Document:

Exhibit
10.8

 

TRONOX
WORLDWIDE LLC

TRONOX FINANCE CORP.

 

$350,000,000

 

91⁄2% Senior
Notes due 2012

 

EXCHANGE
AND REGISTRATION RIGHTS AGREEMENT

 

LEHMAN
BROTHERS INC.

CREDIT SUISSE FIRST BOSTON LLC,

As Representatives of the

several Initial Purchasers

c/o
Lehman Brothers Inc.

745
Seventh Avenue

New
York, New York 10019

 

Ladies
and Gentlemen:

 

Tronox Worldwide LLC, a Delaware limited liability
company (“Tronox
Worldwide”), and Tronox Finance Corp., a Delaware corporation
(together with Tronox Worldwide, the “Issuers”), propose to issue and sell to
certain initial purchasers (collectively, the “Initial Purchasers”) named in that
certain Purchase Agreement, dated November 21, 2005 (the “Purchase Agreement”),
among the Issuers, the Guarantors (as defined below) and Lehman Brothers Inc.
and Credit Suisse First Boston LLC, on behalf of the Initial Purchasers, upon
the terms set forth therein, $350,000,000 aggregate principal amount of the
Issuers’ 91⁄2% Senior Notes due 2012 (the “Securities”) to be issued pursuant to an
indenture, dated as of the date hereof (the “Indenture”), among the Issuers, the
Guarantors and Citibank, N.A., as trustee, which Securities will be
unconditionally guaranteed on a senior unsecured basis by each of the
Guarantors.  As an inducement to the
Initial Purchasers to enter into the Purchase Agreement and to purchase the
Securities, the Issuers and the Guarantors agree with you for the benefit of
the Holders (as defined below) as follows:

 

1.                                       Definitions.  As
used in this Agreement, the following terms shall have the following meanings:

 

“Additional Interest”
shall have the meaning set forth in Section 2(e).

 

“Affiliate” of any
specified Person shall mean any other Person that, directly or indirectly, is
in control of, is controlled by, or is under common control with, such
specified Person.  For purposes of this
definition, control of a person means the power, direct or indirect, to direct
or cause the direction of the management and policies of such Person whether by
contract or otherwise; and the terms “controlling” and “controlled” have
meanings correlative to the foregoing.

 

“Agreement” shall mean
this Exchange and Registration Rights Agreement.

 

1

 

“Business Day” shall
mean any day that is not a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to remain closed.

 

“Blackout Period”
shall have the meaning set forth in Section 4(b).

 

“Blue Sky Application”
shall have the meaning set forth in Section 6(a).

 

“Closing Date” shall
mean the Closing Date as defined in the Purchase Agreement.

 

“Effectiveness Target Date”
shall have the meaning set forth in Section 2(e)(ii).

 

“Exchange Act” shall
mean the Securities Exchange Act of 1934, as amended from time to time.

 

“Exchange Date” shall
have the meaning set forth in Section 2(a).

 

“Exchange Offer” shall
mean the exchange offer by the Issuers and the Guarantors of Exchange
Securities for Transfer Restricted Securities pursuant to Section 2(a).

 

“Exchange Offer Registration”
shall mean a registration under the Securities Act effected pursuant to
Section 2(a).

 

“Exchange Offer Registration
Statement” shall mean an exchange offer registration statement
on Form S-4 (or, if applicable, on another appropriate form) and all
amendments and supplements to such registration statement, in each case
including the Prospectus contained therein, all exhibits thereto and any
document incorporated by reference therein.

 

“Exchange Securities”
shall mean the securities to be issued by the Issuers and guaranteed by the Guarantors
under the Indenture containing terms substantially identical to the terms of
the Securities (except that the Exchange Securities will not be subject to
restrictions on transfer or to the requirements to pay Additional Interest
pursuant to Section 2(e)) and to be offered to Holders of Securities in
exchange for such Securities pursuant to the Exchange Offer.

 

“Guarantors” shall
mean each of the subsidiary guarantors listed on Schedule I hereto,
together with any Guarantor’s successors and any additional parties that become
guarantors of the Securities under the Indenture.

 

“Holders” shall mean
the Initial Purchasers, for so long as they own any Transfer Restricted
Securities, and each of their successors, assigns and direct and indirect
transferees who become owners of Transfer Restricted Securities under the
Indenture; provided that for
purposes of Sections 5 and 6, the term “Holders” shall include Participating
Broker-Dealers.

 

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“Indemnified Person”
shall have the meaning set forth in Section 6(c).

 

“Indemnifying Person”
shall have the meaning set forth in Section 6(c).

 

“Initial Purchasers”
shall have the meaning set forth in the preamble.

 

“Indenture” shall have
the meaning set forth in the preamble, as the same may be amended from time to
time in accordance with the terms thereof.

 

“Inspector” shall have
the meaning set forth in Section 3(n).

 

“Issuers” shall have
the meaning set forth in the preamble and shall also include the Issuers’
respective successors.

 

“Losses” shall have
the meaning set forth in Section 6(a).

 

“Majority Holders”
shall mean the Holders of a majority of the aggregate principal amount of
Transfer Restricted Securities outstanding from time to time.

 

“Participating Broker-Dealer”
shall have the meaning set forth in Section 5(a) hereof.

 

“Person” shall mean an
individual, partnership, limited liability company, corporation, trust or
unincorporated organization, or a government or agency or political subdivision
thereof.

 

“Prospectus” shall
mean the prospectus included in a Registration Statement, including any
preliminary prospectus, and any such prospectus as amended or supplemented by
any prospectus supplement, including a prospectus supplement with respect to
the terms of the offering of any portion of the Transfer Restricted Securities
covered by a Shelf Registration Statement, and by all other amendments and
supplements to such prospectus, and in each case including any document
incorporated by reference therein.

 

“Purchase Agreement”
shall have the meaning set forth in the preamble.

 

“Registration Default”
shall have the meaning set forth in Section 2(e)(vi).

 

“Registration Expenses”
shall mean any and all expenses incident to performance of, or compliance by,
the Issuers and the Guarantors with this Agreement, including without
limitation: (i) all SEC, stock exchange or National Association of
Securities Dealers, Inc. registration and filing fees, (ii) all fees
and expenses incurred in connection with compliance with state securities or
blue sky laws (including reasonable fees and disbursements of counsel for any
Underwriters or Holders in connection with blue sky qualification of any
Exchange Securities or Transfer Restricted Securities), (iii) all expenses
of any Persons not otherwise specifically addressed herein in preparing or
assisting in preparing, word processing, printing and distributing any
Registration Statement, any Prospectus and any amendments or supplements
thereto, any underwriting

 

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agreements, securities sales agreements or other
similar agreements and any other documents relating to the performance of and
compliance with this Agreement, (iv) all rating agency fees, (v) all
fees and disbursements relating to the qualification of the Indenture under the
Trust Indenture Act, and the rules and regulations of the SEC applicable
to an indenture which is qualified thereunder, (vi) the fees and
disbursements of the Trustee and its counsel, (vii) the fees and
disbursements of counsel for the Issuers and the Guarantors and, in the case of
a Shelf Registration Statement, the fees and disbursements of one counsel for
the Holders (which counsel shall be Akin Gump Strauss Hauer & Feld LLP
unless another firm shall be selected by the Majority Holders and which counsel
may also be counsel for the Initial Purchasers) and (viii) the fees and
disbursements of the independent public accountants of the Issuers and the
Guarantors, including the expenses of any special audits or “comfort” letters
required by or incident to the performance of and compliance with this Agreement,
but excluding fees and expenses of counsel to the Underwriters (other than fees
and expenses set forth in clause (ii) above) or the Holders and
underwriting discounts and commissions and transfer taxes, if any, relating to
the sale or disposition of Transfer Restricted Securities by a Holder.

 

“Registration Statement”
shall mean any registration statement of the Issuers and the Guarantors, as
applicable, that covers any of the Exchange Securities or Transfer Restricted
Securities pursuant to the provisions of this Agreement and all amendments and
supplements to any such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and any document incorporated by reference therein.

 

“Reviewed Filings”
shall have the meaning set forth in Section 3(j).

 

“SEC” shall mean the
Securities and Exchange Commission.

 

“Securities” shall
have the meaning set forth in the preamble.

 

“Securities Act” shall
mean the Securities Act of 1933, as amended from time to time.

 

“Shelf Effectiveness Period”
shall have the meaning set forth in Section 2(b).

 

“Shelf Filing Date”
shall have the meaning set forth in Section 2(e)(iv).

 

“Shelf Registration”
shall mean a registration effected pursuant to Section 2(b).

 

“Shelf Registration Statement”
shall mean a “shelf” registration statement of the Issuers and the Guarantors
that covers all the Transfer Restricted Securities (but no other securities
unless approved by the Holders of a majority of the aggregate principal amount
of Transfer Restricted Securities which are to be covered by such Shelf
Registration Statement) on an appropriate form under Rule 415 under the
Securities Act, or any similar rule that may be adopted by the SEC, and
all amendments and supplements to such registration statement, including
post-effective amendments, in each case including

 

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the Prospectus contained therein, all exhibits
thereto and any document incorporated by reference therein.

 

“Staff” shall mean the
staff of the SEC.

 

“Transfer Restricted Securities”
shall mean the Securities; provided
that the Securities shall cease to be Transfer Restricted Securities
(i) when a Registration Statement covering the resale of such Securities
has been declared effective by the SEC and such Securities have been disposed
of pursuant to such Registration Statement, (ii) when such Securities have
been exchanged pursuant to the Exchange Offer for Exchange Securities that may
be resold without restriction under federal and state securities laws,
(iii) when such Securities have been sold in compliance with Rule 144
or are eligible to be sold pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A) under the Securities Act or
(iv) when such Securities cease to be outstanding.

 

“Trust Indenture Act”
shall mean the Trust Indenture Act of 1939, as amended from time to time.

 

“Trustee” shall mean
the trustee with respect to the Securities under the Indenture.

 

“Underwriters” shall
have the meaning set forth in Section 3.

 

“Underwritten Offering”
shall mean an offering in which Transfer Restricted Securities are sold to an
Underwriter for reoffering to the public.

 

“Unrestricted Securities”
shall mean the Securities issued by the Issuers and guaranteed by the
Guarantors under the Indenture containing terms substantially identical to the
Securities (except that the Unrestricted Securities will not be subject to
restrictions on transfer or the requirements to pay Additional Interest
pursuant to Section 2(e)).

 

2.                                       Exchange
Offer and Registration Under the Securities Act.

 

(a)                                  Exchange Offer. 
To the extent not prohibited by any applicable law or applicable
interpretations of the Staff, the Issuers and the Guarantors shall
(i) within 150 days (or, if the 150th day is not a Business Day, the next
Business Day thereafter) after the Closing Date, cause to be filed an Exchange
Offer Registration Statement covering an offer to the Holders to exchange all
the Transfer Restricted Securities for Exchange Securities, (ii) use their
respective commercially reasonable efforts to cause the Exchange Offer
Registration Statement to be declared effective under the Securities Act within
210 days (or, if the 210th day is not a Business Day, the next Business Day
thereafter) after the Closing Date and remain effective until the closing of
the Exchange Offer, (iii) as soon as practicable after the effectiveness
of the Exchange Offer Registration Statement, offer the Exchange Securities in
exchange for the Securities and (iv) keep the Exchange Offer open for not
less than 30 days (or longer if required by law) after the date notice of the
Exchange Offer is mailed to the Holders. 
The Issuers and the Guarantors shall use their respective commercially
reasonable efforts to complete the Exchange Offer on the earliest practicable
date after the Exchange Offer Registration Statement has

 

5

 

become effective, but in
any event on or prior to the 30th Business Day after the Exchange Offer
Registration Statement is declared effective under the Securities Act.

 

The Issuers and the Guarantors shall commence the
Exchange Offer by promptly mailing the related Prospectus, appropriate letters
of transmittal and other accompanying documents to each Holder stating, in
addition to such other disclosures as are required by applicable law:

 

(i)                                     that the Exchange Offer is being made
pursuant to this Agreement and that all Transfer Restricted Securities validly
tendered and not properly withdrawn will be accepted for exchange;

 

(ii)                                  the date of acceptance for exchange (which
shall be a period of at least 30 days from the date such notice is mailed) (the
“Exchange Date”);

 

(iii)                               that any Transfer Restricted Security not
tendered will remain outstanding and continue to accrue interest but will not
retain any rights under this Agreement;

 

(iv)                              that any Holder electing to have a Transfer
Restricted Security exchanged pursuant to the Exchange Offer will be required
to surrender such Transfer Restricted Security, together with the appropriate
letters of transmittal, to the institution and at the address (located in the
Borough of Manhattan, The City of New York) and in the manner specified in the
notice, prior to the close of business on the Exchange Date; and

 

(v)                                 that any Holder will be entitled to withdraw
its election, not later than the close of business on the Exchange Date, by
sending to the institution and at the address (located in the Borough of
Manhattan, The City of New York) specified in the notice, a telegram, telex,
facsimile transmission or letter setting forth the name of such Holder, the
aggregate principal amount of Transfer Restricted Securities delivered for
exchange and a statement that such Holder is withdrawing its election to have
such Securities exchanged.

 

As a condition to participating in the Exchange
Offer, a Holder will be required to represent to the Issuers and the Guarantors
that (i) any Exchange Securities to be received by it will be acquired in
the ordinary course of its business, (ii) at the time of the commencement
of the Exchange Offer it has no arrangement or understanding with any Person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Securities in violation of the provisions of the Securities Act,
(iii) it is not an “affiliate” (within the meaning of Rule 405 under
the Securities Act) of the Issuers or any Guarantor and (iv) it either
(A) is not a broker-dealer or (B) it is a broker-dealer that acquired
the Securities for its own account as a part of its market-making or other
trading activities and will deliver a Prospectus in connection with any resale
of such Exchange Securities.

 

As soon as practicable after the Exchange Date, the
Issuers shall:

 

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(i)                                     accept for exchange Transfer Restricted
Securities or portions thereof validly tendered and not properly withdrawn
pursuant to the Exchange Offer; and

 

(ii)                                  deliver, or cause to be delivered, to the
Trustee for cancellation all Transfer Restricted Securities or portions thereof
so accepted for exchange by the Issuers and issue, and cause the Trustee to promptly
authenticate and deliver to each Holder, Exchange Securities equal in principal
amount to the principal amount of the Transfer Restricted Securities
surrendered by such Holder.

 

(b)                                 Shelf Registration
Statement.  If (i) the Issuers determine, upon advice
of their outside counsel, that the Exchange Offer Registration provided for in
Section 2(a) above is not available or may not be completed as soon
as practicable after the Exchange Date because it would violate any applicable
law or applicable interpretations of the Staff, (ii) the Exchange Offer is
not for any other reason completed on or prior to the date specified therefor
in Section 2(a), (iii) an Initial Purchaser notifies the Issuers that
Securities held by it are not eligible to be exchanged for Exchange Securities
in the Exchange Offer, or (iv) any Holder notifies the Issuers that it is
prohibited by law or the applicable interpretations of the Staff from
participating in the Exchange Offer or may not resell the Exchange Securities
acquired by it in the Exchange Offer to the public without delivering a
Prospectus and the Prospectus included in the Exchange Offer Registration
Statement is not appropriate or available for such resales, then the Issuers
and the Guarantors shall use their respective commercially reasonable efforts
to cause to be filed as soon as practicable after such determination or
notification, as the case may be, a Shelf Registration Statement providing for
the resale of all the Transfer Restricted Securities by the Holders thereof and
to have such Shelf Registration Statement declared effective by the SEC.

 

If the Issuers and the Guarantors are required to
file a Shelf Registration Statement pursuant to Section 2(b), the Issuers
and the Guarantors shall use their respective commercially reasonable efforts
to file the Shelf Registration Statement with the SEC on or prior to the 60th
day after such filing obligation arises and to cause the Shelf Registration
Statement to be declared effective under the Securities Act by the SEC on or
prior to the 120th day after the date on which the Shelf Registration Statement
is filed.

 

The Issuers and the Guarantors agree to use their
respective commercially reasonable efforts to keep the Shelf Registration
Statement continuously effective until the earliest of (i) the time the
Securities covered by the Shelf Registration Statement can be sold pursuant to
Rule 144 under the Securities Act without any limitations under clauses
(c), (e), (f) and (h) of Rule 144, (ii) two years from the
Closing Date and (iii) the date on which all Securities registered
thereunder have been disposed of in accordance therewith (the “Shelf Effectiveness Period”).  The Issuers shall be deemed not to have used
their commercially reasonable efforts to keep the Shelf Registration Statement
effective during the requisite period if they voluntarily take any action that
would result in Holders of Transferred Securities covered thereby not being
able to offer and sell such securities during the Shelf Effectiveness Period,
unless (i) such action is required by applicable law, (ii) the
Issuers and the Guarantors comply with this Agreement or (iii) such action
is taken by the Issuers in good faith and for valid business reasons (not
including avoidance of the Issuers’ and the Guarantors’ obligations hereunder),
including the acquisition or divestiture of assets, so long as the Issuers and
the Guarantors promptly thereafter comply with the requirements of
Section 3(i), if applicable.

 

7

 

The Issuers and the Guarantors further agree to
supplement or amend the Shelf Registration Statement and the related Prospectus
if required by the rules, regulations or instructions applicable to the
registration form used by the Issuers for such Shelf Registration Statement or
by the Securities Act or by any other rules and regulations thereunder for
shelf registrations or if reasonably requested by a Holder of Transfer
Restricted Securities with respect to information relating to such Holder, and
to use their respective commercially reasonable efforts to cause any such
amendment to become effective and such Shelf Registration Statement and
Prospectus to become usable as soon as thereafter practicable.  The Issuers and the Guarantors agree to
furnish to the Holders of Transfer Restricted Securities copies of any such
supplement or amendment promptly after its being filed with (in the case of a
supplement) or declared effective by (in the case of an amendment) the
SEC.  Each Holder participating in such Shelf
Registration Statement shall notify the Issuers promptly of any sale of
Securities by it.

 

In the event that any Initial Purchaser determines
that it is not eligible to participate in the Exchange Offer with respect to
the exchange of Securities constituting any portion of an unsold allotment,
upon the effectiveness of the Shelf Registration Statement as contemplated by
Section 2(b) and at the request of such Initial Purchaser, the
Issuers shall issue and deliver to the party purchasing Securities registered
under the Shelf Registration Statement from that Initial Purchaser, upon the
sale of such Securities, a like aggregate principal amount of Unrestricted
Securities.  The Issuers shall use their
commercially reasonable efforts to cause the CUSIP Service Bureau to issue the
same CUSIP number for such Unrestricted Securities as for Exchange Securities
issued pursuant to the Exchange Offer.

 

(c)                                  Registration Expenses. 
The Issuers shall pay all Registration Expenses in connection with any
registration pursuant to Section 2(a) and Section 2(b).  Each Holder shall pay all underwriting
discounts and commissions and transfer taxes, if any, relating to the sale or
disposition of such Holder’s Transfer Restricted Securities pursuant to the
Shelf Registration Statement or, if a Participating Broker-Dealer, relating to
the sale or disposition pursuant to the Exchange Offer Registration Statement.

 

(d)                                 Conditions to Exchange
Offer.  The Issuers and the Guarantors shall use
their respective commercially reasonable efforts to complete the Exchange
Offers as provided above and shall comply with the applicable requirements of
the Securities Act, the Exchange Act and other applicable laws and regulations
in connection with the Exchange Offer. 
The Exchange Offer shall not be subject to any conditions, other than
that (i) the Exchange Offer shall not violate applicable law or any
applicable interpretation of the Staff, (ii) no action or proceeding shall
have been instituted or threatened in any court or by any governmental agency
which has resulted or could reasonably be expected to result in a temporary or
permanent injunction prohibiting the Issuers from proceeding with the Exchange
Offer and (iii) all governmental approvals shall have been obtained, which
approvals the Issuers deem necessary (based on advice of outside counsel) for
the consummation of the Exchange Offer. 
The Issuers shall inform the Initial Purchasers, upon their request, of
the names and addresses of the Holders to whom any Exchange Offer is made, and
the Initial Purchasers shall have the right, subject to applicable law, to
contact such Holders and otherwise facilitate the tender of Securities in any
Exchange Offer.

 

8

 

(e)                                  Additional Interest. 
The Issuers shall pay, as liquidated damages, additional cash interest
(“Additional Interest”)
on the Transfer Restricted Securities if:

 

(i)                                     the Issuers and the Guarantors fail to file
an Exchange Offer Registration Statement with the SEC on or prior to the 150th
day after the Closing Date;

 

(ii)                                  the Exchange Offer Registration Statement is
not declared effective by the SEC on or prior to the 210th day after the
Closing Date (the “Effectiveness Target Date”);

 

(iii)                               the Exchange Offer is not consummated on or
before the 30th Business Day after the Effectiveness Target Date;

 

(iv)                              the Issuers and the Guarantors are obligated
to file a Shelf Registration Statement pursuant to Section 2(b), the
Issuers and the Guarantors fail to file the Shelf Registration Statement with
the SEC on or prior to the 60th day (the “Shelf Filing Date”) after the date on which
the obligation to file a Shelf Registration Statement arises;

 

(v)                                 the Issuers and the Guarantors are obligated
to file a Shelf Registration Statement pursuant to Section 2(b), the Shelf
Registration Statement is not declared effective under the Securities Act by
the SEC on or prior to the 120th day after the Shelf Filing Date; or

 

(vi)                              after the Exchange Offer Registration
Statement or the Shelf Registration Statement, as the case may be, is declared
effective, such Registration Statement thereafter ceases to be effective or
usable during the period in which such Registration Statement is required to be
effective and usable pursuant to this Agreement (each such event referred to in
this clause (vi) and the preceding clauses (i) through (v) being
called a “Registration
Default”),

 

from
and including the date on which any such Registration Default shall occur but
excluding the date on which all Registration Defaults have been cured.

 

The rate of the Additional Interest will be $.05 per
week per $1,000 principal amount of Transfer Restricted Securities for the
first 90-day period immediately following the occurrence of a Registration
Default, and such rate will increase by an additional $.05 per week per $1,000
principal amount of Transfer Restricted Securities with respect to each
subsequent 90-day period until all Registration Defaults have been cured, up to
a maximum additional interest rate of $.50 per week per $1,000 principal amount
of Transfer Restricted Securities.  Such
Additional Interest will be in addition to any other interest payable from time
to time with respect to the Transfer Restricted Securities.

 

All accrued Additional Interest shall be paid to the
Holders entitled thereto, in the manner provided for the payment of interest in
the Indenture, on each interest payment date, as more fully set forth in the
Indenture and the Securities. 
Notwithstanding the fact that any Securities for which Additional
Interest are due cease to be Transfer Restricted Securities, all

 

9

 

obligations
of the Issuers to pay Additional Interest with respect to Securities shall
survive until such time as such obligations with respect to such Securities
shall have been satisfied in full.

 

An Exchange Offer Registration Statement pursuant to
Section 2(a) or a Shelf Registration Statement pursuant to
Section 2(b) will not be deemed to have become effective unless it
has been declared effective by the SEC.

 

(f)                                    Additional Remedies. 
Without limiting the remedies available to the Initial Purchasers and
the Holders, the Issuers and the Guarantors acknowledge that any failure by the
Issuers or any of the Guarantors to comply with their obligations under
Section 2(a) and Section 2(b) may result in material
irreparable injury to the Initial Purchasers or the Holders for which there is
no adequate remedy at law, that it will not be possible to measure damages for
such injuries precisely and that, in the event of any such failure, the Initial
Purchasers or any Holder may obtain such relief as may be required to
specifically enforce the Issuers’ and the Guarantors’ (as applicable)
obligations under Section 2(a) and Section 2(b).

 

3.                                       Registration
Procedures.  In connection with their obligations pursuant
to Section 2(a) and Section 2(b), the Issuers and the Guarantors
shall as expeditiously as possible:

 

(a)                                  prepare and file with the SEC a
Registration Statement on the appropriate form under the Securities Act, which
form (i) shall be selected by the Issuers and the Guarantors,
(ii) shall, in the case of a Shelf Registration, be available for the sale
of the Transfer Restricted Securities by the selling Holders thereof and
(iii) shall comply as to form in all material respects with the
requirements of the applicable form and include all financial statements
required by the SEC to be filed therewith; and use their respective
commercially reasonable efforts to cause such Registration Statement to become
effective and remain effective for the applicable period in accordance with
Section 2 and Section 5;

 

(b)                                 prepare and file with the SEC such
amendments and post-effective amendments to each Registration Statement as may
be necessary to keep such Registration Statement effective for the applicable
period in accordance with Section 2 and Section 5 and cause each
Prospectus to be supplemented by any required prospectus supplement and, as so
supplemented, to be filed pursuant to Rule 424 under the Securities Act;
and keep each Prospectus current during the period described in
Section 5(3) of and Rule 174 under the Securities Act that is
applicable to transactions by brokers or dealers with respect to the Transfer
Restricted Securities or Exchange Securities;

 

(c)                                  in the case of a Shelf Registration,
furnish to each Holder and each Participating Broker-Dealer of Transfer
Restricted Securities, to counsel for the Initial Purchasers, to counsel for
such Holders and to each Underwriter of an Underwritten Offering of Transfer
Restricted Securities, if any, without charge, as many copies of each
Prospectus, including each preliminary Prospectus, and any amendment or
supplement thereto, in order to facilitate the sale or other disposition of the
Transfer Restricted Securities thereunder; and the Issuers and the Guarantors
consent to the use of such Prospectus and any amendment or supplement thereto
in accordance with applicable law by each of the selling Holders of Transfer
Restricted Securities and any such Underwriters in connection with the offering
and sale of the

 

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Transfer
Restricted Securities covered by and in the manner described in such Prospectus
or any amendment or supplement thereto in accordance with applicable law;

 

(d)                                 use their respective commercially
reasonable efforts to register or qualify the Transfer Restricted Securities
under all applicable state securities or blue sky laws of such jurisdictions as
any Holder of Transfer Restricted Securities covered by a Registration
Statement shall reasonably request in writing by the time the applicable
Registration Statement is declared effective by the SEC; cooperate with the
Holders in connection with any filings required to be made with the National
Association of Securities Dealers, Inc.; and do any and all other acts and
things that may be reasonably necessary or advisable to enable each Holder to
complete the disposition in each such jurisdiction of the Transfer Restricted
Securities owned by such Holder; provided
that neither Issuer nor any Guarantor shall be required to (i) qualify as
a foreign corporation or other entity or as a dealer in securities in any such
jurisdiction where it would not otherwise be required to so qualify,
(ii) file any general consent to service of process in any such
jurisdiction or (iii) subject itself to taxation in any such jurisdiction
if it is not so subject;

 

(e)                                  in the case of a Shelf Registration,
notify each Holder of Transfer Restricted Securities, counsel for such Holders
and counsel for the Initial Purchasers promptly and, if requested by any such
Holder or counsel, confirm such advice in writing (i) when a Registration
Statement and any amendment thereto has become effective and when any
post-effective amendment thereto has been filed and becomes effective,
(ii) of any request by the SEC or any state securities authority for
amendments and supplements to a Registration Statement and Prospectus or for
additional information after the Registration Statement has become effective,
(iii) of the issuance by the SEC or any state securities authority of any
stop order suspending the effectiveness of a Registration Statement or the
initiation of any proceedings for that purpose, (iv) if, between the
effective date of a Registration Statement and the closing of any sale of
Transfer Restricted Securities covered thereby, the representations and
warranties of the Issuers or any Guarantor contained in any underwriting
agreement, securities sales agreement or other similar agreement, if any, relating
to an offering of such Transfer Restricted Securities cease to be true and
correct in all material respects or if the Issuers or any Guarantor receives
any notification with respect to the suspension of the qualification of the
Transfer Restricted Securities for sale in any jurisdiction or the initiation
of any proceeding for such purpose, (v) of the happening of any event
during the period a Shelf Registration Statement or Exchange Offer Registration
Statement is effective that requires the making of any changes in such
Registration Statement or Prospectus so that as of such date, such Registration
Statement or Prospectus does not include an untrue statement of material fact
or omit to state a material fact necessary to make the statements therein (in
the case of the Prospectus, in light of the circumstances under which they were
made) not misleading or upon discovery that such Registration Statement or
Prospectus includes an untrue statement of a material fact or omits to state a
material fact necessary to make the statements therein (in the case of the
Prospectus, in the light of the circumstances under which they were made) not
misleading (which advice shall be accompanied by an instruction to suspend the
use of the Prospectus until the requisite changes have been made) and
(vi) of any determination by the Issuers or any Guarantor, as applicable,
that a post-effective amendment to a Registration Statement would be
appropriate;

 

11

 

(f)                                    use their respective commercially
reasonable efforts to obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest possible moment and
provide immediate notice to each Holder of the withdrawal of any such order;

 

(g)                                 in the case of a Shelf Registration,
furnish to each Holder of Transfer Restricted Securities, without charge, at
least one conformed copy of each Registration Statement and any post-effective
amendment thereto including financial statements and schedules, and, if the
Holder so requests in writing, all exhibits thereto;

 

(h)                                 in the case of a Shelf Registration,
cooperate with the selling Holders of Transfer Restricted Securities to
facilitate the timely preparation and delivery of certificates representing
Transfer Restricted Securities to be sold and not bearing any restrictive
legends and enable such Transfer Restricted Securities to be issued in such
denominations and registered in such names (consistent with the provisions of
the Indenture) as the selling Holders may reasonably request at least one
Business Day prior to the closing of any sale of Transfer Restricted
Securities;

 

(i)                                     upon the occurrence of any event
contemplated by Section 3(e)(v), use their respective commercially
reasonable efforts to prepare and file with the SEC a supplement or
post-effective amendment to a Registration Statement or the related Prospectus
or any document incorporated therein by reference or file any other required
document so that, as thereafter delivered to purchasers of the Transfer
Restricted Securities, such Prospectus will not contain 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; and the Issuers shall notify the Holders of Transfer
Restricted Securities to suspend use of the Prospectus as promptly as
practicable after the occurrence of such an event, and such Holders hereby
agree to suspend use of the Prospectus until the Issuers have amended or
supplemented the Prospectus to correct such misstatement or omission;

 

(j)                                     a reasonable time prior to the filing of
any Registration Statement, any Prospectus, any pre-effective amendment to a
Registration Statement or a Prospectus and, in the case of an Underwritten
Offering, any post-effective amendment to a Registration Statement, or
supplement to a Prospectus filed during the period in which a Prospectus is
required to be delivered in connection with such Underwritten Offering (collectively,
the “Reviewed Filings”)
(excluding any document that is to be incorporated by reference into a
Registration Statement or a Prospectus after initial filing of a Registration
Statement), provide copies of such document to the Initial Purchasers and their
counsel (and, in the case of a Shelf Registration Statement, to the Holders of
Transfer Restricted Securities and their counsel) and make such of the
representatives of the Issuers and the Guarantors as shall be reasonably
requested by the Initial Purchasers or their counsel (and, in the case of a
Shelf Registration Statement, the Holders of Transfer Restricted Securities or
their counsel) available for discussion of such document; and the Issuers and
the Guarantors shall not make any Reviewed Filing (excluding any document that
is to be incorporated by reference into a Registration Statement or a
Prospectus), of which the Initial Purchasers and their counsel (and, in the
case of a Shelf Registration Statement, the Holders of Transfer Restricted
Securities and their counsel) shall not have previously been advised and
furnished a copy or to which the Initial Purchasers or their counsel (and, in
the case of a Shelf

 

12

 

Registration Statement,
the Holders of Transfer Restricted Securities or their counsel) shall
reasonably object;

 

(k)                                  obtain a CUSIP number for all Exchange
Securities or Transfer Restricted Securities, as the case may be, not later
than the effective date of a Registration Statement, and provide the Trustee
with certificates for such Exchange Securities or Transfer Restricted
Securities, in a form eligible for deposit with The Depository Trust Company;

 

(l)                                     comply with all applicable rules and
regulations of the SEC and shall make generally available to its Holders as
soon as practicable after the effective date of the applicable Registration
Statement an earnings statement meeting the requirements of Rule 158 under
the Securities Act.

 

(m)                               cause the Indenture to be qualified under
the Trust Indenture Act in connection with the registration of the Exchange
Securities or Transfer Restricted Securities, as the case may be; cooperate
with the Trustee and the Holders to effect such changes to the Indenture as may
be required for the Indenture to be so qualified in accordance with the terms
of the Trust Indenture Act; and execute, and use their respective commercially
reasonable efforts to cause the Trustee to execute, all documents as may be
required to effect such changes and all other forms and documents required to
be filed with the SEC to enable the Indenture to be so qualified in a timely
manner;

 

(n)                                 in the case of a Shelf Registration, make
available for inspection by a representative of the Holders of the Transfer
Restricted Securities (an “Inspector”),
any Underwriter participating in any disposition pursuant to such Shelf
Registration Statement, and attorneys, accountants or other agents designated
by the Holders or any Underwriter, at reasonable times and in a reasonable
manner, all pertinent financial and other records, documents and properties of
the Issuers and the Guarantors and cause the respective officers, directors and
employees of the Issuers and the Guarantors to supply all information
reasonably requested by any such Inspector, Underwriter, attorney, accountant
or agent in connection with a Shelf Registration Statement; provided that if any such information is
identified in writing by the Issuers as being confidential or proprietary, each
Person receiving such information shall take such actions as are reasonably
necessary to protect the confidentiality of such information to the extent such
action is otherwise not inconsistent with applicable law or such information
becomes available to the public generally or through a third party without an
accompanying obligation of confidentiality other than as a result of disclosure
of such information by any such Person. 
The foregoing actions may, if the Holders of the Transferred Restricted
Securities or the Underwriters so desire, be performed prior to (A) the
effectiveness of such Shelf Registration Statement and each post-effective
amendment thereto upon request of an Underwriter and (B) each closing
under any underwriting or similar agreement as and to the extent required
thereunder.

 

(o)                                 in the case of a Shelf Registration, use
their respective commercially reasonable efforts to cause all Transfer
Restricted Securities to be listed on any securities exchange or any automated
quotation system on which similar securities issued or guaranteed by the
Issuers or any Guarantor are then listed, if requested by the Holders of a
majority in principal amount of the Transfer Restricted Securities included in
the Shelf Registration, to the extent such Transfer Restricted Securities
satisfy applicable listing requirements;

 

13

 

(p)                                 if reasonably requested by any Holder of
Transfer Restricted Securities covered by a Registration Statement, promptly
incorporate in a Prospectus supplement or post-effective amendment such
information with respect to such Holder as such Holder reasonably requests to
be included therein and make all required filings of such Prospectus supplement
or such post-effective amendment as soon as the Issuers has received
notification of the matters to be incorporated in such filing; and

 

(q)                                 in the case of a Shelf Registration,
enter into such customary agreements (including underwriting agreements) and
take all such other actions in connection therewith (including those requested
by the Holders of a majority in principal amount of the Transfer Restricted
Securities being sold ) in order to expedite or facilitate the registration or
the disposition of such Transfer Restricted Securities including, but not
limited to, in an Underwritten Offering and in such connection, (i) make
representations and warranties to the Holders and any Underwriters of such
Transfer Restricted Securities with respect to the business of the Issuers and
its subsidiaries, the Registration Statement, Prospectus and documents
incorporated by reference or deemed incorporated by reference, if any, in each
case, in form, substance and scope as are customarily made by issuers to
underwriters in underwritten offerings and confirm the same if and when
requested, (ii) obtain opinions of counsel to the Issuers and the
Guarantors (which opinions, with the consent of the Underwriters (such consent
not to be unreasonably withheld), may include the opinion of the Issuers’
in-house counsel with respect to certain matters and which shall be reasonably
satisfactory to such Underwriters and their counsel) addressed to each
Underwriter of Transfer Restricted Securities, covering the matters customarily
covered in opinions requested in underwritten offerings, (iii) obtain
“comfort” letters from the independent certified public accountants of the
Issuers and the Guarantors (and, if necessary, any other certified public
accountant of any subsidiary of the Issuers or any Guarantor, or of any
business acquired by the Issuers or any Guarantor for which financial
statements and financial data are or are required to be included in the
Registration Statement) addressed to each Underwriter of Transfer Restricted
Securities, such letters to be in customary form and covering matters of the
type customarily covered in “comfort” letters in connection with underwritten
offerings, and (iv) cause any underwriting agreement entered into in
connection therewith to contain indemnification provisions and procedures no
less favorable than those set forth in Section 6 (or such other provisions
and procedures acceptable to the Majority Holders and the Underwriters, if any)
with respect to all parties to be indemnified pursuant to Section 6 and
(v) deliver such documents and certificates as may be reasonably requested
by the Holders of a majority in principal amount of the Transfer Restricted
Securities being sold or the Underwriters, and which are customarily delivered
in underwritten offerings, to evidence the continued validity of the
representations and warranties of the Issuers and the Guarantors made pursuant
to clause (i) above and to evidence compliance with any customary
conditions contained in an underwriting agreement; provided, however, that the Issuers and the Guarantors shall
not be responsible for payment of any underwriter discounts or commissions.

 

The foregoing actions set forth in clauses (i),
(ii), (iii) and (v) of this Section 3(q) shall be performed at
(A) the effectiveness of such Shelf Registration Statement and each
post-effective amendment thereto and (B) each closing under any
underwriting or similar agreement as and to the extent required thereunder.

 

14

 

In the case of a Shelf Registration Statement, the
Issuers may require each Holder of Transfer Restricted Securities to furnish to
the Issuers such information regarding such Holder and the proposed disposition
by such Holder of such Transfer Restricted Securities as the Issuers may from
time to time reasonably request in writing.

 

The Holders of Transfer Restricted Securities
covered by a Shelf Registration Statement who desire to do so may sell such
Transfer Restricted Securities in an Underwritten Offering.  In any such Underwritten Offering, the
investment banker or investment bankers and manager or managers (the “Underwriters”) that
will administer the offering will be selected by the Majority Holders of the
Transfer Restricted Securities included in such offering.

 

4.                                       Blackout
Periods.

 

(a)                                  In the case of a Shelf Registration
Statement, each Holder of Transfer Restricted Securities agrees that, upon
receipt of any notice from the Issuers of the happening of any event of the
kind described in Section 3(e)(iii), 3(e)(iv) or 3(e)(v), and
provided that the Issuers and the Guarantors are proceeding promptly and in
good faith to amend or supplement (including by way of filing documents under
the Exchange Act which are incorporated by reference to the related Prospectus
to describe such events), such Holder will forthwith discontinue disposition of
Transfer Restricted Securities pursuant to a Registration Statement until such
Holder’s receipt of the copies of the supplemented or amended Prospectus
contemplated by Section 3(i) or notice form the Issuers that the use
of the Prospectus may be resumed, and, if so directed by the Issuers, such
Holder will deliver to the Issuers all copies in its possession, other than
permanent file copies then in such Holder’s possession, of the Prospectus
covering such Transfer Restricted Securities that is current at the time of
receipt of such notice.

 

(b)                                 If the Issuers shall give any such notice
to suspend the disposition of Transfer Restricted Securities pursuant to a
Registration Statement, the Issuers shall extend the period during which the
Registration Statement shall be maintained effective pursuant to this Agreement
by the number of days during the period from and including the date of the
giving of such notice to and including the date when the Holders shall have
received copies of the supplemented or amended Prospectus or notice from the
Issuers necessary to resume such dispositions (such period, a “Blackout Period”).  The Issuers may give any such notice only
three times during any 365-day period and any such suspensions shall not exceed
30 days for each suspension and 45 days in the aggregate for all suspensions
during any 365-day period and there shall not be more than three suspensions in
effect during any 365-day period; provided,
however, that a suspension that occurs solely as a result of the filing of a
post-effective amendment to a Registration Statement to incorporate annual
audited financial information with respect to the Issuers where such
post-effective amendment is not yet effective and needs to be declared
effective to permit Holders to use the related Prospectus shall not be deemed a
suspension for purposes of calculating the limits set forth in this sentence; provided further, that in any case, if
such Blackout Period occurs for a continuous period in Excess of 30 days, a
Registration Default shall be deemed to have occurred on the 31st
day of such Blackout Period and Additional Interest shall be payable in
accordance with Section 2(e) from the day such Registration Default
occurs until such Registration Default is cured or until the Issuers are no
longer required pursuant to this Agreement to keep such Registration Statement
effective or such Registration Statement or the related Prospectus usable.

 

15

 

5.                                       Participation
of Broker-Dealers in Exchange Offer

 

(a)                                  The Staff has taken the position that any
broker-dealer that receives Exchange Securities for its own account in the
Exchange Offer in exchange for Securities that were acquired by such
broker-dealer as a result of market-making or other trading activities (a “Participating Broker-Dealer”)
may be deemed to be an “underwriter” within the meaning of the Securities Act
and must deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Securities.

 

The Issuers and the Guarantors understand that it is
the Staff’s position that if the Prospectus contained in the Exchange Offer
Registration Statement includes a plan of distribution containing a statement
to the above effect and setting forth the means by which Participating
Broker-Dealers may resell the Exchange Securities, without naming the
Participating Broker-Dealers or specifying the amount of Exchange Securities
owned by them, such Prospectus may be delivered by Participating Broker-Dealers
to satisfy their prospectus delivery obligation under the Securities Act in
connection with resales of Exchange Securities for their own accounts, so long
as the Prospectus otherwise meets the requirements of the Securities Act.

 

(b)                                 In light of the above, and notwithstanding
the other provisions of this Agreement, the Issuers and the Guarantors agree to
amend or supplement the Prospectus contained in the Exchange Offer Registration
Statement, as would otherwise be contemplated by Section 3(i) and to
use their respective commercially reasonable efforts to keep the Exchange Offer
Registration Statement continuously effective for a period of at least 90 days
following consummation of the Exchange Offer Registration or such longer period
if requested in writing by one or more Participating Broker-Dealers, in order
to expedite or facilitate the disposition of any Exchange Securities by
Participating Broker-Dealers or other Persons, if any, with similar Prospectus
delivery requirements, consistent with the positions of the Staff recited in
Section 5(a) above.  The
Issuers and the Guarantors further agree that Participating Broker-Dealers, and
other Persons, if any, shall be authorized to deliver such Prospectus during
such period in connection with the resales contemplated by this Section 5.

 

The Issuers and the Guarantors shall provide
sufficient copies of the latest version of the Prospectus to Participating
Broker-Dealers promptly upon request at any time during such 90-day period (or
such longer period as may be requested pursuant to the foregoing paragraph) in
order to facilitate resales.

 

(c)                                  The Initial Purchasers shall have no
liability to the Issuer, any Guarantor or any Holder with respect to any
request that they may make pursuant to Section 5(b) above.

 

6.                                       Indemnification
and Contribution.  

 

(a)                                  Each of the Issuers and each Guarantor,
jointly and severally, agree to indemnify and hold harmless each Initial
Purchaser and each Holder and with respect to any Prospectus delivery as
contemplated by Section 5, each Participating Broker-Dealer, their
respective Affiliates, directors, officers, employees and agents and each
Person, if any, who controls any Initial Purchaser or any Holder within the
meaning of Section 15 of the Securities

 

16

 

Act or Section 20 of
the Exchange Act, from and against any and all losses, claims, damages and
liabilities or any action in respect thereof (including, but not limited to,
any loss, claim, damage, liability or action relating to purchases and sales of
Securities and/or Exchange Securities and without limitation, legal fees and
other expenses incurred in connection with any suit, action or proceeding or
any claim asserted, as such fees and expenses are incurred), joint or several
(“Losses”),
that arise out of, or are based upon, (i) any untrue statement or alleged
untrue statement of a material fact contained in (A) any Registration
Statement or any Prospectus or (B) any blue sky application or other
document prepared or executed by the Issuers or any Guarantor (or based upon
any written information furnished by the Issuers or any Guarantor) specifically
for the purpose of qualifying any or all of the Transferred Restricted
Securities or Exchange Securities under the securities laws of any state or
other jurisdiction (any such application, document or information being
hereinafter called a “Blue
Sky Application”) or (ii) any omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading or (iii) any act or failure to act,
or any alleged act or failure to act, by any such Initial Purchaser or Holder
in connection with, or relating in any manner to, the Transferred Restricted
Securities or the Exchange Securities or any Exchange Offer contemplated
hereby, and which is included as part of or referred to in any Losses arising
out of or based upon matters covered by clause (i) or (ii) above (provided that the Issuers and the
Guarantors shall not be liable in the case of any matter covered by this clause
(iii) to the extent that it is determined in a final judgment by a court
of competent jurisdiction that such Losses resulted solely from any such act or
failure to act undertaken or omitted to be taken by such Initial Purchaser or
Holder, as the case may be, through its gross negligence or willful
misconduct), and shall reimburse each such Initial Purchaser or Holder and each
such officer, director, employee, agent or controlling person promptly upon
written demand for any legal or other expenses reasonably incurred by that
Initial Purchaser or Holder, officer, director, employee, agent or controlling
person in connection with investigating or defending or preparing to defend
against any such Losses as such expenses are incurred; provided, however, that the Issuers and
the Guarantors shall not be liable in any such case to the extent that any such
Losses arises out of, or is based upon, any untrue statement or alleged untrue
statement or omission or alleged omission made in any Prospectus, Registration
Statement or Blue Sky Application in reliance upon and in conformity with the
written information concerning such Initial Purchaser or Holder furnished to
the Issuers by or on behalf of such Initial Purchaser or Holder specifically
for inclusion therein.  The foregoing
indemnity agreement is in addition to any liability which the Issuers may
otherwise have to any Holder or to any officer, director, employee, agent or
controlling person of that Holder.

 

(b)                                 Each Holder of Transfer Restricted
Securities and Exchange Securities covered by a Registration Statement agrees,
severally and not jointly, to indemnify and hold harmless the Issuer, the
Guarantors, the Initial Purchasers and the other selling Holders, the directors
of the Issuers and the Guarantors, each officer of the Issuers and the
Guarantors who signed the Registration Statement and each Person, if any, who
controls the Issuer, the Guarantors, any Initial Purchaser and any other
selling Holder within the meaning of Section 15 of the Securities Act or
Section 20 of the Exchange Act to the same extent as the indemnity set
forth in paragraph (a) above, but only with respect to any Losses that
arise out of, or are based upon, any untrue statement or omission or alleged
untrue statement or omission made in reliance

 

17

 

upon and
in conformity with any information relating to such Holder furnished to the Issuers
in writing by or on behalf of such Holder expressly for use in any Registration
Statement, any Prospectus and any Blue Sky Application.

 

(c)                                  If any suit, action, proceeding
(including any governmental or regulatory investigation), claim or demand shall
be brought or asserted against any Person in respect of which indemnification
may be sought pursuant to either paragraph (a) or (b) above, such
Person (the “Indemnified
Person”) shall promptly notify the Person against whom such
indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the
Indemnifying Person shall not relieve it from any liability that it may have
under this Section 6 except to the extent that it has been materially
prejudiced (through the forfeiture of substantive rights or defenses) by such
failure; and provided, further,
that the failure to notify the Indemnifying Person shall not relieve it from
any liability that it may have to an Indemnified Person otherwise than under
this Section 6.  If any such
proceeding shall be brought or asserted against an Indemnified Person and it
shall have notified the Indemnifying Person thereof, the Indemnifying Person
shall retain counsel reasonably satisfactory to the Indemnified Person to
represent the Indemnified Person and any others entitled to indemnification
pursuant to this Section 6 that the Indemnifying Person may designate in
such proceeding and shall pay the fees and expenses of such counsel related to
such proceeding, as incurred.  In any such
proceeding, any Indemnified Person shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such Indemnified Person unless the Indemnified Person shall have reasonably
concluded that there may be legal defenses available to it that are different
from or in addition to those available to other Indemnified Persons or the
Indemnifying Person.  It is understood
and agreed that the Indemnifying Person shall not, in connection with any
proceeding or related proceeding in the same jurisdiction, be liable for the
fees and expenses of more than one separate firm (in addition to any local
counsel) for all Indemnified Persons, and that all such fees and expenses shall
be reimbursed as they are incurred.  Any
such separate firm (i) for any Initial Purchaser, its Affiliates,
directors and officers and any control Persons of such Initial Purchaser shall
be designated in writing by Lehman Brothers Inc., on behalf of the Initial
Purchasers, (ii) for any
Holder, its Affiliates, directors and officers and any control Persons of such
Holder shall be designated in writing by the Majority Holders and (iii) in
all other cases shall be designated in writing by the Issuers.  The Indemnifying Person shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the Indemnifying Person agrees to indemnify each Indemnified Person from and
against any loss or liability by reason of such settlement or judgment.  Notwithstanding the foregoing sentence, if at
any time an Indemnified Person shall have requested that an Indemnifying Person
reimburse the Indemnified Person for fees and expenses of counsel as
contemplated by this paragraph, the Indemnifying Person shall be liable for any
settlement of any proceeding effected without its written consent if
(i) such settlement is entered into more than 30 days after receipt by the
Indemnifying Person of such request and (ii) the Indemnifying Person shall
not have reimbursed the Indemnified Person in accordance with such request
prior to the date of such settlement.  No
Indemnifying Person shall, without the written consent of the Indemnified
Person, effect any settlement of any pending or threatened proceeding in
respect of which any Indemnified Person is or could have been a party and
indemnification could have been sought hereunder by such Indemnified Person,
unless such settlement (A) includes an unconditional release of such
Indemnified Person, in form and

 

18

 

substance
reasonably satisfactory to such Indemnified Person, from all liability on
claims that are the subject matter of such proceeding and (B) does not
include any statement as to or any admission of fault, culpability or a failure
to act by or on behalf of any Indemnified Person.

 

(d)                                 If the indemnification provided for in
paragraphs (a) and (b) above is unavailable to an Indemnified Person
or insufficient in respect of any Losses referred to therein, then each
Indemnifying Person under such paragraph, in lieu of indemnifying such
Indemnified Person thereunder, shall contribute to the amount paid or payable
by such Indemnified Person as a result of such Losses (i) in such
proportion as is appropriate to reflect the relative benefits received by the
Issuers and the Guarantors from the offering of the Securities and the Exchange
Securities, on the one hand, and by the Holders from receiving Securities or
Exchange Securities registered under the Securities Act, on the other hand, or
(ii) if the allocation provided by clause (i) is not permitted by
applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) but also the relative fault of
the Issuers and the Guarantors on the one hand, and the Holders on the other in
connection with the statements or omissions that resulted in such Losses, as
well as any other relevant equitable considerations.  The relative fault of the Issuers and the
Guarantors on the one hand and the Holders on the other 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 Issuers and the Guarantors
or by the Holders and the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.

 

(e)                                  The Issuers, the Guarantors and the
Holders agree that it would not be just and equitable if contribution pursuant
to this Section 6 were determined by pro
rata allocation (even if the Holders were treated as one entity for
such purpose) or by any other method of allocation that does not take account
of the equitable considerations referred to in paragraph (d) above.  The amount paid or payable by an Indemnified
Person as a result of the Losses referred to in paragraph (d) above shall be
deemed to include, subject to the limitations set forth above, any legal or
other expenses incurred by such Indemnified Person in connection with any such
action or claim.  Notwithstanding the
provisions of this Section 6, in no event shall a Holder be required to
contribute any amount in excess of the amount by which the total price at which
the Securities or Exchange Securities sold by such Holder exceeds the amount of
any damages that such Holder has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission.  No Person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any Person who was not
guilty of such fraudulent misrepresentation.

 

(f)                                    The remedies provided for in this
Section 6 are not exclusive and shall not limit any rights or remedies
that may otherwise be available to any Indemnified Person at law or in equity.

 

(g)                                 The indemnity and contribution provisions
contained in this Section 6 shall remain operative and in full force and
effect regardless of (i) any termination of this Agreement, (ii) any
investigation made by or on behalf of the Initial Purchasers or any Holder,
their respective Affiliates or any Person controlling any Initial Purchaser or
any Holder, or by or on behalf of the Issuers or the Guarantors their
respective Affiliates or the officers or directors of

 

19

 

or any
Person controlling the Issuers or the Guarantors, (iii) acceptance of any of
the Exchange Securities and (iv) any sale of Transfer Restricted
Securities pursuant to a Shelf Registration Statement.

 

7.                                       General

 

(a)                                  Securities Held by the
Issuers.  Whenever the consent or approval of Holders
of a specified percentage of the aggregate principal amount of Securities or
Exchange Securities is required hereunder, Securities or Exchange Securities,
as applicable, held by either Issuer or its Affiliates (other than subsequent
Holders of Securities or Exchange Securities if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Securities
or Exchange Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.

 

(b)                                 No Inconsistent
Agreements.   The Issuers and the Guarantors represent,
warrant and agree that (i) the rights granted to the Holders hereunder do
not in any way conflict with and are not inconsistent with the rights granted
to the holders of any other outstanding securities issued or guaranteed by the
Issuers or any Guarantor under any other agreement and (ii) neither the
Issuers nor any Guarantor has entered into, or on or after the date of this
Agreement will enter into, any agreement that is inconsistent with the rights
granted to the Holders of Transfer Restricted Securities in this Agreement or
otherwise conflicts with the provisions hereof.

 

(c)                                  Amendments and Waivers.   The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given unless the Issuers and the Guarantors have obtained the written consent
of Holders of at least a majority in aggregate principal amount of the outstanding
Transfer Restricted Securities affected by such amendment, modification,
supplement, waiver or consent; provided
that no amendment, modification, supplement, waiver or consent to any departure
from the provisions of Section 6 shall be effective as against any Holder
of Transfer Restricted Securities unless consented to in writing by such
Holder.  Any amendments, modifications,
supplements, waivers or consents pursuant to this Section 7(c) shall
be by a writing executed by each of the parties hereto.

 

(d)                                 Notices. 
All notices and other communications provided for or permitted hereunder
shall be made in writing by hand-delivery, registered first-class mail, telex,
telecopier, or any courier guaranteeing overnight delivery:

 

(i)                                     if to a Holder, at the most current address
given by such Holder to the Company in accordance with the provisions of this
Section 7(d), which address initially is, with respect to each Holder, the
address of such Holder maintained by the exchange agent, with a copy in like
manner to Lehman Brothers Inc.;

 

(ii)                                  if to the Initial Purchasers, to Lehman
Brothers Inc., 745 Seventh Avenue, New York, New York 10019, Attention:  High Yield Capital Markets (Fax:                   ),
with a copy to Akin Gump Stauss Hauer & Feld LLP, 1111 Louisiana
Street, 44th Floor, Houston, Texas 77002, Attention:  J. Michael Chambers; and

 

20

 

(iii)                               if to the Issuers or any Guarantor, to Tronox
Incorporated, 123 Robert S. Kerr Avenue, Oklahoma City, Oklahoma  73102, Attention: General Counsel (Fax:  (405) 270-4101), with a copy to
Covington & Burling, 1201 Pennsylvania Avenue, NW, Washington, DC  20004-2401, Attention:  David H. Engvall (Fax:  (202) 778-5307).

 

All
such notices and communications shall be deemed to have been duly given: at the
time delivered by hand, if personally delivered; five Business Days after being
deposited in the mail, postage prepaid, if mailed; when answered back, if
telexed; when receipt is acknowledged, if telecopied; and on the next Business
Day if timely delivered to an air courier guaranteeing overnight delivery.  Copies of all such notices, demands or other
communications shall be concurrently delivered by the Person giving the same to
the Trustee, at the address specified in the Indenture.

 

(e)                                  Successors and Assigns. This
Agreement shall inure to the benefit of and be binding upon the successors,
assigns and transferees of each of the parties, including, without limitation
and without the need for an express assignment, subsequent Holders; provided that nothing herein shall be
deemed to permit any assignment, transfer or other disposition of Transfer
Restricted Securities in violation of the terms of the Purchase Agreement or
the Indenture.  If any transferee of any
Holder shall acquire Transfer Restricted Securities in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities shall be
held subject to all the terms of this Agreement, and by taking and holding such
Transfer Restricted Securities such Person shall be conclusively deemed to have
agreed to be bound by and to perform all of the terms and provisions of this
Agreement and such Person shall be entitled to receive the benefits
hereof.  The Initial Purchasers (in their
capacity as Initial Purchasers) shall have no liability or obligation to the
Issuers or the Guarantors with respect to any failure by a Holder to comply
with, or any breach by any Holder of, any of the obligations of such Holder
under this Agreement.

 

(f)                                    Third Party Beneficiaries. 
Each Holder shall be a third party beneficiary to the agreements made
hereunder between the Issuers and the Guarantors on the one hand, and the
Initial Purchasers, on the other hand, and shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of other Holders hereunder.

 

(g)                                 Counterparts. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement.

 

(h)                                 Headings.  The headings in this Agreement are
for convenience of reference only, are not a part of this Agreement and shall
not limit or otherwise affect the meaning hereof.

 

(i)                                     Severability. 
The remedies provided herein are cumulative and not exclusive of any
remedies provided by law.  If any term,
provision, covenant or restriction contained in this Agreement is held by a
court of competent jurisdiction to be invalid, illegal, void, unenforceable or
against public policy, the remainder of the terms, provisions, covenants

 

21

 

and
restrictions contained herein shall remain in full force and effect and shall
in no way be affected, impaired or invalidated. 
The Issuer, the Guarantors and the Initial Purchasers shall endeavor in
good faith negotiations to replace such provisions with valid provisions, the
economic effect of which comes as close as possible to that of the provisions
that were held to be invalid, illegal, void, unenforceable or against public
policy.  It is hereby stipulated and
declared to be the intention of the parties that they would have executed the
remaining terms, provisions, covenants and restrictions without including any
of such that may be hereafter declared invalid, illegal, void, unenforceable or
against public policy.

 

(j)                                     Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

 

(k)                                  Miscellaneous. 
This Agreement contains the entire agreement between the parties
relating to the subject matter hereof and supersedes all oral statements and
prior writings with respect thereto.

 

[Signature Page to Follow]

 

22

 

Please
confirm that the foregoing correctly sets for the agreement among the Issuers,
the Guarantors and you.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  	
   

  
	
   

  	
  TRONOX WORLDWIDE LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas W. Adams

  	
   

  
	
   

  	
   

  	
  Name: Thomas W. Adams

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  
	
   

  	
  TRONOX FINANCE CORP.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas W. Adams

  	
   

  
	
   

  	
   

  	
  Name: Thomas W. Adams

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
  CIMARRON CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name: Mary Mikkelson

  
	
   

  	
   

  	
  Title: Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  KERR-MCGEE HOLDINGS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marty J. Rowland

  	
   

  
	
   

  	
   

  	
  Name: Marty J. Rowland

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
  KERR-MCGEE MINERALS RESOURCES

  CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marty J. Rowland

  	
   

  
	
   

  	
   

  	
  Name: Marty J. Rowland

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
  KERR-MCGEE PIGMENTS (SAVANNAH) INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas W. Adams

  	
   

  
	
   

  	
   

  	
  Name: Thomas W. Adams

  
	
   

  	
   

  	
  Title: President

  

 

[Signature Page to Exchange and Registration Rights Agreement]

 

 

	
   

  	
  KERR-MCGEE REFINING CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name: Mary Mikkelson

  
	
   

  	
   

  	
  Title: Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  SOUTHWESTERN REFINING COMPANY, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name: Mary Mikkelson

  
	
   

  	
   

  	
  Title: Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  TRANSWORLD DRILLING COMPANY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name: Mary Mikkelson

  
	
   

  	
   

  	
  Title: Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  TRIANGLE REFINERIES, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name: Mary Mikkelson

  
	
   

  	
   

  	
  Title: Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  TRIPLE S, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mary Mikkelson

  	
   

  
	
   

  	
   

  	
  Name: Mary Mikkelson

  
	
   

  	
   

  	
  Title: Senior Vice President and Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
  TRONOX LLC

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marty J. Rowland

  	
   

  
	
   

  	
   

  	
  Name: Marty J. Rowland

  
	
   

  	
   

  	
  Title: President

  
	
   

  	
   

  	
   

  
	
   

  	
  TRONOX INCORPORATED

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marty J. Rowland

  	
   

  
	
   

  	
   

  	
  Name: Marty J. Rowland

  
	
   

  	
   

  	
  Title: Chief Operating Officer

  

 

[Signature Page to
Exchange and Registration Rights Agreement]

 

 

Accepted
on behalf of the Initial Purchasers:

 

	
  LEHMAN BROTHERS INC., as Authorized Representative

  
	
   

  
	
  By:

  	
  /s/ Laurie B. Perper

  	
   

  
	
   

  	
  Name: Laurie B. Perper

  
	
   

  	
  Title: EVP

  
	
   

  
	
  CREDIT SUISSE FIRST BOSTON LLC, as Authorized Representative

  
	
   

  
	
  By:

  	
  /s/ David Faris

  	
   

  
	
   

  	
  Name: David Faris

  
	
   

  	
  Title: Managing Director

  
				

 

[Signature Page to Exchange and Registration Rights Agreement]

 

 

SCHEDULE I

 

Guarantors

 

Cimarron
Corporation

Kerr-McGee
Holdings, Inc.

Kerr-McGee
Minerals Resources Corporation

Kerr-McGee
Pigments (Savannah) Inc.

Kerr-McGee
Refining Corporation

Southwestern
Refining Company, Inc.

Transworld
Drilling Company

Triangle
Refineries, Inc.

Triple
S, Inc.

Tronox
LLC

Tronox
IncorporatedExhibit 10.1

 

STIPULATION
AND AGREEMENT OF SETTLEMENT

 

This
Stipulation and Agreement of Settlement (the “Agreement”) is submitted pursuant
to Rules 7023 and 9019 of the Federal Rules of Bankruptcy
Procedure.  Subject to the approval of
the Bankruptcy Court, this Agreement is entered into between and among the
following parties: (i) James D. Pippin, on behalf of himself and the Class of
ICT Spectrum Bankruptcy Claimants (1) (the “Class”), by and through his
counsel, and (ii) Kaiser Group Holdings, Inc. (“Holdings”), and (iii) Kaiser
Group International, Inc. (“Kaiser”) and its affiliated debtors(2) and
debtors in possession (collectively with Kaiser, the “Debtors”).

 

R
E C I T A L S

 

A.            On
June 9, 2000, the Debtors voluntarily filed petitions under chapter 11 of
the Bankruptcy Code in the United States Bankruptcy Court for the District of
Delaware (the “Bankruptcy Court”) and have since served continuously as debtors
in possession.  On November 15,
2000, the Debtors filed their “Second Amended Plan of Reorganization” (the “Plan”).  Under the Plan, equity holders are entitled
to one common share of Holdings (“New Common Stock”) for every 96 common shares
of Kaiser that they hold.  On November 17,
2000, the Bankruptcy Court entered its “Findings of Fact, Conclusions of Law,
Order and Judgment Confirming the Debtors’ Second Amended Plan of
Reorganization” (the “Confirmation Order”), which confirms the Plan and vests
the property of the Debtors’ estates in the Debtors and Holdings.  The Plan became effective on December 18,
2000.  The Debtors continue to serve as
legal representatives of their estates.

 

B.            On
August 1, 2000, James D. Pippin filed a proof of claim as a general
unsecured creditor in the Bankruptcy Court, on behalf of the Class, in the
asserted amount of $7,943,196.70

 

(1)           The
Class is defined as former stockholders of ICT Spectrum Constructors, Inc. who
exchanged their shares for shares of ICF Kaiser Securities pursuant to the
Agreement and Plan of Merger among ICF Kaiser International, Inc. ICT Spectrum
Constructors, Inc. and certain shareholders of ICT Spectrum Constructors, Inc.,
dated February 5, 1998.  The members of
the Class are set forth on Exhibit “A.” 

 

(2)           The
affiliated debtor subsidiaries are EDA, Incorporated; Kaiser/Georgia Wilson,
Inc.; Kaiser Engineers Massachusetts, Inc.; Kaiser Technology Holdings, Inc.;
Kaiser Advanced Technology, Inc.; Tudor Engineering Company; Cygna Group, Inc.;
Liability Risk Management, Inc.; Kaiser Europe, Inc.; Kaiser Engineers Group,
Inc.; International Waste Energy Systems, Inc.; Henry J. Kaiser Company; Kaiser
Engineers, Inc.; ICF Kaiser Advanced Technology of New Mexico, Inc.; Kaiser
Engineers & Builders, Inc.; Kaiser Engineers Corporation; Kaiser Engineers
International, Inc.; Kaiser Engineers (California) Corporation; KE Services
Corporation; Kaiser Engineers of Michigan, Inc.; Kaiser Engineers and
Constructors, Inc.; Kaiser Overseas Engineering, Inc.; KE Livermore, Inc.;
Kaiser Engineers Pacific, Inc.; Kaiser Hanford Company; Phase Linear Systems
Incorporated; Kaiser R.G.P. No. 1, Inc.; Henry J. Kaiser Development
Corporation, Inc.; Global Trade & Investment, Inc.; HBG Hawaii, Inc.; HBG
International, Inc.; Kaiser Holdings Unlimited, Inc.; American Venture
Investments Incorporated; American Venture Holdings, Inc.; Excell Development
Construction, Inc.; Kaiser Leasing Corporation, Inc.; Kaiser DPI Holding Co.,
Inc.; and Cygna Consulting Engineers and Project Management, Inc.

 

 

(the “Class Claim”).  The basis for the Class Claim was an “Agreement
and Plan of Merger” dated February 5, 1998 between ICF Kaiser
International, Inc., its wholly owned subsidiary, and ICT Spectrum
Constructors, Inc. and the holders of a majority of ICT Spectrum
Constructors, Inc. shares.  Some
members of the Class also filed individual proofs of claim based on the
same rights asserted in the Class Claim.

 

C.            On
April 11, 2001, the Bankruptcy Court granted Kaiser’s motion to
subordinate the Class Claim pursuant to Bankruptcy Code section 510(b).  The United States District Court for the
District of Delaware (the “District Court”) affirmed the decision of the
Bankruptcy Court.  The Bankruptcy Court’s
order granting the motion to subordinate is final and unappealable.

 

D.            On
May 21, 2002, the Bankruptcy Court granted James D. Pippin’s “Motion for
Certification of a Class of ICT Spectrum Claimants.”  On November 27, 2002, the Bankruptcy
Court entered the “Stipulated Order Approving Notice to Class of ICT
Spectrum Bankruptcy Claimants Regarding Certification of James D. Pippin’s Class Proof
of Claim,” thereby approving the service of the “Notice of Certification of Class Proof
of Claim” (the “Class Certification Notice”), which gave notice to each
member of the Class of his or her right to opt out of the Class.  No member of the Class timely exercised
his or her opt-out right.

 

E.             On
November 20, 2003, the Class filed the “Motion of Claimant James D.
Pippin and the Class of ICT Spectrum Claimants for Resolution of the Class Claim”
(the “Motion for Resolution”) in the Bankruptcy Court.  On February 2, 2004, the Bankruptcy
Court entered an order on the Motion for Resolution (the “Resolution Order”)
that required the Debtors to set aside and hold, for the benefit of the Class,
247,350 shares of New Common Stock on account of the Class Claim and 15,625
shares of New Common Stock on account of the other Class 5 Allowed Equity
Interests of the Class based on their holdings of Kaiser common stock
pending further order of the Bankruptcy Court.

 

F.             On
March 29, 2004, Kaiser appealed the Resolution Order.  On June 24, 2005, the District Court
entered its final order and memorandum of opinion affirming the Resolution
Order.  On July 22, 2005, Kaiser
timely filed its notice of appeal initiating case number 05-3524, an appeal in
the United States Court of Appeals for the Third Circuit Court (the “Third
Circuit Appeal”).  Pursuant to the joint
motion of the parties, filed September 16, 2005, the United States Court
of Appeals for the Third Circuit has stayed the Third Circuit Appeal pending, inter alia, Bankruptcy Court approval and consummation of
this Agreement.

 

G.            On
April 7, 2005, Holdings announced that its Board of Directors approved a 1-for-20
reverse stock split of the New Common Stock, subject to approval of its
stockholders, to enable Holdings to deregister its common stock under the
Securities Exchange Act of 1934.

 

H.            On
May 6, 2005, the Class filed the “Motion of Claimant Pippin and the Class of
ICT Spectrum Claimants for a Stay of the De-Registration of Kaiser Group
Holdings Common Stock Pending the Final Disposition of the Bankruptcy Court’s February 2,
2004 Order.”  On May 31, 2005, the
Bankruptcy Court denied the motion.  On June 8,
2005, the Class filed an Emergency Notice of Appeal of the Bankruptcy
Court’s order denying its motion thereby initiating case number 05-384, an
appeal in the District Court (the “District Court Appeal”).  

 

2

 

Pursuant
to a stipulation of the parties, the District Court Appeal has been stayed
pending, inter alia, Bankruptcy Court approval
and consummation of this Agreement.

 

I.              The
parties desire to settle and resolve completely all obligations and disputes
between them.

 

A
G R E E M E N T

 

THEREFORE, subject to final approval by the
Bankruptcy Court, and based upon the foregoing recitals, in consideration of
the promises and mutual covenants contained in this Agreement, and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties agree as follows:

 

1.             Agreement to Recitals.  The
parties incorporate the recitals set forth above, and agree that the recitals
are true and correct.

 

2.             Satisfaction of the Class Claim. 
Subject to Bankruptcy Court approval, as described in paragraph 7 below,
the parties hereby stipulate that Holdings will issue 175,000 shares of New
Common Stock (the “Class Claim Shares”), which will be distributed as
provided in paragraphs 3 and 4 below in full and complete satisfaction of (1) the
Class Claim, (2) any individual proofs of claim filed by members of
the Class based on similar facts, and (3) any right of Miller Faucher
and Cafferty LLP or its co-counsel to payment from Holdings, the Debtors, or
their estate in connection with the Debtors’ bankruptcy cases on account of its
representation of the Class or any member thereof in an amount to be
determined and approved by the Bankruptcy Court.  The Class Claim Shares, less shares
comprising any Bankruptcy Court approved attorneys’ fees, will constitute the “Net
Class Claim.”

 

3.             Distribution of Shares to Class. 
Subject to Bankruptcy Court approval, as described in paragraph 7 below,
the parties hereby agree that on the Distribution Date (as defined in paragraph
9 below), Holdings will cause Computershare (or any successor transfer agent
engaged by Holdings) (the “Transfer Agent”) to prepare and distribute stock
certificates of New Common Stock representing the appropriate pro rata share of
each Class member of the Net Class Claim to the members of the Class in
the amounts and to the names and addresses set forth on Exhibit “A” by
registered mail through the United States Postal Service.  Additional shares of New Common Stock will be
distributed to the members of the Class in the amounts and manner set
forth on Exhibit “B,” on account of the Kaiser common stock previously
registered in their names, to the extent not already distributed to such Class members.  It is understood and agreed that those Class members
shown on Exhibit “B” whose stock certificates representing their
respective pro rata shares of the prior distribution of Kaiser common stock
under the “Agreement and Plan of Merger” referred to in Recital B have been
held by Holdings will be sent their pro rata shares
in the form of New Common Stock in an aggregate amount of 4,259 shares through
the United States Postal Service by registered mail to the addresses shown on Exhibit ”A.”
Evidence of mailing will be provided by filing a proof of service together with
copies of United States Postal Service registered mail receipts with the
Bankruptcy Court and delivering a copy of such proof of service to Miller
Faucher and Cafferty LLP at the address provided in paragraph 23 below.  The remaining members of the Class, to the
extent that they continue to hold Kaiser shares previously distributed, may
exchange them through the Transfer Agent by presenting, by 

 

3

 

certified
or registered mail, their Kaiser share certificates within 180 days of the
Distribution Date at:

 

Computershare

Corporate
Actions

250
Royall Street

Canton, MA 02021

 

Kaiser
shares so presented for exchange by Class members in accordance with Exhibit “B”
will be exchanged by the Transfer Agent for New Common Stock at the 1:96 ratio
provided for in the Plan.  If a member of
the Spectrum Class has lost previously issued but not exchanged share
certificates, such class member may obtain Holdings Stock in respect of such
lost certificates by contacting Computershare’s shareholder services line at
(781) 575-3400 and following Computershare’s procedures for the exchange of
lost shares.

 

4.             Distribution of Shares for Attorneys’ Fees.  On
the Distribution Date, Holdings will cause its transfer agent to deliver those
shares of New Common Stock on account of all approved attorneys’ fees and costs
of the Class in an amount to be determined and approved by the Bankruptcy
Court, but in no event to exceed 30% of the Class Claim, to Miller Faucher
and Cafferty LLP by registered mail through the United States Postal Service at
the address in paragraph 23 below.  The
parties stipulate that the distribution under this paragraph is on account of
all fees and expense claims of Miller Faucher and Cafferty LLP and any
co-counsel or other professional fees and expenses incurred by or on behalf of
the Class or its members in connection with the Debtors’ bankruptcy
cases.  Notwithstanding the foregoing, in
addition to the distribution of shares provided above, Holdings agrees to
reimburse the court approved out-of-pocket costs incurred by Miller Faucher and
Cafferty in an amount not to exceed $20,000. 
Further, Holdings and the Debtors stipulate and agree that they will not
oppose Miller Faucher and Cafferty LLP’s request for attorneys’ fees and
reimbursement of expenses provided that the attorneys’ fee request does not
exceed an amount of shares representing a maximum of 30% of the Class Claim
shares and the request for reimbursement of expenses does not exceed the amount
of actual expenses incurred by Miller Faucher and Cafferty LLP during the
prosecution of the Class Claim, up to $20,000.

 

5.             Unclaimed Shares.  Any
undeliverable or unclaimed distributions of New Common Stock to be issued or
delivered under this Agreement will be deemed permanently and irrevocably
cancelled on the first business day following the 180th day from the
Distribution Date and neither Holdings nor the Debtors will have any further
obligations to any person or entity on account of such undeliverable or
unclaimed property, the Class Claim, the Plan or this Agreement.

 

6.             No Fractional Shares. 
Notwithstanding the obligations of paragraphs 2, 3, and 4 above, no fractional shares of New Common Stock will be
issued.  In the event a Class member
would otherwise be entitled to a fractional share (after 

 

4

 

aggregating
all fractional shares of New Common Stock to be received by such class member)
in an amount greater than or equal to one-half share, the amount distributable
to such Class member will be rounded-up to the next whole share.  In the event a Class member would
otherwise be entitled to a fractional share (after aggregating all fractional
shares of New Common Stock to be received by such class member) in an amount
less than one-half share, the amount distributable to such Class member
will be rounded-down to the next whole share.

 

7.             Bankruptcy Court Approval. 
Holdings and the Debtors will file a motion (the “Settlement Motion”) in
the Bankruptcy Court seeking an order approving this Agreement.  The parties’ obligations hereunder are
conditioned on the entry of an Order on the Settlement Motion (the “Settlement
Order”) providing, inter alia,
that:

 

(i)            This Agreement is approved in its entirety,
has been negotiated and entered into in good faith, and is fair and reasonable
and in the best interests of the Class and the Debtors, their bankruptcy
estate, their creditors and their interest-holders;

 

(ii)           Notice of the Settlement Motion was fair,
reasonable and adequate under the circumstances and in compliance with all
applicable law and rules of court;

 

(iii)          There will be reserved from the Class Claim
Shares and distributed to Miller Faucher and Cafferty LLP shares of New Common
Stock in an amount to be determined by the Bankruptcy Court in full and final
satisfaction of all professional fees incurred by or on behalf of the Class (whether
by Miller Faucher and Cafferty LLP, its co-counsel or otherwise).  Expenses will be reimbursed in cash in
accordance with paragraph 4 of the Agreement;

 

(iv)          Notice to all Class members and all
other parties in interest entitled to notice under applicable law of the
proposed settlement and the hearing to approve the proposed settlement was the
best notice practicable under the circumstances and was given in compliance
with all applicable laws and rules of court;

 

(v)           All Class members have had a full and
adequate opportunity to exercise any opt-out right, no further opt-out rights
exist, and this Agreement is binding in accordance with its terms on all
members of the Class;

 

(vi)          The members of the Class are properly
identified and entitled to proportionate distributions under this Agreement as
set forth in Exhibit “A”;

 

(vii)         Performance of Holdings’s and the Debtors’
obligations under this Agreement will be in full and final satisfaction of all
claims and equity interests of the Class and its members with respect to
the Class Claim and, in addition, with respect to the exchange of old
Kaiser shares of common stock for New Common Stock under the Plan as referenced
in Recital A;

 

5

 

(viii)        The issuance of New Common Stock under this
Agreement will not require any further distribution of common or preferred
stock of Holdings, or any other property, to any person or entity, including
without limitation, to existing stockholders of Holdings or members of Class 4
under the Plan, or otherwise. Holdings will not declare or distribute any cash
or stock dividends in respect of its common stock, except on a basis that
includes the New Common Stock distributed to the Class under this
Agreement equally and ratably in any such transaction, notwithstanding any
provision in the Plan or Confirmation Order to the contrary; and

 

(ix)           The issuance of New Common Stock under this
Agreement will be exempt from compliance with otherwise applicable securities
laws, including any registration requirements or restrictions on transfer, to
the fullest extent provided by Bankruptcy Code section 1145.

 

8.             Notice.  Class Counsel will send
notice of the proposed settlement by first-class mail to members of the Class in
the form of Exhibit “C” hereto at the addresses set forth in Exhibit “A.”  The Debtors will provide and pay for notice
to all other interested parties and to members of the Class of the
Settlement Motion (i) by first-class mail, in the form of Exhibit “D”
hereto, and (ii) by publication in the Wall Street Journal national
edition in the form of Exhibit “E” hereto.

 

9.             Distribution Date. 
Absent a timely filed notice of appeal, the parties will consummate the
Agreement and Holdings will distribute the New Common Stock as provided in
paragraph 3 above on the “Distribution Date,” which, except as otherwise
provided in this paragraph, will be the first business day following the tenth
day after entry of the Settlement Order, or as soon thereafter as reasonably
practicable; provided, however, that unless the parties otherwise agree in
writing, the Agreement will be null and void if the Settlement Order is not
obtained on or before February 1, 2006 or if the Distribution Date does
not occur on or before March 31, 2006 for any reason.  If a timely notice of appeal of the
Settlement Order is filed, the Class will have four business days from the
filing of such timely notice of appeal to declare the Agreement null and void
by delivering written notice of cancellation from Miller Faucher and Cafferty
LLP to Klee, Tuchin, Bogdanoff & Stern LLP at the address provided in
paragraph 23 below.  In the event of a
timely filed notice of appeal of the Settlement Order, absent timely written
notice of cancellation or a court order preventing implementation of this
Agreement, the Distribution Date will be the first business day that is at
least eleven calendar days following the filing of any such notice of appeal,
or as soon thereafter as may be reasonably practicable.

 

10.           Dividends.  Unless this Agreement is
rendered null and void, Holdings will not declare or distribute any cash or
stock dividends in respect of its common stock, except on a basis that includes
the shares that will be distributed to the Class under this Agreement
equally and ratably in any such transaction, notwithstanding any provision in
the Plan or Confirmation Order to the contrary. 
Unless this Agreement is rendered null and void, Holdings also will not
declare or distribute any common stock dividends in respect of its preferred
stock for a period of 60 days following the Distribution Date; provided,
however, that the Class members reserve their rights as common
shareholders of Holdings regarding any distribution of common stock dividends
by Holdings to preferred shareholders after the 60 day period following the 

 

6

 

Distribution
Date.  If this Agreement becomes null and
void, then the parties reserve all rights as to their respective positions
regarding the distribution of cash or stock dividends.

 

11.           Reverse Stock Split.  Upon
execution of this Agreement and for a period of 60 days following the
Distribution Date, Holdings will postpone implementation of the reverse stock
split and deregistration referred to in Recital G above; provided, however,
that if this Agreement becomes null and void, then the parties reserve all
rights as to their respective positions regarding the reverse stock split and
deregistration.

 

12.           No Further Dilution.  The
parties hereto have compromised the Class Claim on the condition that the
issuance of New Common Stock to the Class pursuant to this Agreement will
not itself result in or cause a further distribution of New Common Stock.  No shares of New Common Stock or securities
convertible into or exchangeable or exercisable for New Common Stock will be
issued to former Class 4 claimants under the Plan or to existing holders
of Holdings common stock as a consequence of this Agreement or of the issuance
of the Class Claim Shares as provided herein.  Holdings agrees that after the consummation
of this Agreement by the distribution of the Class Claim Shares as set
forth herein, it will not issue any New Common Stock or securities convertible
into or exchangeable or exercisable for New Common Stock other than in a manner
such that the Class Claim Shares are treated equally and ratably with
other Holdings common shares, it being specifically understood and agreed that
Holdings may issue stock options to its employees and directors in accordance
with the terms of the existing “Kaiser Group Holdings, Inc. 2002 Equity
Compensation Plan,” including the 4000 shares of Holdings Stock that Holdings
presently anticipates granting in February, 2006.  All parties will maintain all rights under
otherwise applicable law as to their respective positions regarding any
successor to the “Kaiser Group Holdings, Inc. 2002 Equity Compensation
Plan.”  If this Agreement becomes null
and void, then the parties reserve all rights as to their respective positions
regarding the dilution of Holdings stock.

 

13.           Releases of Kaiser by the Class.  Upon
issuance of the Settlement Order and the consummation of this Agreement as
Provided in Paragraph 9, and provided that this Agreement is not terminated by
any party pursuant to the provisions contained in Paragraph 9, Holdings and the
Debtors, their predecessors, successors, assigns, subsidiaries, bankruptcy
estates, trustees, affiliates, employees, stockholders, trustees, attorneys,
accountants, agents and insurers, and their respective assigns,
representatives, heirs, executors and administrators will thereby be released
and forever discharged from all manner of claims, demands, actions, suits,
causes of action, damages and liabilities of any nature whatsoever including, without
limitation, attorneys’ fees and costs arising out of the prosecution of the Class Claim
or that could have been raised in connection with such prosecution, whether
known or unknown, in law or in equity, that James D. Pippin or any member or
members of the Class have or had based upon or arising out of any facts,
events, or circumstances that were or could have been alleged in the Class Claim
involving that certain “Agreement and Plan of Merger” dated February 5,
1998 between ICF Kaiser International, Inc., its wholly-owned subsidiary,
and ICT Spectrum Constructors, Inc. and the holders of a majority of ICT
Spectrum Constructors, Inc. shares. 
This release covers all such claims as described in this Paragraph
arising before the date of this Agreement. 
All obligations under this Agreement are expressly excluded from this
release provision.

 

7

 

14.           Waiver of California Civil Code Section 1542.  The
parties acknowledge familiarity with California Civil Code section 1542,
which provides that:

 

A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known by him must have materially affected his settlement with the
debtor.

 

To
the fullest extent that they may lawfully do so, the Class and each of its
members expressly waive and relinquish all rights and benefits that they have
or may have under California Civil Code section 1542 or any similar
law.  To the extent that the Class, its
members, and its attorneys have not fully investigated or do not know about any
facts, events, or circumstances occurring at any time until the date of this
Agreement, those unknown facts, events, and circumstances, and in particular, any
and all unknown claims and equity interests arising out of them, are hereby
expressly waived and released.

 

15.           Assumption of Risk.  It
is expressly understood and agreed by the parties that the facts with respect
to this Agreement may turn out to be different from the facts now known or
believed by the parties to be true.  Each
of the parties expressly assumes the risk of the facts turning out to be
different and agrees that this Agreement will be in all respects effective and
not subject to termination or rescission by reason of any such
differences.  Each of the parties
understands and acknowledges the significance and the consequences of this
specific waiver of unknown claims and hereby assumes full responsibility for
any injuries, damages, losses, or liabilities that the party may incur from the
waiver of any unknown claims or equity interests.

 

16.           Dismissal of Actions.  Upon
entry of the Settlement Order and consummation of this Agreement, the parties
will stipulate to the immediate dismissal with prejudice of the District Court
Appeal and the Third Circuit Appeal each of the parties to bear its own costs. 

 

17.           Agreement Binding.  No Class member
will be given any further opportunity to opt out of the Class or this
Settlement subject to Holdings’s ability to waive this condition.  All members of the Class, and their heirs,
successors, assigns, and predecessors and successors in interest will be bound
by this Agreement and any amendments to or waivers of this Agreement agreed to
in writing by Class counsel, Miller Faucher and Cafferty LLP.

 

18.           Kaiser’s Representations and Warranties. 
Holdings and the Debtors hereby represent and warrant that, subject to
the approval of the Bankruptcy Court, they have full and complete authority to
execute this Agreement and that, in executing this Agreement, they are binding
themselves, the Debtors’ estate, their predecessors, successors, and assigns to
this Agreement.  Holdings and the Debtors
further represent and warrant that to the best of their knowledge, formed after
reasonable inquiry and diligence, Exhibit “B” accurately and completely
identifies the members of the Class that are still entitled to
distributions of stock under the “Agreement and Plan of Merger” referred to in
Recital B and the amount of New Common Stock to which those members are
entitled.  Holdings and the Debtors
hereby disclaim any other representation or warranty not contained in this
Agreement.

 

19.           Class Representations and Warranties.  Class counsel,
Miller Faucher and Cafferty LLP, hereby represents and warrants that, subject
to the approval of the Bankruptcy 

 

8

 

Court,
it has full and complete authority to sign this Agreement on behalf of the
Class.  It further represents and
warrants that to the best of its knowledge, formed after reasonable inquiry and
diligence, Exhibit ”A” accurately and completely identifies the members of
the Class, their addresses, and their pro rata entitlement to Net Class Claim
shares.  Miller Faucher and Cafferty LLP
further represents and warrants that it has successfully delivered the Class Certification
Notice referred to in Recital D to each of the members of the Class and
that no member of the Class has opted out. 
The Class and Miller Faucher and Cafferty LLP hereby disclaim any
other representation or warranty not contained in this Agreement.

 

20.           No Admission of Liability.  The
parties acknowledge that this Agreement represents a settlement of disputed
claims and that, by entering into this Agreement, none of the parties admits or
acknowledges the existence of any liability or wrongdoing.

 

21.           Successors and Assigns.  This
Agreement binds the parties’ heirs, successors, and assigns and on assigns of
stock distributed hereunder.

 

22.           Further Assurances and Cooperation.  The
parties hereby provide assurances of cooperation to each other and agree to
take any and all necessary and reasonable steps, including executing any other
and further documents or instructions, and performing any other and further
acts, appropriate to effect the intent of this Agreement.

 

23.           Notices.  The parties will give notice
to each other by sending a written communication by facsimile and first-class
mail to each of the addresses set forth below.

 

To
the Class:

 

William R. Kane, Esq.

Miller Faucher and Cafferty LLP

One Logan Square, Suite 1700

18th and Cherry Streets

Philadelphia, PA 19103

Fax:         (215) 864-2810

 

To
Holdings, Kaiser and the Debtors:

 

Mr. Douglas W. McMinn

9300 Lee Highway

Fairfax, VA 22031

Fax:         (703) 934-3199

 

and

 

Kenneth N. Klee, Esq.

Klee, Tuchin, Bogdanoff & Stern LLP

2121 Avenue of the Stars, 33rd Floor

Los Angeles, California 90067

Fax:         (310) 407-9090

 

9

 

24.           Governing Law.  This
Agreement is to be construed under and governed by the internal laws of the
State of Delaware without regard to conflict of laws principles and, as
applicable, the Bankruptcy Code and other applicable federal law; provided,
however, that the internal laws of the State of Delaware will govern matters
relating to the internal corporate affairs of Holdings or the Debtors.  Any dispute as to the interpretation or
implementation of this Agreement will be determined by the Bankruptcy Court.

 

25.           Entire Agreement.  This
Agreement contains the entire agreement and understanding among the parties
concerning the matters set forth herein and supersedes all prior or
contemporaneous stipulations, negotiations, representations, understandings,
and discussions among the parties or their respective counsel with respect to
the subject matter of this Agreement.  No
other representations, covenants, undertakings, or other earlier or
contemporaneous agreements respecting these matters may be deemed in any way to
exist or bind any of the parties.  The
parties acknowledge that they have not executed this Agreement in reliance on
any promise, representation, or warranty other than those contained in this
Agreement.

 

26.           Neutral Construction of the Agreement.  This
Agreement is the product of negotiation among the parties and represents the
jointly conceived and bargained-for language mutually determined by the parties
to express their intentions in entering into this Agreement.  Any ambiguity or uncertainty in this
Agreement is therefore to be deemed to be caused by or attributable to the
parties collectively and is not to be construed against any particular
party.  Instead, this Agreement is to be
construed in a neutral manner, and no term or provision of this Agreement as a
whole is to be construed more or less favorably to any one party.

 

27.           No Oral Modifications.  This
Agreement may not be modified except as mutually agreed to in a signed writing
by the parties or their authorized representatives.  No waiver of any of the provisions of this
Agreement will be deemed or will constitute a waiver of any of the other
provisions hereof whether or not similar, nor will such waiver constitute a
continuing waiver.

 

28.           Counterparts.  This
Agreement may be executed in several counterparts, and any and all such
executed counterparts will constitute a single agreement binding on each party
to this Agreement.  Facsimiles of
signatures may be taken as the actual signatures, and each party agrees, within
five business days after the facsimile transmission, to provide the other
parties with documents bearing the original signatures.

 

10

 

IN
WITNESS WHEREOF, the
parties have executed this Stipulation and Agreement of Settlement as of October 19,
2005.

 

	
   

  	
  Miller Faucher and Cafferty LLP

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: October 19, 2005

  	
  By: 

  	
  /s/ William R. Kane

  	
   

  
	
   

  	
   

  	
  Counsel for Pippin and the Class

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Kaiser Group International, Inc., and 

  
	
   

  	
  affiliated debtors

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Dated: October 19, 2005

  	
  By: 

  	
  /s/ Douglas W. McMinn

  	
   

  
	
   

  	
   

  	
  Douglas W. McMinn

  
	
   

  	
  Its: President and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Kaiser Group Holdings, Inc.

  
	
   

  	
   

  
	
   

  	
   

  
	
  Dated: October 19, 2005

  	
  By: 

  	
  /s/ Douglas W. McMinn

  	
   

  
	
   

  	
   

  	
  Douglas W. McMinn

  
	
   

  	
  Its: President and Chief Executive Officer

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