom shall be deemed to have been cured for every
purpose of this Indenture;  but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereon.

Section 6.5.      Control by Majority.

            Holders of a majority in  principal  amount of the then  outstanding
Notes may direct the time,  method and place of conducting  any  proceeding  for
exercising any remedy  available to the Trustee or exercising any trust or power
conferred on it.  However,  the Trustee may refuse to follow any direction  that
conflicts with  applicable  law or this  Indenture  that the Trustee  reasonably
determines may be unduly  prejudicial to the rights of other Holders of Notes or
that may subject the Trustee to personal  liability and shall be entitled to the
benefit of Sections 7.1(3)(c) and 7.1(5) of this Indenture.

Section 6.6.      Limitation on Suits.

            A  Holder  of a Note  may  pursue  a  remedy  with  respect  to this
Indenture or the Notes only if:

            (1) the Holder of a Note gives to the  Trustee  written  notice of a
      continuing  Event of Default (other than an Event of Default  specified in
      Section 6.1(7) or 6.1(8));

            (2) the  Holders  of at least  25% in  principal  amount of the then
      outstanding  Notes  make a written  request  to the  Trustee to pursue the
      remedy;

            (3) such Holder or Holders of Notes offer and, if requested, provide
      to the Trustee  indemnity  satisfactory  to the Trustee  against any loss,
      liability or expense;

            (4) the  Trustee  does not comply  with the  request  within 60 days
      after  receipt  of the  request  and the  offer  and,  if  requested,  the
      provision of indemnity; and

<PAGE>
                                      -74-

            (5) during such 60-day period the Holders of a majority in principal
      amount of the then  outstanding  Notes do not give the Trustee a direction
      inconsistent with the request.

A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another  Holder of a
Note.

            Notwithstanding  the foregoing,  if an Event of Default specified in
clause (7) or (8) of Section 6.1 of this  Indenture  with respect to the Company
occurs and is continuing, then all unpaid principal of, and premium, if any, and
accrued  and unpaid  interest on all of the  outstanding  Notes shall ipso facto
become and be immediately  due and payable  without any declaration or other act
on the part of the Trustee or any Holder.

Section 6.7.      Rights of Holders of Notes to Receive Payment.

            Notwithstanding any other provision of this Indenture,  the right of
any Holder of a Note to receive  payment of  principal  of, or premium,  if any,
interest or Additional Interest, if any, on the Note, on or after the respective
due dates thereon  (including in  connection  with an offer to purchase),  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 written  consent of such
Holder.

Section 6.8.      Collection Suit by Trustee.

            If an Event of Default specified in Section 6.l(1) or (2) occurs and
is continuing, the Trustee is authorized to recover judgment in its own name and
as trustee of an express  trust  against  the  Company  for the whole  amount of
principal of, premium and Additional  Interest,  if any, and interest  remaining
unpaid on the Notes and interest on overdue principal and, to the extent lawful,
interest and Additional  Interest,  if any, and such further amounts as shall be
sufficient  to cover  the  costs  and  expenses  of  collection,  including  the
reasonable compensation, expense, disbursements and advances of the Trustee, its
agents and counsel.

Section 6.9.      Trustee May File Proofs of Claim.

            The  Trustee is  authorized  to 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 (including any claim for the reasonable  compensation,  expenses,
disbursements and advances of the Trustee,  its agents  (including  accountants,
experts or such other professionals as the Trustee deems necessary, advisable or
appropriate)  and counsel) and the Holders of the Notes  allowed in any judicial
proceedings  relative to the Company (or any other obligor upon the Notes),  its
creditors  or its  property  and shall be  entitled  and  empowered  to collect,
receive and distribute any money or other property payable or deliverable on any
such  claims,  and any  custodian  in any such  judicial  proceeding  is  hereby
authorized by each Holder to make such 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  to it  for  the  reasonable
compensation,  expenses,  disbursements and advances of the Trustee,  its agents
and counsel,  and any other  amounts due the Trustee  under  Section 7.7 of this

<PAGE>
                                      -76-

Indenture.  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 of this Indenture 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 or adopt 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 pursuant to this Article, it shall
pay out the money in the following order:

            First:  to the Trustee, its agents and attorneys, and any
      Collateral Agent, for amounts due under Section 7.7 of this
      Indenture, including payment of all compensation, expense and
      liabilities incurred, and all advances made, by the Trustee and
      the costs and expenses of collection;

            Second:  to Holders of Notes for amounts due and unpaid on the Notes
      for principal,  Purchase Price,  Redemption Price and Additional Interest,
      if any, and interest, ratably, without preference or priority of any kind,
      according  to the  amounts  due and  payable  on the Notes for  principal,
      Purchase  Price,  Redemption  Price and Additional  Interest,  if any, and
      interest, respectively; and

            Third:  to the Company, the Guarantors, if any, or to such
      party as a court of competent jurisdiction shall direct.

The  Trustee may fix a special  record date and payment  date for any payment to
Holders of Notes pursuant to this Section 6.10.

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 a 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  does  not  apply  to a suit by the  Trustee,  a suit by a  Holder
pursuant to Section 6.7 of this Indenture, or a suit by Holders of more than 10%
in principal amount of the then outstanding Notes.

<PAGE>
                                      -76-

                                  ARTICLE VII.

                                     TRUSTEE

Section 7.1.      Duties of Trustee.

            (1)   If an Event of Default has  occurred  and is  continuing,  the
Trustee shall  exercise  such rights and powers vested in it by this  Indenture,
and use the same degree of care and skill in its exercise,  as a prudent  person
would exercise or use under the circumstances in the conduct of his own affairs.

            (2)   Except during the continuance of an Event of  Default:

            (a) the  duties of the  Trustee  shall be  determined  solely by the
      express  provisions  of this  Indenture  and the TIA and the Trustee  need
      perform  only  those  duties  that  are  specifically  set  forth  in this
      Indenture and no others,  and no implied covenants or obligations shall be
      read into this Indenture or the TIA against the Trustee; and

            (b) in the  absence  of bad  faith  on its  part,  the  Trustee  may
      conclusively  rely,  without  investigation,   as  to  the  truth  or  the
      statements and the correctness of the opinions expressed therein, upon and
      statements,   certificates  or  opinions  furnished  to  the  Trustee  and
      conforming to the  requirements  of this Indenture.  However,  the Trustee
      shall examine the  certificates  and opinions  required to be furnished to
      the Trustee under this Indenture to determine  whether or not they conform
      on their face to the  requirements of this Indenture but need not confirm,
      verify or investigate  the accuracy of any  mathematical  calculations  or
      other facts stated therein.

            (3)   The  Trustee may not be relieved from  liabilities for its own
negligent  action,  its  own  negligent  failure  to  act,  or its  own  willful
misconduct, except that:

            (a)   this paragraph (3) does not limit the effect of
      paragraph (2) of this Section 7.1;

            (b) the Trustee  shall not be liable for any error of judgment  made
      in good  faith by a  Responsible  Officer,  unless it is  proved  that the
      Trustee was negligent in ascertaining the pertinent facts; and

            (c) 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 of this Indenture.

            (4)   Whether or not therein expressly so provided,  every provision
of this  Indenture  that in any way  relates  to the  Trustee is subject to this
Section 7.1.

<PAGE>
                                      -77-

            (5)   No  provision of this  Indenture  shall require the Trustee to
expend or risk its own funds or incur any liability.  The Trustee shall be under
no obligation  to exercise any of its rights and powers under this  Indenture at
the request or  direction  of any Holders,  pursuant to the  provisions  of this
Indenture,  including, without limitation, Section 6.5, unless such Holder shall
have offered to the Trustee  security and indemnity  satisfactory  to it against
any loss,  liability or expense which might be incurred by it in compliance with
such request or direction.

            (6)   The  Trustee  shall not be liable  for  interest  on any money
received  by it except as the  Trustee  may agree in writing  with the  Company.
Money held in trust by the  Trustee  need not be  segregated  from  other  funds
except to the extent required by law.

Section 7.2.      Rights of Trustee.

            (1)   The  Trustee may  conclusively  rely and shall be protected in
acting or refraining from acting upon any document  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 such document.

            (2)   Before the Trustee acts or refrain from acting, it may require
an Officers' Certificate or an Opinion of Counsel or both. The Trustee shall not
be liable for any action it takes or omits to take in good faith in  reliance on
such Officers'  Certificate or Opinion of Counsel.  The Trustee may consult with
counsel of its choice and the advice of such  counsel  and  Opinions  of Counsel
shall be full and  complete  authorization  and  protection  from  liability  in
respect of any action  taken,  suffered or omitted by it hereunder in good faith
and in reliance thereon.

            (3)   The  Trustee  may  act  through  its  attorneys,  accountants,
experts and such other  professionals as the Trustee deems necessary,  advisable
or appropriate  and shall not be responsible for the misconduct or negligence of
any attorney,  accountant,  expert or other such professional appointed with due
care.

            (4)   The  Trustee  shall not be liable  for any  action it takes or
omits to take in good  faith that it  believes  to be  authorized  or within the
rights or powers conferred upon it by this Indenture.

            (5)   Unless otherwise specifically provided in this Indenture,  any
demand,  request,  direction  or notice from the Company  shall be  sufficiently
evidenced by a written order signed by two Officers of the Company.

            (6)   The Trustee shall not be charged with knowledge of any Default
or Event of  Default  under  Section  6.1 of this  Indenture  (other  than under
Section  6.1(1)  (subject to the following  sentence) or Section  6.1(2) of this
Indenture)  unless either (i) a Responsible  Officer shall have actual knowledge
thereof,  or (ii) the Trustee shall have received  notice  thereof in accordance
with Section 13.2 of this Indenture from the Company or any Holder of the Notes,
which notice specifically references the Notes. The Trustee shall not be charged
with knowledge of the Company's  obligation to pay Additional  Interest,  or the
cessation of such obligation, unless the Trustee receives written notice thereof
from the Company or any Holder.

<PAGE>
                                      -78-

            (7)   The Trustee shall not be bound to make any investigation  into
the  facts  or  matters  stated  in  any  resolution,   certificate,  statement,
instrument,  opinion, report, notice, request, directions, consent, order, bond,
debenture,  note, other evidence of indebtedness or other paper or document, but
the Trustee,  in its discretion,  may make such further inquiry or investigation
into such facts or matters as it may see fit.

            (8)   The rights, privileges,  protections,  immunities and benefits
given  to  the  Trustee,  including,   without  limitation,  its  rights  to  be
indemnified,  are extended to, and shall be enforceable  by, the Trustee in each
of its capacities hereunder.

            (9)   The  Trustee may request that the Company deliver an Officers'
Certificate  setting  forth the names of  individuals  and/or titles of officers
authorized at such time to take specified  actions  pursuant to this  Indenture,
which Officers'  Certificate  may be signed by any Person  authorized to sign an
Officers'  Certificate,  including any Person  specified as so authorized in any
such certificate previously delivered and not superseded.

Section 7.3.      Individual Rights of Trustee.

            The Trustee in its  individual or any other  capacity may become the
owner or  pledgee  of Notes  and may  otherwise  deal  with the  Company  or any
Affiliate  of the  Company  with the same  rights  it would  have if it were not
Trustee.  However,  in the  event  that the  Trustee  acquires  any  conflicting
interest within the meaning of the TIA it must eliminate such conflict within 90
days,  apply  (subject to the  consent of the  Company)  to the  Commission  for
permission to continue as trustee or resign. Any Agent may do the same with like
rights and duties. The Trustee is also subject to Sections 7.10 and 7.11 of this
Indenture.

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  Company's  use of the proceeds from the Notes or any money
paid to the Company or upon the Company's  direction under any provision of this
Indenture,  it shall not be responsible  for the use or application of any money
received  by any  Paying  Agent  other  than the  Trustee,  and it shall  not be
responsible for any statement or recital herein or any statement in the Notes or
any other document in connection  with the sale of the Notes or pursuant to this
Indenture other than its certificate of authentication.

Section 7.5.      Notice of Defaults.

            If a Default  or Event of  Default  occurs  and is  continuing,  the
Trustee  shall  mail to  Holders  of Notes a notice of the  Default  or Event of
Default  within 90 days  after it  occurs.  Except  in the case of a Default  in
payment on any Note (including the failure to make a mandatory purchase pursuant
hereto),  the Trustee may  withhold  the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding the notice is
in the interests of the Holders of the Notes.

<PAGE>
                                      -79-

Section 7.6.      Reports by Trustee to Holders of the Notes.

            Within 60 days after each June 1  beginning  with June 1, 2003,  and
for so long as Notes remain  outstanding,  the Trustee shall mail to the Holders
of the Notes a brief report dated as of such  reporting  date that complies with
TIA Section 313(a) (but if no event described in TIA Section 313(a) has occurred
within the twelve (12) months  preceding the  reporting  date, no report need be
transmitted). The Trustee also shall comply with TIA Section 313(b). The Trustee
shall also transmit by mail all reports as required by TIA Section 313(c).

            A copy of each  report at the time of its  mailing to the Holders of
Notes  shall be mailed to the  Company  and filed with the  Commission  and each
stock  exchange  on which the Notes are listed in  accordance  with TIA  Section
313(d).  The Company shall promptly notify the Trustee when the Notes are listed
on any stock exchange.

Section 7.7.      Compensation, Reimbursement and Indemnity.

            The  Company  shall  pay to the  Trustee  from  time  to  time  such
compensation  as shall be agreed  upon by the  Company  and the  Trustee for its
acceptance of this  Indenture  and the rendering by it of the services  required
hereunder.  The  Trustee's  compensation  shall  not be  limited  by any  law on
compensation  of a trustee of an express trust.  The Company shall reimburse the
Trustee  promptly upon request for all reasonable  out-of-pocket  disbursements,
advances and expenses  incurred or made by or on behalf of it in addition to the
compensation  for its  services.  Such  expenses  shall  include the  reasonable
compensation,   disbursements   and   expenses  of  the   Trustee's   attorneys,
accountants,  experts and such other  professionals  as the  Trustee  reasonably
deems necessary, advisable or appropriate.

            The Company shall indemnify the Trustee, any predecessor Trustee and
their officers,  employees and agents against any and all out-of-pocket  losses,
liabilities or expenses,  including taxes (other than taxes based upon, measured
by or determined by the income of the Trustee)  incurred by it arising out of or
in connection  with the  acceptance or  administration  of its duties under this
Indenture (including its duties under Section 9.6 of this Indenture),  including
the  out-of-pocket  costs  and  expenses  of  enforcing  this  Indenture  or any
Guarantee  against the Company or a Guarantor  (including  this Section 7.7) and
defending  itself against or  investigating  any claim (whether  asserted by the
Company,  any  Guarantor,  any  Holder  or any other  Person)  or  liability  in
connection  with the  exercise  or  performance  of any of its  powers or duties
hereunder,  except to the  extent  any such loss,  liability  or expense  may be
attributable to its negligence or willful  misconduct.  The Trustee shall notify
the Company  promptly of any claim for which it may seek  indemnity.  Failure by
the  Trustee to so notify  the  Company  shall not  relieve  the  Company of its
obligations  hereunder.  The Company shall defend any claim or threatened  claim
asserted  against the Trustee,  and the Trustee shall  cooperate in the defense.
The Trustee shall have the right to employ  separate  counsel in any such action
proceeding and participate in the  investigation  and defense  thereof,  and the
Company shall pay the  reasonable  fees and expenses of such  separate  counsel;
provided,  however,  that the Trustee may only  employ  separate  counsel at the
expense of the  Company  if in the  reasonable  judgment  of the  Trustee  (i) a
conflict of interest exists by reason of common representation or (ii) there are
legal  defenses  available  to the  Trustee  that are  different  from or are in

<PAGE>
                                      -80-

addition  to  those  available  to  the  Company  or  if  all  parties  commonly
represented do not agree as to the action (or inaction) of counsel.  The Company
need not pay for any  settlement  made without its consent,  which consent shall
not be unreasonably withheld.

            The  obligations of the Company under this Section 7.7 shall survive
the  resignation or removal of the Trustee,  the  satisfaction  and discharge of
this Indenture and the termination of this Indenture.

            To secure the Company's 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, except that held in trust to pay principal, Redemption
Price or Purchase  Price of or  Additional  Interest,  if any,  or interest  on,
particular  Notes.  Such Lien shall  survive the  resignation  or removal of the
Trustee, the satisfaction and discharge of this Indenture and the termination of
this Indenture.

            When the Trustee incurs expenses or renders  services after an Event
of Default  specified in Section  6.1(7) or (8) of this  Indenture  occurs,  the
expenses and the compensation for the services  (including the fees and expenses
of its agents and counsel) are intended to constitute expenses of administration
under any Bankruptcy Law.

Section 7.8.      Replacement of Trustee.

            A  resignation  or  removal  of the  Trustee  and  appointment  of a
successor  Trustee  shall become  effective  only upon the  successor  Trustee's
acceptance of appointment as provided in this Section 7.8.

            The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Company.  The Holders of Notes of a
majority  in  principal  amount of the then  outstanding  Notes may  remove  the
Trustee by so notifying the Trustee and the Company in writing.  The Company may
remove the Trustee if:

            (1)   the Trustee fails to comply with Section 7.10 of this
      Indenture;

            (2) the Trustee is adjudged a bankrupt or an  insolvent  or an order
      for relief is entered  with  respect to the Trustee  under any  Bankruptcy
      Law;

            (3)   a custodian, receiver or public officer takes charge
      of the Trustee or its property for the purpose of rehabilitation,
      conversation or liquidation; or

            (4)   the Trustee becomes incapable of acting.

            If the Trustee  resigns or is removed or if a vacancy  exists in the
office of Trustee for any reason, the Company shall promptly appoint a successor
Trustee.  Within one year after the date on which the  successor  Trustee  takes
office,  the Holders of a majority in principal  amount of the then  outstanding
Notes may appoint a successor Trustee to replace the successor Trustee appointed
by the Company.

<PAGE>
                                      -81-

            If a successor Trustee does not take office within 30 days after the
retiring trustee resigns or is removed,  the retiring Trustee,  the Company,  or
the Holders of Notes of at least 10% in principal amount of the then outstanding
Notes may petition any court of competent  jurisdiction for the appointment of a
successor Trustee.

            If the Trustee,  after  written  request by any Holder of a Note who
has been a bona fide  holder  of a Note or Notes  for at least  six (6)  months,
fails to comply with Section 7.10,  such Holder of a Note may petition any court
of competent  jurisdiction for the removal of the Trustee and the appointment of
a successor Trustee.

            A  successor  Trustee  shall  deliver  a written  acceptance  of its
appointment  to  the  retiring  Trustee  and  to  the  Company.  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  Company  shall mail a notice of its  succession  to
Holder of the Notes. The retiring  Trustee shall promptly  transfer all property
held by it as Trustee to the successor  Trustee,  provided all sums owing to the
Trustee hereunder have been paid and subject to the Lien provided for in Section
7.7 of this Indenture.  Notwithstanding  replacement of the Trustee  pursuant to
this Section 7.8, the Company's  obligations under Section 7.7 of this Indenture
shall continue for the benefit of the retiring Trustee.

Section 7.9.      Successor Trustee by Merger, Etc.

            If the Trustee  consolidates,  merges or converts into, or transfers
all or substantially all of its corporate trust business to, another corporation
that is eligible under Section 7.10 of this Indenture, the successor corporation
without any further act shall be the successor Trustee.

Section 7.10.     Eligibility; Disqualification.

            There  shall  at  all  times  be  a  Trustee  hereunder  that  is  a
corporation  organized and doing business under the laws of the United States or
of any state  thereof  (including  the District of Columbia)  that is authorized
under  such  laws  to  exercise  corporate  trust  power,  that  is  subject  to
supervision  or  examination  by  federal  or state  authorities  and that has a
combined  capital and surplus of at least $100  million as set forth in its most
recent published annual report of condition.

            This  Indenture  shall  always  have a  Trustee  who  satisfies  the
requirements  of TIA Section  310(a)(1),  (2) and (5). The Trustee is subject to
TIA Section 310(b).

Section 7.11.     Preferential Collection of Claims Against Company.

            The Trustee is subject to TIA Section 311(a), excluding any creditor
relationship  listed in TIA Section  311(b).  A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated therein.

<PAGE>
                                      -82-

Section 7.12.     Concerning the Trustee and the Collateral.

            The Trustee  shall have no duty to act outside of the United  States
or the United Kingdom in respect of any Collateral  located in the  jurisdiction
other than the United States or the United Kingdom  ("Foreign  Collateral")  but
shall at the specific request of a majority in aggregate principal amount of the
Notes or the Company appoint a Person or Persons to act on behalf of the Holders
with respect to such Foreign  Collateral.  Such qualified  Person or Persons and
the Trustee shall,  provided the same are reasonably  acceptable to the Trustee,
enter  into  a  collateral  assignment  pledge  agreement,  mortgage,  enforcing
document or other security  agreement  relating to the Lien or Security Interest
in such item of Foreign  Collateral  pursuant  to which  such  Person or Persons
shall  exercise  the rights  and  remedies  of the  Trustee  and  Holders in the
Collateral for their respective benefit.  The duties and responsibilities of the
Trustee with respect to any Person or Persons and any  Collateral are limited to
those set forth in this Article VII.

            Both before and after an Event of Default, the Trustee shall have no
duty to supervise or monitor such Collateral  Agent or its  performance,  and no
liability for any acts or omissions of such Collateral Agent;  provided that (x)
if  a  Responsible  Officer  has  actual  knowledge  of  willful  misconduct  or
negligence of such  Collateral  Agent,  the Trustee may replace such  Collateral
Agent with a  successor  Collateral  Agent  which it may appoint and (y) (i) the
Trustee shall satisfy itself that any instructions  given by the Trustee to such
Collateral  Agent have been  carried  out;  (ii) the Trustee  shall give to such
Collateral  Agent such  instructions  to make effective the Liens granted by the
Collateral  Documents  as the Company may request or, if an Event of Default has
occurred,  as shall  be  stated  to be  necessary  in the  Opinions  of  Counsel
furnished pursuant to Section 11.2 of this Indenture with respect to the Foreign
Collateral  with  respect to which any such  Collateral  Agent is acting and the
Liens granted  therein;  (iii) the Trustee shall give notice to such  Collateral
Agent of any  Event  of  Default  of  which a  Responsible  Officer  has  actual
knowledge;  and  (iv)  the  Trustee  may,  but  has no  obligation  to,  request
information  from such  Collateral  Agent with respect to realization on Foreign
Collateral.

Section 7.13.     Appointment of Co-Trustee.

            It is the purpose of this Indenture that there shall be no violation
of any law of any  jurisdiction  denying  or  restricting  the right of  banking
corporations  or   associations   to  transact   business  as  trustee  in  such
jurisdiction.  It is recognized that in case of litigation under this Indenture,
and in particular in case of the enforcement  thereof on default, or in the case
the  Trustee  deems  that  by  reason  of  any  present  or  future  law  of any
jurisdiction  it may not exercise any of the powers,  rights or remedies  herein
granted  to the  Trustee or hold title to the  properties,  in trust,  as herein
granted or take any action which may be  desirable  or  necessary in  connection
therewith,  it may be  necessary  that the  Trustee  appoint  an  individual  or
institution  as a separate  or  co-trustee.  The  following  provisions  of this
Section 7.13 are adopted to these ends.

            In the event that the Trustee  appoints an additional  individual or
institution as a separate or co-trustee,  each and every remedy,  power,  right,
claim,  demand,  cause of action,  immunity,  estate,  title,  interest and lien
expressed  or  intended by this  Indenture  to be  exercised  by or vested in or
conveyed to the Trustee with respect thereto shall be exercisable by and vest in

<PAGE>
                                      -83-

such  separate or  co-trustee  but only to the extent  necessary  to enable such
separate or co-trustee to exercise such powers, rights and remedies, and only to
the extent  that the Trustee by the laws of any  jurisdiction  is  incapable  of
exercising  such powers,  rights and remedies and every covenant and obligations
necessary to the exercise  thereof by such separate or  co-trustee  shall run to
and be enforceable by either of them.

            Should any instrument in writing from the Company be required by the
separate or  co-trustee so appointed by the Trustee for more fully and certainly
vesting in and confirming to him or it such properties,  rights, powers, trusts,
duties  and  obligations,  any and all such  instruments  in writing  shall,  on
reasonable  request,  be executed,  acknowledged  and  delivered by the Company;
provided, that if an Event of Default shall have occurred and be continuing,  if
the Company does not execute any such instrument  within fifteen (15) days after
request therefor,  the Trustee shall be empowered as an attorney-in-fact for the
Company to execute any such  instrument  in the Company's  name and stead,  such
power to be effective  for only such  continuance  of such Event of Default.  In
case any  separate or  co-trustee  or a successor  to either  shall die,  become
incapable of acting, resign or be removed, all the estates, properties,  rights,
powers, trusts, duties and obligations of such separate or co-trustee, so far as
permitted  by law,  shall  vest in and be  exercised  by the  Trustee  until the
appointment of a new trustee or successor to such separate or co-trustee.

            Every separate trustee and co-trustee shall, to the extent permitted
by law, be appointed and act subject to the following provisions and conditions:

            (1) all rights and  powers,  conferred  or imposed  upon the Trustee
      shall be  conferred  or imposed  upon and may be exercised or performed by
      such separate trustee or co-trustee; and

            (2) no trustee hereunder shall be personally liable by reason of any
      act or omission of any other trustee hereunder.

      Any notice,  request or other writing given to the Trustee shall be deemed
to have been given to each of the then  separate  trustees and  co-trustees,  as
effectively  as if  given  to each of  them.  Every  instrument  appointing  any
separate  trustee or co-trustee shall refer to this Indenture and the conditions
of this Article.

      Any separate  trustee or co-trustee may at any time appoint the Trustee as
its agent or attorney-in-fact  with full power and authority,  to the extent not
prohibited by law, to do any lawful act under or in respect of this Indenture on
its behalf and in its name.  If any separate  trustee or  co-trustee  shall die,
become  incapable  of  acting,  resign  or  be  removed,  all  of  its  estates,
properties,  rights,  remedies  and trusts shall vest in and be exercised by the
Trustee,  to the extent  permitted by law,  without the  appointment of a new or
successors trustee.

Section 7.14.     Trustee Not Liable for Losses or Damages.

            Anything in this  Indenture to the contrary  notwithstanding,  in no
event shall the Trustee be liable under or in connection with this Indenture for
indirect,  special,  incidental,  punitive or consequential losses or damages of
any kind whatsoever,  including but not limited to lost profits,  whether or not

<PAGE>
                                      -84-

foreseeable, even if the Trustee has been advised of the possibility thereof and
regardless of the form of action in which such damages are sought.

                              ARTICLE VIII.

                LEGAL DEFEASANCE AND COVENANT DEFEASANCE

Section 8.1.      Option to Effect Legal Defeasance or Covenant Defeasance.

            The Company may, at the option of its Board of  Directors  evidenced
by a resolution  set forth in an Officers'  Certificate,  at any time,  elect to
have either Section 8.2 or 8.3 of this  Indenture be applied to all  outstanding
Notes upon compliance with the conditions set forth below in this Article VIII.

Section 8.2.      Legal Defeasance and Discharge.

            Upon the Company's  exercise  under Section 8.1 of this Indenture of
the option  applicable  to this  Section  8.2,  the  Company  and,  if any,  the
Guarantors,  shall,  subject to the  satisfaction of the conditions set forth in
Section  8.4 of this  Indenture,  be deemed to have been  discharged  from their
obligations with respect to all outstanding Notes on the date the conditions set
forth below are satisfied (hereinafter,  "Legal Defeasance").  For this purpose,
Legal  Defeasance  means  that the  Company  shall be  deemed  to have  paid and
discharged the entire  Indebtedness  represented by the outstanding Notes, which
shall thereafter be deemed to the "outstanding" only for the purposes of Section
8.5 and the other Sections of this Indenture  referred to in clauses (1) through
(2) below, and to have satisfied all its other  obligations under such Notes and
this Indenture (and the Trustee, on demand of and at the expense of the Company,
shall  execute  proper  instruments  acknowledging  the  same),  except  for the
following   provisions  which  shall  survive  until  otherwise   terminated  or
discharged hereunder:

            (1) the  rights of Holders  to  receive  payments  in respect of the
      principal  of,  premium,  if any,  and  interest  on the  Notes  when such
      payments are due;

            (2) the Company's  obligations  with respect to the Notes concerning
      issuing temporary Notes, registration of Notes, mutilated, destroyed, lost
      or stolen Notes and the maintenance of an office or agency for payments;

            (3)   the rights, powers, trust, duties and immunities of
      the Trustee and the Company's obligations in connection
      therewith; and

            (4)   the Legal Defeasance provisions of this Article VIII.

            Subject to  compliance  with this  Article  VIII,  the  Company  may
exercise its option under this Section 8.2,  notwithstanding  the prior exercise
of its option under Section 8.3 of this Indenture.

<PAGE>
                                      -85-

Section 8.3.      Covenant Defeasance.

            Upon the Company's  exercise  under Section 8.1 of this Indenture of
the option  applicable to this Section 8.3, the Company,  the Guarantors and the
Restricted Subsidiaries of the Company shall, subject to the satisfaction of the
conditions  set forth in Section 8.4 of this  Indenture,  be  released  from its
obligations under the covenants contained in Sections 3.9, 3.10, 3.11, 4.3, 4.5,
4.7 through 4.18 of this Indenture,  inclusive,  and Section 5.1 with respect to
the  outstanding  Notes on and after the date the conditions set forth below are
satisfied (hereinafter,  "Covenant Defeasance"),  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 Company 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 of this Indenture,  but, except
as specified  above,  the  remainder of this  Indenture  and such Notes shall be
unaffected thereby.  In addition,  upon the Company's exercise under Section 8.1
of the option applicable to this Section 8.3, subject to the satisfaction of the
conditions set forth in Section 8.4, Sections 6.1(3),  and 6.1(5) through 6.1(8)
of this Indenture shall not constitute Events of Default.

Section 8.4.      Conditions to Legal or Covenant Defeasance.

            The following are the  conditions  precedent to the  application  of
either Section 8.2 or 8.3 of this Indenture to the outstanding Notes:

            In order to exercise either Legal Defeasance or Covenant Defeasance:

            (1) the Company must irrevocably deposit with the Trustee, in trust,
      for the benefit of the Holders cash in Euros or Government Securities,  or
      a  combination  thereof,  in such  amounts as will be  sufficient,  in the
      opinion of a nationally recognized firm of independent public accountants,
      to pay the principal of, premium, if any, and interest on the Notes on the
      stated date for payment thereof or on the applicable  redemption  date, as
      the case may be, and, in the event that the Trustee at any time determines
      the amount on deposit is insufficient to pay the principal of, premium, if
      any, and  interest on the Notes on the stated date for payment  thereof or
      on the  applicable  redemption  date, as the case may be, the Company must
      irrevocably  deposit  with the Trustee,  in trust,  for the benefit of the
      Holders  additional  cash  in  Euros  or  Government   Securities,   or  a
      combination  thereof,  in such  amounts  as will be,  together  with prior
      deposit(s),  sufficient, in the opinion of a nationally recognized firm of
      independent public accountants,  to pay the principal of, premium, if any,
      and interest on the Notes on the stated date for payment thereof or on the
      applicable redemption date, as the case may be;

<PAGE>
                                      -86-

            (2)  in the  case  of  Legal  Defeasance,  the  Company  shall  have
      delivered  to the  Trustee an  Opinion  of  Counsel  in the United  States
      reasonably  acceptable to the Trustee confirming that the Holders 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 on 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  have
      delivered  to the  Trustee an  Opinion  of  Counsel  in the United  States
      reasonably  acceptable to the Trustee confirming that the Holders 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 on
      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  granting  of Liens to  secure  such  borrowing  and such
      deposit) or insofar as Events of Default  from  bankruptcy  or  insolvency
      events are  concerned,  at any time in the  period  ending on the 91st day
      after the date of deposit;

            (5) such Legal Defeasance or Covenant Defeasance shall not result in
      a breach or violation of, or constitute a default under, this Indenture or
      any other material  agreement or instrument to which the Company or any of
      its  Subsidiaries  is a  party  or by  which  the  Company  or  any of its
      Subsidiaries is bound (other than a breach, violation or default resulting
      from the  borrowing  of funds to be  applied  to such  borrowing  and such
      deposit and the granting of Liens to secure such deposit);

            (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 over any other  creditors of the Company
      or with the intent of defeating,  hindering,  delaying or  defrauding  any
      other creditors of the Company or others;

            (7) the Company  shall have  delivered  to the Trustee an  Officers'
      Certificate  and an Opinion of Counsel,  each stating that all  conditions
      precedent  specified in this  Indenture  providing  for or relating to the
      Legal Defeasance or the Covenant Defeasance have been complied with; and

            (8) the Company  shall have  delivered  to the Trustee an Opinion of
      Counsel to the effect that:

                  (a) either (i) the Company has irrevocably assigned all of its
            ownership  interest  in the trust  funds to the  Trustee or (ii) the
            Trustee has a valid perfected  security  interest in the trust fund;
            and

<PAGE>
                                      -87-

                  (b) assuming no intervening  bankruptcy of the Company between
            the date of deposit and the 91st day  following  the date of deposit
            and that no Holder is an insider of the Company,  after the 91st day
            following  the date of deposit,  the trust funds will not be subject
            to  avoidance  as  a  preference  under  Section  547  of  the  U.S.
            Bankruptcy Code.

            Notwithstanding  the foregoing,  the Opinion of Counsel  required by
clause (2) above with respect to a Legal Defeasance need not be delivered if all
Notes not theretofore  delivered to the Trustee for cancellation (1) have become
due and payable or (2) will become due and payable on the  maturity  date within
one year under arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of the Company.

Section 8.5.
            Deposited Money and Government Securities to Be Held
            in Trust; Other Miscellaneous Provisions.

            Subject to Section 8.6 of this  Indenture,  all money and Government
Securities (including the proceeds thereof) deposited with the Trustee (or other
qualifying  trustee,  collectively  for purposes of this  Section 8.5 only,  the
"Trustee")  pursuant  to  Section  8.4  of  this  Indenture  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  (other than the  Company) as the
Trustee  may  determine,  to the  Holders  of such  Notes of all sums due and to
become  due  thereon  in  respect  of  principal  or  Redemption  Price of,  and
Additional Interest, if any, interest on, the Notes, that such money need not be
segregated from other funds except to the extent required by law.

            The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the cash or Government Securities
deposited  pursuant  to  Section  8.4 of this  Indenture  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 money or  Government  Securities  held by it as provided in
Section 8.4 of this Indenture  which, in the opinion of a nationally  recognized
firm of  independent  public  accountants  expressed in a written  certification
thereof  delivered  to the  Trustee  (which may be the opinion  delivered  under
Section  8.4(a) of this  Indenture),  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 the Company.

            Any money  deposited  with the Trustee or any Paying Agent,  or then
held by the Company, in trust for the payment of the principal, Redemption Price
or Purchase Price of, or Additional  Interest,  if any, or interest on any Notes
and  remaining  unclaimed for two (2) years after such amount has become due and
payable  shall be paid to the  Company  on its  request  or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Notes shall

<PAGE>
                                      -88-

thereafter look only to the Company for payment  thereof as a general  creditor,
and all liability of the Trustee or such Paying Agent with respect to such trust
money,  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,  at the expense of the Company, if required
by  applicable  law shall cause to be published  once, in The New York Times and
The Wall Street Journal  (national  editions) and, so long as the Series B Notes
are listed on the  Luxembourg  Stock Exchange and it is required by the rules of
the Luxembourg  Stock  Exchange,  shall cause the  publication of such notice in
English in a leading  newspaper having general  circulation in Luxembourg (which
is  expected  to be  the  Luxemburger  Wort)  or,  if  such  publication  is not
practicable,  in one other leading English language daily newspaper with general
circulation in Europe,  notice that such money remains unclaimed and that, after
a date specified therein, which shall not be less than 30 days after the date of
such  notification  or  publication,  any  unclaimed  balance of such money then
remaining will be repaid to the Company.

Section 8.7.      Reinstatement.

            If the  Trustee  or  Paying  Agent is  unable  to apply any Euros or
Government  Securities in accordance  with Section 8.2 or 8.3 of this Indenture,
as the  case  may be,  by  reason  of any  order  of  judgment  of any  court or
governmental  authority  enjoining,  restraining or otherwise  prohibiting  such
application,  then the obligations of the Company under this Indenture,  and the
Notes shall be revived and reinstated as though no deposit had occurred pursuant
to Section 8.2 or 8.3 of this Indenture until such time as the Trustee or Paying
Agent is permitted to apply all such money in accordance with Section 8.2 or 8.3
of this Indenture,  as the case may be; provided,  however, that, if the Company
makes any payment with respect to any Note  following the  reinstatement  of its
obligations,  the Company  shall be  subrogated  to the rights of the Holders of
such Notes to receive  such payment from the money held by the Trustee or Paying
Agent.
                               ARTICLE IX.

                        AMENDMENT, SUPPLEMENT AND WAIVER

Section 9.1.      Without Consent of Holders of Notes.

            Notwithstanding  Section 9.2 of this Indenture,  the Company and the
Trustee  (and,  in the case of the Security  Documents  to which the  Collateral
Agent is a party, the Collateral  Agent) may amend or supplement this Indenture,
the Security Documents or the Notes without the consent of any Holder of a Note:

            (1) to cure any ambiguity,  defect or  inconsistency so long as such
      changes do not, in the opinion of the Trustee, adversely affect the rights
      of any of the Holders in any material respect;

            (2)   to provide for uncertificated notes in addition to or
      in place of certificated Notes;

<PAGE>
                                      -89-

            (3) to provide for the  assumption of the Company's  obligations  to
      the Holders of the Notes in the case of a merger or  consolidation or sale
      of all or substantially  all of the Company's assets pursuant to Article V
      of this Indenture;

            (4)   to comply with the requirements of the Commission in
      order to effect or maintain the qualification of this Indenture
      under the TIA; or

            (5) to make any change that would provide any  additional  rights or
      benefits to the Holders of the Notes or that does not adversely affect the
      legal rights hereunder of any Holder of the Notes in any material respect.

            Upon the request of the Company,  accompanied by a resolution of the
Board of Directors  (evidenced  by an  Officers'  Certificate)  authorizing  the
execution of any such amended or supplemental indenture, and upon receipt by the
Trustee of the  documents  described in Section  7.2(2) of this  Indenture,  the
Trustee  shall  join  with  the  Company  in the  execution  of any  amended  or
supplemental  Indenture  authorized or permitted by the terms of this  Indenture
and to make any further  appropriate  agreements  and  stipulations  that may be
therein  contained,  but the Trustee  shall not be  obligated to enter into such
amended  or  supplemental  Indenture  that  affects  its own  rights,  duties or
immunities under this Indenture or otherwise.

Section 9.2.      With Consent of Holders of Notes.

            Except as provided  below in this  Section  9.2, the Company and the
Trustee  (and,  in the case of the Security  Documents  to which the  Collateral
Agent is a party, the Collateral  Agent) may amend or supplement this Indenture,
the Security Documents (including any amendments that provide for the release of
all or a portion  of the  Collateral  as set  forth  in,  and  subject  to,  the
conditions herein and in the Security  Documents) and the Notes with the consent
of the  Holders of at least a  majority  in  principal  amount of the Notes then
outstanding (including, without limitation, consents obtained in connection with
a tender offer or exchange offer for the Notes),  and,  subject to Sections 6.2,
6.4 and 6.7 of this  Indenture,  any  existing  Default  or Event of  Default or
compliance  with any provision of this Indenture or the Notes may be waived with
the  consent  of the  Holders  of a  majority  in  principal  amount of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes).

            Without the consent of each Holder affected,  an amendment or waiver
may not (with respect to any Notes held by a non-consenting Holder):

            (1) reduce  the amount of Notes  whose  Holders  must  consent to an
      amendment;

            (2) reduce the rate of or change or have the effect of changing  the
      time for payment of interest, including defaulted interest, on any Notes;

            (3) reduce the principal of or change or have the effect of changing
      the fixed maturity of any Notes, or change the date on which any Notes may
      be subject to redemption or reduce the redemption price therefor;

<PAGE>
                                      -90-

            (4) make any Notes  payable in money  other than that  stated in the
      Notes;

            (5) make any change in provisions of this  Indenture  protecting the
      right of each Holder to receive  payment of  principal  of and interest on
      such  Holder's  Note on or after the due date  thereof or to bring suit to
      enforce such  payment,  or  permitting  Holders of a majority in principal
      amount of Notes to waive Defaults or Events of Default;

            (6)  after  the  Company's   obligation  to  purchase  Notes  arises
      hereunder,  amend, change or modify in any material respect the obligation
      of the  Company to make and  consummate  a Change of Control  Offer in the
      event of a Change of Control or make and  consummate a Net Proceeds  Offer
      with  respect to any Asset Sale that has been  consummated  or, after such
      Change of Control has  occurred  or such Asset Sale has been  consummated,
      modify any of the provisions or definitions with respect thereto; or

            (7) modify or change any provision of this  Indenture or the related
      definitions  affecting  the ranking of the  Indebtedness  evidenced by the
      Notes.

            Upon the written request of the Company  accompanied by a resolution
of the Board (evidenced by an Officers'  Certificate)  authorizing the execution
of any such  amended or  supplemental  indenture,  and upon the filing  with the
Trustee of evidence satisfactory to the Trustee of the consent of the Holders of
Notes as aforesaid,  and upon receipt by the Trustee of the documents  described
in Section 7.2(2) of this Indenture,  the Trustee shall join with the Company in
the execution of such amended or supplemental  indenture  unless such amended or
supplemental  indenture  affects the Trustee's own rights,  duties or immunities
under  this  Indenture  or  otherwise,  in  which  case the  Trustee  may in its
discretion,  but  shall  not  be  obligated  to,  enter  into  such  amended  or
supplemental indenture.

            It shall not be  necessary  to obtain the  consent of the Holders of
Notes  under this  Section 9.2 to approve the  particular  form of any  proposed
amendment or waiver,  but it shall be  sufficient  if such consent  approves the
substance thereof.

            After an  amendment,  supplement  or waiver  under this  Section 9.2
becomes  effective,  the  Company  shall mail to the  Holders of Notes  affected
thereby a notice briefly  describing the  amendment,  supplement or waiver.  Any
failure of the Company to mail such notice,  or any defect  therein,  shall not,
however,  in any way  impair or  affect  the  validity  of any such  amended  or
supplemental Indenture or waiver.

Section 9.3.      Compliance with Trust Indenture Act.

            Every  amendment or supplement to this  Indenture or the Notes shall
be set forth in a amended or  supplemental  indenture that complies with the TIA
as then in effect.

<PAGE>
                                      -91-

Section 9.4.      Revocation and Effect of Consents.

            Until an  amendment,  supplement  or  waiver  becomes  effective,  a
consent to it by a Holder of a Note is a  continuing  consent by the Holder of a
Note and every  subsequent  Holder of a Note or portion of a Note that evidences
the same debt as the consenting  Holder's Note,  even if notation of the consent
is not made on any Note. However, any such Holder of a Note or subsequent Holder
of a Note may revoke the consent as to its Note if the Trustee  receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective.  An amendment,  supplement or waiver becomes  effective in accordance
with its terms and therefore binds every Holder.

Section 9.5.      Notation on or Exchange of Notes.

            The Trustee may place an  appropriate  notation  about an amendment,
supplement  or waiver on any Note  thereafter  authenticated.  The  Company,  in
exchange for all Notes, may issue, and the Trustee shall authenticate, new Notes
that reflect the amendment, supplement or waiver.

            Failure to make the  appropriate  notation or issue a new Note shall
not affect the validity and effect of such amendment, supplement or waiver.

Section 9.6.      Trustee to Sign Amendment, Etc.

            The  Trustee  shall  sign  any  amended  or  supplemental  indenture
authorized  pursuant to this Article IX if the amendment or supplement  does not
adversely affect the rights,  duties,  liabilities or immunities of the Trustee.
The Company may not sign an amendment or supplemental  Indenture until the Board
of Directors approves such amendment or supplemental indenture. In executing any
amended or supplemental indenture,  the Trustee shall be entitled to receive, in
addition to the documents  required by Sections 13.4 and 13.5 of this Indenture,
and,  subject to Section  7.1,  shall be fully  protected  in relying  upon,  an
Officers'  Certificate  and an Opinion of Counsel stating that (i) the execution
of such amended or  supplemental  indenture is  authorized  or permitted by this
Indenture,  (ii) no Event of Default shall occur as a result of the execution of
such Officers'  Certificate or the delivery of such Opinion of Counsel and (iii)
the amended or supplemental indenture complies with the terms of this Indenture.

                               ARTICLE X.

                           SATISFACTION AND DISCHARGE

Section 10.1.     Satisfaction and Discharge.

            This  Indenture  will be discharged  and will cease to be of further
effect  (except  as set forth  below)  and the  Trustee,  at the  expense of the
Company,  shall  execute  proper  instruments  acknowledging   satisfaction  and
discharge of this Indenture when:

<PAGE>
                                      -92-

            (1)   either:

                        (a)  all  the  Notes   theretofore   authenticated   and
                  delivered  (except lost,  stolen or destroyed Notes which have
                  been replaced or paid as provided in Section 2.7 and Notes for
                  whose payment money has theretofore been deposited in trust or
                  segregated  and held in trust by the  Company  and  thereafter
                  repaid to the Company or discharged from such trust) have been
                  delivered to the Trustee for cancellation; or

                        (b) all Notes not  theretofore  delivered to the Trustee
                  for  cancellation  have become due and payable and the Company
                  has  irrevocably  deposited or caused to be deposited with the
                  Trustee funds in an amount sufficient to pay and discharge the
                  entire Indebtedness on the Notes not theretofore  delivered to
                  the Trustee for  cancellation,  for principal of, premium,  if
                  any, and interest on the Notes to the date of deposit together
                  with irrevocable  instructions  from the Company directing the
                  Trustee to apply such funds to the payment thereof at maturity
                  or redemption, as the case may be;

            (2)   the Company has paid all other sums payable under
      this Indenture by the Company; and

            (3)  the  Company  has   delivered   to  the  Trustee  an  Officers'
      Certificate  and  an  Opinion  of  Counsel  stating  that  all  conditions
      precedent under this Indenture  relating to the satisfaction and discharge
      of this Indenture have been complied with.

            Notwithstanding  the  satisfaction  and discharge of this Indenture,
the Company's  obligations in Sections 2.3, 2.4, 2.6, 2.7, 2.11, 7.7, 7.8, 13.2,
13.3 and 13.4, and the Trustee's and Paying Agent's  obligations in Section 10.2
shall survive until the Notes are no longer  outstanding.  Thereafter,  only the
Company's obligations in Section 7.7 shall survive.

Section 10.2.     Application of Trust Money.

            All money deposited with the Trustee  pursuant to Section 10.1 shall
be held in trust and, at the written direction of the Company, be invested prior
to maturity in Government  Securities,  and applied by the Trustee in accordance
with the  provisions  of the Notes and this  Indenture,  to the payment,  either
directly  or through  any Paying  Agent as the  Trustee  may  determine,  to the
Persons entitled  thereto,  of the principal (and premium,  if any) and interest
for the payment of which money has been  deposited  with the  Trustee;  but such
money need not be segregated  from other funds except to the extent  required by
law.

<PAGE>
                                      -93-

                               ARTICLE XI.

                             COLLATERAL AND SECURITY

Section 11.1.     Security Documents.

            (1)   In order to secure the due and punctual payment of all amounts
due under this  Indenture  and the  Notes,  the  Company  has  entered  into the
respective  Security  Documents  to which they are party to create the  Security
Interests and for related matters.

            (2)   Each  holder of a Note, by accepting a Note,  agrees to all of
the terms and provisions of the Security  Documents,  as the same may be amended
from time to time pursuant to the provisions of the Security  Documents and this
Indenture;  including  but not  limited to any powers of attorney  provided  for
therein.

            (3)   Pursuant to the terms of this Indenture, the Collateral as now
or hereafter  constituted  shall be held by the Trustee or the Collateral  Agent
for  the  equal  and  ratable  benefit  of the  Holders,  including  Holders  of
Additional  Notes, if any,  without  preference,  priority or distinction of any
thereof  over any other by reason of  difference  in time of  issuance,  sale or
otherwise,  as security for the Notes,  including  Additional Notes, if any, and
any proceeds  realized from the Collateral  shall be distributed to the Holders,
the Trustee,  the Collateral  Agent, each other agent employed to act hereunder,
or the Company, pursuant to the terms of this Indenture.

            (4)   The  Company  shall  deliver  to  the  Trustee  copies  of all
documents  delivered to the Collateral Agent pursuant to the Security Documents,
and shall do or cause to be done all such acts and things as may be necessary or
proper,  or as may be required by the provisions of the Security  Documents,  to
assure and confirm to the Trustee and any Collateral Agent the Security Interest
in the  Collateral  contemplated  hereby or any part  thereof,  by the  Security
Documents or any part thereof, as from time to time constituted, so as to render
the same  available  for the security and benefit of this  Indenture  and of the
Notes or Parallel Obligations,  as applicable secured thereby,  according to the
intent and purposes herein and therein expressed.

Section 11.2.     Recording, etc.

            (1)   The  Company and the Guarantors,  if any, will cause, at their
own expense,  the Security  Documents,  this  Indenture,  the Collateral  Agency
Agreement,  as applicable,  and all amendments or supplements thereto or notices
or acknowledgments thereof to be registered,  recorded and filed or re-recorded,
refiled,  renewed or acknowledged in such manner and in such place or places, if
any, as may be required by law in order fully to preserve  and protect the Liens
created  by the  Security  Documents  on all  parts  of  the  Collateral  and to
effectuate and preserve the Security Interest of the Holders, the Trustee or the
Collateral Agent, as applicable.

            (2)   The Company shall furnish or cause to be furnished to
the Trustee:

<PAGE>
                                      -94-

            (a) at the  time  of  execution  and  delivery  of  this  Indenture,
      Opinion(s) of Counsel  substantially in the form of the Opinion of Counsel
      delivered on the Issue Date to the Initial Purchasers of the Notes (or the
      Trustee shall be permitted to rely on such Opinion(s) of Counsel); and

            (b) the Company  shall  furnish to the  Trustee,  promptly but in no
      event  later  than  30 days  after  the  execution  and  delivery  of this
      Indenture,  Opinion(s)  of Counsel  required by TIA Section  314(b)(1) and
      thereafter Opinion(s) of Counsel required by TIA Section 314(b)(2).

            (3)...The  Company and the  Guarantors,  if any, agree to record and
file,  at its or their  own  expense,  financing  statements  (and  continuation
statements  when  applicable)  with  respect to the  Collateral  now existing or
hereafter  created meeting the requirements of applicable law in such manner and
in such  jurisdictions as are necessary to perfect,  and maintain the perfection
of, the Lien, and deliver a file stamped copy of each such  financing  statement
or other  evidence of filing to the Trustee and, if  applicable,  the Collateral
Agent, promptly. Neither the Trustee nor the Collateral Agent shall be under any
obligation  whatsoever to file such financing or contamination  statements or to
make any other filing under the UCC in connection therewith.

Section 11.3.     Release of Collateral.

            (1)   The  Company  will have the right to obtain a release of items
of  Collateral   from  the  Lien  of  the  Security   Documents  (the  "Released
Collateral")  subject to a sale or disposition in accordance with this Indenture
(including,  without  limitation,  in  Section  4.11)  and  the  Trustee  or the
Collateral Agent, as applicable,  will release (or instruct the Collateral Agent
to release)  the  Released  Collateral  from the Lien of the  relevant  Security
Documents  (and   notwithstanding  any  provision  of  the  applicable  Security
Documents to the contrary)  and reconvey the Released  Collateral to the Company
promptly prior to such sale or disposition  upon  compliance  with the condition
that the Company  deliver to the Trustee the following  and any other  documents
necessary to effect the release of the Collateral:

            (a) Release  Notice.  A notice (each,  a "Release  Notice") from the
      Company (i) describing the proposed Released  Collateral,  (ii) certifying
      that if such  transfer  would  constitute  an Asset Sale,  such Asset Sale
      complies  with the terms and  conditions  of this  Indenture  with respect
      thereto and (iii) accompanied by a counterpart of the instruments proposed
      to  give  effect  to the  release  fully  executed  and  acknowledged  (if
      applicable)  by  all  parties  thereto  other  than  the  Trustee  or  the
      Collateral  Agent, as applicable,  with a copy to the Collateral Agent, if
      the Collateral Agent is a party to the relevant Security Document;

            (b) Officers'  Certificate.  An Officers' Certificate of the Company
      stating that (i) all Net Cash  Proceeds,  if any,  from the sale of any of
      the Released Collateral will be applied pursuant to the provisions of this
      Indenture in respect of Asset Sales,  (ii) there is no Default or Event of
      Default in effect and continuing on the date thereof, (iii) the release of

<PAGE>
                                      -95-

      the Collateral and the sale or disposition will not result in a Default or
      Event of Default under Section 6.1, with a copy to the  Collateral  Agent,
      if the Collateral Agent is a party to the relevant Security Document;

            (c)  Opinions of  Counsel.  An Opinion of Counsel  stating  that the
      documents that have been or are therewith delivered to the Trustee and the
      Collateral  Agent, if applicable,  in connection with such release conform
      to the  requirements  of this Indenture and that all conditions  precedent
      herein provided for such release have been complied with; and

            (d) Other Documents.  All documentation required by the TIA, if any,
      prior to the release of Collateral by the Trustee or the Collateral Agent,
      as applicable, and, in the event there is to be a substitution of property
      for the Collateral subject to the transfer, all documentation necessary to
      subject such new Collateral to the Lien of the Security Documents.

            (2)   Notwithstanding the foregoing provisions of this Section 11.3,
the Company may obtain a release of (a)  Collateral  pursuant to Section 9.2 and
(b) any Net Cash  Proceeds for the  purposes set forth in Section  4.10(c) or as
may be required to purchase  Notes pursuant to Section 4.10 of this Indenture by
directing  the Trustee in writing to cause to be applied such Net Cash  Proceeds
to  such  purchase  in  accordance  with  Section  4.10 of  this  Indenture,  as
applicable, and this Article XI.

            (3)   The  Company  shall also have the right to obtain  releases of
Collateral pursuant to, and subject to, Section 9.2.

Section 11.4.     Satisfaction and Discharge; Defeasance.

            The Company shall be entitled to obtain a full release of all of the
Collateral  from the Lien of this  Indenture  and the  Security  Documents  upon
compliance with all of the conditions  precedent for  satisfaction and discharge
of this  Indenture  pursuant to Article X, for a defeasance  pursuant to Article
VIII or in accordance  with,  and subject to,  Section 9.2. Upon delivery by the
Company to the Trustee of an  Officers'  Certificate  and an Opinion of Counsel,
each to the effect that all of the conditions  precedent have been complied with
(which may be the same Officers'  Certificate and Opinion of Counsel required by
Article VIII),  together with such documentation,  if any, as may be required by
this Indenture or the TIA (including  without  limitation,  TIA Section 3.14(d))
prior to the release of such  Collateral,  the Trustee  shall take all necessary
action, at the request and expense of the Company,  to release and reconvey,  or
to ensure that the Collateral  Agent shall release and reconvey,  to the Company
all of the  Collateral,  and shall deliver,  or shall  instruct  delivery by the
Collateral Agent of, such Collateral in its, or their, possession to the Company
including, without limitation, the execution and delivery of releases or waivers
whenever necessary.

Section 11.5.     Additional Collateral.

            The Company  shall grant to the  Trustee or any  Collateral  Agent a
Security  Interest in  additional  Collateral  pursuant to Section  4.17 of this
Indenture  or the  Security  Documents  and shall  deliver  to the  Trustee or a
Collateral Agent, as applicable, the following documents:

<PAGE>
                                      -96-

            (1) an instrument  or  instruments  in recordable  form or otherwise
      proper  form for the  applicable  jurisdiction  sufficient  for the  valid
      creation and perfection,  if applicable,  of a senior Lien of the Security
      Documents  to cover  and  create a  Security  Interest  in the  additional
      Collateral; and

            (2)  Opinion(s)  of  Counsel  in each  jurisdiction  in  which  such
      Collateral  is  located  substantially  in the form of the  local  counsel
      opinions  delivered on the date hereof and otherwise in form and substance
      satisfactory  to the Trustee  with respect to the  documents  executed and
      delivered by the Company and the Collateral encumbered thereby.

            Any such additional  Collateral shall be pledged to the Trustee or a
Collateral Agent,  directly or indirectly,  on behalf of all Holders pursuant to
the terms of this Indenture,  regardless of the enforceability of such pledge in
respect to any  specific  series of Notes  issued  under this  Indenture  or any
amendments or supplements hereto.

Section 11.6.     Trust Indenture Act Requirements.

            The release of any Collateral  pursuant to Article X or XI, from the
Lien of any of the  Security  Documents  or the release of, in whole or in part,
the Liens created by any of the Security Documents, will not be deemed to impair
the Security  Interests in contravention of the provisions  hereof if and to the
extent the Collateral or Liens are released pursuant to the applicable  Security
Documents and pursuant to the terms hereof.  The Trustee and each of the Holders
of the Notes  acknowledge  that a release of  Collateral  or Liens  strictly  in
accordance  with the terms of the Security  Documents  and the terms hereof will
not be deemed for any purpose to be an impairment  of the Security  Interests in
contravention of the terms of this Indenture. To the extent applicable,  without
limitation, the Company and the Guarantors, if any, on the Notes shall cause TIA
Section 314(d)  relating to the release of property or securities from the Liens
hereof and of the Security  Documents to be complied  with.  Any  certificate or
opinion required by TIA Section 314(d) may be made by an Officer of the Company,
except in cases in which TIA Section  314(d)  requires that such  certificate or
opinion be made by an independent Person.

Section 11.7.
            Authorization of Actions to be Taken by the Trustee
            or the Collateral Agent Under the Security Documents.

            Subject to the provisions of the Security Documents:

            (a)   The  Trustee or a Collateral  Agent, as applicable may, in its
sole  discretion  and without the  consent of the  Holders,  take all actions it
deems  necessary or  appropriate in order to (i) enforce any of the terms of the
Security  Documents and (ii) collect and receive any and all amounts  payable in
respect of the Obligations of the Company and the Guarantors,  if any, hereunder
and under the Security Documents; and

            (b)   Each of the Trustee and the Collateral  Agent shall have power
to  institute  and to  maintain  such  suits  and  proceedings  as they may deem
expedient to prevent any  impairment of the  Collateral by any acts which may be
unlawful or in violation of any of the Security Documents or this Indenture, and

<PAGE>
                                      -97-

such  suits  and  proceedings  as  the  Trustee  or  the  Collateral  Agent,  as
applicable,  may deem  expedient  to preserve or protect its  interests  and the
interests of the Holders of the Notes,  the Trustee or the Collateral  Agent, as
applicable,  in the Collateral  (including power to institute and maintain suits
or proceedings to restrain the enforcement of or compliance with any legislative
or other governmental  enactment,  rule or order that may be unconstitutional or
otherwise  invalid if the  enforcement  of, or compliance  with, such enactment,
rule or order would  impair the  Security  Interests  or be  prejudicial  to the
interests of the Holders of the Notes,  the Trustee or the Collateral  Agent, as
applicable).

Section 11.8.     Release Upon Termination of the Company's Obligations.

            In the event that the Company delivers an Officers'  Certificate and
Opinion of Counsel  certifying  that its  obligations  under this Indenture have
been  satisfied and  discharged by complying  with the  provisions of Article X,
together with any documentation, if any, as may be required by this Indenture or
the TIA (including, without limitation, TIA Section 314(d)) prior to the release
of the Collateral, the Trustee or the Collateral Agent, as applicable, shall (i)
execute and deliver such releases,  termination statements and other instruments
(in recordable form, where  appropriate) as the Company,  may reasonably request
evidencing  the  termination of the Security  Interests  created by the Security
Documents and (ii) not be deemed to hold the Security  Interests for its benefit
and the benefit of the Holders of the Notes.

Section 11.9.     Intercreditor Agreement.

            Prior to, and as a condition  to, the creation or  imposition of any
consensual  Lien  (other than that in favor of the  Holders,  the Trustee or the
Collateral Agent) on the Collateral,  the Company,  the Trustee and the proposed
holder of such Lien will  enter  into an  intercreditor  agreement,  in form and
substance  reasonably  satisfactory  to the  Trustee  and the  Company,  and the
Trustee is hereby authorized to enter into such intercreditor agreements.

Section 11.10.    Limitation on Duty of Trustee and Collateral Agent of
            Collateral; Indemnification.

            (a)   Beyond the exercise of reasonable care in the custody thereof,
neither  the  Trustee  nor the  Collateral  Agent  shall have any duty as to any
Collateral in its  possession or control or in the  possession or control of any
agent or bailee or any income  thereon or as to  preservation  of rights against
prior parties or any other rights pertaining thereto and neither the Trustee nor
the  Collateral   Agent  shall  be  responsible  for  filing  any  financing  or
continuation  statements or recording any documents or instruments in any public
office  at any  time  or  times  or  otherwise  perfecting  or  maintaining  the
perfection  of  any  security  interest  in  the  Collateral.  The  Trustee  and
Collateral  Agent  shall be  deemed  to have  exercised  reasonable  care in the
custody of the  Collateral  in its  possession  if the  Collateral  is  accorded
treatment  substantially  equal to that which it accords  its own  property  and
shall not be liable or  responsible  for any loss or  diminution in the value of
any of the  Collateral,  by  reason  of the  act  or  omission  of any  carrier,
forwarding  agency  or other  agent or bailee  selected  by the  Trustee  or the
Collateral Agent in good faith.

<PAGE>
                                      -98-

            (b)   Neither   the  Trustee  nor  the  Collateral  Agent  shall  be
responsible for the existence,  genuineness or value of any of the Collateral or
for the validity, perfection,  priority or enforceability of the Liens in any of
the Collateral,  whether impaired by operation of law or by reason of any of any
action or  omission  to act on its part  hereunder,  except to the  extent  such
action or omission  constitutes  negligence,  bad faith or willful misconduct on
the part of the Trustee or the Collateral Agent, as applicable, for the validity
or  sufficiency  of the  Collateral  or any  agreement or  assignment  contained
therein,  for the  validity of the title of the Company to the  Collateral,  for
insuring the  Collateral or for the payment of taxes,  charges,  assessments  or
Liens upon the Collateral or otherwise as to the maintenance of the Collateral.

            (c)   The  Company shall indemnify the Collateral Agent as set forth
in the Collateral Agency Agreement.

                              ARTICLE XII.

                           APPLICATION OF TRUST MONIES

Section 12.1.     Collateral Account

            On the date of this Indenture there shall be established and, at all
times  hereafter  until this  Indenture  shall have  terminated,  there shall be
maintained with the Trustee a collateral account (the "Collateral Account"). The
Collateral  Account shall be  established  and  maintained by the Trustee at its
Corporate  Trust  Office.  All Trust Monies which are received by the Trustee or
the Collateral Agent shall be deposited in the Collateral Account and thereafter
shall be held by and under the sole  dominion and control of the Trustee for its
benefit and for the benefit of the Holders as a part of the Collateral and, upon
any sale or other  disposition of the Collateral or any part thereof pursuant to
any of the Security Documents,  said Trust Monies shall be applied in accordance
with Section 6.10; but prior to any such sale or other  disposition,  all or any
part of the  Trust  Monies  may be  withdrawn,  and shall be  released,  paid or
applied by the Trustee in accordance with the terms of this Indenture.

Section 12.2.     Investment of Trust Monies

            So  long  as  no  Event  of  Default  shall  have  occurred  and  is
continuing,  all or any part of any Trust Monies held by the Trustee  shall from
time to time be invested or  reinvested  by the Trustee in any Cash  Equivalents
upon the Company's written request,  which shall specify the Cash Equivalents in
which  such  Trust  Monies  shall  be  invested  and  shall  certify  that  such
investments constitute Cash Equivalents and the Trustee shall sell any such Cash
Equivalent  only upon receipt of a written  request from the Company  specifying
the particular Cash Equivalent to be sold. So long as no Event of Default occurs
and is  continuing,  any interest or dividends  accrued,  earned or paid on such
Cash  Equivalents  (in excess of any accrued  interest or dividends  paid at the
time of purchase) that may be received by the Trustee shall be forthwith paid to
the Company. Such Cash Equivalents shall be held by the Trustee as a part of the
Collateral,  subject  to the same  provisions  hereof  as the cash used by it to
purchase such Cash Equivalents.

<PAGE>
                                      -99-

            The  Trustee  shall  not be  liable  or  responsible  for  any  loss
resulting  from such  investments  or sales  except  only for its own  negligent
action,  its own  negligent  failure  to act or its own  willful  misconduct  in
complying with this Section 12.2.

                              ARTICLE XIII.

                                  MISCELLANEOUS

Section 13.1.     Trust Indenture Act Controls.

            If any  provision  hereof  limits,  qualifies  or  conflicts  with a
provision of the TIA or another provision that would be required or deemed under
such Act to be part of and govern this  Indenture if this Indenture were subject
thereto,  the latter provision shall control. If any provision of this Indenture
modifies  or  excludes  any  provision  of the TIA  that may be so  modified  or
excluded,  the latter provision shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.

Section 13.2.     Notices.

            Any notice or  communication by the Company or the Trustee to others
is duly given if in writing  and  delivered  in Person or mailed by first  class
mail (registered or certified,  return receipt requested),  telex, telecopier or
overnight air courier guaranteeing next day delivery, to the others' address:

            If to the Company:

                  Kronos International, Inc.
                  16825 North Chase Drive
                  Suite 1200
                  Houston, Texas  77060
                  Attention: Robert D. Hardy
                  Fax:  (281) 423-3333

            With a copy to:

                  Locke Liddell & Sapp LLP
                  2200 Ross Avenue
                  Suite 2200
                  Dallas, Texas  75201
                  Attention:  Don M. Glendenning, Esq.
                  Fax:  (214) 756-8623

            If to the Trustee:

                  The Bank of New York
                  101 Barclay Street
                  New York, New York 10286
                  Attention:  Global Finance Unit
                  Fax:  (212) 235-2530

<PAGE>
                                      -100-

            The Company or the Trustee,  by notice to the others,  may designate
additional or different addresses for subsequent notices or communications.

            All  notices and  communications  (other than those sent to Holders)
shall be deemed  to have been duly  given:  at the time  delivered  by hand,  if
personally delivered;  five (5) Business Days after being deposited in the mail,
postage  prepaid,  if mailed;  when  answered  back,  if telexed;  when  receipt
acknowledged,  if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.

            Any  notice or  communication  to a Holder  shall be mailed by first
class mail, certified or registered,  return receipt requested,  or by overnight
air courier  guaranteeing next day delivery to its address shown on the register
kept by the Registrar.  Any notice or  communication  shall also be so mailed to
any Person  described in TIA Section 313(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
within  the  time  prescribed,  it is duly  given,  whether  or not the  address
receives it.

            If the Company mails a notice or communication to Holders,  it shall
mail a copy to the Trustee and each Agent at the same time.

            So long as the  Series B Notes are  listed on the  Luxembourg  Stock
Exchange  and it is  required  by the rules of the  Luxembourg  Stock  Exchange,
publication of such notice to the Holders of the Series B Notes shall be made in
English in a leading  newspaper having general  circulation in Luxembourg (which
is  expected  to be  the  Luxemburger  Wort)  or,  if  such  publication  is not
practicable,  in one other leading English language daily newspaper with general
circulation in Europe,  such newspaper  being  published on each business day in
morning  editions,  whether or not it shall be published on Saturday,  Sunday or
holiday editions.

Section 13.3.     Communication by Holders of Notes with Other Holders of Notes.

            Holders may  communicate  pursuant to TIA Section  312(b) with other
Holders  with respect to their  rights  under this  Indenture or the Notes.  The
Company, the Trustee, the Registrar and anyone else shall have the protection of
TIA Section 312(c).

<PAGE>
                                      -101-

Section 13.4.     Certificate and Opinion as to Conditions Precedent.

            Upon any request or  application by the Company and/or any Guarantor
to the Trustee to take any action under this  Indenture,  the Company and/or any
Guarantor shall furnish to the Trustee:

            (1) an  Officers'  Certificate  in  form  and  substance  reasonably
      satisfactory  to the Trustee (which shall include the statements set forth
      in Section 13.5 of this  Indenture)  stating  that,  in the opinion of the
      signers, all conditions  precedent and covenants,  if any, provided for in
      this Indenture relating to the proposed action have been satisfied; and

            (2)  an  Opinion  of  Counsel  in  form  and  substance   reasonably
      satisfactory  to the Trustee (which shall include the statements set forth
      in Section 13.5 of this  Indenture)  stating  that, in the opinion of such
      counsel, all such conditions precedent and covenants have been satisfied.

Section 13.5.     Statements Required in Certificate or Opinion.

            Each  certificate  or  opinion  with  respect to  compliance  with a
condition or covenant  provided for in this Indenture  (other than a certificate
provided pursuant to TIA Section  314(a)(4)) shall comply with the provisions of
TIA Section 314(e) and shall include:

            (1)   a statement that the Person 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 Person,  he or she 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 satisfied; and

            (4) a statement as to whether or not, in the opinion of such Person,
      such condition or covenant has been satisfied.

Section 13.6.     Rules by Trustee and Agents.

            The Trustee may make reasonable  rules for action by or at a meeting
of Holders.  The  Registrar  or Paying Agent may make  reasonable  rules and set
reasonable requirements for its functions.

Section 13.7.     No  Personal  Liability of  Directors, Officers, Employees and
                  Stockholders.

            No  past,   present   or   future   director,   officer,   employee,
incorporator,  agent or stockholder or Affiliate of the Company,  as such, shall
have any liability  for any  obligations  of the Company  under the Notes,  this

<PAGE>
                                      -102-

Indenture  or for any claim  based  on, in  respect  of, or by reason  of,  such
obligations or their creation.  No past,  present or future  director,  officer,
employee,  incorporator,  agent  or  stockholder  or  Affiliate  of  any  of the
Guarantors,  as  such,  shall  have any  liability  for any  obligations  of the
Guarantors  under the  Guarantees,  this Indenture or for any claim based on, in
respect of, or by reason of, such obligations or their creation.  Each Holder of
Notes and Guarantees by accepting a Note and a Guarantee waives and releases all
such  liabilities.  The waiver and  release  are part of the  consideration  for
issuance of the Notes and the  Guarantees.  Such waiver may not be  effective to
waive  liabilities  under the federal  securities  law and it is the view of the
Commission that such a waiver is against public policy.

Section 13.8.     Governing  Law;  Submission  to  Jurisdiction;  Waiver of Jury
                  Trial.

            THIS  INDENTURE,  THE  GUARANTEES AND THE NOTES SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE  WITH THE LAWS OF THE STATE OF NEW YORK, BUT WITHOUT
GIVING  EFFECT TO  APPLICABLE  PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT
THE APPLICATION OF THE LAW OF ANOTHER  JURISDICTION  WOULD BE REQUIRED  THEREBY.
THE COMPANY AND EACH GUARANTOR HEREBY  IRREVOCABLY  SUBMITS TO THE NON-EXCLUSIVE
JURISDICTION  OF ANY NEW YORK STATE COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK OR ANY FEDERAL COURT SITTING IN THE BOROUGH OF MANHATTAN IN
THE CITY OF NEW YORK IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF
OR RELATING TO THIS  INDENTURE,  THE GUARANTEES AND THE NOTES,  AND  IRREVOCABLY
ACCEPTS   FOR   ITSELF  AND  IN  RESPECT   OF  ITS   PROPERTY,   GENERALLY   AND
UNCONDITIONALLY, NON-EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY
AND  EACH  GUARANTOR  IRREVOCABLY  WAIVES,  TO THE  FULLEST  EXTENT  THAT IT MAY
EFFECTIVELY DO SO UNDER APPLICABLE LAW, TRIAL BY JURY AND ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT  FORUM.
NOTHING  HEREIN SHALL AFFECT THE RIGHT OF THE TRUSTEE OR ANY HOLDER OF THE NOTES
TO SERVE  PROCESS IN ANY OTHER  MANNER  PERMITTED  BY LAW OR TO  COMMENCE  LEGAL
PROCEEDINGS  OR OTHERWISE  PROCEED  AGAINST THE COMPANY OR ANY  GUARANTOR IN ANY
OTHER JURISDICTION.

Section 13.9.     No Adverse Interpretation of Other Agreements.

            This  Indenture  may not be used to interpret  any other  indenture,
loan or debt  agreement  of the  Company  or its  Subsidiaries  or of any  other
Person. Any such indenture,  loan or debt agreement may not be used to interpret
this Indenture.
<PAGE>
                                      -103-

Section 13.10.    Judgment Currency.

            The Company and the Guarantors, if any, jointly and severally, agree
to indemnify the Holders and each person, if any, who controls any Holder within
the meaning of Section 15 of the  Securities  Act or Section 20 of the  Exchange
Act against any loss incurred, as incurred, as a result of any judgment or award
against the Company or such Guarantor in connection  with this  Indenture  being
expressed  in a currency  (the  "Judgment  Currency")  other than Euros and as a
result of any  variation  as between  (i) the spot rate of exchange in London at
which the Judgment  Currency  could have been converted into Euro as of the date
such  judgment  or award is paid and (ii) the spot rate of exchange at which the
indemnified party converts such Judgment Currency;  provided,  however, that the
liability of the Company and the Guarantors,  if any, to the  indemnified  party
under this Section 13.10 shall be limited to that which would have arisen if the
indemnified  party had acted promptly to convert such judgment or award from the
Judgment  Currency  into Euros.  The  foregoing  indemnity  shall  constitute  a
separate and independent  obligation of the Company and the Guarantors,  if any,
and shall continue in full force and effect notwithstanding any such judgment or
order as aforesaid.  The term "spot rate of exchange" shall include any premiums
and costs of exchange  payable in connection with the purchase of, or conversion
into, the relevant currency.

Section 13.11.    Successors.

            All  agreements of the Company in this Indenture and the Notes shall
bind their  successors.  All agreements of the Trustee in this  Indenture  shall
bind its successors.

Section 13.12.    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 13.13.    Counterpart 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.

Section 13.14.    Table of Contents, Headings, Etc.

            The Table of  Contents,  Cross-Reference  Table and  Headings of the
Articles  and  Sections  of  this  Indenture,   which  have  been  inserted  for
convenience of reference only, are not to be considered a part of this Indenture
and shall in no way modify or restrict any of the terms or provisions hereof.

Section 13.15.    Qualification of Indenture.

            The Company shall qualify this Indenture under the TIA in accordance
with the terms and conditions of the Registration Rights Agreement and shall pay
all reasonable  out-of-pocket costs and expenses (including  attorneys' fees for

<PAGE>
                                      -104-

the Company,  the Trustee and the Holders of the Notes)  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  Company  any such  Officers'
Certificates,  Opinions of Counsel or other  documentation  as it may reasonably
request in connection  with any such  qualification  of this Indenture under the
TIA.

                     [Signatures on following pages]

<PAGE>
                                      -105-

                                   SIGNATURES

                                    KRONOS INTERNATIONAL, INC.

                                    By:  /s/ Robert D. Hardy
                                         -----------------------------------
                                         Name:  Robert D. Hardy
                                         Title: Vice President and Chief
                                         Financial Officer

                                    By:  /s/ John St. Wrba
                                         -----------------------------------
                                         Name:  John St. Wrba
                                         Title: Assistant Treasurer

                                    THE BANK OF NEW YORK,
                                    as Trustee

                                    By:  /s/ Luis Perez
                                         -----------------------------------
                                         Name:  Luis Perez
                                         Title: Assistant Vice President

<PAGE>

                                                                EXHIBIT A

                              FORM OF SERIES A NOTE

                                 (Face of Note)

                       KRONOS INTERNATIONAL, INC.

                   8 7/8% SENIOR SECURED NOTE DUE 2009

[THIS NOTE IS A GLOBAL  NOTE  WITHIN THE  MEANING OF THE  INDENTURE  HEREINAFTER
REFERRED  TO AND IS  REGISTERED  IN THE NAME OF A  DEPOSITARY  OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR  DEPOSITARY.  THIS NOTE IS NOT  EXCHANGEABLE FOR NOTES
REGISTERED  IN THE NAME OF A PERSON  OTHER THAN THE  DEPOSITARY  OR ITS  NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE,  AND NO TRANSFER
OF THIS  SECURITY  (OTHER  THAN A TRANSFER  OF THIS  SECURITY  AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE  DEPOSITARY OR BY A NOMINEE OF THE  DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

THIS GLOBAL NOTE IS HELD BY THE COMMON  DEPOSITORY  (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF,
AND IS NOT  TRANSFERABLE TO ANY PERSON UNDER ANY  CIRCUMSTANCES  EXCEPT THAT (I)
THE  TRUSTEE  MAY MAKE SUCH  NOTATIONS  HEREON AS MAY BE  REQUIRED  PURSUANT  TO
SECTIONS 2.1, 2.6,  2.7, 3.3, 4.10 AND 4.15 OF THE  INDENTURE,  (II) THIS GLOBAL
NOTE MAY BE  EXCHANGED  IN WHOLE BUT NOT IN PART  PURSUANT TO SECTION 2.6 OF THE
INDENTURE,  (III)  THIS  GLOBAL  NOTE  MAY  BE  DELIVERED  TO  THE  TRUSTEE  FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR  DEPOSITORY  WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY.1

THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S.  SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES  ACT"),  AND,  ACCORDINGLY,  MAY NOT BE OFFERED OR SOLD
WITHIN THE UNITED  STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S.  PERSONS
EXCEPT AS SET FORTH BELOW. BY ITS ACQUISITION  HEREOF, THE HOLDER (1) REPRESENTS
THAT (A) IT IS A "QUALIFIED  INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A UNDER
THE SECURITIES  ACT), (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING THIS SECURITY
IN AN OFFSHORE  TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT

1  To be included only if the Note is issued in global form.

                                      A-1
<PAGE>

OR (C) IT IS AN ACCREDITED INVESTOR (AS DEFINED IN RULE 501(a)(1),  (2), (3), OR
(7) UNDER THE SECURITIES ACT (AN "ACCREDITED INVESTOR"), (2) AGREES THAT IT WILL
NOT  WITHIN  TWO  YEARS  AFTER THE  ORIGINAL  ISSUANCE  OF THIS  NOTE  RESELL OR
OTHERWISE  TRANSFER  THIS NOTE EXCEPT (A) TO KRONOS  INTERNATIONAL,  INC. OR ANY
SUBSIDIARY  THEREOF,  (B) INSIDE THE UNITED STATES TO A QUALIFIED  INSTITUTIONAL
BUYER IN  COMPLIANCE  WITH RULE 144A UNDER THE  SECURITIES  ACT,  (C) INSIDE THE
UNITED STATES TO AN ACCREDITED INVESTOR THAT, PRIOR TO SUCH TRANSFER,  FURNISHES
(OR HAS FURNISHED ON ITS BEHALF BY A U.S. BROKER-DEALER) TO THE TRUSTEE A SIGNED
LETTER  CONTAINING  CERTAIN  REPRESENTATIONS  AND  AGREEMENTS  RELATING  TO  THE
RESTRICTIONS  ON  TRANSFER  OF THIS  SECURITY  (THE FORM OF WHICH  LETTER CAN BE
OBTAINED FROM THE TRUSTEE FOR THIS  SECURITY),  (D) OUTSIDE THE UNITED STATES IN
AN OFFSHORE TRANSACTION IN COMPLIANCE WITH RULE 904 UNDER THE SECURITIES ACT (IF
AVAILABLE), (E) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144
UNDER  THE  SECURITIES  ACT  (IF  AVAILABLE),  (F) IN  ACCORDANCE  WITH  ANOTHER
EXEMPTION FROM THE  REGISTRATION  REQUIREMENTS  OF THE SECURITIES ACT (AND BASED
UPON AN OPINION OF COUNSEL IF KRONOS  INTERNATIONAL,  INC. SO REQUESTS),  OR (G)
PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS  SECURITY IS  TRANSFERRED A
NOTICE  SUBSTANTIALLY  TO THE EFFECT OF THIS LEGEND IN ADVANCE OF SUCH TRANSFER.
IN  CONNECTION  WITH ANY  TRANSFER OF THIS  SECURITY  WITHIN TWO YEARS AFTER THE
ORIGINAL ISSUANCE OF THIS SECURITY,  IF THE PROPOSED TRANSFEREE IS AN ACCREDITED
INVESTOR,  THE HOLDER MUST,  PRIOR TO SUCH TRANSFER,  FURNISH TO THE TRUSTEE AND
KRONOS  INTERNATIONAL,  INC.  SUCH  CERTIFICATIONS,   LEGAL  OPINIONS  OR  OTHER
INFORMATION  AS EITHER  OF THEM MAY  REASONABLY  REQUIRE  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. AS USED HEREIN,
THE TERMS "OFFSHORE  TRANSACTION,"  "UNITED  STATES" AND "U.S.  PERSON" HAVE THE
MEANING GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.

                                      A-2

<PAGE>

                       KRONOS INTERNATIONAL, INC.
                   8 7/8% SENIOR SECURED NOTE DUE 2009

                                                ISIN Co.
                                                              -------------
                                                Common Code
                                                              -------------
No.                                             (euro)
    --------                                          ---------------------

Interest Payment Dates: June 30 and December 30
Record Dates: June 15 and December 15

            KRONOS  INTERNATIONAL,  INC., a Delaware corporation (the "Company,"
which term includes any successor  corporation  under the Indenture  hereinafter
referred  to),  for  value  received  promises  to pay to The  Bank of New  York
Depository  (Nominees)  Limited or  registered  assigns,  the  principal  sum of
_____________________ Euro on June 30, 2009.

            Reference is hereby made to the further  provisions of this Note set
forth on the reverse  hereof,  which further  provisions  shall for all purposes
have the same effect as set forth at this place.

            Unless the certificate of authentication hereon has been executed by
the Trustee  referred to on the reverse  hereof by manual  signature,  this Note
shall not be entitled to any  benefits  under the  Indenture  referred to on the
reverse hereof or be valid or obligatory for any purpose.

            IN WITNESS  WHEREOF,  the  Company  has caused  this Note to be duly
executed under its corporate seal.

                                    Dated:

                                    KRONOS INTERNATIONAL, INC.

                                    By:
                                         -----------------------------------
                                         Name:
                                         Title:

                                    By:
                                         -----------------------------------
                                         Name:
                                         Title:

This is one of the Notes referred to
in the within-mentioned Indenture:

THE BANK OF NEW YORK
as Trustee

By:
     -------------------------
     Authorized Signatory

                                      A-3

<PAGE>

                                 (Back of Note)

                  8 7/8% Senior Secured Notes due 2009

            Capitalized  terms used herein shall have the  meanings  assigned to
them in the Indenture referred to below unless otherwise indicated.

            1. Interest.  The Company  promises to pay interest on the principal
amount of this Note at the rate of 8 7/8% per  annum  from the date of  original
issuance until maturity and shall pay the  Additional  Interest  pursuant to the
Registration  Rights Agreement referred below. The Company will pay interest and
Additional Interest semi-annually on June 30 and December 30 of each year, or if
any such day is not a Business Day, on the next succeeding Business Day (each an
"Interest Payment Date").  Interest on the Note will accrue from the most recent
date to which interest has been paid or, if no interest has been paid,  from the
date of issuance;  provided that if there is no existing  Default in the payment
of interest, and if this Note is authenticated between a record date referred to
on the face hereof and the next succeeding Interest Payment Date, interest shall
accrue from such next succeeding Interest Payment Date; provided,  further, that
the first  Interest  Payment Date shall be December 30, 2002.  The Company shall
pay  interest  (including  post-petition  interest in any  proceeding  under any
Bankruptcy  Law) on  overdue  payments  of the  principal,  Purchase  Price  and
Redemption  Price of this  Note from time to time on demand at a rate that is 1%
per annum in excess of the rate then in effect; it shall pay interest (including
post-petition  interest in any proceeding  under any Bankruptcy  Law) on overdue
installments of interest and Additional Interest, if any, (without regard to any
applicable grace periods) hereon from time to time on demand at the same rate to
the extent  lawful.  Interest will be computed on the basis of a 360-day year of
twelve 30-day months.

            2. Method of Payment.  The  Company  will pay  interest on the Notes
(except defaulted interest) and Additional Interest,  if any, to the Persons who
are  registered  Holders  of Notes at the close of  business  on the June 15 and
December 15 next  preceding the Interest  Payment  Date,  even if such Notes are
canceled  after such record date and on or before such  Interest  Payment  Date,
except as provided in Section  2.12 of the  Indenture  with respect to defaulted
interest.  Any such installment of interest or Additional Interest,  if any, not
punctually  paid or duly provided for shall forthwith cease to be payable to the
registered  Holders  on  such  Interest  Payment  Date,  and  may be paid to the
registered  Holders at the close of business on a special  interest payment date
to be fixed by the Trustee for the payment of such  defaulted  interest,  notice
whereof shall be given to the registered  Holders not less than 10 days prior to
such  special  interest  payment  date,  or may be paid at any time 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,  all as more fully  provided in the Indenture.  The Notes will be
payable  as  to  principal,  Redemption  Price,  Purchase  Price,  interest  and
Additional  Interest,  if any, at the office or agency of the Company maintained
for such  purpose  within or without the City and State of New York,  or, at the
option of the Company,  payment of interest and Additional  Interest may be made
by check mailed to the Holders at their  addresses  set forth in the register of
Holders,  provided that payment by wire transfer of immediately  available funds
will be required with respect to principal,  Redemption Price and Purchase Price
of, and interest and  Additional  Interest (if any) on, all Global Notes and all
other Notes the Holders of which shall have provided wire transfer  instructions
to the  Trustee  or the  Paying  Agent.  Such  payment  shall be in such coin or

                                      A-4

<PAGE>

currency  of the  European  Union as at the time of payment is legal  tender for
payment of public and private debts.

            3.    Paying Agent and Registrar.  Initially, The Bank of
New York, the Trustee under the Indenture, will act as Paying Agent and
Registrar.  The Company may change any Paying Agent or Registrar
without notice to any Holder.  The Company may act in any such capacity.

            4.  Indenture.  The Company  issued  (euro)285  million in aggregate
principal  amount of the Notes under an Indenture dated as of June 28, 2002 (the
"Indenture")  between the Company and the Trustee. The Company shall be entitled
to issue Additional Notes (as defined in the Indenture) pursuant to Section 2.16
of the  Indenture.  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, as amended (15 U.S.C. Code Sections  77aaa-77bbbb).  The Notes are subject
to all such terms,  and Holders are referred to the Indenture and such Act for a
statement of such terms.  The Notes are general  obligations of the Company.  By
purchasing the Notes, each Holder acknowledges and agrees to benefit from and be
bound by the terms and conditions of the Indenture.

            5. Optional Redemption. Except as described below, the Notes are not
redeemable  before  December  30, 2005.  Thereafter,  the Company may redeem the
Notes at any time on or after  December  30, 2005 at its option,  in whole or in
part,  upon not less  than 30 nor more  than 60 days  notice,  at the  following
redemption  prices (expressed as percentages of the principal amount thereof) if
redeemed  during  the  twelve-month  period  (or,  in the  case  of  the  period
commencing on December 30, 2008, six-month period) commencing on December of the
year set forth below:

                   Year                 Percentage
      ---------------------------       ----------

      2005.......................       104.437%
      2006.......................       102.958%
      2007.......................       101.479%
      2008 and thereafter........       100.000%

            In addition, the Company must pay accrued and unpaid interest on the
Notes redeemed.

            6. Special Redemption.  (a) At any time, or from time to time, on or
prior  to June  30,  2005,  the  Company,  at its  option,  may use the net cash
proceeds  of one or more  Public  Equity  Offerings  to  redeem up to 35% of the
principal  amount of the Notes,  including the original  principal amount of any
Additional  Notes,  issued under the Indenture at a Redemption Price of 108.875%
of the principal  amount thereof plus accrued and unpaid interest and Additional
Interest,  if any, to the date of redemption;  provided that (1) at least 65% of
the principal  amount of Notes,  including the original  principal amount of any
Additional  Notes,  issued under the Indenture  remain  outstanding  immediately
after any such  redemption;  and (2) such redemption  shall occur within 90 days
after the date of closing of the applicable Public Equity Offering.

            (b) At any time on or prior to December 30, 2005, the Notes may also
be redeemed or purchased  (by the Company or any other  Person) in whole but not
in part, at the Company's option, upon the occurrence of a Change of Control, at

                                      A-5

<PAGE>

a price  equal to 100% of the  principal  amount  thereof  plus  the  Applicable
Premium  as of,  and  accrued  but  unpaid  interest,  if any,  to,  the date of
redemption or purchase (the "Redemption  Date") (subject to the right of Holders
of record on the  relevant  record date to receive  interest due on the relevant
interest  payment  date).  Such  redemption  or purchase may be made upon notice
mailed by first-class mail to each Holder's registered address, not less than 30
nor more than 60 days prior to the  Redemption  Date (but in no event shall such
notice be mailed  more than 180 days  after  the  occurrence  of such  Change of
Control).  The Company may provide in such notice that payment of such price and
performance  of the  Company's  obligations  with respect to such  redemption or
purchase may be performed by another Person.  Any such notice may be given prior
to the  occurrence of the related  Change of Control,  and any such  redemption,
purchase  or  notice  may,  at  the  Company's  discretion,  be  subject  to the
satisfaction of one or more conditions  precedent,  including but not limited to
the occurrence of the related Change of Control.

            7.    Mandatory Redemption.  Except as set forth in
Paragraph 9 below with respect to purchases of Notes in certain events,
the Company shall not be required to make mandatory redemption payments
with respect to the Notes.

            8. Notice of  Redemption or Purchase.  Subject to the  provisions of
the  Indenture,  a notice of redemption  will be mailed at least 30 days but not
more than 60 days before the  Redemption  Date to each Holder whose Notes are to
be  redeemed  at its  registered  address.  Notes in  denominations  larger than
(euro)1,000  may be redeemed or purchased in part but only in whole multiples of
(euro)1,000,  unless  all of the Notes held by a Holder  are to be  redeemed  or
purchased.  On and after the Redemption  Date interest ceases to accrue on Notes
or portions thereof called for redemption or purchase.

            9.    Purchase at Option of Holder.

            (a) Upon the  occurrence  of a Change of  Control,  each Holder will
have the right to require  that the  Company  purchase  all or a portion of such
Holder's  Notes,  at a purchase  price equal to 101% of the aggregate  principal
amount thereof plus accrued and unpaid interest and Additional Interest, if any,
to the date of  purchase.  Such  purchase  shall be made upon  notice  mailed by
first-class  mail  within 60 days  following  the date upon  which the Change of
Control occurred to each Holder, with a copy to the Trustee,  which notice shall
govern the terms of the Change of Control Offer. Such notice shall state,  among
other things, the purchase date, which must be no earlier than 30 days nor later
than 45 days from the date such notice is mailed,  other than as may be required
by law (the  "Change  of  Control  Payment  Date").  In the event of a Change of
Control,  the  Company  will also  publish a notice of the offer to  purchase in
accordance  with the procedures  described  under Section 13.2 of the Indenture.
Holders electing to have a Note purchased  pursuant to a Change of Control Offer
will be required to surrender the Note, with the form entitled "Option of Holder
to Elect Purchase" on the reverse of the Note completed,  to the Paying Agent at
the address  specified in the notice prior to the close of business on the third
Business Day prior to the Change of Control Payment Date.

            (b) On the 366th day after an Asset Sale or such  earlier  date,  if
any, as the Board of  Directors  of the Company or of an  applicable  Restricted
Subsidiary  determines not to apply the Net Cash Proceeds relating to such Asset
Sale as set forth in Section  4.10(1)(c)(i),  (1)(c)(ii) and  (1)(c)(iii) of the
Indenture  (each, a "Net Proceeds Offer Trigger Date"),  the aggregate amount of
Net Cash  Proceeds  which have not been  applied on or before such Net  Proceeds

                                      A-6

<PAGE>

Offer  Trigger Date as  permitted  in Section  4.10(1)  (c)(i),  (1)(c)(ii)  and
(1)(c)(iii)  of the Indenture  (each,  a "Net Proceeds  Offer  Amount") shall be
applied  by the  Company  or such  Restricted  Subsidiary  to make an  offer  to
purchase (the "Net  Proceeds  Offer") to all Holders and, on a Purchase Date not
less than 30 nor more than 45 days  following the  applicable Net Proceeds Offer
Trigger Date,  from all Holders on a pro rata basis,  that amount of Notes to be
purchased,  plus accrued and unpaid  interest  thereon,  if any, to the Purchase
Date; provided, however, that if at any time any non-cash consideration received
by the Company or any Restricted  Subsidiary of the Company, as the case may be,
in  connection  with  any  Asset  Sale is  converted  into or sold or  otherwise
disposed of for cash  (other than  interest  received  with  respect to any such
non-cash consideration),  then such conversion or disposition shall be deemed to
constitute an Asset Sale under the  Indenture and the Net Cash Proceeds  thereof
shall be applied in accordance with Section 4.10 of the Indenture.

            (c) Each Net Proceeds  Offer will be mailed to the record Holders as
shown on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date,  with a copy to the Trustee,  and shall comply with the procedures
set forth in the  Indenture.  Upon receiving  notice of the Net Proceeds  Offer,
Holders  may  elect to  tender  their  Notes  in  whole  or in part in  integral
multiples of (euro)1,000  in exchange for cash. To the extent  Holders  properly
tender Notes in an amount  exceeding  the Net Proceeds  Offer  Amount,  Notes of
tendering  Holders  will be  purchased  on a pro rata  basis  (based on  amounts
tendered).  A Net  Proceeds  Offer shall remain open for a period of 20 Business
Days or such longer period as may be required by law.

            10. Denominations,  Transfer,  Exchange. The Notes are in registered
form without coupons in denominations  of (euro)1,000 and integral  multiples of
(euro)1,000.  The transfer of Notes may be registered and Notes may be exchanged
as  provided  in the  Indenture.  The  Registrar  and the  Trustee may require a
Holder,  among other things,  to furnish  appropriate  endorsements and transfer
documents  and the  Company  may  require  a Holder  to pay any  taxes  and fees
required by law or permitted by the Indenture.  The Company need not exchange or
register the transfer of any Note or portion of a Note selected for  redemption,
except for the unredeemed  portion of any Note being redeemed in part.  Also, it
need not  exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

            11.   Persons Deemed Owners.  The registered Holder of a
Note may be treated as its owner for all purposes.

            12. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture and the Notes may be amended or  supplemented  with the consent of
the Holders of at least a majority in principal  amount of the then  outstanding
Notes,  and any  existing  default  or  compliance  with  any  provision  of the
Indenture  or the Notes may be  waived  with the  consent  of the  Holders  of a
majority in principal amount of the then outstanding Notes.  Without the consent
of any  Holder  of a  Note,  the  Indenture  and the  Notes  may be  amended  or
supplemented  to cure any  ambiguity,  defect or  inconsistency,  to provide for
uncertificated  Notes  in  addition  to or in place of  certificated  Notes,  to
provide for the assumption of the Company's  obligations to Holders of the Notes
in case of a merger or consolidation,  to make any change that would provide any
additional  rights  or  benefits  to the  Holders  of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder,  or to

                                      A-7

<PAGE>

comply with the  requirements  of the  Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.

            13.  Defaults and  Remedies.  Each of the following  constitutes  an
"Event of  Default":  (i) the failure to pay interest on any Notes when the same
becomes due and payable and the default  continues for a period of 30 days; (ii)
the failure to pay the principal on any Note,  when such  principal  becomes due
and payable, at maturity, upon redemption or otherwise (including the failure to
make a payment to purchase Notes tendered  pursuant to a Change of Control Offer
or a Net Proceeds  Offer);  (iii) a default in the  observance or performance of
any other  covenant or  agreement  contained  in the  Indenture  or any Security
Document  which  default  continues  for a period of 45 days  after the  Company
receives written notice  specifying the default (and demanding that such default
be remedied) from the Trustee or the Holders of at least 25% of the  outstanding
principal  amount of the Notes  (except in the case of a default with respect to
Section 5.1 of the  Indenture,  which will  constitute  an Event of Default with
such notice requirement but without such passage of time requirement);  (iv) the
failure to pay at final maturity  (giving effect to any applicable grace periods
and any  extensions  thereof) the principal  amount of any  Indebtedness  of the
Company or any Restricted  Subsidiary of the Company, or the acceleration of the
final  stated  maturity  of any such  Indebtedness  (which  acceleration  is not
rescinded,  annulled or otherwise cured within 20 days of receipt by the Company
or such  Restricted  Subsidiary  of  notice  of any  such  acceleration)  if the
aggregate  principal  amount of such  Indebtedness,  together with the principal
amount of any other such Indebtedness in default for failure to pay principal at
final maturity or which has been accelerated (in each case with respect to which
the 20-day period  described above has elapsed),  aggregates $20 million or more
at any time; (v) the repudiation by the Company of any of its obligations  under
any Security Document,  or the unenforceability of any Security Document against
the Company if such unenforceability reasonably would be expected to result in a
material  adverse  effect on the Liens  granted by the Company  pursuant to such
Security Documents;  (vi) one or more judgments in an aggregate amount in excess
of $20  million  shall  have been  rendered  against  the  Company or any of its
Restricted  Subsidiaries  and such  judgments  remain  undischarged,  unpaid  or
unstayed for a period of 60 days after such  judgment or judgments  become final
and non-appealable;  or (vii) certain events of bankruptcy affecting the Company
or any of its Significant  Subsidiaries.  Upon any such declaration,  the entire
principal amount of, and accrued and unpaid interest and Additional Interest, if
any, on the Notes shall become immediately due and payable.  Notwithstanding the
foregoing,  in the case of an Event of Default  arising from  certain  events of
bankruptcy  or  insolvency,  all  outstanding  Notes will become due and payable
without  further action or notice.  Holders may not enforce the Indenture or the
Notes  except as  provided  in the  Indenture.  Subject to certain  limitations,
Holders of a majority  in  principal  amount of the then  outstanding  Notes may
direct the  Trustee  in its  exercise  of any trust or power.  The  Trustee  may
withhold from Holders of the Notes notice of any continuing  Default or Event of
Default  (except a Default or Event of Default  relating to payment on any Note)
if it determines that withholding notice is in their interest.  The Holders of a
majority in principal amount of the Notes may waive any existing or past Default
or Event of Default under the Indenture, and its consequences,  except a default
in the payment of the  principal  of, or  interest on any Notes.  The Company is
required to deliver to the Trustee  annually a  statement  regarding  compliance
with the  Indenture,  and the Company is  required  upon  becoming  aware of any
Default or Event of Default,  to deliver to the  Trustee a statement  specifying
such Default or Event of Default.

                                      A-8

<PAGE>

            14.   Trustee Dealings with Company.  Subject to certain
limitations, the Trustee under the Indenture, in its individual or any
other capacity, may become owner or pledge of Notes and may otherwise
deal with the Company or its Affiliates as if it were not Trustee.

            15. No Recourse Against Others. No past, present or future director,
officer,  employee,  incorporator or stockholder of the Company,  as such, shall
have any  liability  for any  obligations  of the Company under the Notes or the
Indenture  or for any claim  based  on, in  respect  of, or by reason  of,  such
obligations  or their  creation.  Each  Holder by  accepting  a Note  waives and
releases  all  such   liability.   The  waiver  and  release  are  part  of  the
consideration for the issuance of the Notes.

            16.   Authentication.  This Note shall not be valid until
authenticated by the manual signature of the Trustee or an
authenticating agent.

            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  entireties),  JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian),  and U/G/M/A (= Uniform Gifts
to Minors Act).

            18.  Discharge Prior to Maturity.  If the Company  deposits with the
Trustee or Paying  Agent cash or  Government  Securities  sufficient  to pay the
principal or Redemption Price of, and interest and Additional Interest,  if any,
on, the Notes to maturity or a specified  Redemption Date and satisfies  certain
conditions  specified in the Indenture,  the Company will be discharged from the
Indenture, except for certain Sections thereof.

            19. Governing Law. The Indenture, the Guarantees and this Note shall
be governed by and  construed  in  accordance  with the laws of the State of New
York, but without giving effect to applicable  principles of conflicts of law to
the extent  that the  application  of the law of another  jurisdiction  would be
required  thereby.  Each of the Company and each  Guarantor  hereby  irrevocably
submits to the non-exclusive jurisdiction of any New York state court sitting in
the Borough of Manhattan in the City of New York or any Federal court sitting in
the Borough of Manhattan in the City of New York in respect of any suit,  action
or proceeding  arising out of or relating to the  Indenture,  the Guarantees and
the Notes,  and  irrevocably  accepts for itself and in respect of its property,
generally  and  unconditionally,  non-exclusive  jurisdiction  of the  aforesaid
courts.  Each of the  Company  and each  Guarantor  irrevocably  waives,  to the
fullest extent that it may effectively do so under applicable law, trial by jury
and any objection  which it may now or hereafter have to the laying of the venue
of any such suit,  action or proceeding  brought in any such court and any claim
that any such  suit,  action or  proceeding  brought  in any such court has been
brought in an inconvenient  forum.  Nothing herein shall affect the right of the
Trustee  or any  Holder  of the  Notes  to serve  process  in any  other  manner
permitted by law or to commence legal  proceedings or otherwise  proceed against
the Company or any Guarantor in any other jurisdiction.

            20.  ISIN and Common Code  Numbers.  The Company has caused ISIN and
Common Code numbers to be printed on the Notes as a convenience  to the Holders.
No  representation  is made as to the accuracy of such numbers as printed on the
Notes and  reliance  may be  placed  only on the  other  identification  numbers
printed hereon.

                                      A-9

<PAGE>

            21.   Registration   Rights.   Pursuant  to  a  registration  rights
agreement,  the Company will be obligated  upon the occurrence of certain events
to consummate an exchange  offer pursuant to which the Holder of this Note shall
have the right to exchange  this  Series A Note for the  Company's 8 7/8% Senior
Secured  Notes due 2009,  Series B Note,  which have been  registered  under the
Securities  Act, in like  principal  amount and having  terms  identical  in all
material  respects  as the Series A Notes.  The  Holders  shall be  entitled  to
receive certain additional interest payments in the event such exchange offer is
not  consummated  and upon  certain  other  conditions,  all  pursuant to and in
accordance with the terms of such registration rights agreement.

            The  Company  will  furnish to any Holder upon  written  request and
without charge a copy of the Indenture. Request may be made to:

                           Kronos International, Inc.
                           16825 North Chase Drive
                           Suite 1200
                           Houston, Texas 77060
                           Attention: Robert D. Hardy

                                      A-10

<PAGE>

                                 ASSIGNMENT FORM

            To assign this Note, fill in the form below:

            (I) or (we) assign and transfer this Note to

--------------------------------------------------------------------------------
              (Insert assignee's soc. sec. or tax I.D. no.)

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
              (Print or type assignee's name address and zip code)

and irrevocably appoint
                        --------------------------------------------------------
agent to transfer this Note on the books of the Company.  The agent may
substitute another to act for him.

      Date: _____________________

                                    Your Signature:
                                                    ----------------------------
                                                    (Sign exactly as your
                                                    name appears on the
                                                    face of this Note)

            Signature Guarantee:
                                 -----------------------------------------------
                                 (Participant in recognized signature
                                 guarantee medallion program)

                                      A-11

<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

            If you  wish  to  elect  to have  all or any  portion  of this  Note
purchased  by the Company  pursuant to Section  4.10 ("Net  Proceeds  Offer") or
Section 4.15 ("Change of Control Offer") of the Indenture,  check the applicable
boxes

            |_| Net Proceeds Offer:       |_| Change of Control Offer:

               in whole    |_|               in whole    |_|

               in part     |_|               in part     |_|

               Amount to be                  Amount to be
               purchased:(euro)___________       purchased:(euro)___________

            Dated: __________________    Signature:
                                                    -----------------------
                                                    (Sign exactly as your
                                                    name appears on the
                                                    other side of this Note)

            Signature Guarantee:
                                 ------------------------------------------
                                 (Participant in recognized signature
                                 guarantee medallion program)

            Social Security Number or
            Taxpayer Identification Number:
                                            -------------------------------

                                      A-12

<PAGE>

                                                                EXHIBIT B

                              FORM OF SERIES B NOTE

                                 (Face of Note)

                       KRONOS INTERNATIONAL, INC.

                   8 7/8% SENIOR SECURED NOTE DUE 2009

[THIS NOTE IS A GLOBAL  NOTE  WITHIN THE  MEANING OF THE  INDENTURE  HEREINAFTER
REFERRED  TO AND IS  REGISTERED  IN THE NAME OF A  DEPOSITARY  OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR  DEPOSITARY.  THIS NOTE IS NOT  EXCHANGEABLE FOR NOTES
REGISTERED  IN THE NAME OF A PERSON  OTHER THAN THE  DEPOSITARY  OR ITS  NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE,  AND NO TRANSFER
OF THIS  SECURITY  (OTHER  THAN A TRANSFER  OF THIS  SECURITY  AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE  DEPOSITARY OR BY A NOMINEE OF THE  DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

THIS GLOBAL NOTE IS HELD BY THE COMMON  DEPOSITORY  (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF,
AND IS NOT  TRANSFERABLE TO ANY PERSON UNDER ANY  CIRCUMSTANCES  EXCEPT THAT (I)
THE  TRUSTEE  MAY MAKE SUCH  NOTATIONS  HEREON AS MAY BE  REQUIRED  PURSUANT  TO
SECTIONS 2.1, 2.6,  2.7, 3.3, 4.10 AND 4.15 OF THE  INDENTURE,  (II) THIS GLOBAL
NOTE MAY BE  EXCHANGED  IN WHOLE BUT NOT IN PART  PURSUANT TO SECTION 2.6 OF THE
INDENTURE,  (III)  THIS  GLOBAL  NOTE  MAY  BE  DELIVERED  TO  THE  TRUSTEE  FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR  DEPOSITORY  WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY.1

1    To be included only if the Note is issued in global form.

                                      B-1

<PAGE>

                       KRONOS INTERNATIONAL, INC.
                  8 7/8 % SENIOR SECURED NOTE DUE 2009

                                                     ISIN Co.
                                                             -------------------
                                                     Common Code
                                                                 ---------------
No.                                             (euro)
    --------                                            ------------------------

Interest Payment Dates: June 30 and December 30
Record Dates:  June 15 and December 15

            KRONOS  INTERNATIONAL,  INC., a Delaware corporation (the "Company,"
which term includes any successor  corporation  under the Indenture  hereinafter
referred  to),  for  value  received  promises  to pay to The  Bank of New  York
Depository  (Nominees)  Limited or  registered  assigns,  the  principal  sum of
_____________________ Euro on June 30, 2009.

            Reference is hereby made to the further  provisions of this Note set
forth on the reverse  hereof,  which further  provisions  shall for all purposes
have the same effect as set forth at this place.

            Unless the certificate of authentication hereon has been executed by
the Trustee  referred to on the reverse  hereof by manual  signature,  this Note
shall not be entitled to any  benefits  under the  Indenture  referred to on the
reverse hereof or be valid or obligatory for any purpose.

            IN WITNESS  WHEREOF,  the  Company  has caused  this Note to be duly
executed under its corporate seal.

                                    Dated:

                                    KRONOS INTERNATIONAL, INC.

                                    By:
                                         -----------------------------------
                                         Name:
                                         Title:

                                    By:
                                         -----------------------------------
                                         Name:
                                         Title:

This is one of the Notes referred to
in the within-mentioned Indenture:

THE BANK OF NEW YORK,
as Trustee

By:
     -------------------------
     Authorized Signatory

                                      B-2

<PAGE>

                                 (Back of Note)

                  8 7/8 % Senior Secured Notes due 2009

            Capitalized  terms used herein shall have the  meanings  assigned to
them in the Indenture referred to below unless otherwise indicated.

            1. Interest.  The Company  promises to pay interest on the principal
amount of this Note at the rate of 8 7/8% per  annum  from the date of  original
issuance until maturity.  The Company will pay interest semi-annually on June 30
and December 30 of each year,  or if any such day is not a Business  Day, on the
next succeeding Business Day (each an "Interest Payment Date").  Interest on the
Note will accrue from the most recent date to which  interest  has been paid or,
if no interest has been paid, from the date of issuance;  provided that if there
is no  existing  Default  in the  payment  of  interest,  and if  this  Note  is
authenticated  between a record date referred to on the face hereof and the next
succeeding   Interest  Payment  Date,  interest  shall  accrue  from  such  next
succeeding  Interest Payment Date;  provided,  further,  that the first Interest
Payment  Date  shall be  December  30,  2002.  The  Company  shall pay  interest
(including post-petition interest in any proceeding under any Bankruptcy Law) on
overdue  payments of the principal,  Purchase Price and Redemption Price of this
Note from time to time on demand at a rate that is 1% per annum in excess of the
rate then in effect; it shall pay interest (including  post-petition interest in
any proceeding  under any Bankruptcy  Law) on overdue  installments  of interest
(without  regard to any applicable  grace  periods)  hereon from time to time on
demand at the same rate to the extent  lawful.  Interest will be computed on the
basis of a 360-day year of twelve 30-day months.

            2. Method of Payment.  The  Company  will pay  interest on the Notes
(except defaulted  interest) to the Persons who are registered  Holders of Notes
at the close of  business  on the June 15 and  December  15 next  preceding  the
Interest  Payment Date,  even if such Notes are canceled  after such record date
and on or before such Interest Payment Date,  except as provided in Section 2.12
of the Indenture  with respect to defaulted  interest.  Any such  installment of
interest not punctually  paid or duly provided for shall  forthwith  cease to be
payable to the registered Holders on such Interest Payment Date, and may be paid
to the registered Holders at the close of business on a special interest payment
date to be fixed by the  Trustee  for the  payment of such  defaulted  interest,
notice  whereof shall be given to the  registered  Holders not less than 10 days
prior to such special  interest  payment date, or may be paid at any time 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,  all as more fully  provided in the  Indenture.  The
Notes will be payable as to  principal,  Redemption  Price,  Purchase  Price and
interest  at the office or agency of the  Company  maintained  for such  purpose
within  or  without  the City and State of New  York,  or, at the  option of the
Company, payment of interest may be made by check mailed to the Holders at their
addresses  set forth in the register of Holders,  provided  that payment by wire
transfer  of  immediately  available  funds  will be  required  with  respect to
principal,  Redemption  Price and Purchase Price of, and interest on, all Global
Notes and all other Notes the Holders of which shall have provided wire transfer
instructions  to the Trustee or the Paying Agent.  Such payment shall be in such
coin or currency of the European Union as at the time of payment is legal tender
for payment of public and private debts.

                                      B-3
<PAGE>

            3. Paying Agent and Registrar.  Initially, The Bank of New York, the
Trustee under the Indenture, will act as Paying Agent and Registrar. The Company
may change any Paying  Agent or  Registrar  without  notice to any  Holder.  The
Company may act in any such capacity.

            4.  Indenture.  The Company  issued  (euro)285  million in aggregate
principal  amount of the Notes under an Indenture dated as of June 28, 2002 (the
"Indenture")  between the Company and the Trustee. The Company shall be entitled
to issue Additional Notes (as defined in the Indenture) pursuant to Section 2.16
of the  Indenture.  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, as amended (15 U.S.C. Code Sections  77aaa-77bbbb).  The Notes are subject
to all such terms,  and Holders are referred to the Indenture and such Act for a
statement of such terms.  The Notes are general  obligations of the Company.  By
purchasing the Notes, each Holder acknowledges and agrees to benefit from and be
bound by the terms and conditions of the Indenture.

            5. Optional Redemption. Except as described below, the Notes are not
redeemable  before  December  30, 2005.  Thereafter,  the Company may redeem the
Notes at any time on or after  December  30, 2005 at its option,  in whole or in
part,  upon not less  than 30 nor more  than 60 days  notice,  at the  following
redemption  prices (expressed as percentages of the principal amount thereof) if
redeemed  during  the  twelve-month  period  (or,  in the  case  of  the  period
commencing on December 30, 2008, six-month period) commencing on December of the
year set forth below:

                   Year               Percentage
      -----------------------------   ----------
      2005.........................   104.437%
      2006.........................   102.958%
      2007.........................   101.479%
      2008 and thereafter..........   100.000%

            In addition, the Company must pay accrued and unpaid interest on the
Notes redeemed.

            6. Special Redemption.  (a) At any time, or from time to time, on or
prior  to June  30,  2005,  the  Company,  at its  option,  may use the net cash
proceeds  of one or more  Public  Equity  Offerings  to  redeem up to 35% of the
principal  amount of the Notes,  including the original  principal amount of any
Additional  Notes,  issued under the Indenture at a Redemption Price of 108.875%
of the principal  amount thereof plus accrued and unpaid  interest  thereon,  if
any, to the date of redemption;  provided that (1) at least 65% of the principal
amount of Notes,  including  the  original  principal  amount of any  Additional
Notes, issued under the Indenture remains outstanding immediately after any such
redemption; and (2) such redemption shall occur within 90 days after the date of
the closing of the applicable Public Equity Offering.

            (b) At any time on or prior to December 30, 2005, the Notes may also
be redeemed or purchased  (by the Company or any other  Person) in whole but not
in part, at the Company's option, upon the occurrence of a Change of Control, at
a price  equal to 100% of the  principal  amount  thereof  plus  the  Applicable
Premium  as of,  and  accrued  but  unpaid  interest,  if any,  to,  the date of
redemption or purchase (the "Redemption  Date") (subject to the right of Holders
of record on the  relevant  record date to receive  interest due on the relevant
interest  payment  date).  Such  redemption  or purchase may be made upon notice
mailed by first-class mail to each Holder's registered address, not less than 30
nor more than 60 days prior to the  Redemption  Date (but in no event shall such

                                      B-4

<PAGE>

notice be mailed  more than 180 days  after  the  occurrence  of such  Change of
Control).  The Company may provide in such notice that payment of such price and
performance  of the  Company's  obligations  with respect to such  redemption or
purchase may be performed by another Person.  Any such notice may be given prior
to the  occurrence of the related  Change of Control,  and any such  redemption,
purchase  or  notice  may,  at  the  Company's  discretion,  be  subject  to the
satisfaction of one or more conditions  precedent,  including but not limited to
the occurrence of the related Change of Control.

            7.  Mandatory  Redemption.  Except as set forth in Paragraph 9 below
with respect to purchases of Notes in certain  events,  the Company shall not be
required to make mandatory redemption payments with respect to the Notes.

            8. Notice of  Redemption or Purchase.  Subject to the  provisions of
the  Indenture,  a notice of redemption  will be mailed at least 30 days but not
more than 60 days before the  Redemption  Date to each Holder whose Notes are to
be  redeemed  at its  registered  address.  Notes in  denominations  larger than
(euro)1,000  may be redeemed or purchased in part but only in whole multiples of
(euro)1,000,  unless  all of the Notes held by a Holder  are to be  redeemed  or
purchased.  On and after the Redemption  Date interest ceases to accrue on Notes
or portions thereof called for redemption or purchase.

            9.    Purchase at Option of Holder.

            (a) Upon the  occurrence  of a Change of  Control,  each Holder will
have the right to require  that the  Company  purchase  all or a portion of such
Holder's  Notes,  at a purchase  price equal to 101% of the aggregate  principal
amount thereof plus accrued and unpaid interest thereon to the date of purchase.
Such  purchase  shall be made upon notice mailed by  first-class  mail within 60
days  following  the date upon  which the  Change of  Control  occurred  to each
Holder,  with a copy to the Trustee,  which notice shall govern the terms of the
Change of Control  Offer.  Such notice  shall  state,  among other  things,  the
purchase date, which must be no earlier than 30 days nor later than 45 days from
the date such  notice  is  mailed,  other  than as may be  required  by law (the
"Change of Control  Payment  Date").  In the event of a Change of  Control,  the
Company will also publish a notice of the offer to purchase in  accordance  with
the procedures  described under Section 13.2 of the Indenture.  Holders electing
to have a Note purchased  pursuant to a Change of Control Offer will be required
to  surrender  the  Note,  with the form  entitled  "Option  of  Holder to Elect
Purchase"  on the  reverse of the Note  completed,  to the  Paying  Agent at the
address  specified  in the notice  prior to the close of  business  on the third
Business Day prior to the Change of Control Payment Date.

            (b) On the 366th day after an Asset Sale or such  earlier  date,  if
any, as the Board of  Directors  of the Company or of an  applicable  Restricted
Subsidiary  determines not to apply the Net Cash Proceeds relating to such Asset
Sale as set forth in Section  4.10(1)(c)(i),  (1)(c)(ii) and  (1)(c)(iii) of the
Indenture  (each, a "Net Proceeds Offer Trigger Date"),  the aggregate amount of
Net Cash  Proceeds  which have not been  applied on or before such Net  Proceeds
Offer  Trigger  Date as  permitted  in  Section  4.10(1)(c)(i),  (1)(c)(ii)  and
(1)(c)(iii)  of the Indenture  (each,  a "Net Proceeds  Offer  Amount") shall be
applied  by the  Company  or such  Restricted  Subsidiary  to make an  offer  to
purchase (the "Net  Proceeds  Offer") to all Holders and, on a Purchase Date not
less than 30 nor more than 45 days  following the  applicable Net Proceeds Offer
Trigger Date,  from all Holders on a pro rata basis,  that amount of Notes to be
purchased,  plus accrued and unpaid  interest  thereon,  if any, to the Purchase
Date; provided, however, that if at any time any non-cash consideration received
by the Company or any Restricted  Subsidiary of the Company, as the case may be,

                                      B-5

<PAGE>

in  connection  with  any  Asset  Sale is  converted  into or sold or  otherwise
disposed of for cash  (other than  interest  received  with  respect to any such
non-cash consideration),  then such conversion or disposition shall be deemed to
constitute an Asset Sale under the  Indenture and the Net Cash Proceeds  thereof
shall be applied in accordance with Section 4.10 of the Indenture.

            (c) Each Net Proceeds  Offer will be mailed to the record Holders as
shown on the register of Holders within 25 days following the Net Proceeds Offer
Trigger Date,  with a copy to the Trustee,  and shall comply with the procedures
set forth in the  Indenture.  Upon receiving  notice of the Net Proceeds  Offer,
Holders  may  elect to  tender  their  Notes  in  whole  or in part in  integral
multiples of (euro)1,000  in exchange for cash. To the extent  Holders  properly
tender Notes in an amount  exceeding  the Net Proceeds  Offer  Amount,  Notes of
tendering  Holders  will be  purchased  on a pro rata  basis  (based on  amounts
tendered).  A Net  Proceeds  Offer shall remain open for a period of 20 Business
Days or such longer period as may be required by law.

            10. Denominations,  Transfer,  Exchange. The Notes are in registered
form without coupons in denominations  of (euro)1,000 and integral  multiples of
(euro)1,000.  The transfer of Notes may be registered and Notes may be exchanged
as  provided  in the  Indenture.  The  Registrar  and the  Trustee may require a
Holder,  among other things,  to furnish  appropriate  endorsements and transfer
documents  and the  Company  may  require  a Holder  to pay any  taxes  and fees
required by law or permitted by the Indenture.  The Company need not exchange or
register the transfer of any Note or portion of a Note selected for  redemption,
except for the unredeemed  portion of any Note being redeemed in part.  Also, it
need not  exchange or register the transfer of any Notes for a period of 15 days
before a selection of Notes to be redeemed or during the period between a record
date and the corresponding Interest Payment Date.

            11. Persons Deemed  Owners.  The registered  Holder of a Note may be
treated as its owner for all purposes.

            12. Amendment, Supplement and Waiver. Subject to certain exceptions,
the Indenture and the Notes may be amended or  supplemented  with the consent of
the Holders of at least a majority in principal  amount of the then  outstanding
Notes,  and any  existing  default  or  compliance  with  any  provision  of the
Indenture  or the Notes may be  waived  with the  consent  of the  Holders  of a
majority in principal amount of the then outstanding Notes.  Without the consent
of any  Holder  of a  Note,  the  Indenture  and the  Notes  may be  amended  or
supplemented  to cure any  ambiguity,  defect or  inconsistency,  to provide for
uncertificated  Notes  in  addition  to or in place of  certificated  Notes,  to
provide for the assumption of the Company's  obligations to Holders of the Notes
in case of a merger or consolidation,  to make any change that would provide any
additional  rights  or  benefits  to the  Holders  of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder,  or to
comply with the  requirements  of the  Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.

            13.  Defaults and  Remedies.  Each of the following  constitutes  an
"Event of  Default":  (i) the failure to pay interest on any Notes when the same
becomes due and payable and the default  continues for a period of 30 days; (ii)
the failure to pay the principal on any Note when such principal becomes due and
payable,  at maturity,  upon  redemption or otherwise  (including the failure to
make a payment to purchase Notes tendered  pursuant to a Change of Control Offer
or a Net Proceeds  Offer);  (iii) a default in the  observance or performance of
any other  covenant or  agreement  contained  in the  Indenture  or any Security
Document  which  default  continues  for a period of 45 days  after the  Company

                                      B-6

<PAGE>

receives written notice  specifying the default (and demanding that such default
be remedied) from the Trustee or the Holders of at least 25% of the  outstanding
principal  amount of the Notes  (except in the case of a default with respect to
Section 5.1 of the  Indenture,  which will  constitute  an Event of Default with
such notice requirement but without such passage of time requirement);  (iv) the
failure to pay at final maturity  (giving effect to any applicable grace periods
and any  extensions  thereof) the principal  amount of any  Indebtedness  of the
Company or any Restricted  Subsidiary of the Company, or the acceleration of the
final  stated  maturity  of any such  Indebtedness  (which  acceleration  is not
rescinded,  annulled or otherwise cured within 20 days of receipt by the Company
or such  Restricted  Subsidiary  of  notice  of any  such  acceleration)  if the
aggregate  principal  amount of such  Indebtedness,  together with the principal
amount of any other such Indebtedness in default for failure to pay principal at
final maturity or which has been accelerated (in each case with respect to which
the 20-day period  described above has elapsed),  aggregates $20 million or more
at any time; (v) the repudiation by the Company of any of its obligations  under
any Security Document,  or the unenforceability of any Security Document against
the Company if such unenforceability reasonably would be expected to result in a
material  adverse  effect on the Liens  granted by the Company  pursuant to such
Security Documents;  (vi) one or more judgments in an aggregate amount in excess
of $20  million  shall  have been  rendered  against  the  Company or any of its
Restricted  Subsidiaries  and such  judgments  remain  undischarged,  unpaid  or
unstayed for a period of 60 days after such  judgment or judgments  become final
and non-appealable;  or (vii) certain events of bankruptcy affecting the Company
or any of its Significant  Subsidiaries.  Upon any such declaration,  the entire
principal amount of, and accrued and unpaid interest and Additional Interest, if
any, on the Notes shall become immediately due and payable.  Notwithstanding the
foregoing,  in the case of an Event of Default  arising from  certain  events of
bankruptcy  or  insolvency,  all  outstanding  Notes will become due and payable
without  further action or notice.  Holders may not enforce the Indenture or the
Notes  except as  provided  in the  Indenture.  Subject to certain  limitations,
Holders of a majority  in  principal  amount of the then  outstanding  Notes may
direct the  Trustee  in its  exercise  of any trust or power.  The  Trustee  may
withhold from Holders of the Notes notice of any continuing  Default or Event of
Default  (except a Default or Event of Default  relating to payment on any Note)
if it determines that withholding notice is in their interest.  The Holders of a
majority in principal amount of the Notes may waive any existing or past Default
or Event of Default under the Indenture, and its consequences,  except a default
in the payment of the  principal  of, or  interest on any Notes.  The Company is
required to deliver to the Trustee  annually a  statement  regarding  compliance
with the  Indenture,  and the Company is  required  upon  becoming  aware of any
Default or Event of Default,  to deliver to the  Trustee a statement  specifying
such Default or Event of Default.

            14. Trustee Dealings with Company.  Subject to certain  limitations,
the Trustee under the Indenture,  in its individual or any other  capacity,  may
become owner or pledge of Notes and may  otherwise  deal with the Company or its
Affiliates as if it were not Trustee.

            15. No Recourse Against Others. No past, present or future director,
officer,  employee,  incorporator or stockholder of the Company,  as such, shall
have any  liability  for any  obligations  of the Company under the Notes or the
Indenture  or for any claim  based  on, in  respect  of, or by reason  of,  such
obligations  or their  creation.  Each  Holder by  accepting  a Note  waives and
releases  all  such   liability.   The  waiver  and  release  are  part  of  the
consideration for the issuance of the Notes.

            16. Authentication. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.

                                      B-7

<PAGE>

            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  entireties),  JT TEN (= joint tenants with right of survivorship
and not as tenants in common), CUST (= Custodian),  and U/G/M/A (= Uniform Gifts
to Minors Act).

            18.  Discharge Prior to Maturity.  If the Company  deposits with the
Trustee or Paying  Agent cash or  Government  Securities  sufficient  to pay the
principal or Redemption Price of, and interest and Additional Interest,  if any,
on, the Notes to maturity or a specified  Redemption Date and satisfies  certain
conditions  specified in the Indenture,  the Company will be discharged from the
Indenture, except for certain Sections thereof.

            19. Governing Law. The Indenture, the Guarantees and this Note shall
be governed by and  construed  in  accordance  with the laws of the State of New
York, but without giving effect to applicable  principles of conflicts of law to
the extent  that the  application  of the law of another  jurisdiction  would be
required  thereby.  Each of the Company and each  Guarantor  hereby  irrevocably
submits to the non-exclusive jurisdiction of any New York state court sitting in
the Borough of Manhattan in the City of New York or any Federal court sitting in
the Borough of Manhattan in the City of New York in respect of any suit,  action
or proceeding  arising out of or relating to the  Indenture,  the Guarantees and
the Notes,  and  irrevocably  accepts for itself and in respect of its property,
generally  and  unconditionally,  non-exclusive  jurisdiction  of the  aforesaid
courts.  Each of the  Company  and each  Guarantor  irrevocably  waives,  to the
fullest extent that it may effectively do so under applicable law, trial by jury
and any objection  which it may now or hereafter have to the laying of the venue
of any such suit,  action or proceeding  brought in any such court and any claim
that any such  suit,  action or  proceeding  brought  in any such court has been
brought in an inconvenient  forum.  Nothing herein shall affect the right of the
Trustee  or any  Holder  of the  Notes  to serve  process  in any  other  manner
permitted by law or to commence legal  proceedings or otherwise  proceed against
the Company or any Guarantor in any other jurisdiction.

            20.  ISIN and Common Code  Numbers.  The Company has caused ISIN and
Common Code numbers to be printed on the Notes as a convenience  to the Holders.
No  representation  is made as to the accuracy of such numbers as printed on the
Notes and  reliance  may be  placed  only on the  other  identification  numbers
printed hereon.

            The  Company  will  furnish to any Holder upon  written  request and
without charge a copy of the Indenture. Request may be made to:

                           Kronos International, Inc.
                           16825 North Chase Drive
                           Suite 1200
                           Houston, Texas 77060
                           Attention: Robert D. Hardy

                                      B-8

<PAGE>

                                 ASSIGNMENT FORM

            To assign this Note, fill in the form below:

            (I) or (we) assign and transfer this Note to

--------------------------------------------------------------------------------
              (Insert assignee's soc. sec. or tax I.D. no.)

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------

--------------------------------------------------------------------------------
          (Print or type assignee's name address and zip code)

and irrevocably appoint
                        ---------------------------------------------------
agent to transfer this Note on the books of the Company.  The agent may
substitute another to act for him.

      Date: _____________________

                                    Your Signature:
                                                    -----------------------
                                                    (Sign exactly as your
                                                    name appears on the
                                                    face of this Note)

            Signature Guarantee:
                                 ------------------------------------------
                                 (Participant in recognized signature
                                 guarantee medallion program)

                                      B-9

<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

            If you  wish  to  elect  to have  all or any  portion  of this  Note
purchased  by the Company  pursuant to Section  4.10 ("Net  Proceeds  Offer") or
Section 4.15 ("Change of Control Offer") of the Indenture,  check the applicable
boxes

            |_| Net Proceeds Offer:       |_| Change of Control Offer:

               in whole    |_|               in whole    |_|

               in part     |_|               in part     |_|

               Amount to be                  Amount to be
               purchased:(euro)___________       purchased:(euro)___________

            Dated: __________________    Signature: ________________________
                                                    (Sign exactly as your
                                                    name appears on the
                                                    other side of this Note)

            Signature Guarantee: ___________________________________________
                                 (Participant in recognized signature
                                 guarantee medallion program)

            Social Security Number or
            Taxpayer Identification Number: ________________________________

                                      B-10Exhibit 4.4

                           Kronos International, Inc.

                                (euro)285,000,000
                      8 7/8% Senior Secured Notes due 2009

                               PURCHASE AGREEMENT

                                                               June 19, 2002

DEUTSCHE BANK AG LONDON
DRESDNER BANK AG LONDON BRANCH
COMMERZBANK AKTIENGESELLSCHAFT, LONDON BRANCH
   c/o Deutsche Bank AG London
   1 Great Winchester Street
   London EC2N 2DB, UK

Ladies and Gentlemen:

            Kronos   International,   Inc.,  a  Delaware   corporation  (the
"Company"),   hereby   confirms  its  agreement  with  you  (the  "Initial
Purchasers"), as set forth below.

            1. The  Securities.  Subject  to the  terms  and  conditions  herein
contained,  the Company  proposes  to issue and sell to the  Initial  Purchasers
(euro)285,000,000  aggregate principal amount of its 8 7/8% Senior Secured Notes
due 2009, Series A (the "Notes").  The Notes are to be issued under an indenture
(the "Indenture") to be dated as of June 28, 2002 by and between the Company and
The Bank of New York, as Trustee (the "Trustee").

            The Notes will be offered and sold to the Initial Purchasers without
being  registered  under the Securities Act of 1933, as amended (the "Act"),  in
reliance on exemptions therefrom.

            In connection with the sale of the Notes, the Company has prepared a
preliminary   offering   memorandum   dated  June  6,  2002  (the   "Preliminary
Memorandum")  and a final  offering  memorandum  dated June 19, 2002 (the "Final
Memorandum";  the  Preliminary  Memorandum and the Final  Memorandum each herein
being referred to as a "Memorandum") setting forth or including a description of
the terms of the Notes, the terms of the offering of the Notes, a description of
the  Company and any  material  developments  relating to the Company  occurring
after  the date of the most  recent  historical  financial  statements  included
therein.

<PAGE>

                                       -2-

            The Initial Purchasers and their direct and indirect  transferees of
the Notes will be entitled to the benefits of the Registration Rights Agreement,
substantially in the form attached hereto as Exhibit C (the "Registration Rights
Agreement"),  pursuant to which the Company has agreed,  among other things,  to
file a registration statement (the "Registration Statement") with the Securities
and Exchange Commission (the "Commission") registering the Notes or the Exchange
Notes (as defined in the Registration Rights Agreement) under the Act.

            The Initial Purchasers and their direct and indirect  transferees of
the Notes will also be entitled to the benefits,  and  otherwise  subject to the
terms, of the Security Documents (as to be defined in the Indenture) pursuant to
which the Company has agreed,  among other  things,  to grant a senior  security
interest  in the  Collateral  (as to be  defined in the  Indenture),  subject to
certain exceptions and otherwise in accordance with the terms of the Indenture.

            2.  Representations  and  Warranties.   The  Company  represents
and warrants to and agrees with each of the Initial Purchasers that:

            (a) Neither the  Preliminary  Memorandum  as of the date thereof nor
      the Final  Memorandum  nor any amendment or  supplement  thereto as of the
      date  thereof and at all times  subsequent  thereto up to the Closing Date
      (as defined in Section 3 below) contained or contains any untrue statement
      of a material fact or omitted or omits to state a material fact  necessary
      to make the statements  therein,  in the light of the circumstances  under
      which they were made, not misleading,  except that the representations and
      warranties  set forth in this Section 2(a) do not apply to  statements  or
      omissions  made  in  reliance  upon  and in  conformity  with  information
      relating  to any of the  Initial  Purchasers  furnished  to the Company in
      writing by the Initial  Purchasers  expressly  for use in the  Preliminary
      Memorandum, the Final Memorandum or any amendment or supplement thereto.

            (b) As of the Closing  Date:  the Company will have the  authorized,
      issued and outstanding  capitalization  set forth in the Final Memorandum;
      all of the material  subsidiaries of the Company are listed in Schedule 2A
      attached   hereto   (each,   a   "Subsidiary"   and   collectively,    the
      "Subsidiaries");  all of the  outstanding  shares of capital  stock of the
      Company and the  Subsidiaries  have been,  and as of the Closing Date will
      be, duly authorized and validly issued,  are fully paid and  nonassessable
      and were not issued in violation of any preemptive or similar rights;  all
      of the  outstanding  shares of capital stock of the Company and of each of
      the  Subsidiaries  will be free  and  clear  of all  liens,  encumbrances,
      equities and claims or restrictions on  transferability  (other than those
      imposed  by the Act,  by the  securities  or "Blue  Sky"  laws of  certain
      jurisdictions,  by the Security Documents or, with respect to Subsidiaries
      other than those the capital  stock of which is to be pledged  pursuant to
<PAGE>

                                       -3-

      the Security  Documents,  by the Credit Agreement (as defined in the Final
      Memorandum)) or voting; except as set forth in the Final Memorandum, there
      are no (i) options,  warrants or other rights to purchase, (ii) agreements
      or other  obligations  to  issue or (iii)  other  rights  to  convert  any
      obligation  into, or exchange any securities  for, shares of capital stock
      of or  ownership  interests  in the  Company  or  any of the  Subsidiaries
      outstanding.  Except for the Subsidiaries and the additional  subsidiaries
      listed  on  Schedule  2B  attached  hereto  or as  disclosed  in the Final
      Memorandum,  the Company does not own, directly or indirectly,  any shares
      of capital stock or any other equity or long-term debt  securities or have
      any  equity  interest  in any firm,  partnership,  joint  venture or other
      entity.

            (c) Each of the Company and the Subsidiaries is duly incorporated or
      formed,  validly  existing  and in good  standing  under  the  laws of its
      respective   jurisdiction  of  incorporation  or  formation  and  has  all
      requisite  corporate  or  partnership  power  and  authority  to  own  its
      properties  and conduct its business as now  conducted and as described in
      the Final  Memorandum;  each of the Company and the  Subsidiaries  is duly
      qualified  to do  business as a foreign  corporation  or  partnership,  as
      applicable,  in  good  standing  in  all  other  jurisdictions  where  the
      ownership  or leasing of its  properties  or the  conduct of its  business
      requires such  qualification,  except where the failure to be so qualified
      would not,  individually  or in the  aggregate,  have a  material  adverse
      effect on the business,  condition  (financial or otherwise) or results of
      operations of the Company and the Subsidiaries, taken as a whole (any such
      event, a "Material Adverse Effect").

            (d) The Company has all requisite  corporate  power and authority to
      execute,  deliver and perform each of its obligations under the Notes, the
      Exchange  Notes  and  the  Private  Exchange  Notes  (as  defined  in  the
      Registration  Rights  Agreement).  The Notes, when issued,  will be in the
      form contemplated by the Indenture.  The Notes, the Exchange Notes and the
      Private  Exchange Notes have each been duly and validly  authorized by the
      Company and, when executed by the Company and authenticated by the Trustee
      in accordance with the provisions of the Indenture and, in the case of the
      Notes,  when  delivered  to and  paid  for by the  Initial  Purchasers  in
      accordance  with the terms of this Agreement,  will  constitute  valid and
      legally  binding  obligations of the Company,  entitled to the benefits of
      the  Indenture,  and  enforceable  against the Company in accordance  with
      their  terms,  except that the  enforcement  thereof may be subject to (i)
      bankruptcy, insolvency, reorganization,  fraudulent conveyance, moratorium
      or other  similar laws now or hereafter in effect  relating to  creditors'
      rights generally and (ii) general  principles of equity and the discretion
      of the court before which any proceeding therefor may be brought.

            (e) The Company has all requisite  corporate  power and authority to
      execute,  deliver and perform its  obligations  under the  Indenture.  The

<PAGE>

                                       -4-

      Indenture (including  provisions that are incorporated  therein) meets the
      requirements for  qualification  under the Trust Indenture Act of 1939, as
      amended (the "TIA"). The Indenture has been duly and validly authorized by
      the Company and, when executed and delivered by the Company  (assuming the
      due authorization, execution and delivery by the Trustee), will constitute
      a valid and legally binding agreement of the Company,  enforceable against
      the Company in  accordance  with its terms,  except  that the  enforcement
      thereof  may be subject  to (i)  bankruptcy,  insolvency,  reorganization,
      fraudulent  conveyance,  moratorium or other similar laws now or hereafter
      in  effect  relating  to  creditors'  rights  generally  and (ii)  general
      principles  of equity and the  discretion  of the court  before  which any
      proceeding therefor may be brought.

            (f) The Company has all requisite  corporate  power and authority to
      execute, deliver and perform its obligations under the Registration Rights
      Agreement.  The  Registration  Rights  Agreement has been duly and validly
      authorized  by the Company and, when executed and delivered by the Company
      (assuming  the due  authorization,  execution  and delivery by the Initial
      Purchasers),  will constitute a valid and legally binding agreement of the
      Company  enforceable  against  the Company in  accordance  with its terms,
      except that (A) the enforcement  thereof may be subject to (i) bankruptcy,
      insolvency,  reorganization,  fraudulent  conveyance,  moratorium or other
      similar  laws now or  hereafter in effect  relating to  creditors'  rights
      generally and (ii) general  principles of equity and the discretion of the
      court  before  which any  proceeding  therefor  may be brought and (B) any
      rights to indemnity or  contribution  thereunder may be limited by federal
      and state securities laws and public policy considerations.

            (g) The Company has all requisite  corporate  power and authority to
      execute,  deliver and perform its obligations  under this Agreement and to
      consummate the transactions  contemplated  hereby.  This Agreement and the
      consummation by the Company of the transactions  contemplated  hereby have
      been duly and validly  authorized by the Company.  This Agreement has been
      duly executed and delivered by the Company.

            (h) The Company has all requisite  corporate  power and authority to
      execute,  deliver and perform its obligations under the Security Documents
      to which it is a party and to  consummate  the  transactions  contemplated
      thereby  to  be  consummated  by  it.  The  Security   Documents  and  the
      consummation by the Company of the transactions  contemplated thereby have
      been duly and validly  authorized  by the Company  and,  when the Security
      Documents are executed and  delivered,  each of the Security  Documents to
      which it is a party will constitute a valid and legally binding obligation
      of the Company  enforceable  against the  Company in  accordance  with its
      terms,  except  that  the  enforcement  thereof  may  be  subject  to  (i)

<PAGE>

                                       -5-

      bankruptcy, insolvency, reorganization,  fraudulent conveyance, moratorium
      or other  similar laws now or hereafter in effect  relating to  creditor's
      rights generally and (ii) general  principals of equity and the discretion
      of the court before which any proceeding  therefore may be brought. On the
      Closing Date, the Collateral will conform in all material  respects to the
      description thereof contained in the Final Memorandum.

            (i) The  Security  Documents,  once  executed  and  delivered,  will
      create,  in  favor  of  the  Collateral  Agent  (as to be  defined  in the
      Indenture)  for the benefit of the Trustee and the holders of the Notes, a
      valid and  enforceable,  and upon filing or recording with the appropriate
      governmental  authorities and delivery of the applicable  documents to the
      Collateral  Agent, a perfected  senior security  interest in and Lien upon
      (in each case in accordance  with the provisions of the relevant  Security
      Document)  all of the  Collateral,  superior to and prior to the rights of
      all third persons and subject to no other Liens except for Liens expressly
      permitted  to  exist on such  Collateral  by the  terms of the  applicable
      Security Document.

            (j) No  consent,  approval,  authorization  or order of any court or
      governmental  agency or body,  or third party is required for the issuance
      and sale by the  Company  of the Notes to the  Initial  Purchasers  or the
      consummation by the Company of the other transactions contemplated hereby,
      except  such as have  been  obtained  and  such as may be  required  under
      foreign and state  securities  or "Blue Sky" laws in  connection  with the
      purchase  and resale of the Notes by the Initial  Purchasers.  None of the
      Company or the  Subsidiaries  is (i) in  violation of its  certificate  of
      incorporation  or bylaws (or  similar  organizational  document),  (ii) in
      breach or violation  of any  statute,  judgment,  decree,  order,  rule or
      regulation applicable to any of them or any of their respective properties
      or  assets,  except  for any such  breach or  violation  that  would  not,
      individually  or in  the  aggregate,  reasonably  be  expected  to  have a
      Material  Adverse Effect,  or (iii) in breach of or default under (nor has
      any event  occurred  that,  with notice or passage of time or both,  would
      constitute  a  default  under)  or in  violation  of any of the  terms  or
      provisions of any  indenture,  mortgage,  deed of trust,  loan  agreement,
      note, lease, license, franchise agreement,  permit, certificate,  contract
      or other  agreement  or  instrument  to which any of them is a party or to
      which any of them or their  respective  properties  or  assets is  subject
      (collectively,   "Contracts"),   except  for  any  such  breach,  default,
      violation  or event  that  would not,  individually  or in the  aggregate,
      reasonably be expected to have a Material Adverse Effect.

            (k) The execution,  delivery and  performance by the Company of this
      Agreement,  the  Indenture,  the  Registration  Rights  Agreement  and the
      Security Documents and the consummation by the Company of the transactions
      contemplated  hereby  and  thereby  to be  consummated  by it  (including,
      without  limitation,  the  issuance  and sale of the Notes to the  Initial

<PAGE>

                                       -6-

      Purchasers)  will not conflict with or constitute or result in a breach of
      or a default  under (or an event  that with  notice or  passage of time or
      both would  constitute  a default  under) or  violation  of (i) any of the
      terms or provisions of any Contract, except for any such conflict, breach,
      violation,  default  or  event  that  would  not,  individually  or in the
      aggregate,  reasonably be expected to have a Material Adverse Effect, (ii)
      the  certificate  of  incorporation  or bylaws (or similar  organizational
      document)  of the Company or any of the  Subsidiaries  or (iii)  (assuming
      compliance  with all  applicable  state  securities or "Blue Sky" laws and
      assuming the accuracy of the representations and warranties of the Initial
      Purchasers in Section 8 hereof) any statute, judgment, decree, order, rule
      or regulation  applicable to the Company or any of the Subsidiaries or any
      of their  respective  properties or assets,  except for any such conflict,
      breach, violation, default or event that would not, individually or in the
      aggregate, reasonably be expected to have a Material Adverse Effect.

            (l) The audited consolidated financial statements of the Company and
      its subsidiaries  included in the Final  Memorandum  present fairly in all
      material respects the financial  position,  results of operations and cash
      flows of the Company and its subsidiaries at the dates and for the periods
      to which they relate and have been prepared in accordance  with accounting
      principles generally accepted in the United States of America applied on a
      consistent  basis,  except  as  otherwise  stated  therein.   The  interim
      unaudited  consolidated  financial  statements  of  the  Company  and  its
      subsidiaries  included  in the  Final  Memorandum  present  fairly  in all
      material respects the financial  position,  results of operations and cash
      flows of the Company and its subsidiaries at the dates and for the periods
      to which they relate, except for the absence of footnotes and normal audit
      adjustments,   and  have  been  prepared  in  accordance  with  accounting
      principles generally accepted in the United States of America applied on a
      consistent  basis,  except as otherwise  stated  therein.  The summary and
      selected  financial and statistical data in the Final  Memorandum  present
      fairly in all material  respects the  information  shown  therein and have
      been  prepared  and  compiled  on a  basis  consistent  with  the  audited
      financial statements included therein, except as otherwise stated therein.
      PricewaterhouseCoopers,   LLP  (the   "Independent   Accountants")  is  an
      independent  public  accounting firm within the meaning of the Act and the
      rules and regulations promulgated thereunder.

            (m) Except as described in the Final  Memorandum,  the unaudited pro
      forma financial data  (including the notes thereto)  included in the Final
      Memorandum  (i)  comply  as to  form in all  material  respects  with  the
      applicable requirements of Regulation S-X promulgated under the Securities
      Exchange Act of 1934,  as amended  (the  "Exchange  Act"),  (ii) have been
      prepared in accordance  with the  Commission's  rules and guidelines  with
      respect to pro forma  financial  statements  and (iii) have been  properly
      computed  on the bases  described  therein;  the  assumptions  used in the

<PAGE>

                                       -7-

      preparation of the pro forma  financial data and other pro forma financial
      information  included  in the  Final  Memorandum  are  reasonable  and the
      adjustments   used  therein  are   appropriate   to  give  effect  to  the
      transactions or circumstances referred to therein.

            (n) Except as disclosed in the Preliminary  Memorandum and the Final
      Memorandum,  there is not pending  or, to the  knowledge  of the  Company,
      threatened any action, suit, proceeding, inquiry or investigation to which
      the  Company  or any of the  Subsidiaries  is a  party,  or to  which  the
      property or assets of the Company or any of the  Subsidiaries are subject,
      before or brought by any court,  arbitrator or governmental agency or body
      that, if determined  adversely to the Company or any of the  Subsidiaries,
      would, individually or in the aggregate,  reasonably be expected to have a
      Material  Adverse  Effect or that seeks to restrain,  enjoin,  prevent the
      consummation  of or otherwise  challenge the issuance or sale of the Notes
      to be sold hereunder or the  consummation of the other  transactions to be
      consummated  by the Company or any of its  Affiliates and described in the
      Final Memorandum.

            (o) Each of the Company and the Subsidiaries possesses all licenses,
      permits,    certificates,    consents,   orders,   approvals   and   other
      authorizations  from, and has made all  declarations and filings with, all
      federal,   state,   local  and   other   governmental   authorities,   all
      self-regulatory   organizations   and  all  courts  and  other  tribunals,
      presently  required or necessary to own or lease,  as the case may be, and
      to  operate  its  respective  properties  and to carry  on its  respective
      businesses  as  now  conducted  as  set  forth  in  the  Final  Memorandum
      ("Permits"),  except where the failure to obtain such  Permits  would not,
      individually  or in  the  aggregate,  reasonably  be  expected  to  have a
      Material  Adverse  Effect;  each of the Company and the  Subsidiaries  has
      fulfilled  and  performed  all of its  obligations  with  respect  to such
      Permits and no event has occurred that allows, or after notice or lapse of
      time would  allow,  revocation  or  termination  thereof or results in any
      other  impairment  of the rights of the holder of any such Permit,  except
      where any such absence of  fulfillment  or  performance,  or revocation or
      termination,  would not reasonably be expected to have a Material  Adverse
      Effect;  and none of the  Company or the  Subsidiaries  has  received  any
      notice of any  proceeding  relating to revocation or  modification  of any
      such Permit,  except as described in the Final Memorandum and except where
      such  revocation  or  modification  would  not,  individually  or  in  the
      aggregate, reasonably be expected to have a Material Adverse Effect.

            (p) Since the date of the most recent financial statements appearing
      in the Final Memorandum,  except as described in the Final Memorandum, (i)
      none of the Company or the  Subsidiaries  has incurred any  liabilities or
      obligations, direct or contingent, or entered into or agreed to enter into
      any transactions or contracts (written or oral) not in the ordinary course
      of business,  which  liabilities,  obligations,  transactions or contracts
      would,  individually  or in the  aggregate,  be materially  adverse to the

<PAGE>

                                       -8-

      business,  condition  (financial or otherwise) or results of operations of
      the Companies  and its  Subsidiaries,  taken as a whole,  (ii) none of the
      Company or the Subsidiaries  has purchased any of its outstanding  capital
      stock,  nor declared,  paid or otherwise made any dividend or distribution
      of any kind on its capital  stock  (other than with respect to any of such
      Subsidiaries,  the purchase of, or dividend or  distribution  on,  capital
      stock owned by the Company or a wholly owned  Subsidiary)  and (iii) there
      has not  been any  material  change  in the  capital  stock  or  long-term
      indebtedness of the Company or the Subsidiaries.

            (q) Each of the Company and the Subsidiaries has filed all necessary
      federal, state and foreign income and franchise tax returns,  except where
      the  failure to so file such  returns  would not,  individually  or in the
      aggregate,  reasonably be expected to have a Material Adverse Effect,  and
      has paid all taxes shown as due thereon;  and, other than tax deficiencies
      that the Company or any  Subsidiary  is  contesting  in good faith and for
      which the Company or such Subsidiary has provided adequate reserves, there
      is no tax  deficiency  that has been  expressly  asserted  to the  Company
      against the Company or any of the  Subsidiaries  that would  reasonably be
      expected to have,  individually  or in the aggregate,  a Material  Adverse
      Effect.

            (r) The  statistical and  market-related  data included in the Final
      Memorandum  are based on or derived  from sources that the Company and the
      Subsidiaries  believe to be reliable  and  accurate  with  respect to such
      data.

            (s) None of the  Company,  the  Subsidiaries  or any agent acting on
      their  behalf  has taken or will take any  action  that  might  cause this
      Agreement or the sale of the Notes to violate  Regulation T, U or X of the
      Board of  Governors  of the  Federal  Reserve  System,  in each case as in
      effect, or as the same may hereafter be in effect, on the Closing Date.

            (t) Each of the Company and the  Subsidiaries  has good title to all
      real  property  and good title to all personal  property  described in the
      Final  Memorandum  as  being  owned by it free  and  clear  of all  liens,
      charges,  encumbrances or  restrictions,  except as described in the Final
      Memorandum  or  pursuant  to the  Credit  Agreement  or to the  extent the
      failure  to have  such  title or the  existence  of such  liens,  charges,
      encumbrances or restrictions would not,  individually or in the aggregate,

<PAGE>

                                       -9-

      reasonably  be expected  to have a Material  Adverse  Effect.  All leases,
      contracts and  agreements to which the Company or any of the  Subsidiaries
      is a party or by which  any of them is bound  are  valid  and  enforceable
      against the Company or such Subsidiary,  to the Company's  knowledge,  and
      are valid and  enforceable  against the other party or parties thereto and
      are in full  force and  effect  with only such  exceptions  as would  not,
      individually  or in  the  aggregate,  reasonably  be  expected  to  have a
      Material  Adverse Effect.  The Company and the Subsidiaries own or possess
      adequate licenses or other rights to use all patents, trademarks,  service
      marks,  trade  names,  copyrights  and  know-how  necessary to conduct the
      businesses  now  operated by them as  described  in the Final  Memorandum,
      except  where the  failure  to own or  possess  the  foregoing  would not,
      individually  or in  the  aggregate,  reasonably  be  expected  to  have a
      Material  Adverse  Effect.  None of the  Company or the  Subsidiaries  has
      received  any written  (or, to the  Company's  knowledge,  oral) notice of
      infringement of or conflict with (or knows of any such  infringement of or
      conflict  with)  expressly  asserted  (in  writing)  rights of others with
      respect to any patents, trademarks, service marks, trade names, copyrights
      or know-how  that,  if such  assertion of  infringement  or conflict  were
      sustained, would reasonably be expected to have a Material Adverse Effect.

            (u)  There are no legal or  governmental  proceedings  involving  or
      affecting  the  Company  or any  Subsidiary  or any  of  their  respective
      properties or assets that are of such  materiality  that such  proceedings
      would be required to be described in a prospectus  pursuant to the Act and
      which  are not  described  in the  Final  Memorandum,  nor are  there  any
      material  contracts or agreements  that are of such  materiality  that the
      same would be required to be described in a prospectus pursuant to the Act
      (but excluding,  for the avoidance of doubt, any contract that need not be
      so  described  in a  registration  statement  filed  under  the  act,  and
      containing such  prospectus,  other than by the filing of such contract as
      an exhibit to such  registration  statement) that are not described in the
      Final Memorandum.

            (v)  Except  as  would  not,   individually  or  in  the  aggregate,
      reasonably be expected to have a Material Adverse Effect,  (A) each of the
      Company  and the  Subsidiaries  is in  compliance  with and not subject to
      liability under applicable Environmental Laws (as defined below), (B) each
      of the Company and the  Subsidiaries has made all filings and provided all
      notices required under any applicable Environmental Law, and has and is in
      compliance  with all Permits  required under any applicable  Environmental
      Laws and each of them is in full force and effect, (C) except as disclosed
      in the  Preliminary  Memorandum and Final  Memorandum,  there is no civil,
      criminal or administrative action, suit, demand, claim, hearing, notice of
      violation,  investigation,  proceeding, notice or demand letter or request
      for information  pending or, to the knowledge of the Company or any of the
      Subsidiaries,  threatened  against the Company or any of the  Subsidiaries
      under  any  Environmental  Law,  (D)  no  lien,  charge,   encumbrance  or
      restriction has been recorded under any  Environmental Law with respect to
      any assets, facility or property owned, operated,  leased or controlled by
      the  Company or any of the  Subsidiaries,  (E) none of the  Company or the
      Subsidiaries  has  received  notice  that  it  has  been  identified  as a
      potentially  responsible  party  under  the  Comprehensive   Environmental

<PAGE>

                                       -10-

      Response,  Compensation and Liability Act of 1980, as amended  ("CERCLA"),
      or any comparable state law and (F) no property or facility of the Company
      or any of the  Subsidiaries  is (i) listed or proposed  for listing on the
      National  Priorities List under CERCLA or (ii) listed in the Comprehensive
      Environmental  Response,  Compensation,  Liability Information System List
      promulgated  pursuant to CERCLA,  or on any comparable  list maintained by
      any state or local governmental authority.

            For  purposes  of this  Agreement,  "Environmental  Laws"  means the
      common  law  and  all  applicable   federal,   state  and  local  laws  or
      regulations,  codes,  orders,  decrees,  judgments or injunctions  issued,
      promulgated,  approved or entered  thereunder,  relating to  pollution  or
      protection  of public or  employee  health and safety or the  environment,
      including, without limitation, laws relating to (i) emissions, discharges,
      releases  or  threatened   releases  of  hazardous   materials   into  the
      environment  (including,  without limitation,  ambient air, surface water,
      ground water,  land surface or subsurface  strata),  (ii) the manufacture,
      processing,  distribution, use, generation,  treatment, storage, disposal,
      transport or handling of hazardous  materials,  and (iii)  underground and
      above ground storage tanks and related piping, and emissions,  discharges,
      releases or threatened releases therefrom.

            (w) There is no strike,  organized labor dispute,  labor slowdown or
      work stoppage with the employees of the Company or any of the Subsidiaries
      that  is  pending  or,  to  the  knowledge  of the  Company  or any of the
      Subsidiaries,  threatened which,  individually or in the aggregate,  would
      reasonably be expected to have a Material Adverse Effect.

            (x) Each of the Company and the  Subsidiaries  carries  insurance in
      such amounts and covering such risks as are  reasonably  believed by it to
      be adequate, in all material respects, for the conduct of its business and
      the value of its properties.

            (y) Except as disclosed in the Final Memorandum, none of the Company
      or  the  Subsidiaries  has  any  material  liability  for  any  prohibited
      transaction  or funding  deficiency or any complete or partial  withdrawal
      liability  with respect to any pension,  profit sharing or other plan that
      is subject to the Employee  Retirement  Income  Security  Act of 1974,  as
      amended  ("ERISA"),  or  analogous  foreign  plans  governed by  analogous
      foreign regulation,  to which the Company or any of the Subsidiaries makes
      or, within the prior six years has made, a  contribution  and in which any
      employee  of the  Company  or of any  Subsidiary  is or  has  ever  been a
      participant.  With respect to such plans,  the Company and each Subsidiary
      is in compliance in all material  respects with all applicable  provisions
      of ERISA.

<PAGE>

                                       -11-

            (z) Each of the  Company  and the  Subsidiaries  (i) makes and keeps
      accurate books and records  within the meaning of Section  13(b)(2) of the
      Exchange Act and (ii) maintains internal  accounting controls that provide
      reasonable assurance that (A) transactions are executed in accordance with
      management's  general or  specific  authorization,  (B)  transactions  are
      recorded as necessary to permit  preparation  of its financial  statements
      and to maintain accountability for its assets, (C) access to its assets is
      permitted  only  in  accordance  with  management's  general  or  specific
      authorization  and (D) the  reported  accountability  for  its  assets  is
      compared with existing assets at reasonable intervals.

            (aa) None of the  Company or the  Subsidiaries  is or as a result of
      the transactions  contemplated hereby will become an "investment  company"
      or "promoter" or "principal  underwriter" for an "investment  company," as
      such terms are defined in the Investment  Company Act of 1940, as amended,
      and the rules and regulations thereunder.

            (bb) The Notes, the Indenture and the Registration  Rights Agreement
      will conform in all material  respects to the descriptions  thereof in the
      Final Memorandum.

            (cc) No holder of securities of the Company or any  Subsidiary  will
      be  entitled to have such  securities  registered  under the  registration
      statements   required  to  be  filed  by  the  Company   pursuant  to  the
      Registration Rights Agreement other than as expressly permitted thereby.

            (dd)   Immediately   after  the  consummation  of  the  transactions
      contemplated by this  Agreement,  the fair value and present fair saleable
      value of the assets of the Company and its subsidiaries (on a consolidated
      basis,  considered as a single  enterprise for purposes of this paragraph)
      will exceed the sum of its stated  liabilities  and identified  contingent
      liabilities; the Company and its subsidiaries (on a consolidated basis) is
      not, nor will the Company and its subsidiaries  (on a consolidated  basis)
      be, after giving effect to the execution, delivery and performance of this
      Agreement,  and the consummation of the transactions  contemplated hereby,
      (a)  left  with  unreasonably  small  capital  with  which to carry on its
      business as it is proposed  to be  conducted,  (b) unable to pay its debts
      (contingent or otherwise) as they mature or (c) otherwise insolvent.

            (ee)  None  of  the  Company,  the  Subsidiaries  or  any  of  their
      respective Affiliates (as defined in Rule 501(b) of Regulation D under the
      Act) has  directly,  or through  any agent,  (i) sold,  offered  for sale,
      solicited  offers  to buy or  otherwise  negotiated  in  respect  of,  any
      "security" (as defined in the Act) that is or could be integrated with the
      sale of the Notes in a manner that would  require the  registration  under

<PAGE>

                                       -12-

      the Act of the Notes or (ii)  engaged in any form of general  solicitation
      or general  advertising (as those terms are used in Regulation D under the
      Act) in  connection  with  the  offering  of the  Notes  or in any  manner
      involving a public offering within the meaning of Section 4(2) of the Act.
      Assuming the truth and correctness of the  representations  and warranties
      of the Initial  Purchasers in Section 8 hereof and their  compliance  with
      their  covenants in such Section,  it is not necessary in connection  with
      the offer, sale and delivery of the Notes to the Initial Purchasers in the
      manner  contemplated  by this Agreement to register any of the Notes under
      the Act or to qualify the Indenture under the TIA.

            (ff) No securities of the Company or any  Subsidiary are of the same
      class  (within  the  meaning  of Rule 144A under the Act) as the Notes and
      listed on a national securities exchange registered under Section 6 of the
      Exchange Act, or quoted in a U.S. automated inter-dealer quotation system.

            (gg) None of the Company or the Subsidiaries has taken, nor will any
      of them take,  directly or  indirectly,  any action  designed  to, or that
      might be  reasonably  expected  to,  cause or result in  stabilization  or
      manipulation of the price of the Notes.

            (hh) None of the Company, the Subsidiaries,  any of their respective
      Affiliates  or any person  acting on its or their  behalf  (other than the
      Initial  Purchasers) has engaged in any directed  selling efforts (as that
      term is  defined  in  Regulation  S under the Act  ("Regulation  S")) with
      respect to the Notes;  the Company,  the Subsidiaries and their respective
      Affiliates  and any person  acting on its or their behalf  (other than the
      Initial   Purchasers)   have  complied  with  the  offering   restrictions
      requirement of Regulation S.

            Any  certificate  signed  by  any  officer  of  the  Company  or any
Subsidiary  and  delivered (at the purchase and sale of the Notes on the Closing
Date) to any Initial Purchaser or to counsel for the Initial Purchasers shall be
deemed a representation and warranty by the Company to each Initial Purchaser as
to the matters covered thereby.

            3.  Purchase,  Sale and  Delivery of the Notes.  On the basis of the
representations,  warranties,  agreements  and  covenants  herein  contained and
subject to the terms and  conditions  herein set forth,  the  Company  agrees to
issue and sell to the Initial  Purchasers,  and the Initial  Purchasers,  acting
severally and not jointly, agree to purchase the Notes in the respective amounts
set forth on  Schedule  1 hereto  from the  Company  at 100% of their  principal
amount less an Initial  Purchasers' fee of 2.25% of their principal amount.  One
or  more  certificates  in  definitive  form  for the  Notes  that  the  Initial
Purchasers  have  agreed to  purchase  hereunder,  and in such  denomination  or
denominations  and  registered  in such name or names as the Initial  Purchasers
request upon notice to the Company at least 36 hours prior to the Closing  Date,

<PAGE>

                                       -13-

shall be  delivered  by or on behalf of the Company to the  Initial  Purchasers,
against payment by or on behalf of the Initial  Purchasers of the purchase price
therefor by wire transfer  (same day funds),  to such account or accounts as the
Company shall specify prior to the Closing Date, or by such means as the parties
hereto shall agree prior to the Closing  Date.  Such delivery of and payment for
the Notes  shall be made at the  offices  of Cahill  Gordon &  Reindel,  80 Pine
Street, New York, New York at 10:00 A.M., New York time, on June 28, 2002, or at
such other place, time or date as the Initial  Purchasers,  on the one hand, and
the Company,  on the other hand, may agree upon,  such time and date of delivery
against payment being herein referred to as the "Closing Date." The Company will
make such  certificate or certificates  for the Notes available for checking and
packaging by the Initial  Purchasers at the offices of Deutsche Bank  Securities
Inc. in New York,  New York, or at such other place as Deutsche Bank  Securities
Inc. may designate, at least 24 hours prior to the Closing Date.

            4.  Offering  by the  Initial  Purchasers.  The  Initial  Purchasers
propose  to make an  offering  of the  Notes at the price and upon the terms set
forth in the Final  Memorandum as soon as  practicable  after this  Agreement is
entered into and as in the judgment of the Initial Purchasers is advisable.

            5.  Covenants of the Company. The Company  covenants and agrees with
each of the Initial Purchasers that:

            (a) The Company will not amend or supplement the Final Memorandum or
      any amendment or supplement  thereto of which the Initial Purchasers shall
      not  previously  have been  advised and  furnished a copy for a reasonable
      period of time prior to the  proposed  amendment or  supplement  and as to
      which the Initial Purchasers shall not have given their consent (not to be
      unreasonably  withheld).  The Company will  promptly,  upon the reasonable
      request of the Initial  Purchasers or counsel for the Initial  Purchasers,
      make any amendments or supplements  to the  Preliminary  Memorandum or the
      Final Memorandum that may be necessary or advisable in connection with the
      resale of the Notes by the Initial Purchasers.

            (b) The  Company  will  cooperate  with the  Initial  Purchasers  in
      arranging for the  qualification  of the Notes for offering and sale under
      the  securities  or "Blue Sky" laws of such  European  Union,  Canadian or
      United States  jurisdictions  as the Initial  Purchasers may designate and
      will  continue  such  qualifications  in  effect  for  as  long  as may be
      reasonably  necessary  to  complete  the  resale of the  Notes;  provided,
      however, that in connection  therewith,  the Company shall not be required
      to  qualify  as a  foreign  corporation  (or any  other  foreign  business
      organization) or to execute a general consent to service of process in any
      jurisdiction  or subject  itself to taxation in excess of a nominal dollar
      amount in any such jurisdiction where it is not then so subject.

<PAGE>

                                      -14-

            (c) If, at any time prior to the completion of the  distribution  by
      the Initial  Purchasers of the Notes or the Private  Exchange  Notes,  any
      event occurs or  information  becomes known as a result of which the Final
      Memorandum  as then  amended  or  supplemented  would  include  any untrue
      statement of a material  fact, or omit to state a material fact  necessary
      to make the statements  therein,  in the light of the circumstances  under
      which they were made,  not  misleading,  or if for any other  reason it is
      necessary  at any time to amend or  supplement  the  Final  Memorandum  to
      comply with  applicable  law, the Company will promptly notify the Initial
      Purchasers  thereof and will  prepare,  at the expense of the Company,  an
      amendment  or  supplement  to the  Final  Memorandum  that  corrects  such
      statement or omission or effects such compliance.

            (d)  The  Company  will,  without  charge,  provide  to the  Initial
      Purchasers and to counsel for the Initial Purchasers as many copies of the
      Preliminary  Memorandum  and the  Final  Memorandum  or any  amendment  or
      supplement thereto as the Initial Purchasers may reasonably request.

            (e) The  Company  will apply the net  proceeds  from the sale of the
      Notes as set forth under "Use of Proceeds" in the Final Memorandum.

            (f) Until the third  anniversary  of the Closing  Date,  the Company
      will  furnish to the  Initial  Purchasers  copies of all reports and other
      communications  (financial or  otherwise)  furnished by the Company to the
      Trustee or to the holders of the Notes and, as soon as  available,  copies
      of any  reports  or  financial  statements  furnished  to or  filed by the
      Company with the Commission or any national  securities  exchange on which
      any class of securities of the Company may be listed;  provided,  however,
      that any such reports or financial statements furnished to or filed by the
      Company  with the  Commission  need  not be  separately  furnished  to the
      Initial  Purchasers if such reports or statements  are publicly  available
      through the Commission's electronic data gathering and retrieval database.

            (g) Prior to the  Closing  Date,  the  Company  will  furnish to the
      Initial  Purchasers,  as soon as they  have been  prepared,  a copy of any
      substantially  complete  unaudited  interim  financial  statements  of the
      Company  prepared  in the  ordinary  course  of  business  for any  period
      subsequent to the period covered by the most recent  financial  statements
      appearing in the Final Memorandum.

            (h) None of the Company or any of its  Affiliates  will sell,  offer
      for sale or solicit offers to buy or otherwise negotiate in respect of any
      "security" (as defined in the Act) that could be integrated  with the sale
      of the Notes in a manner which would  require the  registration  under the
      Act of the Notes.

<PAGE>

                                       -15-

            (i)  The  Company   will  not,  and  will  not  permit  any  of  the
      Subsidiaries  to,  engage in any form of general  solicitation  or general
      advertising  (as those  terms are used in  Regulation  D under the Act) in
      connection  with the  offering  of the Notes or in any manner  involving a
      public offering within the meaning of Section 4(2) of the Act.

            (j) For so long as any of the Notes remain outstanding,  the Company
      will make  available at its expense,  upon request,  to any holder of such
      Notes and any prospective  purchasers thereof the information specified in
      Rule  144A(d)(4)  under the Act,  unless the  Company  is then  subject to
      Section 13 or 15(d) of the Exchange Act.

            (k) The Company will use its commercially  reasonable efforts to (i)
      permit  the Notes to be  eligible  for  trading  on the  Luxembourg  Stock
      Exchange  and (ii)  permit  the Notes to be  eligible  for  clearance  and
      settlement through the Euroclear System and Clearstream  Banking,  societe
      anonyme.

            (l) In  connection  with  Notes  offered  and  sold in an off  shore
      transaction (as defined in Regulation S) the Company will not register any
      transfer  of such  Notes not made in  accordance  with the  provisions  of
      Regulation S and will not,  except in  accordance  with the  provisions of
      Regulation  S,  if  applicable,  issue  any  such  Notes  in the  form  of
      definitive securities.

            (m) The Company will comply with all of its  agreements set forth in
      the  Indenture,   the  Registration  Rights  Agreement  and  the  Security
      Documents.

            6.  Expenses.  The  Company  agrees to pay all  costs  and  expenses
incident to the performance of its obligations under this Agreement,  whether or
not the  transactions  contemplated  herein are consummated or this Agreement is
terminated  pursuant  to  Section 11 hereof,  including  all costs and  expenses
incident to (i) the printing,  word processing or other  production of documents
with respect to the  transactions  contemplated  hereby,  including any costs of
printing the Preliminary  Memorandum and the Final  Memorandum and any amendment
or  supplement  thereto,  and any "Blue Sky"  memoranda,  (ii) all  arrangements
relating to the delivery to the Initial  Purchasers  of copies of the  foregoing
documents,  (iii) the fees and disbursements of the counsel, the accountants and
any  other  experts  or  advisors  retained  by the  Company,  (iv)  preparation
(including  printing),  issuance and delivery to the Initial  Purchasers  of the
Notes,  (v) the  qualification  of the Notes under European Union,  Canadian and
United States state  securities and "Blue Sky" laws,  including  filing fees and
reasonable fees and disbursements of counsel for the Initial Purchasers relating
thereto,  (vi) expenses in connection with the "roadshow" and any other meetings
with prospective  investors in the Notes, (vii) fees and expenses of the Trustee
and Luxembourg Listing Agent including fees and expenses of counsel,  (viii) all
expenses  and listing  fees  incurred in  connection  with the  application  for
listing of the Notes on the Luxembourg  Stock Exchange and (ix) any fees charged

<PAGE>

                                       -16-

by investment  rating  agencies for the rating of the Notes.  If the sale of the
Notes  provided  for herein is not  consummated  because  any  condition  to the
obligations  of the  Initial  Purchasers  set  forth in  Section 7 hereof is not
satisfied on the Closing Date,  because this  Agreement is terminated or because
of any  failure,  refusal or inability on the part of the Company to perform all
obligations  and satisfy all conditions on its part to be performed or satisfied
hereunder  (in any case other than  solely by reason of a default by the Initial
Purchasers of their  obligations  hereunder after all conditions  hereunder have
been satisfied in accordance herewith), the Company agrees to promptly reimburse
the Initial  Purchasers upon demand for all  out-of-pocket  expenses  (including
reasonable fees,  disbursements and charges of Cahill Gordon & Reindel,  counsel
for the  Initial  Purchasers)  that  shall  have been  incurred  by the  Initial
Purchasers in connection with the proposed purchase and sale of the Notes.

            7.  (A)  Conditions  of the  Initial  Purchasers'  Obligations.  The
obligation of the Initial Purchasers to purchase and pay for the Notes shall, in
their sole discretion, be subject to the satisfaction or waiver of the following
conditions on or prior to the Closing Date:

            (a) On the Closing Date, the Initial  Purchasers shall have received
      (i) the opinion, dated as of the Closing Date and addressed to the Initial
      Purchasers,  of Locke Liddell & Sapp LLP, counsel for the Company, in form
      and  substance   reasonably   satisfactory  to  counsel  for  the  Initial
      Purchasers,  to the effect set forth in Exhibit A, (ii) the opinion, dated
      as of the  Closing  Date  and  addressed  to the  Initial  Purchasers,  of
      Meilicke  Hoffman & Partner,  German  counsel to the Company,  in form and
      substance  reasonably  satisfactory to counsel for the Initial Purchasers,
      to the effect set forth in Exhibit B, (iii) the  opinion,  dated as of the
      Closing  Date and  addressed  to the  Initial  Purchasers,  of  Bech-Bruun
      Dragsted Law Firm,  Danish  counsel to the Company,  in form and substance
      reasonably satisfactory to the Initial Purchasers, to the effect set forth
      in Exhibit B, (iv) the opinion, dated as of the Closing Date and addressed
      to the Initial Purchasers,  of Narbarro Nathanson,  United Kingdom counsel
      to the  Company,  in form and  substance  reasonably  satisfactory  to the
      Initial  Purchasers,  to the  effect  set forth in  Exhibit B, and (v) the
      opinion,  dated  as of the  Closing  Date  and  addressed  to the  Initial
      Purchasers,  of MB et Associes, French counsel to the Company, in form and
      substance reasonably satisfactory to the Initial Purchasers, to the effect
      set forth in Exhibit B.

            (b) On the Closing Date, the Initial  Purchasers shall have received
      the opinion, in form and substance satisfactory to the Initial Purchasers,
      dated as of the Closing Date and addressed to the Initial  Purchasers,  of
      Cahill Gordon & Reindel, counsel for the Initial Purchasers,  with respect
      to certain legal matters relating to this Agreement and such other related
      matters as the Initial  Purchasers  may reasonably  require.  In rendering

<PAGE>

                                       -17-

      such  opinion,  Cahill  Gordon & Reindel  shall have received and may rely
      upon such  certificates  and other  documents  and  information  as it may
      reasonably request to pass upon such matters.

            (c) The Initial  Purchasers shall have received from the Independent
      Accountants  a comfort  letter or  letters  dated the date  hereof and the
      Closing Date, in form and substance reasonably satisfactory to counsel for
      the Initial Purchasers.

            (d) The  representations  and warranties of the Company contained in
      this Agreement  shall be true and correct on and as of the date hereof and
      on and as of the Closing  Date as if made on and as of the  Closing  Date;
      the statements of the Company's officers made in any certificate signed by
      them  delivered  on or as of the  Closing  Date  in  accordance  with  the
      provisions hereof shall be true and correct on and as of the date made and
      on and as of the Closing  Date;  the Company  shall have  performed in all
      material   respects  all  covenants  and   agreements  and  satisfied  all
      conditions on its part to be performed or satisfied  hereunder at or prior
      to the Closing  Date;  and,  except as described  in the Final  Memorandum
      (exclusive of any amendment or supplement  thereto after the date hereof),
      subsequent  to the date of the most recent  financial  statements  in such
      Final  Memorandum,  there shall have been no event or development,  and no
      information  shall  have  become  known,  that,  individually  or  in  the
      aggregate,  has or would be reasonably  likely to have a Material  Adverse
      Effect.

            (e)  The  sale  of  the  Notes   hereunder  shall  not  be  enjoined
      (temporarily or permanently) on the Closing Date.

            (f) Subsequent to the date of the most recent  financial  statements
      in the Final Memorandum  (exclusive of any amendment or supplement thereto
      after the date  hereof),  none of the  Company or any of the  Subsidiaries
      shall have sustained any loss or interference with respect to its business
      or properties  from fire,  flood,  hurricane,  accident or other calamity,
      whether or not covered by insurance,  or from any strike,  organized labor
      dispute,   labor  slow  down  or  work  stoppage  or  from  any  legal  or
      governmental  proceeding,  order or decree,  which  loss or  interference,
      individually  or in the  aggregate,  has or would be reasonably  likely to
      have a Material Adverse Effect.

            (g) The Initial  Purchasers shall have received a certificate of the
      Company,  dated the Closing  Date,  signed on behalf of the Company by its
      Chief  Executive  Officer or any President or Vice President and the Chief
      Financial Officer, to the effect that:

                  (i)  The   representations   and  warranties  of  the  Company
            contained  in this  Agreement  are true and correct on and as of the
            date hereof and on and as of the Closing  Date,  and the Company has

<PAGE>

                                       -18-

            performed in all material  respects all covenants and agreements and
            satisfied  all  conditions  on its part to be performed or satisfied
            hereunder at or prior to the Closing Date;

                 (ii) At the  Closing  Date,  since the date hereof or since the
            date of the most recent financial statements in the Final Memorandum
            (exclusive  of any  amendment or  supplement  thereto after the date
            hereof),  no event or development  has occurred,  and no information
            has become known,  that,  individually  or in the aggregate,  has or
            would be reasonably likely to have a Material Adverse Effect; and

                (iii)   The  sale  of  the  Notes  hereunder  has  not  been
            enjoined (temporarily or permanently).

            (h) On the Closing Date, the Initial  Purchasers shall have received
      the  Registration  Rights  Agreement  executed  by the  Company  and  such
      agreement shall be in full force and effect at the Closing Date.

            (i) On the Closing Date, the Initial  Purchasers shall have received
      the  Escrow  and  Pledge  Agreement  and the  Securities  Account  Control
      Agreement,  each dated the  Closing  Date,  executed  by the  Company,  NL
      Industries,  Inc.,  the  trustee  identified  therein  and the  securities
      intermediary identified therein.

            (j) On or before the Closing Date,  the Company shall have caused to
      be delivered the following  documents and  instruments  with regard to the
      Collateral:

                  (i) to the Trustee  (with a copy to the  Initial  Purchasers),
            the Security Agreements and other Security Documents,  duly executed
            by the Company, together with certificates, if any, representing 65%
            of  the  issued  and  outstanding  capital  stock  or  other  equity
            interests of the first-tier  Subsidiaries  required to be pledged to
            the Trustee and evidence of all  registrations or filings in each of
            the offices where such registrations or filings are necessary or, in
            the  opinion of the  Initial  Purchasers,  desirable  to perfect the
            Liens created or intended to be created thereby;

                 (ii)  to the  Initial  Purchasers  and  the  Trustee,  evidence
            satisfactory  to them of the payment of all filing fees and taxes in
            connection with the filings and registrations contemplated in clause
            (i) above and acknowledgment copies of all such filings; and

                (iii) to the Initial Purchasers and the Trustee, evidence as may
            be reasonably  requested that all other actions necessary to perfect

<PAGE>

                                       -19-

            and,  subject to Liens expressly  permitted to exist by the terms of
            the  applicable  Security  Document,  protect  the Liens  created or
            intended to be created by the Security Documents have been taken.

            (k) The new credit facility (the "New Credit Facility") among Kronos
      Titan  GmbH & Co.  OHG,  Kronos  Europe  S.A./N.V.,  Kronos  Titan A/S and
      Titania A/S (and other  subsidiaries of the Company) and the lenders party
      thereto  shall be in full force and effect;  all  conditions to making the
      initial  loans  thereunder  shall have been  satisfied  and the  borrowers
      thereunder shall be in compliance with all the terms thereof.

            On or before the Closing Date,  the Initial  Purchasers  and counsel
for the Initial  Purchasers  shall have  received  from the Company such further
documents, opinions, certificates, letters and schedules or instruments relating
to the business,  corporate,  legal and financial affairs of the Company and the
Subsidiaries  as they  shall  have  heretofore  reasonably  requested  from  the
Company.

            All such documents,  opinions,  certificates,  letters, schedules or
instruments delivered pursuant to this Agreement will comply with the provisions
hereof only if they are reasonably  satisfactory in all material respects to the
Initial  Purchasers  and counsel for the Initial  Purchasers.  The Company shall
furnish to the  Initial  Purchasers  such  conformed  copies of such  documents,
opinions, certificates, letters, schedules and instruments in such quantities as
the Initial Purchasers shall reasonably request.

            (B) Condition of the Company's  Obligations.  The  obligation of the
Company to issue and sell the Notes shall, in its sole discretion, be subject to
the satisfaction or waiver of the condition that on or prior to the Closing Date
the New Credit  Facility  shall be in full force and effect;  all  conditions to
making the initial loans  thereunder shall have been satisfied and the borrowers
thereunder shall be in compliance with all the terms thereof.

            8.  Offering of Notes;  Restrictions  on  Transfer.  (a) Each of the
Initial  Purchasers  agrees with the Company (as to itself only) that (i) it has
not and will not solicit  offers for, or offer or sell, the Notes by any form of
general  solicitation  or  general  advertising  (as  those  terms  are  used in
Regulation D under the Act) or in any manner  involving a public offering within
the meaning of Section 4(2) of the Act; and (ii) it has and will solicit  offers
for the Notes  only  from,  and will  offer the Notes only to (A) in the case of
offers inside the United States,  persons whom the Initial Purchasers reasonably
believe to be  qualified  institutional  buyers  within the meaning of Rule 144A
under the Act  (individually,  a "QIB") or, if any such person is buying for one
or more  institutional  accounts for which such person is acting as fiduciary or
agent, only when such person has represented to the Initial Purchasers that each
such  account is a QIB, to whom notice has been given that such sale or delivery

<PAGE>

                                       -20-

is being made in reliance on Rule 144A, and, in each case, in transactions under
Rule 144A and (B) in the case of offers  outside the United  States,  to persons
other than U.S. persons ("non-U.S. purchasers," which term shall include dealers
or other professional fiduciaries in the United States acting on a discretionary
basis for non-U.S. beneficial owners (other than an estate or trust)); provided,
however,  that in the case of this  clause (B),  in  purchasing  such Notes such
persons are deemed to have  represented and agreed as provided under the caption
"Transfer  Restrictions"  contained  in the Final  Memorandum  (or, if the Final
Memorandum is not in existence, in the most recent Memorandum).

                  (b) Each of the Initial  Purchasers  represents,  warrants and
covenants  (as to itself  only) with  respect to offers  and sales  outside  the
United  States  that (i) it has and will  comply  with all  applicable  laws and
regulations in each jurisdiction in which it acquires, offers, sells or delivers
Notes or has in its possession or  distributes  any Memorandum or any such other
material, in all cases at its own expense; (ii) the Notes have not been and will
not be offered or sold  within  the United  States or to, or for the  account or
benefit of, U.S. persons except in accordance with Regulation S under the Act or
pursuant to an  exemption  from the  registration  requirements  of the Act; and
(iii) it has  offered the Notes and will offer and sell the Notes (A) as part of
its  distribution at any time and (B) otherwise until 40 days after the later of
the  commencement  of the offering and the Closing Date, only in accordance with
Rule 903 of Regulation S and, accordingly,  neither it nor any persons acting on
its behalf have engaged or will engage in any directed  selling  efforts (within
the meaning of  Regulation  S) with  respect to the Notes,  and any such persons
have  complied and will comply with the  offering  restrictions  requirement  of
Regulation S.

            Terms used in this Section 8 and not defined in this  Agreement have
the meanings given to them in Regulation S.

            9.  Indemnification  and  Contribution.  (a) The  Company  agrees to
indemnify  and hold harmless each Initial  Purchaser,  each person,  if any, who
controls  any Initial  Purchaser  within the meaning of Section 15 of the Act or
Section 20 of the  Exchange Act and any U.S.  affiliate of an Initial  Purchaser
against  any  losses,  claims,  damages  or  liabilities  to which  any  Initial
Purchaser  or such  controlling  person may become  subject  under the Act,  the
Exchange  Act or  otherwise,  insofar  as any such  losses,  claims,  damages or
liabilities (or actions in respect thereof) arise out of or are based upon:

                        (i)   any  untrue   statement   or  alleged   untrue
      statement made by the Company in Section 2 hereof;

                  (ii)  any untrue  statement  or alleged  untrue  statement
      of any material fact  contained in any  Memorandum or any amendment or
      supplement thereto; or

<PAGE>

                                       -21-

                  (iii) the  omission  or  alleged  omission  to  state,  in any
      Memorandum  or any  amendment  or  supplement  thereto,  a  material  fact
      required to be stated therein or necessary to make the statements  therein
      not misleading,

and  will  reimburse,   as  incurred,  the  Initial  Purchasers  and  each  such
controlling  person and such U.S.  affiliates for any reasonable  legal or other
expenses  incurred  by the  Initial  Purchasers  or such  controlling  person in
connection with  investigating,  defending against or appearing as a third-party
witness in connection with any such loss,  claim,  damage,  liability or action;
provided,  however,  that the Company will not be liable in any such case to the
extent that any such loss, claim, damage, or liability arises out of or is based
upon any untrue  statement  or alleged  untrue  statement or omission or alleged
omission  made in any  Memorandum  or any  amendment  or  supplement  thereto in
reliance upon and in conformity with written information  concerning the Initial
Purchasers  furnished  to the Company by one or more of the  Initial  Purchasers
specifically for use therein;  provided,  further,  that the Company will not be
liable to any Initial Purchaser or any person controlling such Initial Purchaser
with respect to an untrue  statement or alleged untrue  statement or omission or
alleged  omission made in any  Preliminary  Memorandum  that is corrected in the
Final  Memorandum  (or  any  amendment  or  supplement  thereto)  if the  person
asserting any such loss, claim,  damage or liability purchased Notes but was not
sent or given a copy of the Final  Memorandum (as the same may have been amended
or supplemented) in any case where such delivery of the Final Memorandum (as the
same may have been amended or supplemented) was required by the Act, unless such
failure to deliver the Final  Memorandum  (as the same may have been  amended or
supplemented)  was a result of  non-compliance  by the Company with Section 5(c)
hereof.  The indemnity provided for in this Section 9 will be in addition to any
liability that the Company may otherwise have to the  indemnified  parties.  The
Company shall not be liable under this Section 9 for any settlement of any claim
or  action  effected  without  its prior  written  consent,  which  shall not be
unreasonably withheld.

      (b) Each Initial Purchaser, severally and not jointly, agrees to indemnify
and hold harmless the Company,  its directors,  its officers and each person, if
any,  who  controls  the Company  within the meaning of Section 15 of the Act or
Section  20  of  the  Exchange  Act  against  any  losses,  claims,  damages  or
liabilities  to which the Company or any such  director,  officer or controlling
person may become subject under the Act, the Exchange Act or otherwise,  insofar
as such losses,  claims,  damages or liabilities (or actions in respect thereof)
arise  out of or are based  upon (i) any  untrue  statement  or  alleged  untrue
statement of any material fact  contained in any  Memorandum or any amendment or
supplement  thereto,  or (ii) the  omission  or the  alleged  omission  to state
therein a material fact required to be stated in any Memorandum or any amendment
or  supplement  thereto,  or  necessary  to  make  the  statements  therein  not
misleading, in each case to the extent, but only to the extent, that such untrue
statement or alleged untrue  statement or omission or alleged  omission was made

<PAGE>

                                       -22-

in reliance  upon and in conformity  with written  information  concerning  such
Initial  Purchaser,  furnished  to the Company by any of the Initial  Purchasers
specifically  for  use  therein;   and  subject  to  the  limitation  set  forth
immediately  preceding this clause,  will reimburse,  as incurred,  any legal or
other  expenses  incurred  by the  Company  or any  such  director,  officer  or
controlling  person in connection  with  investigating  or defending  against or
appearing  as a third party  witness in  connection  with any such loss,  claim,
damage,  liability or action in respect thereof.  The indemnity  provided for in
this Section 9 will be in addition to any liability that the Initial  Purchasers
may otherwise have to the indemnified  parties. The Initial Purchasers shall not
be  liable  under  this  Section  9 for any  settlement  of any  claim or action
effected without their consent,  which shall not be unreasonably  withheld.  The
Company shall not, without the prior written consent of the Initial  Purchasers,
effect any  settlement or compromise of any pending or threatened  proceeding in
respect  of which  any  Initial  Purchaser  is or could  have  been a party,  or
indemnity could have been sought hereunder by any Initial Purchaser, unless such
settlement  (A)  includes  an  unconditional  written  release  of  the  Initial
Purchasers,  in  form  and  substance  reasonably  satisfactory  to the  Initial
Purchasers,  from all  liability  on claims that are the subject  matter of such
proceeding  and (B) does not include any  statement as to an admission of fault,
culpability or failure to act by or on behalf of any Initial Purchaser.

                  (c) Promptly after receipt by an indemnified  party under this
Section 9 of notice of the commencement of any action for which such indemnified
party is  entitled to  indemnification  under this  Section 9, such  indemnified
party will, if a claim in respect thereof is to be made against the indemnifying
party  under this  Section 9,  promptly  notify  the  indemnifying  party of the
commencement  thereof in writing; but the omission to so notify the indemnifying
party (i) will not  relieve it from any  liability  under  paragraph  (a) or (b)
above unless and to the extent such  failure  results in the  forfeiture  by the
indemnifying  party of substantial rights and defenses and (ii) will not, in any
event,  relieve the  indemnifying  party from any obligations to any indemnified
party other than the  indemnification  obligation provided in paragraphs (a) and
(b) above. In case any such action is brought against any indemnified party, and
it notifies the indemnifying party of the commencement thereof, the indemnifying
party will be entitled  to  participate  therein  and, to the extent that it may
wish, jointly with any other indemnifying  party similarly  notified,  to assume
the defense thereof,  with counsel  reasonably  satisfactory to such indemnified
party;  provided,  however,  that  if (i)  the  use  of  counsel  chosen  by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the defendants in any such action include both
the indemnified party and the indemnifying party and the indemnified party shall
have been  advised  by  counsel  that  there may be one or more  legal  defenses
available to it and/or other indemnified  parties that are materially  different
from or materially  additional to those available to the indemnifying  party (it
being  understood  that,  without any limitation as to the defenses which may be
materially  different  or  materially  additional,  the  availability  of a  due
diligence defense shall be deemed materially different and materially additional
for purposes of this Section 9(c)),  or (iii) the  indemnifying  party shall not

<PAGE>

                                       -23-

have  employed  counsel  reasonably  satisfactory  to the  indemnified  party to
represent the  indemnified  party within a reasonable  time after receipt by the
indemnifying  party of notice of the  institution of such action,  then, in each
such case, the indemnifying party shall not have the right to direct the defense
of such  action  on  behalf  of such  indemnified  party  or  parties  and  such
indemnified  party or parties shall have the right to select separate counsel to
defend such action on behalf of such indemnified party or parties.  After notice
from the  indemnifying  party to such  indemnified  party of its  election so to
assume the defense  thereof and  approval by such  indemnified  party of counsel
appointed to defend such action,  the  indemnifying  party will not be liable to
such  indemnified  party under this  Section 9 for any legal or other  expenses,
other than  reasonable  costs of  investigation,  subsequently  incurred by such
indemnified  party  in  connection  with the  defense  thereof,  unless  (i) the
indemnified  party shall have employed  separate  counsel in accordance with the
proviso to the immediately  preceding  sentence (it being  understood,  however,
that in connection with such action the  indemnifying  party shall not be liable
for the  expenses  of more  than one  separate  counsel  (in  addition  to local
counsel) in any one action or separate but substantially  similar actions in the
same jurisdiction  arising out of the same general allegations or circumstances,
designated  by the  Initial  Purchasers  in the  case of  paragraph  (a) of this
Section  9 or the  Company  in the  case of  paragraph  (b) of this  Section  9,
representing the indemnified  parties under such paragraph (a) or paragraph (b),
as the case may be,  who are  parties  to such  action or  actions)  or (ii) the
indemnifying  party has  authorized in writing the employment of counsel for the
indemnified  party  at the  expense  of the  indemnifying  party.  All  fees and
expenses  reimbursed  pursuant to this paragraph (c) shall be reimbursed as they
are incurred.  After such notice from the indemnifying party to such indemnified
party, the  indemnifying  party will not be liable for the costs and expenses of
any  settlement of such action  effected by such  indemnified  party without the
prior  written  consent of the  indemnifying  party (which  consent shall not be
unreasonably  withheld),  unless such  indemnified  party  waived in writing its
rights under this Section 9, in which case the indemnified party may effect such
a settlement without such consent.

                  (d) In circumstances in which the indemnity agreement provided
for in the  preceding  paragraphs  of  this  Section  9 is  unavailable  to,  or
insufficient  to hold harmless,  an indemnified  party in respect of any losses,
claims,   damages  or  liabilities  (or  actions  in  respect   thereof),   each
indemnifying  party,  in order to provide for just and  equitable  contribution,
shall  contribute to the amount paid or payable by such  indemnified  party as a
result of such losses,  claims,  damages or  liabilities  (or actions in respect
thereof)  in such  proportion  as is  appropriate  to reflect  (i) the  relative
benefits  received by the indemnifying  party or parties on the one hand and the
indemnified  party on the other  from the  offering  of the Notes or (ii) if the
allocation  provided by the foregoing  clause (i) is not permitted by applicable
law,  not  only  such  relative  benefits  but also  the  relative  fault of the
indemnifying  party or parties on the one hand and the indemnified  party on the

<PAGE>

                                       -24-

other in connection  with the  statements or omissions or alleged  statements or
omissions  that  resulted in such losses,  claims,  damages or  liabilities  (or
actions in respect  thereof).  The relative  benefits received by the Company on
the one hand and any Initial Purchaser on the other shall be deemed to be in the
same  proportion  as the total  proceeds  from the  offering  (before  deducting
expenses)  received by the Company bear to the total  discounts and  commissions
received by such Initial  Purchaser.  The relative fault of the parties shall be
determined by reference  to, among other  things,  whether the untrue or alleged
untrue statement of a material fact or the omission or alleged omission to state
a material fact relates to information  supplied by the Company on the one hand,
or such Initial Purchaser on the other, the parties' relative intent, knowledge,
access to  information  and  opportunity to correct or prevent such statement or
omission  or  alleged   statement   or   omission,   and  any  other   equitable
considerations  appropriate  in the  circumstances.  The Company and the Initial
Purchasers  agree  that  it  would  not be  equitable  if  the  amount  of  such
contribution  were  determined  by pro rata or per capita  allocation  or by any
other  method  of  allocation  that  does not take into  account  the  equitable
considerations  referred  to in  the  first  sentence  of  this  paragraph  (d).
Notwithstanding  any other provision of this paragraph (d), no Initial Purchaser
shall be obligated to make contributions  hereunder that in the aggregate exceed
the total discounts, commissions and other compensation received by such Initial
Purchaser  under this Agreement,  less the aggregate  amount of any damages that
such  Initial  Purchaser  has  otherwise  been  required to pay by reason of the
untrue or alleged  untrue  statements or the  omissions or alleged  omissions to
state a material  fact,  and no person  guilty of  fraudulent  misrepresentation
(within the meaning of Section 11(f) of the Act) in connection with a matter for
which  contribution  is  otherwise  available  hereunder  shall be  entitled  to
contribution   from  any  person   who  was  not   guilty  of  such   fraudulent
misrepresentation.  For purposes of this paragraph (d), each person, if any, who
controls  an Initial  Purchaser  within the  meaning of Section 15 of the Act or
Section 20 of the Exchange Act shall have the same rights to contribution as the
Initial  Purchasers,  and each  director  of the  Company,  each  officer of the
Company and each person,  if any, who controls the Company within the meaning of
Section  15 of the Act or Section 20 of the  Exchange  Act,  shall have the same
rights to contribution as the Company.

            10. Survival  Clause.  The respective  representations,  warranties,
agreements,  covenants,  indemnities  and other  statements of the Company,  its
officers (on behalf of the Company) and the Initial Purchasers set forth in this
Agreement  or made by or on  behalf of them  pursuant  to this  Agreement  shall
remain in full force and effect,  regardless of (i) any investigation made by or
on  behalf  of the  Company,  any of its  officers  or  directors,  the  Initial
Purchasers or any  controlling  person  referred to in Section 9 hereof and (ii)
delivery of and payment for the Notes.  The  respective  agreements,  covenants,
indemnities  and other  statements  set forth in Sections 6, 9, 10 and 15 hereof
shall  remain  in full  force  and  effect,  regardless  of any  termination  or
cancellation of this Agreement.

<PAGE>

                                       -25-

            11.  Termination.  (a) This  Agreement may be terminated in the sole
discretion of the Initial Purchasers by notice to the Company given prior to the
Closing Date if the Company shall have failed, refused or been unable to perform
all  obligations  and  satisfy all  conditions  on its part to be  performed  or
satisfied  hereunder at or prior thereto  (other than as a result of a breach by
the Initial Purchasers of their obligations hereunder) or, if at or prior to the
Closing Date:

                  (i)  any  of  the  Company  or  the  Subsidiaries  shall  have
      sustained  any loss or  interference  with  respect to its  businesses  or
      properties  from  fire,  flood,  hurricane,  accident  or other  calamity,
      whether or not covered by insurance,  or from any strike,  organized labor
      dispute,  labor slow down or work  stoppage  or any legal or  governmental
      proceeding,  which  loss or  interference,  in the  sole  judgment  of the
      Initial  Purchasers,  has had or has a Material  Adverse Effect,  or there
      shall have been, in the sole judgment of the Initial Purchasers, any event
      or development  that,  individually  or in the aggregate,  has or could be
      reasonably  likely to have a Material Adverse Effect,  except in each case
      as  described  in the Final  Memorandum  (exclusive  of any  amendment  or
      supplement thereto);

                  (ii)  trading in  securities  of the Company or in  securities
      generally  on the  Luxembourg  Stock  Exchange,  New York Stock  Exchange,
      American  Stock  Exchange or the NASDAQ  National  Market  shall have been
      suspended or materially  limited or minimum or maximum prices shall, based
      on trading activity, have been implemented on any such exchange or market;

                  (iii)  a  banking  moratorium  shall  have  been  declared  by
      authorities  of the  Federal  Republic  of  Germany,  the United  Kingdom,
      Norway, Denmark, New York or the United States or a material disruption in
      commercial  banking or securities  settlement or clearance services in any
      member state of the European Union or the United States;

                  (iv) there shall have been (A) an outbreak  or  escalation  of
      hostilities  between any member state of the European  Union or the United
      States and any foreign  power,  or (B) an outbreak  or  escalation  of any
      other  insurrection  or armed conflict  involving the United States or any
      other national or international calamity or emergency, or (C) any material
      adverse change in the financial markets of any member state of the Federal
      Republic of Germany,  the United Kingdom,  Norway,  Denmark, or the United
      States  which,  in the  case  of (A),  (B) or (C)  above  and in the  sole
      judgment of the Initial Purchasers,  makes it impracticable or inadvisable
      to proceed with the offering or the delivery of the Notes as  contemplated
      by the Final Memorandum; or

<PAGE>

                                       -26-

                  (v) any  securities of the Company shall have been  downgraded
      or placed on any "watch list" for possible  downgrading  by any nationally
      recognized statistical rating organization.

               (b)Termination  of this  Agreement  pursuant  to this  Section 11
shall be without liability of any party to any other party except as provided in
Section 10 hereof.

            12. Information  Supplied by the Initial Purchasers.  The statements
set forth in the last  paragraph  on the front  cover page and in the second and
third sentences of the third paragraph under the heading "Private  Placement" in
the Final  Memorandum  (to the  extent  such  statements  relate to the  Initial
Purchasers)  constitute the only information furnished by the Initial Purchasers
to the Company for the purposes of Sections 2(a) and 9 hereof.

            13. Notices.  All communications  hereunder shall be in writing and,
if sent to the Initial  Purchasers,  shall be mailed or delivered to the Initial
Purchasers,  c/o Deutsche Bank AG London, 1 Great Winchester Street, London EC2N
2DB, United  Kingdom,  Attention:  Corporate  Finance  Department,  and Dresdner
Kleinwort  Wasserstein,  20 Fenchurch  Street,  London EC3P3DB,  United Kingdom,
Attention:  Corporate  Finance  Department;  with a  copy  (which  shall  not be
considered  notice) to Cahill Gordon & Reindel,  80 Pine Street,  New York,  New
York 10005,  Attention:  William B. Gannett, Esq.; if sent to the Company, shall
be mailed or delivered  to the Company at 16825  Northchase  Drive,  Suite 1200,
Houston, Texas 77060,  Attention:  Robert D. Hardy; with a copy (which shall not
be  considered  notice) to Locke Liddell & Sapp LLP, 2200 JP Morgan Chase Tower,
Suite 2200, 2200 Ross Avenue,  Dallas, Texas 75201-6776,  Attention:  Russell F.
Coleman, Esq.

            All such  notices  and  communications  shall be deemed to have been
duly given: when delivered by hand, if personally  delivered;  five (5) business
days after being  deposited in the mail,  postage  prepaid,  if mailed;  and one
business day after being timely delivered to a next-day air courier.

            14. Successors.  This Agreement shall inure to the benefit of and be
binding upon the Initial Purchasers, the Company and their respective successors
and legal representatives,  and nothing expressed or mentioned in this Agreement
is  intended  or shall  be  construed  to give any  other  person  any  legal or
equitable right,  remedy or claim under or in respect of this Agreement,  or any
provisions  herein  contained;  this Agreement and all conditions and provisions
hereof being intended to be and being for the sole and exclusive benefit of such
persons and for the benefit of no other person  except that (i) the  indemnities
of the Company  contained in Section 9 of this  Agreement  shall also be for the
benefit of any person or persons who control the Initial  Purchasers  within the
meaning of Section 15 of the Act or Section 20 of the  Exchange Act and (ii) the
indemnities of the Initial  Purchasers  contained in Section 9 of this Agreement
shall also be for the benefit of the directors of the Company,  its officers and

<PAGE>

                                       -27-

any person or persons who  control the Company  within the meaning of Section 15
of the Act or Section 20 of the  Exchange  Act. No  purchaser  of Notes from the
Initial Purchasers will be deemed a successor because of such purchase.

            15.  APPLICABLE  LAW.  THE  VALIDITY  AND   INTERPRETATION  OF  THIS
AGREEMENT,  AND THE TERMS AND  CONDITIONS  SET FORTH HEREIN SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED WHOLLY THEREIN,  WITHOUT GIVING EFFECT TO ANY
PROVISIONS THEREOF RELATING TO CONFLICTS OF LAW.

            16.  Counterparts.  This  Agreement  may be  executed  in two or
more  counterparts,  each of which shall be deemed an  original,  but all of
which together shall constitute one and the same instrument.

<PAGE>

                                       -28-

            If the  foregoing  correctly  sets forth our  understanding,  please
indicate your  acceptance  thereof in the space provided below for that purpose,
whereupon this letter shall constitute a binding  agreement  between the Company
and the Initial Purchasers.

                                          Very truly yours,

                                          KRONOS INTERNATIONAL, INC.

                                          By:  /s/ Robert D. Hardy
                                               ----------------------------
                                               Name:  Robert D. Hardy
                                               Title: Vice President

                                          By:  /s/ John St. Wrba
                                               ----------------------------
                                               Name:  John St. Wrba
                                               Title: Assistant Treasurer

The  foregoing  Agreement is hereby  confirmed and accepted as of the date first
above written.

DEUTSCHE BANK AG LONDON

By:  /s/ Brian Bassett
     -------------------------------
     Name:  Brian Bassett
     Title: Director

By:  /s/ Youssef Khlat
     -------------------------------
     Name:  Youssef Khlat
     Title: Managing Director

DRESDNER BANK AG LONDON BRANCH

By:  /s/ M. Aitken
     -------------------------------
     Name:   M. Aitken
     Title:  Managing Director

<PAGE>

                                       -29-

By:  /s/ S. Clunie
     -------------------------------
     Name:   S. Clunie
     Title:  Director

COMMERZBANK AKTIENGESELLSCHAFT, LONDON BRANCH

By:
     -------------------------------
     Name:
     Title:

By:  /s/ R. M. Curtis
     -------------------------------
     Name:   R. M. Curtis
     Title:  Syndicate

<PAGE>

                                                                      SCHEDULE 1

                                                        Principal
                                                        Amount of
Initial Purchaser                                        Notes
-----------------                                      -----------
Deutsche Bank AG London. ......................  (euro)249,375,000
Dresdner Bank AG London Branch.................  (euro) 28,500,000
Commerzbank Aktiengessellschaft,
London Branch..................................  (euro)  7,125,000
                                                       -----------
          Total................................  (euro)285,000,000

<PAGE>

                                                                     SCHEDULE 2A

                           Subsidiaries of the Company

                                                    Jurisdiction of
Name                                                Incorporation
----                                                -------------
Kronos Titan GmbH & Co. OHG                         Germany
Kronos Europe S.A./N.V.                             Belgium
Kronos Limited                                      United Kingdom
Societe Industrielle Du Titane, S.A.                France
Kronos Denmark ApS                                  Denmark
Kronos Norge A/S                                    Norway
Kronos Titan A/S                                    Norway
Titania A/S                                         Norway

<PAGE>

                                                                     SCHEDULE 2B

                        Other Subsidiaries of the Company

                                                    Jurisdiction of
Name                                                Incorporation
----                                                -------------
Kronos Chemie-GmbH                                  Germany
Kronos Invest A/S                                   Norway
Kronos B.V.                                         The Netherlands
The Jossingfjord Manufacturing Company A/S          Norway
Tinfoss Titan & Iron A/S                            Norway
Kronos World Services, S.A.N.V.                     Belgium
Unterstuetzungskasse Kronos Titan GmbH              Germany

<PAGE>

                                       -6-
                                                                       EXHIBIT A

                Form of Opinion of Locke Liddell & Sapp LLP

                                     [See Attached]

<PAGE>

                                                                       EXHIBIT B

              Form of Opinion of Local Counsel to the Company
              -----------------------------------------------

                                 [See Attached]

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