COLLATERAL AGENCY AGREEMENT
COLLATERAL AGENCY AGREEMENT dated as of April 11, 2006 (this "Agreement")
among THE BANK OF NEW YORK, a New York banking corporation, not in its
individual capacity but solely as trustee under the Indenture (as defined
herein) (the "Trustee), U.S. Bank National Association, as collateral agent (the
"Collateral Agent"), and, solely for the purposes of Sections 2, 5, 6 and 8
hereof, Kronos International, Inc. (the "Issuer").
RECITALS
The Issuer and the Trustee have entered into an indenture dated as of the
date hereof (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Indenture") pursuant to which the Issuer is
issuing (euro)400,000,000 in aggregate principal amount at maturity of 6 1/2%
Senior Secured Notes due 2013 (the "Notes"); and
To secure the obligations under the Indenture and the Notes, the Issuer has
agreed, among other things, to execute and deliver the following documents
listed on Exhibit A and any such other agreements as may be entered into from
time to time with respect to the collateral located in Denmark, France and the
Federal Republic of Germany (the "Collateral"), collectively referred to herein
as the ("Collateral Documents"); and
The Issuer has selected and desires the Trustee to jointly appoint the
Collateral Agent, and the Collateral Agent desires to act, as collateral agent
and/or beneficiary pursuant to the Collateral Documents.
NOW, THEREFORE, in consideration of the premises, the parties hereto agree
as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein and not otherwise
defined herein shall have the meaning given to such terms in the Indenture.
SECTION 2. APPOINTMENT OF COLLATERAL AGENT: SUCCESSOR COLLATERAL AGENT.
(a) The Issuer and the Trustee hereby appoint the Collateral Agent,
and the Collateral Agent hereby accepts such appointment, pursuant to the terms
of this Agreement, as collateral agent to act on behalf of the Trustee under the
Indenture for the benefit of the Holders, but solely in respect of the
Collateral Documents and the Collateral covered thereby. The Collateral Agent
shall be authorized to exercise such rights, powers and discretions as are
reasonably necessary or incidental to its obligations as Collateral Agent under
this Agreement and as collateral agent and/or beneficiary under the Collateral
Documents.
(b) The Collateral Agent is an independent contractor and shall have
no authority to act for or represent the Trustee except as expressly set forth
herein. Notwithstanding any provision to the contrary elsewhere, the Collateral
Agent shall not have any duties or responsibilities, except those expressly set
forth in the Collateral Documents to which it is a party and those arising out
of its acceptance and administration of this Agreement. The Collateral Agent
does not owe fiduciary duties to the Trustee or any other person in connection
with the performance its duties hereunder. At the expense of the Issuer, the
Collateral Agent may retain counsel and other experts, and may rely conclusively
on the advice of such counsel and other experts. The Collateral Agent is
entitled to refrain from taking any action hereunder, including, but not limited
to, beginning any legal action or proceeding or taking any steps to enforce or
realize upon any security interest created by the Collateral Documents, unless
the Collateral Agent has received such security or indemnification as it may
require (whether by way of payment in advance or otherwise) against all costs,
claims, expenses (including legal fees) and liabilities it will or may expend or
incur in taking such action.
(c) The Collateral Agent may resign at any time by giving written
notice thereof to the Issuer and the Trustee and may be removed any time with or
without cause by written notice by the Issuer. Prior to the effectiveness of any
such resignation or removal, the Trustee shall have the right to appoint a
successor Collateral Agent which shall be a bank or trust company or the foreign
equivalent thereof incorporated under the laws of any member state of the
European Union or the United States or any political subdivision thereof having
combined capital and surplus of at least US$50,000,000 or the equivalent
thereof. If in respect of the resignation of the Collateral Agent no successor
Collateral Agent shall have been so appointed by the Trustee and shall have
accepted such appointment within 30 days after the retiring Collateral Agent's
giving of notice of resignation, then the retiring Collateral Agent shall, prior
to the effectiveness of its resignation, on behalf of the Trustee, appoint a
successor Collateral Agent, which shall be a bank or trust company or the
foreign equivalent thereof incorporated under the laws of any member state of
the European Union or the United States or any political subdivision thereof
having a combined capital and surplus of at least US$50,000,000 or the
equivalent thereof. Upon the acceptance of any appointment as Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties and obligations under this Agreement. After
any retiring Collateral Agent's resignation or removal hereunder as Collateral
Agent, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Collateral Agent under
this Agreement and the Collateral Documents. Any corporation into which the
Collateral Agent may be merged, or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Collateral
Agent shall be a party, shall be Collateral Agent under this Agreement without
the execution or filing of any paper or any further act on the part of the
parties hereto.
(d) Beyond the exercise of reasonable care in the custody thereof, the
Collateral Agent shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any income
thereon or as to preservation of rights against prior parties or any other
rights pertaining thereto and the Collateral Agent shall not be responsible for
filing any financing or continuation statements or recording any documents or
instruments in any public office at any time or times or otherwise perfecting or
maintaining the perfection of any security interest in the Collateral. The
Collateral Agent shall be deemed to have exercised reasonable care in the
custody of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own property and
shall not be liable or responsible for any loss or diminution in the value of
any of the Collateral, by reason of the act or omission of any carrier,
forwarding agency or other agent or bailee selected by the Collateral Agent in
good faith.
SECTION 3. RESPONSIBILITIES OF COLLATERAL AGENT. The obligations of the
Collateral Agent under this Agreement shall be to:
(a) duly execute and deliver and act as beneficiary under the
Collateral Documents on behalf of the Trustee under the Indenture;
(b) upon the occurrence of an Event of Default, take such action as
requested by written instructions of the Trustee under the Indenture, provided
that such action does not contradict applicable law. In this regard, the
Collateral Agent shall be entitled to rely and act upon, and shall be fully
protected in relying and acting upon, any note, writing, resolution, notice
consent, certificate, request, demand, direction, instruction, waiver, receipt,
agreement, affidavit, letter, statement, order or written document or written
communication reasonably believed by it to be genuine and correct and to have
been signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel and other experts retained or employed by the
Collateral Agent in its reasonable discretion;
(c) be deemed to have actual, constructive, direct or indirect
knowledge or notice of the occurrence of any Event of Default only upon receipt
by the Collateral Agent of a written notice or a certificate from the Trustee,
stating that an Event of Default has occurred. The Collateral Agent shall have
no obligation whatsoever either prior to or after receiving such written notice
or certificate to inquire whether an Event of Default has in fact occurred and
shall be entitled to rely conclusively, and shall be fully protected in so
relying, on any notice or certificate so furnished to it;
(d) remit according to the written instructions of the Trustee any
proceeds recovered from enforcement of the Collateral Documents, provided that
all necessary approvals are obtained from appropriate authorities in the
jurisdiction where the Collateral is located; and
(e) take such other actions requested by the Trustee in accordance
with this Agreement.
SECTION 4. COLLATERAL AGENT'S INDIVIDUAL CAPACITY.
The Collateral Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with the Issuer or any of
their affiliates or subsidiaries as if it were not performing the duties
specified herein, and may accept fees and other consideration from the Issuer
for services in connection with the Agreement and otherwise without having to
account for the same to the Trustee or to the holders of Notes from time to
time.
SECTION 5. TERM FEES, ETC.
The term of this Agreement shall commence on the Issue Date and, unless
earlier terminated pursuant to Section 2(c), shall terminate upon the release of
the Collateral pursuant to the Collateral Documents. For services rendered as
Collateral Agent under this Agreement, the Issuer shall pay the Collateral Agent
$13,000 on the Issue Date and, during the term of this agreement, $10,000 on
each anniversary of the Issue Date, or such other compensation as may be agreed
to from time to time in writing between the Collateral Agent and the Issuer. The
Issuer agrees to pay the fees, expenses and other amounts payable of the
Collateral Agent under this Agreement, in addition to any other fees, expenses
and other amounts payable that may arise under the Collateral Documents (as such
term is defined in the Indenture).
SECTION 6. INDEMNIFICATION: DISCLAIMERS, ETC.
(a) The Issuer shall be liable for and shall reimburse and indemnify
the Collateral Agent and hold the Collateral Agent harmless from and against any
and all claims, losses, liabilities, costs, damages or expenses (including
reasonable attorney's fees and expenses) (collectively, "Losses") arising from
or in connection with or related to this Agreement or being Collateral Agent
hereunder (including but not limited to Losses incurred by the Collateral Agent
in connection with its successful defense, in whole or in part, of any claim of
gross negligence or willful misconduct on its part), provided, however, that
nothing contained herein shall require the Collateral Agent to be indemnified
for Losses caused by its own gross negligence or willful misconduct.
(b) No provision of this Agreement and the Collateral Documents shall
require the Collateral Agent to expend or risk its own funds or otherwise incur
any financial liability in the performance of any of its duties hereunder or
under the Collateral Documents or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability is not reasonably
assured to it.
(c) THE COLLATERAL AGENT SHALL HAVE NO LIABILITY (WHETHER SOUNDING IN
TORT, CONTRACT OR OTHERWISE) FOR LOSSES IN CONNECTION WITH, ARISING OUT OF, OR
IN ANY WAY RELATED TO, PERFORMANCE BY THE COLLATERAL AGENT UNDER ANY OF THE
COLLATERAL DOCUMENTS AND/OR THE RELATIONSHIP ESTABLISHED BY THIS AGREEMENT, OR
ANY ACT, OMISSION OR EVENT OCCURRING IN CONNECTION THEREWITH, UNLESS IT IS
DETERMINED BY A FINAL AND NONAPPEALABLE JUDGMENT OF A COURT OF THE COMPETENT
JURISDICTION THAT IS BINDING ON THE COLLATERAL AGENT THAT SUCH LOSSES WERE THE
RESULT OF ACTS OR OMISSIONS ON THE PART OF THE COLLATERAL AGENT OR ITS OFFICERS,
DIRECTORS, AGENTS, EMPLOYEES AND REPRESENTATIVES CONSTITUTING GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT.
(d) WITHOUT PREJUDICE TO ANY OTHER PROVISION OF THIS SECTION 6, THE
COLLATERAL AGENT AND THE ISSUER AGREE THAT THE TRUSTEE SHALL HAVE NO LIABILITY
TO THE COLLATERAL AGENT OR THE ISSUER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) HEREUNDER, EXCEPT IN ITS CAPACITY AS TRUSTEE UNDER, AND AS PROVIDED
FOR IN, THE INDENTURE.
SECTION 7. ILLEGALITY; NO INCONSISTENCY.
Nothing in this Agreement or the Collateral Documents shall require the
Collateral Agent to take any action which may be inconsistent with, or in
violation of: (i) any laws, rules or regulations in force in the jurisdiction
where the Collateral Agent is located, or (ii) any other agreement that the
Collateral Agent has entered into pursuant to this Agreement.
SECTION 8. MISCELLANEOUS PROVISIONS.
(a) Notices. All notices, approvals, comments or other communications
required or desired to be given hereunder shall be in writing and delivered in
person or mailed by certified mail or courier, postage prepaid, addressed as
follows, or by facsimile transmission, and shall be deemed given when received:
If to the Trustee:
The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Global Finance Unit
Fax: (212) 235-2530
If to the Collateral Agent:
U.S. Bank National Association 555 S.W. Oak Street Portland, Oregon
97204 Attention: Cheryl Nelson Fax: (503) 275-5738
If to the Issuer:
Kronos International, Inc.
5430 LBJ Freeway
Suite 1700
Dallas, Texas 75420
Attention: Robert D. Graham
Fax: (972) 450-4289
(b) Severability. The provisions of this Agreement are severable, and
if any clause or provision shall be held invalid, illegal or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect in that jurisdiction only such clause or provision, or part
thereof, and shall not in any manner affect such clause or provision in any
other jurisdiction or any other clause or provision of this Agreement in any
jurisdiction.
(c) Headings. The headings in this Agreement have been inserted for
convenience of reference only, are not to be considered a part hereof and shall
in no way modify or restrict any of the terms or provisions hereof.
(d) Counterpart Originals. This Agreement may be signed in two or more
counterparts, each of which shall be deemed an original, but all of which shall
together constitute one and the same agreement.
(e) Amendments. This Agreement may be changed, waived, discharged or
terminated only by an instrument in writing signed by all of the parties hereto.
(f) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND INTERPRETED
UNDER THE LAWS OF THE STATE OF NEW YORK AND ANY DISPUTE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THE TRUSTEE AND THE COLLATERAL AGENT IN CONNECTION WITH THIS AGREEMENT,
AND WHETHER ARISING IN CONTRACT, TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAWS
PROVISIONS) AND DECISIONS OF THE STATE OF NEW YORK.
(g) Submission to Jurisdiction. Any suit, action or proceeding against
the Trustee, the Issuer or the Collateral Agent or their respective properties,
assets or revenues with respect to this Agreement (a "Related Proceeding") may
be brought in any federal or state court in the Borough of Manhattan, City of
New York, State of New York, and any appellate court thereof. Each of the
Issuer, the Trustee and the Collateral Agent hereby irrevocably consents to the
jurisdiction of each such court for the purposes of any Related Proceeding, and
irrevocably waives, to the fullest extent it may effectively and lawfully do so,
any objection to the laying of venue of any Related Proceeding in any such court
and the defense of an inconvenient forum to the maintenance of any Related
Proceeding in any such court. Each of the Issuer, the Trustee and the Collateral
Agent further submits to the jurisdiction of the courts of its own corporate
domicile in any Related Proceeding.
(h) Incorporation by Reference. All of the rights, protections and
privileges granted to the Trustee under the Indenture are incorporated by
reference herein and shall inure to the benefit of the Collateral Agent herein;
provided, however, that in the event there is an inconsistency or conflict
between this Agreement and the Indenture, this Agreement shall govern (it being
understood that this proviso is intended solely to resolve conflicts between
this Agreement and the Indenture with respect to the rights of the Collateral
Agent under this Agreement, and shall not in any way modify, diminish or
otherwise affect the rights, protections and privileges granted to the Trustee
under the Indenture).
[Signature Pages to Follow]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the day and year first above written.
THE BANK OF NEW YORK,
Not in its individual capacity but
solely as Trustee under the Indenture
By:/s/ Luis Perez
--------------------------
Name: Luis Perez
Title: Assistant Vice President
U.S. Bank National Association
as Collateral Agent
By:/s/ Cheryl K. Nelson
--------------------
Name: Cheryl K. Nelson
Title: Vice President
Solely for the purposes of Sections 2, 5,
6 and 8 hereof:
KRONOS INTERNATIONAL, INC.,
as Issuer
By: /s/ John St. Wrba
-----------------
Name: John St. Wrba
Title: Vice President and
Assistant Treasurer