FORM OF SERIES B NOTE
(Face of Note)
KRONOS INTERNATIONAL, INC.
6-1/2% SENIOR SECURED NOTE DUE 2013
[THIS NOTE IS A GLOBAL NOTE WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE OF A
DEPOSITARY OR A SUCCESSOR DEPOSITARY. THIS NOTE IS NOT EXCHANGEABLE FOR NOTES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE
EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER
OF THIS SECURITY (OTHER THAN A TRANSFER OF THIS SECURITY AS A WHOLE BY THE
DEPOSITARY TO A NOMINEE OF THE DEPOSITARY OR BY A NOMINEE OF THE DEPOSITARY TO
THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY) MAY BE REGISTERED EXCEPT IN
THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.
THIS GLOBAL NOTE IS HELD BY THE COMMON DEPOSITORY (AS DEFINED IN THE INDENTURE
GOVERNING THIS NOTE) IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF,
AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I)
THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO
SECTIONS 2.1, 2.6, 2.7, 3.3, 4.10 AND 4.15 OF THE INDENTURE, (II) THIS GLOBAL
NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.6 OF THE
INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR
CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE
MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF
THE COMPANY.(1)
(1) To be included only if the Note is issued in global form.
KRONOS INTERNATIONAL, INC.
6-1/2% SENIOR SECURED NOTE DUE 2013
ISIN Co.
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Common Code
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No. (euro)
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Interest Payment Dates: April 15 and October 15
Record Dates: April 1 and October 1
KRONOS INTERNATIONAL, INC., a Delaware corporation (the "Company," which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received promises to pay to The Bank of New York Depository (Nominees)
Limited or registered assigns, the principal sum of _______________ Euro on
April 15, 2013.
Reference is hereby made to the further provisions of this Note set forth on the
reverse hereof, which further provisions shall for all purposes have the same
effect as set forth at this place.
Unless the certificate of authentication hereon has been executed by the Trustee
referred to on the reverse hereof by manual signature, this Note shall not be
entitled to any benefits under the Indenture referred to on the reverse hereof
or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed under
its corporate seal.
Dated:
KRONOS INTERNATIONAL, INC.
By:
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Name:
Title:
By:
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Name:
Title:
This is one of the Notes
referred to in the
within-mentioned Indenture:
THE BANK OF NEW YORK,
as Trustee
By:
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Authorized Signatory
(Back of Note)
6-1/2% Senior Secured Notes due 2013
Capitalized terms used herein shall have the meanings assigned to them in the
Indenture referred to below unless otherwise indicated.
1. Interest. The Company promises to pay interest on the principal amount of
this Note at the rate of 6-1/2% per annum from the date of original issuance
until maturity. The Company will pay interest semi-annually on April 15 and
October 15 of each year, or if any such day is not a Business Day, on the next
succeeding Business Day (each an "Interest Payment Date"). Interest on the Note
will accrue from the most recent date to which interest has been paid or, if no
interest has been paid, from the date of issuance; provided that if there is no
existing Default in the payment of interest, and if this Note is authenticated
between a record date referred to on the face hereof and the next succeeding
Interest Payment Date, interest shall accrue from such next succeeding Interest
Payment Date; provided, further, that the first Interest Payment Date shall be
October 15, 2006. The Company shall pay interest (including post-petition
interest in any proceeding under any Bankruptcy Law) on overdue payments of the
principal, Purchase Price and Redemption Price of this Note from time to time on
demand at a rate that is 1% per annum in excess of the rate then in effect; it
shall pay interest (including post-petition interest in any proceeding under any
Bankruptcy Law) on overdue installments of interest (without regard to any
applicable grace periods) hereon from time to time on demand at the same rate to
the extent lawful. Interest will be computed on the basis of a 360-day year of
twelve 30-day months.
2. Method of Payment. The Company will pay interest on the Notes (except
defaulted interest) to the Persons who are registered Holders of Notes at the
close of business on the April 1 and October 1 next preceding the Interest
Payment Date, even if such Notes are canceled after such record date and on or
before such Interest Payment Date, except as provided in Section 2.12 of the
Indenture with respect to defaulted interest. Any such installment of interest
not punctually paid or duly provided for shall forthwith cease to be payable to
the registered Holders on such Interest Payment Date, and may be paid to the
registered Holders at the close of business on a special interest payment date
to be fixed by the Trustee for the payment of such defaulted interest, notice
whereof shall be given to the registered Holders not less than 10 days prior to
such special interest payment date, or may be paid at any time in any other
lawful manner not inconsistent with the requirements of any securities exchange
on which the Notes may be listed, and upon such notice as may be required by
such exchange, all as more fully provided in the Indenture. The Notes will be
payable as to principal, Redemption Price, Purchase Price and interest at the
office or agency of the Company maintained for such purpose within or without
the City and State of New York, or, at the option of the Company, payment of
interest may be made by check mailed to the Holders at their addresses set forth
in the register of Holders, provided that payment by wire transfer of
immediately available funds will be required with respect to principal,
Redemption Price and Purchase Price of, and interest on, all Global Notes and
all other Notes the Holders of which shall have provided wire transfer
instructions to the Trustee or the Paying Agent. Such payment shall be in such
coin or currency of the European Union as at the time of payment is legal tender
for payment of public and private debts.
3. Paying Agent and Registrar. Initially, The Bank of New York, the Trustee
under the Indenture, will act as Paying Agent and Registrar. The Company may
change any Paying Agent or Registrar without notice to any Holder. The Company
may act in any such capacity.
4. Indenture. The Company issued (euro)400 million in aggregate principal amount
of the Notes under an Indenture dated as of April 11, 2006 (the "Indenture")
between the Company and the Trustee. The Company shall be entitled to issue
Additional Notes (as defined in the Indenture) pursuant to Section 2.16 of the
Indenture. The terms of the Notes include those stated in the Indenture and
those made part of the Indenture by reference to the Trust Indenture Act of
1939, as amended (15 U.S.C. Code ss.ss. 77aaa-77bbbb). The Notes are subject to
all such terms, and Holders are referred to the Indenture and such Act for a
statement of such terms. The Notes are general obligations of the Company. By
purchasing the Notes, each Holder acknowledges and agrees to benefit from and be
bound by the terms and conditions of the Indenture.
5. Optional Redemption. Except as described below, the Notes are not redeemable
before October 15, 2009. Thereafter, the Company may redeem the Notes at any
time on or after October 15, 2009 at its option, in whole or in part, upon not
less than 30 nor more than 60 days notice, at the following redemption prices
(expressed as percentages of the principal amount thereof) if redeemed during
the twelve-month period (or, in the case of the period commencing on October 15,
2012, six-month period) commencing on October 15 of the year set forth below:
Year Percentage
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2009...................................... 103.250%
2010...................................... 102.167%
2011...................................... 101.083%
2012 and thereafter....................... 100.000%
In addition, the Company must pay accrued and unpaid interest on the Notes
redeemed.
6. Special Redemption. (a) At any time, or from time to time, on or prior to
April 15, 2009, the Company, at its option, may use the net cash proceeds of one
or more Public Equity Offerings to redeem up to 35% of the principal amount of
the Notes, including the original principal amount of any Additional Notes,
issued under the Indenture at a Redemption Price of 106.5% of the principal
amount thereof plus accrued and unpaid interest thereon, if any, to the date of
redemption; provided that (1) at least 65% of the principal amount of Notes,
including the original principal amount of any Additional Notes, issued under
the Indenture remains outstanding immediately after any such redemption; and (2)
such redemption shall occur within 90 days after the date of the closing of the
applicable Public Equity Offering.
(b) At any time on or prior to October 15, 2009, the Notes may also be redeemed
or purchased (by the Company or any other Person) in whole but not in part, at
the Company's option, upon the occurrence of a Change of Control, at a price
equal to 100% of the principal amount thereof plus the Applicable Premium as of,
and accrued but unpaid interest, if any, to, the date of redemption or purchase
(the "Redemption Date") (subject to the right of Holders of record on the
relevant record date to receive interest due on the relevant interest payment
date). Such redemption or purchase may be made upon notice mailed by first-class
mail to each Holder's registered address, not less than 30 nor more than 60 days
prior to the Redemption Date (but in no event shall such notice be mailed more
than 180 days after the occurrence of such Change of Control). The Company may
provide in such notice that payment of such price and performance of the
Company's obligations with respect to such redemption or purchase may be
performed by another Person. Any such notice may be given prior to the
occurrence of the related Change of Control, and any such redemption, purchase
or notice may, at the Company's discretion, be subject to the satisfaction of
one or more conditions precedent, including but not limited to the occurrence of
the related Change of Control.
7. Mandatory Redemption. Except as set forth in Paragraph 9 below with respect
to purchases of Notes in certain events, the Company shall not be required to
make mandatory redemption payments with respect to the Notes.
8. Notice of Redemption or Purchase. Subject to the provisions of the Indenture,
a notice of redemption will be mailed at least 30 days but not more than 60 days
before the Redemption Date to each Holder whose Notes are to be redeemed at its
registered address. Notes in denominations larger than (euro)1,000 may be
redeemed or purchased in part but only in whole multiples of (euro)1,000;
provided that no Notes shall be redeemed in part if the resulting Note would
have a minimum denomination that is less than (euro)50,000, unless all of the
Notes held by a Holder are to be redeemed or purchased. On and after the
Redemption Date interest ceases to accrue on Notes or portions thereof called
for redemption or purchase.
9. Purchase at Option of Holder.
(a) Upon the occurrence of a Change of Control, each Holder will have the right
to require that the Company purchase all or a portion of such Holder's Notes, at
a purchase price equal to 101% of the aggregate principal amount thereof plus
accrued and unpaid interest thereon to the date of purchase. Such purchase shall
be made upon notice mailed by first-class mail within 60 days following the date
upon which the Change of Control occurred to each Holder, with a copy to the
Trustee, which notice shall govern the terms of the Change of Control Offer.
Such notice shall state, among other things, the purchase date, which must be no
earlier than 30 days nor later than 45 days from the date such notice is mailed,
other than as may be required by law (the "Change of Control Payment Date"). In
the event of a Change of Control, the Company will also publish a notice of the
offer to purchase in accordance with the procedures described under Section 13.2
of the Indenture. Holders electing to have a Note purchased pursuant to a Change
of Control Offer will be required to surrender the Note, with the form entitled
"Option of Holder to Elect Purchase" on the reverse of the Note completed, to
the Paying Agent at the address specified in the notice prior to the close of
business on the third Business Day prior to the Change of Control Payment Date.
(b) On the 366th day after an Asset Sale or such earlier date, if any, as the
Board of Directors of the Company or of an applicable Restricted Subsidiary
determines not to apply the Net Cash Proceeds relating to such Asset Sale as set
forth in Section 4.10(1)(c)(i), (1)(c)(ii) and (1)(c)(iii) of the Indenture
(each, a "Net Proceeds Offer Trigger Date"), the aggregate amount of Net Cash
Proceeds which have not been applied on or before such Net Proceeds Offer
Trigger Date as permitted in Section 4.10(1)(c)(i), (1)(c)(ii) and (1)(c)(iii)
of the Indenture (each, a "Net Proceeds Offer Amount") shall be applied by the
Company or such Restricted Subsidiary to make an offer to purchase (the "Net
Proceeds Offer") to all Holders and, on a Purchase Date not less than 30 nor
more than 45 days following the applicable Net Proceeds Offer Trigger Date, from
all Holders on a pro rata basis, that amount of Notes to be purchased, plus
accrued and unpaid interest thereon, if any, to the Purchase Date; provided,
however, that if at any time any non-cash consideration received by the Company
or any Restricted Subsidiary of the Company, as the case may be, in connection
with any Asset Sale is converted into or sold or otherwise disposed of for cash
(other than interest received with respect to any such non-cash consideration),
then such conversion or disposition shall be deemed to constitute an Asset Sale
under the Indenture and the Net Cash Proceeds thereof shall be applied in
accordance with Section 4.10 of the Indenture.
(c) Each Net Proceeds Offer will be mailed to the record Holders as shown on the
register of Holders within 25 days following the Net Proceeds Offer Trigger
Date, with a copy to the Trustee, and shall comply with the procedures set forth
in the Indenture. Upon receiving notice of the Net Proceeds Offer, Holders may
elect to tender their Notes in whole or in part in integral multiples of
(euro)1,000 in exchange for cash (provided that no Notes of less than
(euro)50,000 may remain outstanding thereafter). To the extent Holders properly
tender Notes in an amount exceeding the Net Proceeds Offer Amount, Notes of
tendering Holders will be purchased on a pro rata basis (based on amounts
tendered). A Net Proceeds Offer shall remain open for a period of 20 Business
Days or such longer period as may be required by law.
10. Denominations, Transfer, Exchange. The Notes are in registered form without
coupons in denominations of (euro)50,000 and (euro)1,000 increments thereof. The
transfer of Notes may be registered and Notes may be exchanged as provided in
the Indenture. The Registrar and the Trustee may require a Holder, among other
things, to furnish appropriate endorsements and transfer documents and the
Company may require a Holder to pay any taxes and fees required by law or
permitted by the Indenture. The Company need not exchange or register the
transfer of any Note or portion of a Note selected for redemption, except for
the unredeemed portion of any Note being redeemed in part. Also, it need not
exchange or register the transfer of any Notes for a period of 15 days before a
selection of Notes to be redeemed or during the period between a record date and
the corresponding Interest Payment Date.
11. Persons Deemed Owners. The registered Holder of a Note may be treated as its
owner for all purposes.
12. Amendment, Supplement and Waiver. Subject to certain exceptions, the
Indenture and the Notes may be amended or supplemented with the consent of the
Holders of at least a majority in principal amount of the then outstanding
Notes, and any existing default or compliance with any provision of the
Indenture or the Notes may be waived with the consent of the Holders of a
majority in principal amount of the then outstanding Notes. Without the consent
of any Holder of a Note, the Indenture and the Notes may be amended or
supplemented to cure any ambiguity, defect or inconsistency, to provide for
uncertificated Notes in addition to or in place of certificated Notes, to
provide for the assumption of the Company's obligations to Holders of the Notes
in case of a merger or consolidation, to make any change that would provide any
additional rights or benefits to the Holders of the Notes or that does not
adversely affect the legal rights under the Indenture of any such Holder, or to
comply with the requirements of the Commission in order to effect or maintain
the qualification of the Indenture under the Trust Indenture Act.
13. Defaults and Remedies. Each of the following constitutes an "Event of
Default": (i) the failure to pay interest on any Notes when the same becomes due
and payable and the default continues for a period of 30 days; (ii) the failure
to pay the principal on any Note when such principal becomes due and payable, at
maturity, upon redemption or otherwise (including the failure to make a payment
to purchase Notes tendered pursuant to a Change of Control Offer or a Net
Proceeds Offer); (iii) a default in the observance or performance of any other
covenant or agreement contained in the Indenture or any Security Document which
default continues for a period of 45 days after the Company receives written
notice specifying the default (and demanding that such default be remedied) from
the Trustee or the Holders of at least 25% of the outstanding principal amount
of the Notes (except in the case of a default with respect to Section 5.1 of the
Indenture, which will constitute an Event of Default with such notice
requirement but without such passage of time requirement); (iv) the failure to
pay at final maturity (giving effect to any applicable grace periods and any
extensions thereof) the principal amount of any Indebtedness of the Company or
any Restricted Subsidiary of the Company, or the acceleration of the final
stated maturity of any such Indebtedness (which acceleration is not rescinded,
annulled or otherwise cured within 20 days of receipt by the Company or such
Restricted Subsidiary of notice of any such acceleration) if the aggregate
principal amount of such Indebtedness, together with the principal amount of any
other such Indebtedness in default for failure to pay principal at final
maturity or which has been accelerated (in each case with respect to which the
20-day period described above has elapsed), aggregates $20 million or more at
any time; (v) the repudiation by the Company of any of its obligations under any
Security Document, or the unenforceability of any Security Document against the
Company if such unenforceability reasonably would be expected to result in a
material adverse effect on the Liens granted by the Company pursuant to such
Security Documents; (vi) one or more judgments in an aggregate amount in excess
of $20 million shall have been rendered against the Company or any of its
Restricted Subsidiaries and such judgments remain undischarged, unpaid or
unstayed for a period of 60 days after such judgment or judgments become final
and non-appealable; or (vii) certain events of bankruptcy affecting the Company
or any of its Significant Subsidiaries. Upon any such declaration, the entire
principal amount of, and accrued and unpaid interest and Additional Interest, if
any, on the Notes shall become immediately due and payable. Notwithstanding the
foregoing, in the case of an Event of Default arising from certain events of
bankruptcy or insolvency, all outstanding Notes will become due and payable
without further action or notice. Holders may not enforce the Indenture or the
Notes except as provided in the Indenture. Subject to certain limitations,
Holders of a majority in principal amount of the then outstanding Notes may
direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Holders of the Notes notice of any continuing Default or Event of
Default (except a Default or Event of Default relating to payment on any Note)
if it determines that withholding notice is in their interest. The Holders of a
majority in principal amount of the Notes may waive any existing or past Default
or Event of Default under the Indenture, and its consequences, except a default
in the payment of the principal of, or interest on any Notes. The Company is
required to deliver to the Trustee annually a statement regarding compliance
with the Indenture, and the Company is required upon becoming aware of any
Default or Event of Default, to deliver to the Trustee a statement specifying
such Default or Event of Default.
14. Trustee Dealings with Company. Subject to certain limitations, the Trustee
under the Indenture, in its individual or any other capacity, may become owner
or pledge of Notes and may otherwise deal with the Company or its Affiliates as
if it were not Trustee.
15. No Recourse Against Others. No past, present or future director, officer,
employee, incorporator or stockholder of the Company, as such, shall have any
liability for any obligations of the Company under the Notes or the Indenture or
for any claim based on, in respect of, or by reason of, such obligations or
their creation. Each Holder by accepting a Note waives and releases all such
liability. The waiver and release are part of the consideration for the issuance
of the Notes.
16. Authentication. This Note shall not be valid until authenticated by the
manual signature of the Trustee or an authenticating agent.
17. Abbreviations. Customary abbreviations may be used in the name of a Holder
or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by
the entireties), JT TEN (= joint tenants with right of survivorship and not as
tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors
Act).
18. Discharge Prior to Maturity. If the Company deposits with the Trustee or
Paying Agent cash or Government Securities sufficient to pay the principal or
Redemption Price of, and interest and Additional Interest, if any, on, the Notes
to maturity or a specified Redemption Date and satisfies certain conditions
specified in the Indenture, the Company will be discharged from the Indenture,
except for certain Sections thereof.
19. Governing Law. The Indenture, the Guarantees and this Note shall be governed
by and construed in accordance with the laws of the State of New York, but
without giving effect to applicable principles of conflicts of law to the extent
that the application of the law of another jurisdiction would be required
thereby. Each of the Company and each Guarantor hereby irrevocably submits to
the non-exclusive jurisdiction of any New York state court sitting in the
Borough of Manhattan in the City of New York or any Federal court sitting in the
Borough of Manhattan in the City of New York in respect of any suit, action or
proceeding arising out of or relating to the Indenture, the Guarantees and the
Notes, and irrevocably accepts for itself and in respect of its property,
generally and unconditionally, non-exclusive jurisdiction of the aforesaid
courts. Each of the Company and each Guarantor irrevocably waives, to the
fullest extent that it may effectively do so under applicable law, trial by jury
and any objection which it may now or hereafter have to the laying of the venue
of any such suit, action or proceeding brought in any such court and any claim
that any such suit, action or proceeding brought in any such court has been
brought in an inconvenient forum. Nothing herein shall affect the right of the
Trustee or any Holder of the Notes to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
the Company or any Guarantor in any other jurisdiction.
20. ISIN and Common Code Numbers. The Company has caused ISIN and Common Code
numbers to be printed on the Notes as a convenience to the Holders. No
representation is made as to the accuracy of such numbers as printed on the
Notes and reliance may be placed only on the other identification numbers
printed hereon.
The Company will furnish to any Holder upon written request and without charge a
copy of the Indenture. Request may be made to:
Kronos International, Inc.
5430 LBJ Freeway, Suite 1700
Dallas, TX 75240
Attention: Robert D. Graham
Fax: (972) 448-1445
ASSIGNMENT FORM
To assign this Note, fill in the form below:
(I) or (we) assign and transfer this Note to
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(Print or type assignee's name address and zip code)
and irrevocably appoint _______________________________________________________
agent to transfer this Note on the books of the Company. The agent may
substitute another to act for him.
Date: _____________________
Your Signature:
___________________________
(Sign exactly as your name
appears on the face of this
Note)
Signature Guarantee: __________________________________________________________
(Participant in recognized signature guarantee medallion
program)
OPTION OF HOLDER TO ELECT PURCHASE
If you wish to elect to have all or any portion of this Note purchased by the
Company pursuant to Section 4.10 ("Net Proceeds Offer") or Section 4.15 ("Change
of Control Offer") of the Indenture, check the applicable boxes
|_| Net Proceeds Offer: |_| Change of Control Offer:
in whole |_| in whole |_|
in part |_| in part |_|
Amount to be Amount to be
purchased: (euro)___________ purchased: (euro)___________
Dated: __________________ Signature:_____________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee: __________________________________________________________
(Participant in recognized signature guarantee medallion
program)
Social Security Number or
Taxpayer Identification Number:______________________________