Exhibit 10.2
EXECUTION COPY
EQUITY COMMITMENT AGREEMENT
          This Agreement (this “Agreement”) is entered into as of August 27,
2010 by and among (i) Tronox Incorporated, a Delaware corporation (as debtor in
possession and reorganized debtor, as applicable, the “Company”) and (ii) each
of the parties set forth on Schedule 1 hereto (together with any other Person
that, pursuant to Section 11, purchases Unsubscribed Shares or shares of New
Convertible Preferred Stock that a defaulting Backstop Party agreed but failed
to purchase, in each case with such Person’s respective successors and permitted
assigns, a “Backstop Party” and, collectively, the “Backstop Parties”).
Capitalized terms used herein and not otherwise defined shall have the
respective meanings set forth in Attachment A.
          WHEREAS, subject to the terms and conditions set forth herein, the
Company has agreed to file the First Amended Plan and, pursuant to the First
Amended Plan and this Agreement, to offer and sell:
          (i) 11,756,570 shares of its new Common Stock, par value $0.01 per
share (the “New Common Stock”), pursuant to a rights offering (the “Rights
Offering”) whereby any Person who, as of the Record Date, is (A) a holder of a
General Unsecured Claim against the Debtors in excess of $250 and/or (B) a
holder of an Indirect Environmental Claim against the Debtors in excess of $500,
provided, in each case, that such Claim has been Allowed on or before the Rights
Expiration Date (each Person described in clauses (A) and (B) above, an
“Eligible Holder”), shall be offered the right (each, a “Right”) to purchase up
to its pro rata share, based on the amount of such Allowed Claim (provided,
however, that for holders of Indirect Environmental Claims, their respective
Allowed Claim for purposes of participation in the Rights Offering shall be
limited to 50% of such Allowed Claim) (the “Holder Pro Rata Share”), of
11,756,570 shares of New Common Stock (each, an “Offered Share” and,
collectively, the “Offered Shares”) at a purchase price of $14.46 per Offered
Share (the “Purchase Price”); and
          (ii) 600,000 shares of its new Series A Convertible Preferred Stock,
par value $0.01 per share (the “New Convertible Preferred Stock”), having the
terms and conditions to be set forth in a Certificate of Designation to be filed
by the Company with the office of the Secretary of State of the State of
Delaware, substantially in the form set forth as Exhibit A attached hereto (the
“Preferred Stock COD”).
          WHEREAS, in order to facilitate the Rights Offering and the offering
of shares of New Convertible Preferred Stock (the “Preferred Stock Offering”)
and to fund, in part, the payments to be made pursuant to the First Amended
Plan, pursuant to this Agreement, and subject to the terms, conditions and
limitations set forth herein, each Backstop Party is severally (and not jointly
or jointly and severally) committing to purchase, and the Company is committing
to sell, on the effective date of the First Amended Plan (the “Effective Date”),
(i) with respect to the Rights Offering, for the Purchase Price per Offered
Share, the number of Unsubscribed Shares that is equal to the aggregate number
of the Unsubscribed Shares multiplied by the percentage set forth opposite such
Backstop Party’s name under the applicable heading on Schedule 1 (such
percentage, the “Rights Offering Commitment Percentage”), and (ii) with respect
to the New Convertible Preferred Stock, for the purchase price per share of New
Convertible Preferred Stock, the number of shares of New Convertible Preferred
Stock that is

 

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equal to 600,000 shares multiplied by the percentage set forth opposite such
Backstop Party’s name under the applicable heading on Schedule 1 (such
percentage, the “Preferred Stock Commitment Percentage).
          WHEREAS, the Company will conduct the Rights Offering pursuant to the
provisions of the First Amended Plan and this Agreement, which Rights Offering
shall include the terms and conditions set forth in the Term Sheet and such
other terms and conditions as agreed upon in good faith by (i) the Company,
(ii) the Required Backstop Parties, and (iii) the official committee of
unsecured creditors appointed in the Chapter 11 Cases (the “Creditors’
Committee”) (provided, however, that such other terms and conditions shall not
(a) adversely affect the obligations or rights of the Backstop Parties
hereunder, (b) cause any representation or warranty contained herein to be
incorrect or (c) be inconsistent with the Term Sheet; and
          WHEREAS, upon the terms and subject to the conditions set forth
herein, the parties hereto shall seek the approval by the Bankruptcy Court of
each of the First Amended Plan, this Agreement and any other documents necessary
to effectuate the First Amended Plan, the Rights Offering and the Preferred
Stock Offering.
          NOW, THEREFORE, in consideration of the foregoing, and the
representations, warranties and covenants set forth herein, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by the parties hereto, the Company and the Backstop Parties hereby
agree as follows:
1. The Rights Offering.
     (a) Subject to the terms and conditions of this Agreement, the Company
hereby undertakes to offer the Offered Shares for subscription by Eligible
Holders holding Rights as set forth in this Agreement, including pursuant to the
procedures governing the Rights Offering set forth on Exhibit C attached hereto,
with such changes therein as shall be reasonably acceptable to the Company, the
Creditors’ Committee and the Required Backstop Parties (the “Rights
Procedures”).
     (b) In connection with the consummation of the transactions contemplated by
the First Amended Plan, the Company shall issue to all Eligible Holders, Rights
to purchase an aggregate of 11,756,570 Offered Shares. Each Eligible Holder as
of the Record Date will receive a Right to purchase up to its Holder Pro Rata
Share of the Offered Shares at the Purchase Price per Offered Share. The rights
subscription form, substantially in the form of Exhibit D attached hereto, with
such changes therein as shall be reasonably acceptable to the Creditors’
Committee and the Required Backstop Parties (the “Rights Subscription Form”),
will be distributed to Eligible Holders in connection with the solicitation of
acceptances of the First Amended Plan and shall provide a means whereby each
Eligible Holder may exercise its Rights. The Rights may be exercised during the
period specified in the Rights Procedures (the “Rights Exercise Period”). The
Rights Subscription Form and other documentation setting forth the procedures
for the Rights Offering shall provide that each Backstop Party shall have the
right to pay the aggregate Purchase Price for the Shares acquired by such
Backstop Party to the Company on the Effective Date.

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     (c) The Rights shall not be transferrable (other than in connection with a
transfer of the underlying General Unsecured Claim or Indirect Environmental
Claim against the Debtors to which such Rights relate) and may be exercised in
part or in full as set forth in the Rights Procedures.
     (d) Subject to the provisions set forth in Sections 3, 8 and 13, each
Backstop Party hereby agrees, severally (and not jointly or jointly and
severally), to subscribe for and purchase, and the Company hereby agrees to sell
and issue, on the Effective Date, for the Purchase Price per Offered Share, the
number of Unsubscribed Shares that is equal to the aggregate number of the
Unsubscribed Shares multiplied by such Backstop Party’s Rights Offering
Commitment Percentage (the Backstop Parties’ commitment to acquire the
Unsubscribed Shares pursuant to this Agreement, the “Backstop Commitment”).
     (e) The Company hereby agrees and undertakes to give, or instruct the
Subscription Agent to give, the Backstop Parties, by electronic facsimile
transmission or by electronic mail, a notice conforming to the requirements
specified herein of either (i) the number of Unsubscribed Shares, as determined
in good faith by the Company, and the aggregate Purchase Price therefor (each, a
“Purchase Notice”) or (ii) in the absence of any Unsubscribed Shares, the fact
that there are no Unsubscribed Shares and that the Backstop Commitment is
terminated (each, a “Satisfaction Notice”), in either case as soon as
practicable after the Voting Deadline and, in any event, not less than seven
(7) Business Days prior to the Effective Date (the date of transmission of
confirmation of a Purchase Notice or a Satisfaction Notice, as the case may be,
the “Determination Date”). The Company shall provide to the Backstop Parties
such written supplemental information regarding the determination of the number
of Unsubscribed Shares as any Backstop Party may reasonably request. On the
Effective Date, the Backstop Parties shall purchase, and the Company shall sell,
only such number of Unsubscribed Shares as are listed in the Purchase Notice,
without prejudice to the rights of the Backstop Parties to seek later an upward
or downward adjustment if the number of Unsubscribed Shares set forth in such
Purchase Notice is determined to be inaccurate.
     (f) Delivery of the certificates representing the shares of Unsubscribed
Shares will be made by the Company to the Backstop Parties at 9:00 a.m., New
York City time, at the offices of Kirkland & Ellis LLP, 601 Lexington Avenue,
New York, New York 10022, on the Effective Date against payment of the aggregate
Purchase Price for the Unsubscribed Shares by wire transfer on or prior to the
Effective Date of federal (same day) funds to the account specified by the
Company to the Backstop Parties at least five (5) Business Days in advance.
     (g) All Unsubscribed Shares will be delivered with any and all issue,
stamp, transfer or similar taxes or duties payable in connection with such
delivery duly paid by the Company to the extent required under the Confirmation
Order or applicable Law.
     (h) Notwithstanding anything to the contrary in this Agreement, the
Backstop Parties, in their sole discretion, may designate in writing at least
five (5) Business Days prior to the Effective Date that some or all of the
Offered Shares be issued in the name of, and delivered to, one or more of their
Affiliates, and shall provide all information reasonably requested by the
Company in connection therewith.

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     (i) No Backstop Party shall have any liability for the Backstop Commitment
of any other Backstop Party.
     (j) The Rights and the Offered Shares will be issued to the Eligible
Holders without registration under the Securities Act in reliance upon the
exemption from registration provided by Section 1145 of the Bankruptcy Code. The
Unsubscribed Shares will be issued to the Backstop Parties without registration
under the Securities Act in reliance upon the exemption from registration
provided by Section 4(2) of the Securities Act.
2. The Preferred Stock Offering.
     (a) Subject to the provisions set forth in Sections 3, 8 and 13, each
Backstop Party hereby agrees, severally (and not jointly or jointly and
severally) to subscribe for and purchase, and the Company hereby agrees to sell
and issue to each Backstop Party, on the Effective Date, at a purchase price of
$25.00 per share, the number of shares of New Convertible Preferred Stock that
is equal to 600,000 shares of New Convertible Preferred Stock multiplied by such
Backstop Party’s Preferred Stock Commitment Percentage (the Backstop Parties’
commitment to acquire the shares of New Convertible Preferred Stock pursuant to
this Agreement, the “Preferred Stock Commitment”).
     (b) Delivery of the certificates representing the shares of New Convertible
Preferred Stock will be made by the Company to the Backstop Parties at 9:00
a.m., New York City time, at the offices of Kirkland & Ellis LLP, 601 Lexington
Avenue, New York, New York 10022, on the Effective Date against payment of the
aggregate purchase price for the shares of New Convertible Preferred Stock by
wire transfer on or prior to the Effective Date of federal (same day) funds to
the account specified by the Company to the Backstop Parties at least five
(5) Business Days in advance.
     (c) All shares of New Convertible Preferred Stock will be delivered with
any and all issue, stamp, transfer or similar taxes or duties payable in
connection with such delivery duly paid by the Company to the extent required
under the Confirmation Order or applicable law.
     (d) Notwithstanding anything to the contrary in this Agreement, the
Backstop Parties, in their sole discretion, may designate in writing at least
five (5) Business Days prior to the Effective Date that some or all of the
shares of New Convertible Preferred Stock be issued in the name of, and
delivered to, one or more of their Affiliates and shall provide all information
reasonably requested by the Company in connection therewith.
     (e) No Backstop Party shall have any liability for the Preferred Stock
Commitment of any other Backstop Party.
     (f) The New Convertible Preferred Stock will be issued to the Backstop
Parties without registration under the Securities Act in reliance upon the
exemption from registration provided by Section 4(2) of the Securities Act.

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3. Backstop Consideration; Transaction Expenses.
     (a) Backstop Consideration. To compensate each Backstop Party for the risk
of its undertakings related to the Backstop Commitment and the Preferred Stock
Commitment:
          (i) Subject to the entry of a final, non-appealable ECA Order, on the
Effective Date, the Company will pay to the Backstop Parties an aggregate
backstop commitment fee consisting of 705,394 shares of New Common Stock (the
“Equity Backstop Consideration”), distributed to each Backstop Party on a
ratable basis in accordance with such Backstop Party’s Rights Offering
Commitment Percentage; provided that, notwithstanding the foregoing, if the
Effective Date shall not occur (subject to Section 11(b), other than directly
and solely as a result of a breach by any Backstop Party of any of the terms or
conditions of this Agreement) and/or this Agreement is terminated in accordance
with the provisions hereof (subject to Section 11(b), other than directly and
solely as a result of a breach by any Backstop Party of any of the terms or
conditions of this Agreement), then (x) the Backstop Parties shall be paid in
cash an amount equal to six percent (6%) of the aggregate Purchase Price of the
Offered Shares and the aggregate purchase price of the shares of New Convertible
Preferred Stock being offered pursuant to Sections 1 and 2 hereof (i.e.,
$11,100,000) (the “Cash Backstop Consideration” and, together with the Equity
Backstop Consideration, the “Backstop Consideration”). To the extent payable,
the Cash Backstop Consideration shall be paid (A) if this Agreement is
terminated by the Company, then on the date on which this Agreement is so
terminated, and (B) if this Agreement terminates automatically by its terms or
is terminated by the Backstop Parties, then within two (2) Business Days
following the date on which this Agreement is so terminated.
          (ii) The Backstop Consideration and the Transaction Expenses shall
constitute administrative expenses of the Company under sections 364(c)(1) and
503(b) of the Bankruptcy Code. All payments of the Backstop Consideration and
the Transaction Expenses hereunder shall be made free and clear of any
withholding on account of Taxes unless the Company receives advice of counsel
that withholding on account of Taxes is required under applicable Law.
          (iii) The Backstop Consideration shall be deemed earned upon the
execution of this Agreement by each of the parties hereto and will be payable in
accordance with Section 3(a)(i), whether or not any Unsubscribed Shares or any
shares of New Convertible Preferred Stock are actually purchased pursuant to the
Backstop Commitment or the Preferred Stock Commitment and will be nonrefundable
when paid; provided that a Backstop Party shall not be entitled to receive any
portion of the Backstop Consideration if this Agreement is terminated by the
Company solely as a result of a breach of any of the terms or conditions of this
Agreement by such Backstop Party.
          (iv) The Backstop Parties hereby agree that they shall not be entitled
to any fee or payment other than as provided in this Section 3(a) and in
Section 3(b) in connection with the Backstop Commitment, the Preferred Stock
Commitment or otherwise in any way related to this Agreement and hereby
irrevocably waive all rights to other fees and payments from any Debtor or any
of their respective Affiliates in connection with the Backstop Commitment, the
Preferred Stock Commitment or otherwise in any way related to this Agreement.

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     (b) Transaction Expenses.
          (i) Subject to the professionals for the Backstop Parties providing
invoices (sufficiently detailed to enable a determination as to the
reasonableness of such fees and expenses (without limiting the right of the
various professionals to redact privileged, confidential or sensitive
information)) to the Company and any other applicable procedures set forth in
the ECA Order, whether or not the transactions contemplated hereby are
consummated (subject to Section 11(b), unless such transactions are not
consummated directly and solely as a result of a breach by any Backstop Party of
any of the terms or conditions of this Agreement), the Company will reimburse or
pay, as the case may be, all reasonable and documented out-of-pocket expenses of
the Backstop Parties (A) incurred (and not previously paid) in connection with
this Agreement, their participation in the Chapter 11 Cases, the Backstop
Commitment and the Preferred Stock Commitment through the earlier to occur of
(1) the date on which this Agreement is terminated for any reason and (2) the
60th day following the Effective Date, and (B) incurred in connection with the
enforcement of any rights of the Backstop Parties under this Agreement and any
document or instrument entered into in connection with this Agreement or the
transactions contemplated hereby (such expenses, collectively, “Transaction
Expenses”). The Transaction Expenses include the reasonable and documented fees
and expenses of Gleacher & Company Securities, Inc., financial advisor to the
Backstop Parties, as set forth in its engagement letter attached hereto as
Exhibit E (which such engagement letter was previously approved by the Court and
is hereby re-affirmed by the Company), and Milbank, Tweed, Hadley & McCloy LLP,
legal advisor to the Backstop Parties, and the reasonable and documented fees
and expenses of any other professionals reasonably retained by the Backstop
Parties in connection with the transactions contemplated hereby; provided that,
notwithstanding any other provision herein, the Company shall not be responsible
for the fees or expenses of more than one financial advisor or more than one
firm of counsel, together with any local counsel. Notwithstanding any other
provision contained in this Agreement, the parties hereto agree that the Company
shall have no obligation to reimburse or pay, as the case may be, any
Transaction Expenses under subclause (A) of the first sentence of this
Section 4(b)(i), incurred following the Effective Date, that exceed an aggregate
amount equal to $150,000.
          (ii) Subject to Section 11(b), the reimbursement or payment of
Transaction Expenses shall be made by the Company within five (5) Business Days
of presentation of an invoice approved by the Required Backstop Parties, without
Bankruptcy Court review or further Bankruptcy Court order (but subject to any
conditions imposed by the Bankruptcy Court), subject to paragraph (i) above,
whether or not the transactions contemplated hereby are consummated.
Notwithstanding any other provision contained in this Agreement, any payment of
a fee to the Backstop Parties’ financial advisor shall be conditioned upon the
consummation of the transactions contemplated by this Agreement, in which case
payment of such fee shall be made on the Effective Date.
          (iii) The obligations of the Company under this Section 3 are in
addition to, and do not limit, its obligations to provide indemnification to
each Indemnified Party pursuant to Section 9. The Company’s agreement to
reimburse or pay, as the case may be, the Transaction Expenses is an integral
part of the transactions contemplated by this Agreement and, without such
agreement, the Backstop Parties would not have entered into this Agreement, and
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Transaction Expenses shall constitute an administrative expense of the Company
under sections 364(c)(1) and 503(b) of the Bankruptcy Code.
4. Representations and Warranties of the Company. The Company hereby represents
and warrants to the Backstop Parties, on the date hereof and on the Effective
Date, that the following statements are true and correct (it being understood
and agreed that (i) the representations and warranties contained herein shall
relate solely to the Retained Assets and the business to be conducted by the
Tronox Parties after the Effective Date, any Liabilities related thereto and any
other Liabilities that, in each case, will be retained by the Company after the
Effective Date, and (ii) the representations and warranties made on the
Effective Date are deemed to be made concurrently with the consummation of the
transactions contemplated hereby), except as set forth in the Schedules attached
hereto:
     (a) Projections. On and as of the date hereof, the projections of Tronox
Worldwide and its Subsidiaries attached as Exhibit C to the “Disclosure
Statement Regarding the Joint Plan of Reorganization of Tronox Incorporated et
al.” filed with the Bankruptcy Court on July 7, 2010 [Dkt. No. 1707] (the
“Projections”) are based on good faith estimates and assumptions made by the
management of the Company; provided that the Projections are not to be viewed as
facts and that actual results during the period or periods covered by the
Projections may differ from such Projections and that the differences may be
material; provided, further, that as of the date hereof, management of the
Company believes that the Projections are reasonable and attainable.
     (b) Organization; Requisite Power and Authority; Qualification. Each of the
Company and its Subsidiaries (i) is duly organized, validly existing and in good
standing under the Laws of its jurisdiction of organization as identified in
Schedule 4(b), (ii) has all requisite power and authority to own and operate its
properties, to carry on its business as now conducted and as proposed to be
conducted, and the Company has all requisite power and authority to enter into
this Agreement and, upon entry by the Bankruptcy Court of the ECA Order, will
have all requisite power and authority to carry out the transactions
contemplated hereby, and (iii) is qualified to do business and in good standing
in every jurisdiction where its assets are located and wherever necessary to
carry out its business and operations, except in jurisdictions where the failure
to be so qualified or in good standing has not had, and could not be reasonably
expected to have, a Material Adverse Effect.
     (c) Capitalization. Unless otherwise agreed to by the Required Backstop
Parties, at the Effective Date, the Company shall have authorized for issuance
50,000,000 shares of New Common Stock and 1,000,000 shares of preferred stock,
with a par value of $0.01 per share. At the Effective Date, immediately after
giving effect to the distributions under the First Amended Plan, the purchase of
Offered Shares pursuant to the Rights Offering and the purchase and issuance of
Unsubscribed Shares and shares of New Convertible Preferred Stock pursuant to
this Agreement, there will be issued and outstanding 15,000,000 shares of New
Common Stock, 600,000 shares of New Convertible Preferred Stock and warrants to
acquire 821,750 shares of New Common Stock if the class of Equity Interests
votes to accept the First Amended Plan. Except as set forth in the preceding two
sentences and as expressly contemplated by this Agreement and the Management
Equity Plan, at the Effective Date (i) there will not be issued or outstanding
any shares of capital stock of the Company, or any options, rights, warrants,
convertible or exchangeable securities or other instruments obligating the
Company to issue any

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shares of capital stock of the Company (collectively, “Dilutive Rights”), and
(ii) there will not be any Contracts obligating the Company to issue, or
entitling any person to purchase, any shares of capital stock of the Company or
any Dilutive Rights.
     (d) Due Authorization.
          (i) The execution and delivery of this Agreement has been duly
authorized by all necessary corporate action on the part of the Company, and no
further authorization is necessary for the performance of the Company’s
obligations hereunder other than the entry of the ECA Order by the Bankruptcy
Court.
          (ii) The distribution of the Rights and issuance of the Offered Shares
and the shares of New Convertible Preferred Stock on the Effective Date will
have been duly and validly authorized by all necessary corporate action of the
Company.
          (iii) On the Effective Date, the Debtors will have the requisite
corporate or other entity power and authority to effectuate the First Amended
Plan and to perform their obligations thereunder, and will have taken all
necessary corporate other entity actions required for the due authorization,
execution, delivery and, subject to entry of the Confirmation Order and the
expiration, or waiver by the Bankruptcy Court, of the 14-day period set forth in
Bankruptcy Rule 3020(e), performance by the Debtors of the First Amended Plan.
     (e) Binding Obligation.
          (i) This Agreement has been duly executed and delivered by the Company
and, upon entry by the Bankruptcy Court of the ECA Order, will be the legally
valid and binding obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar Laws relating to or limiting creditors’
rights generally or by equitable principles relating to enforceability.
          (ii) The Offered Shares, when issued and sold pursuant to the valid
exercise of Rights or issued and sold to the Backstop Parties hereunder, and the
shares of New Convertible Preferred Stock to be issued and sold to the Backstop
Parties hereunder, will, when issued and delivered against payment therefor in
the Rights Offering or to the Backstop Parties hereunder, as applicable, be duly
and validly issued, fully paid and non-assessable, and free and clear of all
Liens, and shall not be subject to any pre-emptive or similar rights.
          (iii) The First Amended Plan will be duly and validly filed with the
Bankruptcy Court by the Debtors and, upon the entry of the Confirmation Order
and the expiration, or waiver by the Bankruptcy Court, of the 14-day period set
forth in Bankruptcy Rule 3020(e), will constitute the valid and binding
obligation of the Debtors, enforceable against the Debtors in accordance with
its terms, subject to general equitable principles.
     (f) No Conflict. Subject to the entry of the Confirmation Order and the
expiration, or waiver by the Bankruptcy Court, of the 14-day period set forth in
Bankruptcy Rules 6004(h) and 3020(e), as applicable, and except as set forth on
Schedule 4(f), the distribution of the Rights, the issuance, sale and delivery
of New Common Stock upon exercise of the Rights, the issuance, sale

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and delivery of New Convertible Preferred Stock hereunder, and the consummation
of each of the Rights Offering and the Preferred Stock Offering by the Company
and the execution and delivery (or, with respect to the First Amended Plan, the
filing) by the Company of this Agreement and the First Amended Plan and
compliance by the Debtors with all of the provisions hereof and thereof and the
consummation of the transactions contemplated herein and therein do not and will
not: (i) violate (A) any provision of any Law applicable to the Company or any
of its Subsidiaries, (B) any of the Organizational Documents of the Company or
any of its Subsidiaries, or (C) any order, judgment or decree of any court or
other agency of government binding on the Company or any of its Subsidiaries;
(ii) conflict with, result in a breach of or constitute (with due notice or
lapse of time or both) a default under any Contractual Obligation of the Company
or any of its Subsidiaries; (iii) result in or require the creation or
imposition of any Lien upon any of the properties or assets of the Company or
any of its Subsidiaries (other than any Liens created under the Credit
Agreement); or (iv) require any approval of stockholders, members or partners or
any approval or consent of any Person under any Contractual Obligation of the
Company or any of its Subsidiaries, except for such approvals or consents which
will be obtained on or before the Effective Date and which are set forth on
Schedule 4(f), except in any such case described in subclause (i)(A), (i)(C) or
(ii), as would not reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect.
     (g) Governmental Consents. The consummation of the transactions
contemplated by this Agreement do not and will not require any filing or
registration with, consent or approval of, or notice to, or other action to,
with or by, any Governmental Authority, except for (i) the entry of the
Confirmation Order and the expiration, or waiver by the Bankruptcy Court, of the
14-day period set forth in Bankruptcy Rules 6004(h) and 3020(e), as applicable;
(ii) the expiration or earlier termination of the waiting period under the HSR
Act, if applicable; (iii) any required filings with the United States Securities
and Exchange Commission; (iv) such registrations, consents, approvals, notices
or other actions as may be reasonably required under state securities or “blue
sky” Laws in connection with the purchase of Unsubscribed Shares by the Backstop
Parties; or (v) such registrations, consents, approvals, notices or other
actions set forth on Schedule 4(g).
     (h) Historical Financial Statements. The Historical Financial Statements
(other than restatements due to environmental or tort liabilities) were prepared
in conformity with GAAP and fairly present, in all material respects, the
financial position, on a consolidated basis, of the Persons described in such
financial statements as at the respective dates thereof and the results of
operations and cash flows, on a consolidated basis, of the entities described
therein for each of the periods then ended, subject, in the case of any such
unaudited financial statements, to changes resulting from audit and normal year
end adjustments.
     (i) No Registration Requirement.
          (i) The issuance of the Rights to Eligible Holders and the offer and
sale of the Offered Shares to Eligible Holders pursuant to the Rights are exempt
from registration under the Securities Act pursuant to the exemption from
registration provided by Section 1145 of the Bankruptcy Code. None of the
Company or any of its Subsidiaries or anyone acting on its or their behalf has
taken or will take any action that would render unavailable the exemption from
registration provided by Section 1145 of the Bankruptcy Code or otherwise
subject the issuance

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or sale of the Rights or the offer, sale and issuance of the Offered Shares upon
exercise thereof to the registration requirements of Section 5 of the Securities
Act or to the registration requirements of any state securities or “blue sky”
Laws or any foreign securities Laws.
          (ii) Based in part upon the representations and warranties of the
Backstop Parties set forth in Section 5(h), none of the offer or issuance of the
Unsubscribed Shares or the shares of New Convertible Preferred Stock to the
Backstop Parties pursuant to this Agreement requires any registration of the
Unsubscribed Shares or the shares of New Convertible Preferred Stock under the
Securities Act, any state securities or “blue sky” Laws or any foreign
securities Laws. No form of general solicitation or general advertising was used
or will be used in connection with the offering or sale of the Unsubscribed
Shares or the shares of New Convertible Preferred Stock, and none of the Company
or any of its Subsidiaries or anyone acting on its or their behalf has taken or
will take any action that would render unavailable the exemption from
registration provided by Section 4(2) of the Securities Act or otherwise subject
the issuance or sale of the Unsubscribed Shares or the shares of New Convertible
Preferred Stock to the registration requirements of Section 5 of the Securities
Act or to the registration requirements of any state securities or “blue sky”
Laws or any foreign securities Laws (including, without limitation, offering the
Unsubscribed Shares or the shares of New Convertible Preferred Stock for sale
to, or soliciting any offer to buy any of the same from, any person or under any
circumstances that would render such exemption unavailable). None of the Company
or any of its Subsidiaries nor any person acting on its or their behalf, has,
directly or indirectly, made any offers or sales of any security or solicited
any offers to buy any security, under circumstances that could cause this
offering of the Unsubscribed Shares or the shares of New Convertible Preferred
Stock to be integrated with any other offerings by the Company for purposes of
the Securities Act, nor will the Company or its affiliates take any action or
steps that could cause the offering of the Unsubscribed Shares or the shares of
New Convertible Preferred Stock to be integrated with other offerings.
     (j) No Material Adverse Effect. Except as set forth on Schedule 4(j), since
September 30, 2009, other than the filing of the Chapter 11 Cases, no event,
circumstance or change which, or the effect of which, in each case, continues to
be in existence as of the date hereof or the Effective Date, as applicable, has
occurred that has caused or evidences, or would reasonably be expected to result
in, either individually or in the aggregate, a Material Adverse Effect.
     (k) Compliance with Statutes, Etc. (i) Each of the Tronox Parties and, to
the Company’s Knowledge, Tiwest is in material compliance with all material
applicable Laws, Decrees and Permits, and all material applicable restrictions
imposed by all Governmental Authorities, in respect of the conduct of its
respective business and the ownership of its respective property, (ii) none of
the Tronox Parties or, to the Company’s Knowledge, Tiwest has received any
written notice, since September 30, 2009 relating to any material violations or
alleged material violations of any material Law or material violations, alleged
material violations or material defaults under any Decree with respect to its
respective business or any Permit with respect to the operation of its
respective business, (iii) there are no material Decrees or Contracts with any
Governmental Authority to which any Tronox Party or Tiwest is a party or by
which any Tronox Party or Tiwest is bound, and (iv) none of the Tronox Parties
or Tiwest have received any written notification or claim and, to the Company’s
Knowledge, there are no claims

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threatened in writing (in each case, which is material and outstanding) that it
has manufactured, sold or provided any product in connection with its respective
business which does not in any material respect comply with all applicable Laws,
Permits or standards or which in any material respect is defective or dangerous
or not in material compliance with any representation or warranty, express or
implied, given by the Tronox Parties or Tiwest in respect thereof.
     (l) No Defaults. With respect to each Material Contract (as defined below):
(A) such Contract is in full force and effect and constitutes the valid and
legally binding obligation of the Tronox Parties (including, for the purposes of
this Section 4(l), Tiwest) party thereto and, to the Company’s Knowledge, the
counterparty thereto, enforceable against such Tronox Party and, to the
Company’s Knowledge, the counterparty thereto in accordance with its terms and
conditions, subject to applicable bankruptcy, insolvency, moratorium or other
similar Laws relating to creditors’ rights and general principles of equity; and
(B) subject to the payment of Cure Amounts, none of the Tronox Parties party
thereto nor, to the Company’s Knowledge, the counterparty thereto is in breach
or default, and no event has occurred, which with or without the giving of
notice or lapse of time or both, would cause any Tronox Party or, to the
Company’s Knowledge, any counterparty thereto to be in material breach or
default thereunder, and none of the Tronox Parties has received any notice of
termination, cancellation, breach or default under any Material Contract.
          (i) For the purposes of this Agreement, “Material Contracts” means the
following types of Contracts in effect on the date hereof to which a Tronox
Party or Tiwest is a party:
               (A) any Contract for the lease of personal property to or from
any Person providing for lease payments in excess of $1,000,000 per annum;
               (B) any Contract for the purchase or sale of raw materials,
commodities, supplies, products or other personal property, the performance of
which will extend over a period of more than six months after the Effective Date
or involves consideration in excess of $5,000,000 per annum;
               (C) any Contract for shipping or other transportation services
involving consideration in excess of $1,000,000 per annum;
               (D) any Contract that is a collective bargaining agreement;
               (E) any Contract relating to Intellectual Property that:
(1) involves consideration as of the Effective Date in excess of $250,000;
(2) includes a license involving Intellectual Property granted by Tronox to any
third party (other than the implied license in the sale of the Products to
third-party customers); (3) includes the payment of a royalty or fee by any
Tronox Party to any third party for ownership, the use of, or right to use the
Intellectual Property in the processing or manufacturing of the Products, or the
reservation by such third party of the right to use, license, or sublicense such
Intellectual Property (except for licenses of commercially available software or
service agreements with respect to such software entered into in the Ordinary
Course of Business; or (4) is otherwise material to the operation of the
Business;

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               (F) any Contract that (1) limits the freedom of any Tronox Party,
Tiwest or the Business to compete in any line of business or with any Person or
in any geographical area or (2) contains exclusivity obligations or restrictions
binding on any Tronox Party, Tiwest or the Business;
               (G) any joint venture, partnership, limited liability company or
other similar Contracts;
               (H) any Contract relating to any outstanding commitment for
capital expenditures in excess of $500,000 individually;
               (I) any Contract (or series of related Contracts) relating to any
outstanding obligation of an acquisition, disposition or lease of any Person,
business or material real property or other material assets (whether by merger,
sale of stock, sale of assets or otherwise);
               (J) any distribution, agency and marketing Contract (or series of
related Contracts) involving in excess of $250,000 in any annual period;
               (K) any Contract (or series of related Contracts) relating to the
purchase by any Tronox Party of any products or services under which the
undelivered balance of such products or services is in excess of $750,000 in the
aggregate or $250,000 over the next twelve months;
               (L) any Contract (including any “take-or-pay” or keepwell
agreement) under which (1) any Person has directly or indirectly guaranteed any
Liabilities or obligations of any Tronox Party or Tiwest or (2) any Tronox Party
or Tiwest has directly or indirectly guaranteed Liabilities of any other Person.
               (M) any Contract with any current employee of any Tronox Party,
or any current or former employee of any Tronox Party, with aggregate payments
of at least $50,000 remaining under such Contract or providing for severance
Liabilities of at least $50,000 remaining under such Contract (other than, in
each case, pursuant to the standard severance policies of any Tronox Party);
               (N) any Contract that is a settlement or similar agreement
pursuant to which outstanding obligations in excess of $250,000 will exist for
the Business after the Effective Date;
               (O) any Contract related to the use, development, support or
disaster recovery of the IT Systems involving consideration in excess of
$100,000 or otherwise critical to the operation of the Business;
               (P) any Contract that provides for a Bonding Requirement; and
any other Contract that is material to the Business, whether or not entered into
in the Ordinary Course of Business, and the termination of which would
reasonably be expected to have a Material Adverse Effect.

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     (m) Scheduled Contracts. (i) No later than five (5) Business Days following
the date hereof, the Company shall provide to the Backstop Parties
Schedule 4(m)(i), which contains a true, correct and complete list as of the
date hereof of (A) all the contracts or other arrangements in effect on the date
hereof to which the Company or any of its Subsidiaries is a party for which
breach, nonperformance, cancellation or failure to renew would reasonably be
expected to have a Material Adverse Effect; (B) any Contract relating to any
outstanding commitment for capital expenditures in excess of $500,000
individually; and (C) if applicable, any Contract (including any “take-or-pay”
or keepwell agreement) under which (1) any Person has directly or indirectly
guaranteed any Liabilities or obligations of any Tronox Party or Tiwest or
(2) any Tronox Party or Tiwest has directly or indirectly guaranteed Liabilities
of any other Person.
          (ii) Schedule 4(m)(ii) sets forth an accurate and complete list of
each of the top ten customers, distributors and suppliers of the Business, on
the basis of revenues generated or expenditures made, as applicable, during the
twelve months ended December 31, 2009. From December 31, 2009 to the date of
this Agreement, (A) none of the Tronox Parties, or, to the Company’s Knowledge,
Tiwest has received from such customers, distributors or suppliers any notice of
termination or cancellation of its agreement with the Business, other than in
accordance with such agreement’s terms, or (B) to the Company’s Knowledge, none
of such customers, distributors or suppliers has threatened in writing to
cancel, terminate or materially and adversely modify its agreement with the
Business, other than in accordance with such agreement’s terms.
     (n) Adverse Proceedings, Etc. Except for the Chapter 11 Cases and related
proceedings which will be resolved prior to or upon the emergence from the
Chapter 11 Cases by the Company, its applicable Subsidiaries and Tiwest without
having any Material Adverse Effect (either individually or in the aggregate with
all other Adverse Proceedings), there are no Adverse Proceedings, individually
or in the aggregate, that would reasonably be expected to have a Material
Adverse Effect. Neither the Company nor any of its Subsidiaries (i) is in
violation of any applicable Laws that, individually or in the aggregate, would
reasonably be expected to have a Material Adverse Effect, or (ii) is subject to
or in default with respect to any final judgments, writs, injunctions, decrees,
rules or regulations of any court or any federal, state, municipal or other
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, that, individually or in the aggregate, would reasonably be
expected to have a Material Adverse Effect.
     (o) Employee Matters.
          (i) Neither the Company nor any of its Subsidiaries is engaged in, or
has within the last 12 months prior to the date hereof engaged in, any unfair
labor practice that would reasonably be expected to have a Material Adverse
Effect. There is (A) no unfair labor practice complaint pending against the
Company or any of its Subsidiaries, or to the best knowledge of the Company,
threatened against any of them before the National Labor Relations Board and no
grievance or arbitration proceeding arising out of or under any collective
bargaining agreement that is so pending against the Company or any of its
Subsidiaries or to the best knowledge of the Company, threatened against any of
them, (B) no strike or work stoppage in existence or, to the Company’s
Knowledge, threatened involving the Company or any of its Subsidiaries, and
(C) to the Company’s Knowledge, no union representation question existing with
respect to the employees of the Company or any of its Subsidiaries and, to the
Company’s Knowledge, no

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union organization activity that is taking place, except (with respect to any
matter specified in clause (A), (B) or (C) above, either individually or in the
aggregate) such as is not reasonably likely to have a Material Adverse Effect.
Within the 12 months prior to the date hereof, neither the Company nor any of
its Subsidiaries has implemented any plant closing or layoff of any of their
respective employees in violation of the United States Worker Adjustment and
Retraining Notification Act, or any similar applicable non-United States, state
or local “mass layoff” or “plant closing” law (collectively, the “WARN Act”).
          (ii) To the Company’s Knowledge, the Company and it Subsidiaries are
in compliance in all material respects with all applicable laws relating to the
employment of labor, including those related to wages, hours, immigration and
naturalization, collective bargaining, the WARN Act, discrimination, civil
rights, safety and health, workers’ compensation and the payment and withholding
of taxes. To the Company’s Knowledge, neither the Company nor any of its
Subsidiaries is a party to, or otherwise bound by, any material consent decree
with, or material citation by, any Governmental Authority relating to their
respective employees or employment practices. Except as disclosed in
Schedule 4(o), (A) there is no charge or proceeding with respect to a violation
of any occupational safety or health standards asserted or pending with respect
to the Company or any of its Subsidiaries and (B) the there are no suits,
actions or other proceedings in connection with the Company or any of its
Subsidiaries that are pending before the Equal Employment Opportunity
Commission, or any other Governmental Authority responsible for the prevention
of unlawful employment practices, that in each case, individually or in the
aggregate, would reasonably be expected to have a Material Adverse Effect.
     (p) Properties.
          (i) Title. Each of the Company and its Subsidiaries has (A) good,
sufficient and legal title to (in the case of fee interests in real property),
(B) valid leasehold interests in (in the case of leasehold interests in real or
personal property), (C) valid licensed rights in (in the case of licensed
interests in Intellectual Property) and (D) good title to (in the case of all
other personal property), all of their respective Retained Assets reflected in
their respective Historical Financial Statements (as restated) referred to in
Section 4(h) and in the most recent financial statements delivered pursuant to
Section 6(h), in each case, except for assets disposed of since the date of such
financial statements in the Ordinary Course of Business and assets transferred
to the Environmental Response Trusts and/or designated Government Environmental
Entities in connection with the Chapter 11 Cases. All such properties and assets
are free and clear of Liens other than Permitted Liens.
          (ii) Real Estate. Schedule 4(p)(ii) contains a true, accurate and
complete list as of the Effective Date of (A) all Real Estate Assets, and
(B) all leases, subleases or assignments of leases (together with all
amendments, modifications, supplements, renewals or extensions of any thereof)
affecting each Real Estate Asset of the Company and its Subsidiaries, regardless
of whether such Person is the landlord or tenant (whether directly or as an
assignee or successor in interest) under such lease, sublease or assignment.
Each agreement listed in clause (B) of the immediately preceding sentence is in
full force and effect, and the Company does not have knowledge of any default
that has occurred and is continuing thereunder, and each such agreement
constitutes the legally valid and binding obligation of the Company and its

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Subsidiaries, enforceable against such Person in accordance with its terms,
except as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar Laws relating to or limiting creditors’ rights generally
or by equitable principles.
     (q) Investment Company Act. The Company is not, and immediately after
giving effect to the offering and sale of the New Common Stock and the New
Convertible Preferred Stock and the application of the proceeds thereof, the
Company will not be, required to register as an “investment company” or an
entity “controlled” by an “investment company” within the meaning of the
Investment Company Act of 1940, as amended, and the rules and regulations of the
Commission thereunder.
     (r) Employee Benefit Plans.
          (i) As of the date hereof, Schedule 4(r)(i) contains a true, accurate
and complete list of all Employee Benefit Plans and Employment Arrangements.
With respect to each Employee Benefit Plan and Employment Arrangement, the
Company has provided or made available to the Backstop Parties with a complete
copy of: (A) each writing constituting a part of such plan; and (B) the most
recent Annual Report (Form 5500 Series) and accompanying schedule, if any.
          (ii) The Company, each of its Subsidiaries and each of their
respective ERISA Affiliates are in compliance in all material respects with all
applicable provisions and requirements of ERISA and the Internal Revenue Code
and the regulations and published interpretations thereunder with respect to
each Employee Benefit Plan, and have performed all their obligations under each
Employee Benefit Plan in all material respects.
          (iii) Each Employee Benefit Plan which is intended to qualify under
Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the Internal Revenue Service or may rely on a
favorable opinion letter issued by the Internal Revenue Service and, to the
Company’s Knowledge, nothing has occurred subsequent to the issuance of such
determination or opinion letter which would cause such Employee Benefit Plan to
lose its qualified status.
          (iv) No ERISA Event has occurred or is reasonably expected to occur
that would reasonably be expected to result in a material liability to the
Company or any of its Subsidiaries.
          (v) Except as set forth on Schedule 4(r)(v) and except to the extent
required under Section 4980B of the Internal Revenue Code or similar state or
foreign Laws, no Employee Benefit Plan provides health or welfare benefits
(through the purchase of insurance or otherwise) for any retired or former
employee of the Company, any of its Subsidiaries or any of their respective
ERISA Affiliates.
          (vi) Except as set forth on Schedule 4(r)(vi), none of the Employee
Benefit Plans or Employment Arrangements will create any liability on behalf of
the Company or any of its Subsidiaries to (A) pay any benefit, compensation or
other payment to any of their respective employees, (B) increase or accelerate
the level of existing benefits, compensation or other payments payable or
potentially payable to any of their respective employees, or (C) result in any

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limitation on the right of the Company or any of its Subsidiaries to amend,
merge or terminate any Employee Benefit Plan or related trust, or any Employment
Arrangement, in each case arising from the consummation of the transactions
contemplated hereby (either solely as a result thereof or as a result of such
transactions in conjunction with any other event). Without limiting the
generality of the foregoing, no amount paid or payable (whether in cash, in
property, or in the form of benefits) by the Company or any of its Subsidiaries
in connection with the consummation of the transactions contemplated hereby
(either solely as a result thereof or as a result of such transactions in
conjunction with any other event) will be an “excess parachute payment” within
the meaning of Section 280G of the Internal Revenue Code.
          (vii) Each Employee Benefit Plan and Employment Arrangement that is in
any part a “nonqualified deferred compensation plan” subject to Section 409A of
the Internal Revenue Code (a) materially complies and, at all times after
December 31, 2008 has materially complied, both in form and operation, with the
requirements of Section 409A(a)(2), (3) and (4) of the Internal Revenue Code and
the final regulations thereunder and (b) between January 1, 2005 and
December 31, 2009 was operated and maintained in accordance with a good faith
reasonable interpretation of Section 409A of the Internal Revenue Code and its
purpose, as determined under applicable guidance of the United States Department
of the Treasury and the Internal Revenue Service.
          (viii) All Employee Benefit Plans subject to the Laws of any
jurisdiction outside of the United States (A) have been maintained in accordance
with all applicable requirements in all material respects, (B) if they are
intended to qualify for special Tax treatment meet all requirements for such
treatment, and (C) if they are intended to be funded and/or book-reserved are
fully funded and/or book reserved, as appropriate, based upon reasonable
actuarial assumptions.
     (s) Environmental Liabilities. On the Effective Date, except to the extent
set forth in the Environmental Settlement Documents, the First Amended Plan or
in Schedule 4(s), the Company shall have no material liabilities or material
obligations under any environmental, health or safety Laws arising out of or
related to facts, events or circumstances occurring or in existence prior to the
Effective Date.
     (t) Certain Fees. Except as set forth on Schedule 4(t), no broker’s or
finder’s fee or commission will be payable with respect to the transactions
contemplated hereby, except as payable to the Backstop Parties pursuant to
Sections 3(a) and 3(b).
     (u) Sufficiency of Assets of the Acquired Business. The Retained Assets
constitute all assets, properties and rights used or held for use by the Tronox
Parties necessary to conduct and operate the Business in the manner presently
conducted and as proposed to be conducted as described in the Disclosure
Statement.
     (v) Permits. The Tronox Parties and Tiwest hold all material Permits that
are necessary to carry on the Business as presently conducted under applicable
Law. There is no Litigation pending, nor to the Knowledge of the Company,
threatened, that seeks the revocation, cancellation, suspension, failure to
renew or adverse modification of any material Permit used in the Business. To
the Knowledge of the Company, all required filings with respect to the material

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Permits used in the Business have been made and all required applications for
renewal thereof have been filed.
     (w) Tiwest Joint Venture Interests.
          (i) The Tiwest Joint Venture Interests, together with the Exxaro Joint
Venture Interest, include all of the assets, Permits, properties and rights,
used or held for use by Tronox Australia and the Tiwest Joint Venture
Participants in their conduct and operation of the Tiwest Joint Venture as
presently conducted, and no Tronox Party (other than Tronox Australia) owns any
interest in the Tiwest Joint Venture Interests.
          (ii) To the Company’s Knowledge, the Tiwest Joint Venture Participants
do not have any assets, rights, title or interests in any assets, Permits,
properties or rights necessary or required for, or used or held for use by the
Tiwest Joint Venture which are not held by the Tiwest Joint Venture Participants
as tenants in common for the Tiwest Joint Venture.
          (iii) The Company has made available to the Backstop Parties accurate
and complete copies of (A) each of the Tiwest Joint Venture Documents to which
any of the Tronox Parties or Tiwest are, as at the date hereof, a party, and
(B) all Liens created under the Tiwest Joint Venture Documents (including, for
the avoidance of doubt, any cross charges over the Tiwest Joint Venture
Interests and any Liens that the Tiwest Joint Venture Participants or any of
their Subsidiaries may have with respect to the accounts receivable of Tronox
Pigments Ltd., a Bahamian international business company) and the Exxaro Joint
Venture Interest.
          (iv) All of the Owned Real Property in which Tronox Australia has an
interest is held by Tronox Australia and the applicable Tiwest Joint Venture
Participants as tenants in common and no other party holds any fee interest in
such Owned Real Property.
          (v) To the Company’s Knowledge, (A) no Tiwest Joint Venture
Participant has leased, licensed or otherwise granted to any Person the right to
occupy any of the property owned by Tronox Australia and the applicable Tiwest
Joint Venture Participants as tenants in common and (B) other than the rights of
the Tiwest Joint Venture Participants under the Tiwest Joint Venture Documents,
the Tiwest Joint Venture Participants are not a party to an agreement or option
to purchase any real property, or any interest in real property, relating to the
Business.
          (vi) To the Company’s Knowledge, Tiwest does not (A) lease any land,
buildings, structures, improvements or other real property interests other than
on behalf of Tronox Australia and the Tiwest Joint Venture Participants, or
(B) own any real property other than on behalf of Tronox Australia and the
Tiwest Joint Venture Participants.
          (vii) To the Company’s Knowledge, no Tiwest Joint Venture Participant
leases any land, buildings, structures, improvements or other real property
interests used by, or on behalf of, the Tiwest Joint Venture (other than jointly
or as tenants in common with Tronox Australia).

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     (x) Intellectual Property.
          (i) Schedule 4(x)(i) sets forth as of the date hereof an accurate and
complete list of (A) patents and pending patent applications, (B) registrations
and applications for registration of copyrights, and (C) registrations and
applications for registration of trademarks and service marks, in each case,
owned by the Tronox Parties, indicating the owner, jurisdiction, and application
or registration number, as applicable. All Intellectual Property set forth on
Schedule 4(x)(i), (1) has a Tronox Party as the owner of record of such
Intellectual Property in the applicable intellectual property office, (2) has
not been canceled, expired, or abandoned, and, to the Company’s Knowledge, made
the subject of any opposition, cancellation, reissue, reexamination or
interference, and (3) to the Company’s Knowledge, is valid and enforceable. All
fees required for the maintenance or renewal of the Intellectual Property set
forth on Schedule 4(x)(i) have been paid when due. The Tronox Parties own or
have a valid license or lease or other right to use each item of Intellectual
Property owned, used, or held for use by them and all components of the IT
Systems.
          (ii) To the Company’s Knowledge, (A) the conduct of the Business as
currently conducted does not infringe or misappropriate the Intellectual
Property rights of any third party and (B) no third party is infringing or
misappropriating any material Intellectual Property owned or exclusively
licensed by any Tronox Party. No suit, action or proceeding is currently pending
or, to the Company’s Knowledge, threatened against any Tronox Party that
challenges the validity or ownership of any Intellectual Property owned or
exclusively licensed by any Tronox Party or asserts that the conduct of the
Business infringes or misappropriates any third party’s Intellectual Property
rights, or in which any Tronox Party asserts that any third party is infringing
or misappropriating any material Intellectual Property included in the Retained
Assets. None of the Tronox Parties or their Affiliates have received any written
notice in the past twelve months alleging infringement or misappropriation of
any third party’s Intellectual Property by any Tronox Party.
          (iii) The Tronox Parties have taken reasonable and customary steps to
protect and, where applicable, maintain in confidence, Intellectual Property
that is material to the Business, including by implementing employee policies
containing confidentiality and intellectual property assignment provisions.
     (y) Insurance. Not later than five (5) Business Days days following the
date hereof, the Company shall provide to the Backstop Parties a schedule
setting forth a true and complete list of all material insurance policies
(including all director’s and officer’s liability policies) applicable to the
Business which are in effect or binders for policies expected to be in effect
immediately following the Effective Date and which cover or are expected to
cover any Tronox Party, together with the name of the insurer, policy number,
type of coverage, limits, date of issue and applicable business unit deductible
(the “Insurance Schedule”). All premiums due and payable with respect to the
Tronox Parties’ insurance policies identified on the Insurance Schedule which
provide coverage relating to the Retained Assets, Tiwest or the Business have
been paid in full (including with proceeds of any financing or credit
arrangements which may exist), and no Tronox Party nor to the Company’s
Knowledge, Tiwest has received a written claim under such policies which remains
outstanding as of the date hereof. All such policies are in full force and
effect, and the Tronox Parties have complied in all material respects with the

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terms thereof. To the Company’s Knowledge, there exists no event, occurrence,
condition or act that, with the giving of notice, the lapse of time or the
happening of any other event or condition, would entitle any insurer to
terminate or cancel any such insurance policy.
     (z) Tax. Each Tronox Party and Tiwest has timely filed all Tax Returns with
the appropriate Taxing Authority in accordance with all applicable laws, and all
such Tax Returns are true, correct and complete in all material respects. All
Taxes due from each Tronox Party and Tiwest have been timely paid. Adequate
reserves or accruals for Taxes have been provided in the Projections in respect
of any period for which Tax Returns have not yet been filed or for which Taxes
are not yet due and owing. No material Taxes will be imposed on a Tronox Party
or Tiwest in connection with or as the result of the implementation of the First
Amended Plan. There are no Liens with respect to any Retained Asset or Tiwest or
its assets as a result of failure to pay Taxes. No investigation, audit,
proceeding or other examination by any Taxing Authority is in progress, pending
or to the Company’s Knowledge threatened with respect to any Tax Return filed
by, or Taxes relating to any Tronox Party or Tiwest. No agreement, consent,
clearance, or other Tax ruling or agreement has been executed or entered into
relating to Taxes by any Tronox Party in connection with any Retained Asset or
Tiwest, including any IRS private letter rulings or comparable rulings of any
Taxing Authority and closing agreements pursuant to Section 7121 of the IRC or
any similar law. Each Tronox Party has withheld and timely remitted all material
Taxes required to have been withheld and remitted in connection with amounts
paid or owing to any employee, independent contractor, creditor, stockholder, or
other third party. No dispute or claim concerning any Tax Liability of any
Tronox Party with respect to its Retained Assets or Tiwest has been proposed,
threatened or claimed by any Taxing Authority. Neither any Tronox Party nor
Tiwest has waived any statute of limitations in respect of Taxes or agreed to
any extension of time with respect to a Tax assessment or deficiency. Neither
any Tronox Party nor Tiwest is a party to any Tax allocation, sharing, or
similar arrangement or agreement (whether or not in writing). Neither any Tronox
Party nor Tiwest is required to include in income any adjustment in its current
or in any future taxable period by reason of a change in accounting method; nor,
to the Company’s Knowledge, has a Taxing Authority proposed or is considering
proposing, any change in accounting method. Neither any Tronox Party nor Tiwest
is a party to any agreement, Contract, or arrangement that (individually or in
the aggregate) could reasonably be expected to give rise to the payment of any
compensation (whether in cash or property, including stock or other equity
interests) that would not be deductible in full when paid or accrued. Each of
Tronox LLC, Tronox Worldwide LLC, Tronox Pigments (Netherlands) B.V., Tronox
Pigments (Holland) B.V., Tronox B.V., Tronox Funding LLC, Tronox Luxembourg
S.ar.L., Tronox Pigments International GmbH, Tronox Pigments GmbH, Tronox
Pigments S.p.r.l., Tronox Finance B.V., and Tronox Pigments Ltd. is currently
disregarded for U.S. federal income tax purposes and, except as set forth in
Schedule 4(z), has been so disregarded since the date of its formation. Each of
the Company and Tronox Australia is, and has always been since the date of its
respective formation, properly treated as a corporation for U.S. federal income
tax purposes. Tronox Pigments (Holland) B.V. has not in the current fiscal year
or in any of the preceding five fiscal years claimed, utilized or requested
exemptions of deferrals in relation to Tax, including exemptions or deferrals of
Tax relating to reorganizations or mergers.
     (aa) Foreign Corrupt Practices Act. Neither the Tronox Parties nor, to the
Company’s Knowledge, Tiwest or any of their respective representatives, has
made, offered, promised,

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authorized, requested, received or accepted, with respect to the Retained
Assets, the Business, or any other matter which is the subject of this Agreement
or the Restructuring, any payment, gift, promise or other advantage, whether
directly or indirectly through any other Person, to or for the use or benefit of
any Person, where such payment, gift, promise or advantage would violate (i) the
United States Foreign Corrupt Practices Act of 1977, as amended, (ii) the
principles set out in the Organization for Economic Cooperation and Development
Convention Combating Bribery of Foreign Public Officials in International
Business Transactions, or (iii) any other similar anti-corruption and/or
anti-bribery Law of any jurisdiction applicable to the Tronox Parties or Tiwest,
as the case may be. The Company further represents and warrants that none of the
Tronox Parties nor their respective Affiliates has made any such offer, payment,
gift, promise, or advantage to or for the use or benefit of any Person if it
knew, had a firm belief, or was aware that there was a high probability that
such Person would use such offer, payment, gift, promise, or advantage in
violation of the preceding sentence.
     (bb) Internal Controls. The Company and each other Tronox Party has
established and maintains a system of “internal controls over financial
reporting” (as defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act)
that is sufficient to provide reasonable assurance (i) regarding the reliability
of financial reporting and the preparation of financial statements for external
purposes in accordance with GAAP, (ii) that receipts and expenditures of the
Company and the other Tronox Parties are being made only in accordance with the
authorization of management and the board of directors of the Company, and
(iii) regarding prevention or timely detection of the unauthorized acquisition,
use or disposition of the Company’s and the other Tronox Parties’ assets that
could have a material effect on the Company’s financial statements.
     (cc) Foreign Entities Under Receivership.
          (i) As of the date hereof, each of Tronox GmbH and Tronox Pigments
GmbH is properly set up, the share capital of Tronox GmbH and Tronox Pigments
GmbH had been fully paid-in and has not been repaid and no transaction has
occurred which qualifies or could qualify as a hidden formation or contribution
in kind (verdeckte Sachgruendung or verdeckte Sacheinlage). Neither Tronox GmbH
nor Tronox Pigments GmbH (including its insolvency administrator and creditors)
has any outstanding claim against any Tronox Party or any of their Affiliates,
and is not entitled to raise any such claims, other than claims arising out of
the Ordinary Course of Business of the Tronox Parties.
          (ii) No transaction between Tronox GmbH or Tronox Pigments GmbH on the
one hand and any Tronox Party on the other hand, or any measure by Tronox GmbH
or Tronox Pigments GmbH to or for the benefit of any Tronox Party has occurred
which entitles Tronox GmbH or Tronox Pigments GmbH, their insolvency
administrator(s) or creditors to (i) demand (re-)payment of any consideration
received, directly or indirectly, by any Tronox Party or any of their Affiliates
from or on behalf of Tronox GmbH or Tronox Pigments GmbH, (ii) raise claims of
willful or grossly negligent wrongdoings by or on behalf of the Tronox Parties
or any of their Affiliates or (iii) contest, challenge or declare void any such
transaction and no such demand, claim, contest, challenge or declaration of
voidance have been raised or have been threatened in writing.

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5. Representations and Warranties of the Backstop Parties. Each of the Backstop
Parties, severally and not jointly, with respect to itself only, represents and
warrants to, and agrees with, the Company as set forth below. Each
representation, warranty and agreement is made as of the date hereof and as of
the Effective Date:
     (a) Organization. Such Backstop Party has been duly incorporated or formed,
as the case may be, and is validly existing as a corporation, a limited
partnership, a limited liability company or other business organization, as the
case may be, in good standing under the Laws of its jurisdiction of
incorporation or organization.
     (b) Corporate Power and Authority. Such Backstop Party has the requisite
power and authority to enter into, execute and deliver this Agreement and to
perform its obligations hereunder and has taken all necessary action required
for the due authorization, execution, delivery and performance by it of this
Agreement.
     (c) Execution and Delivery. This Agreement has been duly and validly
executed and delivered by such Backstop Party and constitutes its valid and
binding obligation, enforceable against such Backstop Party in accordance with
its terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar Laws relating to or limiting creditors’ rights generally
or by equitable principles relating to enforceability.
     (d) No Conflicts. The execution, delivery, and performance by such Backstop
Party of this Agreement do not and shall not (i) violate any provision of its
certificate of incorporation or by-laws (or other organizational documents) or
any Law applicable to it or (ii) conflict with, result in a breach of, or
constitute (with due notice or lapse of time or both) a default under any
material contractual obligation to which it is a party or under its certificate
of incorporation or by-laws (or other organizational documents).
     (e) Legal Proceedings. No litigation or proceeding before any court,
arbitrator, or administrative or governmental body is pending against it that
could reasonably be expected to adversely affect such Backstop Party’s ability
to enter into this Agreement or perform its obligations hereunder.
     (f) Consents and Approvals. No consent, approval, order, authorization,
registration or qualification of or with any court or governmental agency or
body having jurisdiction over such Backstop Party or such Backstop Party’s
affiliates, is required in connection with the execution and delivery of this
Agreement or the consummation of the transactions contemplated hereby, except
for any consent, approval, order or authorization required under the Bankruptcy
Code.
     (g) Sufficiency of Funds. Such Backstop Party has, or the investment
advisor or investment manager for such Backstop Party has, and such Backstop
Party on the Effective Date will have, sufficient immediately available funds to
make and complete the payment of (i) the aggregate Purchase Price for its
portion of the Unsubscribed Shares and (ii) the aggregate purchase price for its
portion of the New Convertible Preferred Stock, and the availability of such
funds is not subject to the consent, approval or authorization of any third
party.

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     (h) Sophistication and Investment Intent. Such Backstop Party has such
knowledge, sophistication and experience in business and financial matters so as
to be capable of evaluating the merits and risks of the prospective investment
in the New Common Stock and the New Convertible Preferred Stock, and has so
evaluated the merits and risks of such investment. Such Backstop Party is, as of
the date hereof and will be as of the Effective Date, an “accredited investor”
within the meaning of Rule 501(a) under the Securities Act. Such Backstop Party
understands and is able to bear any economic risks associated with such
investments (including, without limitation, the complete loss of such
investments). Such Backstop Party is acquiring the New Common Stock and the New
Convertible Preferred Stock in good faith solely for its own account or accounts
managed by it, for investment and not with a view toward distribution in
violation of the Securities Act. Such Backstop Party acknowledges that the
Company will rely upon the truth and accuracy of the foregoing as well as the
other representations, warranties and other agreements of such Backstop Party in
connection with the transactions described in this Agreement. No Backstop Party
has used or will use any form of general solicitation or general advertising in
connection with the offering or sale of the Rights, the Offered Shares or the
shares of New Convertible Preferred Stock.
     (i) Information. Such Backstop Party acknowledges that it has been afforded
the opportunity to ask questions and receive answers concerning the Company and
to obtain additional information. Notwithstanding the foregoing, nothing
contained herein will operate to modify or limit in any respect the
representations and warranties of the Company or to relieve the Company from any
obligations to such Backstop Party for breach thereof or the making of
misleading statements or the omission of material facts in violation of
applicable Law in connection with the transactions contemplated herein.
     (j) No Broker’s Fees. Such Backstop Party is not a party to any contract,
agreement or understanding with any person (other than this Agreement and
agreements with respect to professional fees and transaction fees as set forth
in the Term Sheet) that would give rise to a valid claim against the Company or
any of its Subsidiaries for a brokerage commission, finder’s fee or like payment
in connection with the offering and sale of the Rights, the Offered Shares or
the shares of New Convertible Preferred Stock.
     (k) Arm’s Length. Such Backstop Party acknowledges and agrees that the
Company is acting solely in the capacity of an arm’s length contractual
counterparty to such Backstop Party with respect to the transactions
contemplated hereby (including in connection with determining the terms of the
Rights Offering and the Preferred Stock Offering). Additionally, such Backstop
Party is not relying on the Company for any legal, tax, investment, accounting
or regulatory advice in any jurisdiction, except as specifically set forth in
this Agreement. Such Backstop Party shall consult with its own advisors
concerning such matters and shall be responsible for making its own independent
investigation and appraisal of the transactions contemplated hereby.
6. Additional Covenants of the Company. The Company agrees with the Backstop
Parties:
     (a) Disclosure Statement and First Amended Plan. The Company will prepare
and file with the Bankruptcy Court a First Amended Proposed Joint Plan of
Reorganization reflecting the terms and conditions set forth in the Term Sheet
in form and substance reasonably acceptable

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to the Required Backstop Parties (the “First Amended Plan”) and a related
amended disclosure statement, in form and substance reasonably acceptable to the
Required Backstop Parties (the “Amended Disclosure Statement”) and will use
commercially reasonable efforts to seek Bankruptcy Court approval thereof under
sections 1125 and 1129 of the Bankruptcy Code. Prior to filing or disseminating
any revision, supplement, modification or amendment to the First Amended Plan,
the Amended Disclosure Statement or any version of the First Amended Plan or the
Amended Disclosure Statement, the Company will provide counsel to the Backstop
Parties a copy of such filing, revision, modification, supplement or amendment
and a reasonable opportunity to review and comment on such documents prior to
being filed or disseminated; provided that such review and comment shall not
constitute a presumption or other determination that the documents constitute
(and comply with the definition of) either a First Amended Plan or an Amended
Disclosure Statement, as applicable. In addition, the Company will provide
counsel to the Backstop Parties a copy of a draft of the Confirmation Order and
a reasonable opportunity to review such draft prior to such order being filed
with the Bankruptcy Court. The Company shall not make any revision, supplement,
modification or amendment to the First Amended Plan, the Amended Disclosure
Statement or the Confirmation Order that would change the provisions of any such
document in a manner that is adverse to the Backstop Parties. “Required Backstop
Parties” shall mean Backstop Parties representing, in the aggregate, at least 66
2/3% of the total dollar amount committed by all Backstop Parties for the
purchase of Unsubscribed Shares and shares of New Convertible Preferred Stock
hereunder (i.e., $185 million); provided that (i) any consent, waiver, approval
or other action of the Backstop Parties which (A) changes in any respect (1) the
economic terms of this Agreement, the First Amended Plan or the other Plan
Support Documents (including the Preferred Stock COD) or (2) the allocations of
the Unsubscribed Shares or the shares of New Convertible Preferred Stock (other
than allocations solely among affiliated or related funds of a Backstop Party);
(B) reduces the Equity Backstop Consideration or the Cash Backstop Consideration
or changes the conditions under which either such fee is payable; or (C) changes
the definition of Required Backstop Parties or the events which require any
consent, waiver, approval or other action of the Required Backstop Parties,
shall require the consent of each Backstop Party, and (ii) any consent, waiver,
approval or other action which adversely and disproportionately affects a
Backstop Party (compared to the effect on other Backstop Parties in their
capacity as such under this Agreement) shall require the consent of each
Backstop Party so disproportionately affected (in addition to any other required
consent of the Backstop Parties). To the extent that the consent of any Backstop
Party is required and such Backstop Party has assigned its rights and
obligations under this Agreement to an Affiliate, the related Backstop Parties
signatories hereto shall cooperate with the Company and the other Backstop
Parties in seeking to obtain consents from such Affiliate in a timely and
reasonable manner.
     (b) Notification. The Company will notify, or cause the Subscription Agent
to notify, on each Friday during the Rights Exercise Period and on each Business
Day during the five (5) Business Days prior to the Voting Deadline (and any
extensions thereto), or more frequently if reasonably requested by the Required
Backstop Parties, each Backstop Party of the aggregate principal amount of
Rights known by the Company or the Subscription Agent to have been exercised
pursuant to the Rights Offering as of the close of business on the preceding
Business Day or the most recent practicable time before such request, as the
case may be.

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     (c) Use of Proceeds. The Company will apply the net proceeds from the sale
of the Offered Shares and the New Convertible Preferred Stock as provided in the
Term Sheet.
     (d) Registration Rights Agreement. The First Amended Plan will provide that
certain holders of the New Common Stock and the New Convertible Preferred Stock
shall be entitled to certain registration rights pursuant to a registration
rights agreement (the “Registration Rights Agreement”) substantially in the form
of Exhibit F attached hereto (with any changes thereto reasonably acceptable to
the Company, the Required Backstop Parties and the Creditors’ Committee) which
form shall also be filed with the Bankruptcy Court as part of the Plan
Supplement to the First Amended Plan. The Company and the Backstop Parties shall
use commercially reasonable efforts to negotiate and execute the Registration
Rights Agreement on or prior to the Effective Date.
     (e) Listing. The Company will use commercially reasonable efforts to list
the New Common Stock on the NYSE or The NASDAQ Stock Market as soon as
reasonably practicable after the Effective Date.
     (f) HSR Act and Other Competition Law. The Company will use its
commercially reasonable efforts to promptly prepare and file all necessary
documentation and to effect all applications that are necessary or reasonably
required under the HSR Act and similar Laws of any relevant foreign
jurisdiction, if any, so that (A) the applicable waiting period, if any, shall
have expired or been terminated thereunder with respect to the issuance of the
Unsubscribed Shares and shares of New Convertible Preferred Stock hereunder, and
(B) all transactions contemplated hereby and pursuant to the First Amended Plan
shall have been approved, if required. The Company shall not take any action
that is intended or reasonably likely to materially impede or delay the ability
of the parties to obtain any necessary approvals reasonably required for the
transactions contemplated by this Agreement.
     (g) Form D and Blue Sky. The Company will timely file a Form D with the
Commission with respect to the Unsubscribed Shares and the shares of New
Convertible Preferred Stock issued hereunder to the extent required under
Regulation D of the Securities Act and will provide, upon request, a copy
thereof to each Backstop Party. The Company shall, on or before the Effective
Date, take such action as the Company shall reasonably determine is necessary in
order to obtain an exemption for, or to qualify the Unsubscribed Shares and the
shares of New Convertible Preferred Stock issued hereunder for, sale to the
Backstop Parties at the Effective Date pursuant to this Agreement under
applicable securities and “blue sky” Laws of the states of the United States (or
to obtain an exemption from such qualification) and any applicable foreign
jurisdictions, and shall provide evidence of any such action so taken to the
Backstop Parties on or prior to the Effective Date. The Company shall timely
make all filings and reports relating to the offer and sale of the Unsubscribed
Shares and the shares of New Convertible Preferred Stock issued hereunder
required under applicable securities and “blue sky” Laws of the states of the
United States following the Effective Date. The Company shall pay all fees and
expenses in connection with satisfying its obligations under this Section 6(g).

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     (h) Conduct of Business.
          (i) Except (x) as otherwise expressly contemplated by this Agreement,
or as expressly permitted under the Credit Agreement (without the obtaining of
any consent or waiver thereunder), the First Amended Plan or the Term Sheet,
(y) with the prior written consent of the Required Backstop Parties, or (z) as
set forth on Schedule 6(h), from the date hereof until the Effective Date, the
Company shall, and shall cause each of its Subsidiaries and Tiwest (to the
extent permitted in the Tiwest Joint Venture Documents) to, use their reasonable
best efforts to operate the Company’s, Tiwest’s and their respective
Subsidiaries’ facilities and to conduct the business and the Tiwest Joint
Venture in substantially the same manner as conducted by such entities prior to
the date hereof, including by using their reasonable best efforts to (A) meet
all material Post-Petition obligations relating to the business as they become
due and (B) preserve intact its present business organization, material permits,
and its relationships with its key customers and suppliers.
          (ii) Without limiting the generality of the foregoing, except (x) as
otherwise expressly contemplated by this Agreement, as expressly permitted under
the Credit Agreement (without the obtaining of any consent or waiver
thereunder), the First Amended Plan or the Term Sheet, (y) with the prior
written consent of the Required Backstop Parties, or (z) as set forth on
Schedule 6(h), from the date hereof until the Effective Date, the Company shall
not, and shall cause each of its Subsidiaries not to, do, and shall not approve
or authorize Tiwest or the Tiwest Joint Venture to do, any of the following:
               (A) offer, issue, deliver, sell, pledge or otherwise encumber or
subject to any lien (other than a Permitted Lien) the capital stock or other
equity interests of the Company or any of its Subsidiaries, or Tiwest, or
securities convertible into or exchangeable for, or any rights, warrants,
options to acquire, any such shares of capital stock or other equity interest in
any such entity;
               (B) acquire or agree to acquire by merging or consolidating with,
or by purchasing a substantial equity interest in or a substantial portion of
the assets of, or by any other manner, any business of another person;
               (C) sell, assign, license, transfer, convey, lease, encumber or
subject to any lien (other than a Permitted Lien or any lien that will be
released at or prior to the Effective Date) or otherwise dispose of any asset
having a fair market value in excess of $100,000 individually or $500,000 in the
aggregate, other than sales of inventory in the Ordinary Course of Business;
               (D) (1) enter into, assume or reject or amend, restate,
supplement, modify, waive or terminate any Material Contract, material permit or
unexpired lease, (2) enter into any settlement of any demand, dispute, suit,
cause of action, claim or proceeding relating to a Material Contract or (3)
enter into any contract that would not be a Material Contract, that (a) is
outside the Ordinary Course of Business, (b) delays or is reasonably expected to
delay the Effective Date, or (c) subjects the Company or any of its
Subsidiaries, including the Tiwest Joint Venture Interests, to any material
non-compete or other similar material restriction on the conduct of the business
that would be binding following the Effective Date; provided that any

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contracts entered into in the Ordinary Course of Business in connection with the
purchase or sale of raw materials, pigments, ore, chemicals or similar materials
used in the operations of the Company or its Subsidiaries are excepted from this
clause (D);
               (E) with respect to employees of the Company or any of its
Subsidiaries, except as may be required by applicable Laws, the First Amended
Plan or any benefit plan of the Company or any of its Subsidiaries, (1) grant
any increase or acceleration in compensation or benefits, except (i) increases
required by Contracts currently in effect and set forth on Schedule 6(i), and
(ii) increases for non-executive officers in the Ordinary Course of Business;
(2) grant any increase in severance or termination pay (including the
acceleration in the exercisability of any options or in the vesting of shares of
common stock (or other property)); (3) enter into any employment, deferred
compensation, severance or termination agreement with or for the benefit of any
employee who is a management-level employee or anyone who upon hire, would
become any such employee; or (4) terminate the employment of any such employee
except due to cause, death, disability or as otherwise determined in the
reasonable discretion of the Debtors exercising their business judgment, as
consistent with the Ordinary Course of Business;
               (F) (1) authorize or agree to any material changes in or to the
current approved budget or business plan of the Tiwest Joint Venture,
(2) encourage or recommend any material changes to the current approved budget
or business plan of the Tiwest Joint Venture to the Tiwest Joint Venture
Participants, and (3) act in any way other than in accordance, in all material
respects, with the current approved budget or business plan of the Tiwest Joint
Venture, in each case, as in effect from time to time;
               (G) (1) adopt or change any method of accounting (except as
required by changes in generally accepted accounting principles in the United
States), or (2) make, change or revoke any tax election, change any annual tax
accounting period, file any amended tax return, enter into any closing
agreement, settle any tax claim or assessment, surrender any right to claim a
tax refund, consent to the extension or waiver of the limitations period
applicable to any tax claim or assessment, or take or omit to take any other
action if such action or omission would have a material and adverse effect on
either the Company or its Subsidiaries (including Tiwest) after the Effective
Date;
               (H) permit the Company or Tiwest or their respective Subsidiaries
to commit to make any capital expenditures, which, in the aggregate, exceeds the
capital expenditure restrictions set forth in Section 6.7(e) of the Credit
Agreement, as in effect on the date hereof;
               (I) adopt or propose any amendments to any the Company’s or its
Subsidiaries’ certificate of incorporation, bylaws or other organizational or
governing document or adopt or propose any amendment or modification to or agree
to any material amendment or modification to the Tiwest Joint Venture Documents;
except, in each case, in furtherance of the First Amended Plan or the
transactions contemplated hereby or by the Term Sheet; provided, however, that
in no event shall such amendments or modifications, directly or indirectly,
adversely affect the Backstop Parties;

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               (J) incur, create, assume, guarantee or otherwise become liable
for any obligation for borrowed money, purchase money indebtedness or any
obligation of any other person or entity, whether or not evidenced by a note,
bond, debenture, guarantee, indemnity, letter of credit or similar instrument,
except for trade payables (including capital leases) incurred in the Ordinary
Course of Business;
               (K) (1) declare, set aside or pay any dividends on, or make any
other distributions in respect of, any of its capital stock (other than upstream
dividends by a direct or indirect wholly-owned subsidiary of the Company to the
Company or another Subsidiary of the Company), (2) split, combine or reclassify
any of its capital stock or issue or authorize the issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock or (3) purchase, redeem or otherwise acquire, except in connection
with the First Amended Plan, any shares of capital stock of the Company or any
other securities thereof or any rights, warrants or options to acquire any such
shares or other securities; or
               (L) agree to take any of the foregoing actions.
     (i) Access to Information. Subject to applicable Law and confidentiality
agreements between the relevant parties, the Company shall (and shall cause its
Subsidiaries to) afford the Backstop Parties and their respective directors,
officers, employees, investment bankers, attorneys, accountants and other
advisors or representatives, reasonable access, throughout the period prior to
the Effective Date, to its employees, properties, books, contracts and records
and, during such period, the Company shall (and shall cause its Subsidiaries to)
furnish promptly to the Backstop Parties all information concerning its
business, properties and personnel as may reasonably be requested by any
Backstop Party; provided that the foregoing shall not require the Company (i) to
permit any inspection, or to disclose any information, that in the reasonable
judgment of the Company would cause the Debtors to violate any of their
obligations with respect to confidentiality to a third party if the Debtors
shall have used commercially reasonable efforts to obtain the consent of such
third party to such inspection or disclosure, (ii) to disclose any privileged
information of the Company or any of its Subsidiaries or (iii) to violate any
Laws; provided, further, that if the Company withholds any information pursuant
to subclauses (i) through (iii) above, it shall notify the legal advisor, orally
or in writing, of the Backstop Parties of such action, and shall describe for
such advisor the nature of the information not disclosed and the reasons
therefor.
     (j) Financial Statements and Other Reports. Until the Effective Date, the
Company shall provide to each Backstop Party the same information as it is
required to deliver, pursuant to Section 5.1 of the Credit Agreement, to the
Administrative Agent and Lenders under such agreement, and any other material
written information that the Company delivers to such Persons pursuant to the
Credit Agreement (including requests by the lenders thereunder).
7. Additional Covenants of the Backstop Parties. Each of the Backstop Parties,
severally and not jointly, agrees with the Company, with respect to itself only:
     (a) No Inconsistent Action. To not file any pleading or take any other
action in the Bankruptcy Court with respect to this Agreement, the First Amended
Plan, the Amended Disclosure Statement, the Confirmation Order or the
consummation of the transactions

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contemplated hereby or thereby that is inconsistent in any more than immaterial
respects with this Agreement or the Company’s efforts to obtain the entry of
court orders consistent with this Agreement other than to enforce such Backstop
Party’s rights and remedies at law or equity, or to enforce the terms of the
Term Sheet or this Agreement; provided, however, that nothing herein shall
prevent any of the Backstop Parties to take any action in its capacity as a
lender under the Replacement DIP Facility.
     (b) Information. To promptly provide the Company with such information as
the Company reasonably requests regarding such Backstop Party for inclusion in
the Disclosure Statement.
     (c) HSR Act. If required, to use reasonable best efforts to promptly
prepare and file all necessary documentation and to effect all applications that
are necessary or reasonably required under the HSR Act or similar Laws in
relevant foreign jurisdictions, so that the applicable waiting period shall have
expired or been terminated thereunder with respect to the purchase of the
Unsubscribed Shares and the New Convertible Preferred Stock hereunder, and not
to take any action that is intended or reasonably likely to materially impede or
delay the ability of the parties to obtain any necessary approvals required
under the HSR Act or any such similar Law for the transactions contemplated by
this Agreement.
8. Conditions.
     (a) Conditions to the Obligations of Each Party. The respective obligations
of the Backstop Parties and the Company to effect the issuance and purchase of
the Unsubscribed Shares and the shares of New Convertible Preferred Stock
pursuant to this Agreement on the Effective Date are subject to the following
conditions:
          (i) Confirmation Order. An order of the Bankruptcy Court confirming a
First Amended Plan consistent in all respects with this Agreement and the Term
Sheet and otherwise in form and substance reasonably acceptable to the Required
Backstop Parties shall have been entered and such order shall, unless waived by
the Required Backstop Parties, be a Final Order (the “Confirmation Order”).
          (ii) Conditions to Confirmation. The conditions to confirmation and
the conditions to the Effective Date of the First Amended Plan shall have been
satisfied or waived in accordance with the First Amended Plan.
          (iii) Documentation. The Company and the Backstop Parties shall have
received all the documentation required to consummate the transactions
contemplated hereby, and, in the case of the Backstop Parties, an officers’
certificate of the Company certifying as to the effect of Section 8(b)(i) hereof
and other documents and certificates as the Company and the Backstop Parties may
reasonably require, each duly executed and in form and substance reasonably
satisfactory to the Company and the Required Backstop Parties.
          (iv) Rights Offering. The Voting Deadline shall have passed.

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          (v) No Restraint. No judgment, injunction, decree or other legal
restraint shall prohibit the consummation of the First Amended Plan, the Rights
Offering or the transactions contemplated by this Agreement.
          (vi) HSR Act; Regulatory Approvals. If the purchase of the
Unsubscribed Shares or the shares of New Convertible Preferred Stock by any
Backstop Party pursuant to this Agreement is subject to the terms of the HSR Act
or similar Laws of any relevant foreign jurisdiction, the applicable waiting
period shall have expired or been terminated thereunder with respect to such
purchase.
          (vii) No Legal Impediment to Issuance. No action shall have been taken
and no statute, rule, regulation or order shall have been enacted, adopted or
issued in each by any federal, state or foreign governmental or regulatory
authority that, as of the Effective Date, prohibits the issuance or sale of the
Rights, the Offered Shares or the shares of New Convertible Preferred Stock
pursuant to this Agreement; and no injunction or order of any federal, state or
foreign court shall have been issued that, as of the Effective Date, prohibits
the issuance or sale of the Rights, the Offered Stock or the shares of New
Convertible Preferred Stock pursuant to the provisions of this Agreement.
          (viii) Consents. All material governmental and third party
notifications, filings, consents, waivers and approvals required in connection
with the consummation of the First Amended Plan, including those set forth on
Schedules 4(f) and 4(g) attached hereto, shall have been made, obtained or
waived.
     (b) Conditions to the Obligations of the Backstop Parties. The several
obligations of the Backstop Parties to purchase the Unsubscribed Shares and the
shares of New Convertible Preferred Stock pursuant to this Agreement on the
Effective Date are subject to the following conditions:
          (i) Representations and Warranties and Covenants. (A) The
representations and warranties of the Company and the other Debtors set forth in
this Agreement, including the representations incorporated by reference
(disregarding all qualifications and exceptions contained therein regarding
materiality or Material Adverse Effect) shall be true and correct on the date
hereof or such other date as specifically stated herein and on the Effective
Date as if made on such date, except, where the failure of such representations
and warranties to be so true and correct, individually or in the aggregate,
would not reasonably be expected to have a Material Adverse Effect; and (b) the
Company shall have complied in all material respects with all of its material
obligations hereunder and under any other agreement entered into by the Company
pursuant to the First Amended Plan; and the Company shall have delivered to
counsel for the Backstop Parties a certificate, dated as of the Effective Date
and executed in the name on and on behalf of the Company, by the Chairman of the
Board, the President or any Vice President of the Company, certifying as to the
foregoing.
          (ii) No Material Adverse Effect. Since the date of this Agreement, no
Material Adverse Effect shall have occurred and be continuing.

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          (iii) Approval of First Amended Plan. Except as otherwise approved in
writing by the Required Backstop Parties, (A) the First Amended Plan (1) shall
be consistent in all material respects with this Agreement and the Term Sheet,
(2) shall provide for the release and exculpation of the Backstop Parties, the
Indemnified Parties, the parties to the Equity Commitment Agreement dated as of
December 20, 2009 by and among the Company and the parties thereto (other than
the Company), their Affiliates, representatives, investment bankers and other
advisors to the fullest extent permitted under applicable Law; provided,
however, that nothing herein shall in any way release any claim against or
liability of the following parties: Lehman Brothers Holdings Inc., Ernst & Young
LLP, Kerr-McGee Corporation and Anadarko Petroleum Corporation and their
respective officers, directors, employees, advisors, attorneys, professionals,
accountants, investment bankers, consultants, agents and other representatives
(including their respective officers, directors, employees, members and
professionals), or any individuals who were former directors or officers of the
Debtors or their subsidiaries and also were or currently are directors or
officers of Kerr-McGee Corporation and/or Anadarko Petroleum Corporation and
(3) shall have conditions to confirmation and the Effective Date (and to what
extent any such conditions can be waived and by whom) that are consistent with
this Agreement and the Term Sheet in all material respects; (B) the Amended
Disclosure Statement shall be consistent in all material respects with this
Agreement and the First Amended Plan; (C) the Confirmation Order shall be
consistent in all material respects with this Agreement and the First Amended
Plan; and (D) any amendments or supplements to any of the foregoing shall be
consistent in all material respects with this Agreement and the First Amended
Plan. For the avoidance of doubt, any change to the type or amount of
consideration payable to any holder of a Claim from that specifically set forth
in the Term Sheet shall be considered to be materially inconsistent with the
Term Sheet.
          (iv) Exit Financing. On the Effective Date, (A) the Debtors shall have
obtained financing (“Exit Financing”) on terms and conditions reasonably
satisfactory to the Required Backstop Parties (and in no event on terms less
favorable to the Debtors than the Replacement DIP Facility upon conversion to
the Exit Facility (as defined, and provided for, in the Credit Agreement),
(B) the Exit Financing shall consist of (1) an asset-backed revolving credit
facility with commitments no greater than $125 million (the “Exit Revolver”) and
(2) a $425 million term loan facility; and (C) the aggregate face amount of all
letters of credit outstanding under the Exit Revolver shall be no more than
$28 million.
          (v) Corporate Documents. The Certificate of Incorporation and Bylaws
of the Company shall be in form and substance reasonably acceptable to the
Required Backstop Parties.
          (vi) Environmental Documentation. The Environmental Claims Settlement
Agreement and the Environmental Response Trust Agreements, and, in each case,
all ancillary agreements thereto (including the sale/leaseback and access
agreements between the Debtors and the applicable Environmental Response Trust
relating to the Henderson, Nevada plant shall have been entered into, shall be
in form and substance reasonably satisfactory to the Company and the Required
Backstop Parties; and the Bankruptcy Court shall have entered a Final Order
approving each of the foregoing Environmental Claims Settlement Agreement and
Environmental Response Trust Agreements, which order may be the Confirmation
Order.

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          (vii) Other Documentation. Except for documents described elsewhere in
this Section 8(b), all other material documentation prepared in connection with
the First Amended Plan, and any other material documents, motions, pleadings,
orders or the like prepared or filed in connection with the Chapter 11 Cases
shall be in form and substance satisfactory to the Company and the Required
Backstop Parties.
          (viii) Available Funds.
               (A) On the Effective Date, immediately prior to giving effect to
the transactions contemplated hereby and by the First Amended Plan (including
the payment in full of all Allowed Administrative Expenses and Allowed Priority
Claims (as such terms are to be defined in the First Amended Plan)), the Tronox
Parties shall have Available Cash equal to or greater than the amounts set forth
on Schedule 8(b)(viii) as the “Cash Balance,” as applicable to the Effective
Date, or such other lower amount as shall be agreed to by the Required Backstop
Parties. To the extent the Effective Date occurs after December 31, 2010, the
Company shall provide an updated schedule setting forth the projected Cash
Balance reasonably acceptable to the Required Backstop Parties.
               (B) On the Effective Date, the amount of capital expenditures
made by the Company for the Kwinana Investment (as defined in the Credit
Agreement) shall not exceed amounts set forth on Schedule 8(b)(viii).
               (C) Financing Fees, Allowed Administrative Expenses, Priority
Claims and Cure Claims (as such terms are defined in the First Amended Plan)
paid on the Effective Date shall not exceed $32,500,000; it being agreed that
Financing Fees shall include fees payable to potential lenders in conjunction
with the Exit Financing.
               (D) Settlement Escrow Account and Cash Collateralized Letters of
Credit released prior to or on the Effective Date shall in the aggregate equal
or exceed $58,000,000.
          (ix) Amount of Claims. (A) The aggregate amount of Allowed General
Unsecured Claims (other than Allowed Indirect Environmental Claims and Claims
with respect to the Unsecured Notes) shall not exceed $80 million; (B) the
aggregate amount of Allowed Indirect Environmental Claims shall not exceed
$80 million; and (C) there shall be no material unresolved Indirect
Environmental Claims, which, individually or in the aggregate, after having been
resolved, reasonably could cause the final aggregate amount of allowed Indirect
Environmental Claims to exceed $80 million; provided, however, that the
conditions in clauses (A) and (B) above shall be deemed to be met so long as the
aggregate amount of Allowed General Unsecured Claims including Allowed Indirect
Environmental Claims (but excluding Claims with respect to the Unsecured Notes)
does not exceed $140 million.
          (x) Purchase Notice. If there are any Unsubscribed Shares, then the
Backstop Parties shall have received a Purchase Notice in accordance with
Section 1(e), dated as of the Determination Date, stating the principal amount
of Unsubscribed Shares to be purchased pursuant to the Backstop Commitment.

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          (xi) Fees and Expenses. The Backstop Consideration and the Transaction
Expenses, to the extent not previously paid or reimbursed, shall have been paid
or reimbursed in full pursuant to the terms of this Agreement; provided that any
Transaction Expenses incurred after the Effective Date may be paid by the
Company in the Ordinary Course of Business.
          (xii) Inconsistent Transaction. The Company shall not have made a
public announcement, entered into an agreement, or filed any pleading or
document with the Bankruptcy Court, evidencing its support for, or intention to
support, any Competing Transaction.
          (xiii) Registration Rights Agreement. The Company shall have entered
into the Registration Rights Agreement with the Backstop Parties in accordance
with Section 6(d), in form and substance reasonably satisfactory to the Company,
the Creditors’ Committee and the Required Backstop Parties.
          (xiv) Preferred Stock COD. The Backstop Parties shall have received
evidence reasonably satisfactory to the Backstop Parties that the Company has
properly filed the Preferred Stock COD with the office of the Secretary of State
of the State of Delaware.
          (xv) No Environmental Liability. On the Effective Date, except to the
extent set forth in the Environmental Settlement Documents, the First Amended
Plan or Schedule 8(b)(xv) attached hereto, the Company shall have no material
liabilities or material obligations under any environmental, health or safety
Laws arising out of or related to facts, events or circumstances occurring or in
existence prior to the Effective Date.
          (xvi) No Termination Event Has Occurred. None of the events set forth
in Section 11 or 13 shall have occurred.
     (c) Conditions to the Obligations of the Company. The obligation of the
Company to effect the sale of the Unsubscribed Shares or the shares of New
Convertible Preferred Stock pursuant to this Agreement on the Effective Date are
subject to the following conditions:
               (i) Aggregate Purchase Price. The Backstop Parties shall have
delivered to the Company, (A) as the total aggregate Purchase Price for the
Unsubscribed Shares, an amount of readily available (same day) funds denominated
in United States Dollars equal to the product obtained by multiplying (1) the
Purchase Price per Offered Share and (2) the number of Unsubscribed Shares, and
(B) as the total aggregate purchase price for the shares of New Convertible
Preferred Stock, an aggregate amount of readily available (same day) funds
denominated in United States Dollars equal to $15,000,000.
               (ii) Representations and Warranties and Covenants. The
representations and warranties of the Backstop Parties set forth in this
Agreement shall be true and correct in all material respects on the date hereof
and on the Effective Date as if made on such date. The Backstop Parties shall
have complied in all material respects with all of their respective obligations
hereunder (and shall have complied in all respects with their payment
obligations hereunder).

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9. Indemnification.
     (a) Whether or not the Rights Offering or Preferred Stock Offering is
consummated or this Agreement is terminated, the Company (in such capacity, the
“Indemnifying Party”) shall indemnify and hold harmless the Backstop Parties and
their successors and assigns, their respective Affiliates and their and their
Affiliates’ respective officers, directors, managing directors, employees,
agents, members, partners, managers, advisors, controlling persons, attorneys,
investment bankers and financial advisors (each, an “Indemnified Person”) from
and against any and all losses, claims, damages, liabilities and reasonable fees
and expenses, joint or several, to which any such Indemnified Person may become
subject to the extent arising out of or in connection with (i) any third party
claim, challenge, litigation, investigation or proceeding with respect to this
Agreement, the Chapter 11 Cases, the Rights Offering, the Preferred Stock
Offering, the Backstop Commitment, the Preferred Stock Commitment or the
transactions contemplated hereby or thereby, including without limitation, the
payment of the Backstop Consideration, the distribution of Rights, the purchase
and sale of Offered Shares pursuant to the Rights Offering, and the purchase and
sale of Unsubscribed Shares and shares of New Convertible Preferred Stock
pursuant to the provisions of this Agreement, or (ii) any breach by the Company
of this Agreement and to reimburse such Indemnified Persons for any reasonable
legal or other reasonable out-of-pocket expenses as they are incurred in
connection with investigating, responding to or defending any of the foregoing;
provided that the foregoing indemnification will not, as to any Indemnified
Person, apply to losses, claims, damages, liabilities or expenses to the extent
that they are finally judicially determined to have resulted from any breach of
this Agreement by such Indemnified Person or bad faith, gross negligence or
willful misconduct on the part of such Indemnified Person. If for any reason the
foregoing indemnification is unavailable to any Indemnified Person or
insufficient to hold it harmless, then the Indemnifying Party shall contribute
to the amount paid or payable by such Indemnified Person as a result of such
loss, claim, damage, liability or expense in such proportion as is appropriate
to reflect not only the relative benefits received by the Indemnifying Party, on
the one hand, and such Indemnified Person, on the other hand, but also the
relative fault of the Indemnifying Party, on the one hand, and such Indemnified
Person, on the other hand, as well as any relevant equitable considerations. It
is hereby agreed that the relative benefits to the Indemnifying Party, on the
one hand, and all Indemnified Persons, on the other hand, shall be deemed to be
in the same proportion as (i) the total value received or proposed to be
received by the Company pursuant to the sale of New Common Stock and New
Convertible Preferred Stock contemplated by this Agreement bears to (ii) the
aggregate fee paid or proposed to be paid to the Backstop Parties in connection
with such sale.
Notwithstanding any of the above, Indemnified Persons shall not include, and
nothing herein, in the First Amended Plan, the Plan Supplement or any document
related thereto shall in any way release any claim against or liability of, the
following parties: Lehman Brothers Holdings Inc., Ernst & Young LLP, Kerr-McGee
Corporation and Anadarko Petroleum Corporation and their officers, directors,
employees, advisors, attorneys, professionals, accountants, investment bankers,
consultants, agents and other representatives (including their respective
officers, directors, employees, members and professionals) in their capacity as
such, whether such Claims or liabilities be direct or indirect, fixed or
contingent, including the Claims asserted in the Anadarko Litigation. For the
avoidance of doubt, nothing herein or in the First Amended Plan, the Plan
Supplement or any document related thereto shall in any way release any
individuals

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who were former directors or officers of Tronox or their subsidiaries and also
were or currently are directors or officers of Kerr-McGee Corporation and/or
Anadarko Petroleum Corporation.
     (b) Promptly after receipt by an Indemnified Person of notice of the
commencement of any claim, litigation, investigation or proceeding relating to
this Agreement, the Chapter 11 Cases, the Rights Offering, the Preferred Stock
Offering, the Backstop Commitment, the Preferred Stock Commitment or any of the
transactions contemplated hereby or thereby (“Proceedings”), such Indemnified
Person will, if a claim is to be made hereunder against the Indemnifying Party
in respect thereof, notify the Indemnifying Party in writing of the commencement
thereof; provided that the omission so to notify the Indemnifying Party will not
relieve it from any liability that it may have hereunder except to the extent it
has been materially prejudiced by such failure. In case any such Proceedings are
brought against any Indemnified Person and it notifies the Indemnifying Party of
the commencement thereof, the Indemnifying Party will be entitled to participate
therein, and, to the extent that it may elect by written notice delivered to
such Indemnified Person, to assume the defense thereof, with counsel reasonably
satisfactory to such Indemnified Person; provided that if the defendants in any
such Proceedings include both such Indemnified Person and the Indemnifying Party
and such Indemnified Person shall have reasonably concluded that there may be
legal defenses available to it that are different from or additional to those
available to the Indemnifying Party, such Indemnified Persons shall have the
right to select separate counsel to assert such legal defenses and to otherwise
participate in the defense of such Proceedings on behalf of such Indemnified
Person. Upon receipt of notice from the Indemnifying Party to such Indemnified
Person of its election so to assume the defense of such Proceedings and approval
by such Indemnified Person of counsel, the Indemnifying Party shall not be
liable to such Indemnified Person for expenses incurred by such Indemnified
Person in connection with the defense thereof (other than reasonable costs of
investigation) unless (i) such Indemnified Person shall have employed separate
counsel in connection with the assertion of legal defenses in accordance with
the proviso to the next preceding sentence (it being understood, however, that
the Indemnifying Party shall not be liable for the expenses of more than one
separate counsel representing the Indemnified Persons who are parties to such
Proceedings), (ii) the Indemnifying Party shall not have employed counsel
reasonably satisfactory to such Indemnified Person to represent such Indemnified
Person within a reasonable time after notice of commencement of the Proceedings
or (iii) the Indemnifying Party shall have authorized in writing the employment
of counsel for such Indemnified Person.
     (c) The Indemnifying Party shall not be liable for any settlement of any
Proceedings effected without its written consent (which consent shall not be
unreasonably withheld). If any settlement of any Proceeding is consummated with
the written consent of the Indemnifying Party or if there is a final judgment
for the plaintiff in any such Proceedings, the Indemnifying Party agrees to
indemnify and hold harmless each Indemnified Person from and against any and all
losses, claims, damages, liabilities and expenses by reason of such settlement
or judgment in accordance with, and subject to the limitations of, the
provisions of this Section 9. The Indemnifying Party shall not, without the
prior written consent of an Indemnified Person (which consent shall not be
unreasonably withheld), effect any settlement of any pending or threatened
Proceedings in respect of which indemnity has been sought hereunder by such
Indemnified Person unless such settlement (a) includes an unconditional release
of such Indemnified Person in form and substance reasonably satisfactory to such
Indemnified Person from all liability on the claims that are the subject matter
of such Proceedings and (b) does not include any statement as

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to or any admission of fault, culpability or a failure to act by or on behalf of
any Indemnified Person.
10. Acknowledgements and Agreements of the Company. Notwithstanding anything
herein to the contrary, the Company acknowledges and agrees that (a) the
transactions contemplated hereby are arm’s-length commercial transactions
between the Company, on the one hand, and the Backstop Parties, on the other,
(b) in connection therewith and with the processes leading to such transactions,
each Backstop Party is acting solely as a principal and not the agent or
fiduciary of the Company or the other Debtors or their estates, (c) the Backstop
Parties have not assumed advisory or fiduciary responsibilities in favor of the
Company or the other Debtors or their estates with respect to such transactions
or the processes leading thereto and (d) the Company and the other Debtors have
consulted their own legal and financial advisors to the extent they deemed
appropriate.
11. Defaulting Backstop Party.
     (a) If any Backstop Party defaults on its obligation to purchase the
Unsubscribed Shares or shares of New Convertible Preferred Stock that it has
agreed to purchase hereunder, the non-defaulting Backstop Parties may, but shall
not be obligated to, purchase such Unsubscribed Shares or shares of New
Convertible Preferred Stock as to which such other Backstop Party has defaulted,
pro rata in accordance with their respective Rights Offering Commitment
Percentage or Preferred Stock Commitment Percentage, as the case may be (or on
such other basis as shall be agreed to by all of the non-defaulting Backstop
Parties), on the terms contained in this Agreement. In the event any
Unsubscribed Shares or shares of New Convertible Preferred Stock have not been
purchased by a non-defaulting Backstop Party in accordance with the foregoing,
the Backstop Parties may, but shall not be obligated to, arrange for the
purchase of such Unsubscribed Shares or shares of New Convertible Preferred
Stock by other Persons satisfactory to the Company.
     (b) If, after giving effect to any arrangements for the purchase of the
Unsubscribed Shares or shares of New Convertible Preferred Stock of a defaulting
Backstop Party or Backstop Parties by (i) the non-defaulting Backstop Parties as
provided in paragraph (a) above and/or (ii) by other purchasers identified by
the Company, the aggregate principal amount of Unsubscribed Shares or shares of
New Convertible Preferred Stock that remain unpurchased immediately prior to the
Effective Date exceeds $10.0 million, then this Agreement shall terminate at
such time without liability on the part of the non-defaulting Backstop Parties.
Any termination of this Agreement pursuant to this Section 11(b) shall be
without liability on the part of the Company (including with respect to the
payment of the Cash Backstop Fee), except that (i) the Company will continue to
be liable for the payment of the Transaction Expenses as set forth in Section
3(b), except with respect to the Transaction Expenses relating solely to such
defaulting Backstop Party and (ii) notwithstanding anything contained herein
(including for the avoidance of doubt, Section 3(a)) the Company shall pay the
non-defaulting Backstop Parties a commitment fee in an aggregate amount of
$4,500,000 (the “Non-Defaulting Backstop Commitment Fee”) pro rata in accordance
with their respective Rights Offering Commitment Percentage or Preferred Stock
Commitment Percentage (excluding the defaulting Backstop Parties), as the case
may be (or on such other basis as shall be agreed to by all of the
non-defaulting Backstop Parties). The Non-Defaulting Backstop Commitment Fee
shall be paid

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within two (2) Business Days following the date on which this Agreement is
terminated pursuant to this Section 11(b). Notwithstanding the foregoing, in no
event shall the Transaction Expenses payable pursuant to Section 3(b) following
a termination of this Agreement pursuant to this Section 11 be proportionally
reduced on account of the defaulting Backstop Party; any reduction of said
Transaction Expenses shall be based solely on the amount of Transaction Expenses
incurred solely on behalf of such defaulting Backstop Party.
     (c) Nothing contained herein shall relieve a defaulting Backstop Party of
any liability it may have to the Company or any non-defaulting Backstop Party
for damages caused by its default.
12. No Survival of Representations and Warranties. Notwithstanding anything
contained herein, the representations and warranties made in this Agreement
shall not survive the Effective Date and shall terminate when the transactions
contemplated by this Agreement (including the Rights Offering and the
Convertible Preferred Stock Offering) are consummated in accordance with the
terms hereof.
13. Termination.
     (a) This Agreement shall automatically terminate, unless waived in writing
by all Parties:
          (i) if terminated pursuant to Section 11;
          (ii) if any (A) Event of Default under the Credit Agreement existing
on the date hereof is not waived in form and substance reasonably satisfactory
to the Required Backstop Parties on or prior to September 30, 2010 or (B) an
Event of Default under the Credit Agreement occurs after the date hereof which
has not been cured within ten (10) days after the occurrence thereof, or (C) any
of the conditions precedent to conversion of the Replacement DIP Facility into
the Exit Facility, as set forth in the Credit Agreement, is not possible to
satisfy (without any modification or waiver thereto, unless agreed to by the
Required Backstop Parties) on or prior to the Effective Date;
          (iii) if (A) the terms of any final document to be approved by the
Backstop Parties pursuant to this Agreement or the Term Sheet does not reflect
the economic terms set forth in, and otherwise conform in all material economic
respects to, this Agreement and the Term Sheet, (B) the Company has received
written notice of such non-conformity, and (C) such non-conforming final
document has not been amended to the reasonable satisfaction of each Backstop
Party within 10 Business Days of the Company’s receipt of the above notice. For
the avoidance of doubt, any change to the treatment provided to any class of
Claims or Equity Interests from that specifically set forth in the Term Sheet
shall be considered a change to the economic terms set forth therein; or
          (iv) if the Effective Date has not occurred on or prior to
December 31, 2010.
     (b) The Required Backstop Parties may terminate this Agreement:

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          (i) If the Plan Support Agreement shall not have been fully executed
and delivered by all intended parties thereto (other than the Backstop Parties)
on or prior to the date that is two (2) Business Days after the date hereof;
          (ii) In the event the Debtors have failed to file a motion to have
this Agreement approved by the Bankruptcy Court within two (2) Business Days
after the date hereof;
          (iii) if the Debtors have not filed with the Bankruptcy Court the
First Amended Plan and Disclosure Statement within five Business Days after the
date hereof;
          (iv) in the event the Bankruptcy Court has failed to enter one or
several orders approving this Agreement and the Plan Support Agreement on or
prior to September 17, 2010, unless such failure is a result of any postponement
by the Bankruptcy Court of any one or more hearing dates in connection with the
Chapter 11 Cases, and the Required Backstop Parties consent to such postponement
or object to such postponement and the Bankruptcy Court overrules such
objection;
          (v) if each of the Government Environmental Entities shall not have
executed the Environmental Settlement Documents on or prior to September 23,
2010;
          (vi) if the Bankruptcy Court has failed to approve the Amended
Disclosure Statement on or prior to September 30, 2010, unless such failure is a
result of any postponement by the Bankruptcy Court of any one or more hearing
dates in connection with the Chapter 11 Cases, and the Required Backstop Parties
consent to such postponement or object to such postponement and the Bankruptcy
Court overrule such objection;
          (vii) if the Company has not either (A) obtained a firm commitment
letter, providing for debt financing after the Effective Date, or (B) amended
the Credit Agreement to provide for additional debt financing after the
Effective Date on or before the date the Confirmation Order is entered, in
either case on terms consistent with the Term Sheet and otherwise on terms
reasonably satisfactory to the Required Backstop Parties;
          (viii) if the Bankruptcy Court has failed to confirm the First Amended
Plan (or any modified version thereof satisfactory to the Required Backstop
Parties) and enter the Confirmation Order on or prior to the earlier of (A) the
date that is sixty (60) days after the Disclosure Statement Order is entered and
(B) November 30, 2010;
          (ix) if the Confirmation Order has not become a Final Order on or
prior to December 15, 2010;
          (x) if any of the conditions set forth in Section 8 to be satisfied at
or prior to the Effective Date becomes incapable of being satisfied on or prior
to the Effective Date;
          (xi) if the projections of Tronox Worldwide and its Subsidiaries
compiled or made available to the Backstop Parties after the date hereof
materially and adversely differ from the Projections;

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          (xii) if the terms and conditions of the Plan Support Agreement are
amended or waived in any way that are materially adverse to the Backstop Parties
or if the Plan Support Agreement is terminated by the Company;
          (xiii) if the Company makes a public announcement that it intends to
support or supports, or enters into an agreement to support, or files any
pleading or document with the Bankruptcy Court indicating its intention to
support, or supports, any Competing Transaction; or the Company enters into a
Competing Transaction;
          (xiv) if the Creditors’ Committee or the United States or any other
Government Environmental Entity foreseen to be a party to any Environmental
Settlement Document makes any public statement or takes any action indicating or
suggesting that it will not pursue or does not support the transactions set
forth in the Term Sheet and the First Amended Plan;
          (xv) if the Company has breached in any material respect its
obligations under this Agreement or the Plan Support Agreement and such breach
is not cured (to the extent curable) within 10 Business Days after the giving of
written notice by any Backstop Party to the Company of such breach;
          (xvi) if the First Amended Plan, as confirmed by the Bankruptcy Court,
is not consistent, in all material non-economic respects, with the Term Sheet
(except such inconsistencies as agreed on by the Required Backstop Parties);
          (xvii) if the terms of the First Amended Plan and the exhibits and any
supplements thereto not otherwise set forth on the Term Sheet, including any
amendment or modification of any of the foregoing, shall not be in form and
substance reasonably acceptable to the Required Backstop Parties;
          (xviii) if an order converting the Chapter 11 Case of any of the
Debtors to a case under chapter 7 of the Bankruptcy Code is entered by the
Bankruptcy Court;
          (xix) if any court of competent jurisdiction or other competent
governmental or regulatory authority issues a ruling, determination, or order
making illegal or otherwise restricting, preventing or prohibiting the
consummation of the First Amended Plan substantially on the terms set forth in
the Term Sheet and in this Agreement, including an order of the Bankruptcy Court
denying confirmation of the First Amended Plan, which ruling, determination or
order (A) has been in effect for 30 days and (B) is not stayed;
          (xx) upon the entry of an order by the Bankruptcy Court appointing an
examiner with enlarged powers relating to the operation of the material part of
the business of the Debtors, taken as a whole (powers beyond those set forth in
section 1106(a)(3) and (4) of the Bankruptcy Code) under section 1106(b) of the
Bankruptcy Code, or the entry of an order by the Bankruptcy Court appointing a
trustee under section 1104 of the Bankruptcy Code and, in either case, such
order (A) has been in effect for 30 days and (B) is not stayed;
          (xxi) if the Bankruptcy Court shall enter an order approving a payment
to any party (whether in cash or other property or whether as adequate
protection, settlement of a dispute, or otherwise) that would be inconsistent
with the treatment of such party under the Term

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Sheet (other than any inconsistency that arises in connection with the Debtors’
continuation of its claims reconciliation process, including fixing or settling
claims made in the Chapter 11 Cases);
          (xxii) upon the entry of an order dismissing one or more of the
Chapter 11 Cases;
          (xxiii) if any order required to be entered by the Bankruptcy Court
under this Section 13 on a final basis shall not become a Final Order within a
reasonable period of time; and
          (xxiv) if the First Amended Plan does not receive the requisite number
of votes in favor of such First Amended Plan in number and amount in the class
of claims in which the Eligible Holders’ claims are placed (other than from
holders of Indirect Environmental Claims);
provided, however, that the Backstop Parties shall not have the right to
terminate this Agreement pursuant to this Section 13(b) if the failure to meet
any deadline or requirement set forth in this Section 13(b) or to otherwise
satisfy any condition is the direct result of any action taken or the omission
of any act by any Backstop Party.
     (c) The Company may terminate this Agreement in order to enter into a
Superior Transaction or an agreement to support a Superior Transaction, subject
to payment of the Cash Backstop Consideration and the Transaction Expenses as
provided in Sections 3(a) and 3(b), in each case prior to or contemporaneously
with such termination.
     (d) Upon termination of this Agreement, the covenants and agreements made
by the parties herein under Sections 3(a), 3(b), 9, 11(b), 13(d), and 15 through
24 will survive indefinitely in accordance with their terms.
14. Competing Transactions. From the date of this Agreement to the Effective
Date or earlier termination of this Agreement, the Company shall not make a
public announcement that it intends to support or supports, enter into an
agreement to support, or file any pleading or document with the Bankruptcy Court
evidencing its intention to support, or otherwise knowingly support, any
transaction inconsistent with this Agreement or the First Amended Plan, shall
not file any plan that is not the First Amended Plan and shall not agree to,
consent to, knowingly provide any support to, solicit, participate in the
formulation of, or vote for any transaction or plan of reorganization other than
the First Amended Plan (each, a “Competing Transaction”). Notwithstanding
anything to the contrary herein, or in the First Amended Plan or any other
agreement among the Company and the Backstop Parties, at any time prior to the
date on which the First Amended Plan is confirmed by the Bankruptcy Court, if
the Company has received a bona fide written proposal for a Competing
Transaction that the board of directors of the Company determines in good faith
is or could reasonably be expected to lead to a Superior Transaction and that
the failure of the board to pursue such Competing Transaction could reasonably
be expected to result in a breach of the board of directors’ fiduciary duties
under applicable Law, then the Company (a) may (i) furnish non-public
information to, and engage in discussions and negotiations with, the person
making such proposal and its representatives with respect to the Competing
Transaction, and (ii) terminate this Agreement pursuant to Section 13(c) in
order to enter into a Superior Transaction or an agreement to support a Superior

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Transaction and (b) shall (i) provide the Backstop Parties with written notice
of the Competing Transaction within 24 hours of the Company’s receipt of such
Competing Transaction, together with copies of all material written documents
setting forth in reasonable detail the details of such Competing Transaction,
and (ii) notify the Backstop Parties in writing within 24 hours of the Company’s
board of directors determination that such Competing Transaction is a Superior
Transaction. For purposes of this Agreement, a “Superior Transaction” shall be a
Competing Transaction that the board of directors of the Company determines in
good faith (x) would be in the best interests of the Company and its creditor
constituencies and equity holders as a whole, including, but not limited to the
Backstop Parties, and (y) would reasonably be expected to provide a superior
recovery (but, with respect to any creditor constituent, not in excess of its
claim) to each class of creditor constituencies and equity holders. At all
times, the Company shall be obligated to promptly deliver to the advisors for
the Backstop Parties all written communications delivered to or received by the
Company or its advisors making or materially modifying any proposals with
respect to any Competing Transaction, including, without limitation, copies of
all expressions of interest, term sheets, letters of interest, offers, proposed
agreements or otherwise, and shall periodically update (not less than once every
week) the advisors for the Backstop Parties concerning such matters.
15. Notices. All notices and other communications in connection with this
Agreement will be in writing and will be deemed given (and will be deemed to
have been duly given upon receipt) if delivered personally, sent via electronic
facsimile (with confirmation), mailed by registered or certified mail (return
receipt requested) or delivered by an express courier (with confirmation) to the
parties at the following addresses (or at such other address for a party as will
be specified by like notice):
     (a) If to Backstop Parties or any of the Backstop Parties, at their
respective addresses set forth on the signature pages hereto, with a copy to:
Milbank, Tweed, Hadley & McCloy LLP
One Chase Manhattan Plaza
New York, NY 10005
Attn: Thomas C. Janson, Esq.
     (b) If to the Company, to:
Tronox Incorporated
3301 NW 150th Street
Oklahoma City, OK 73134
Attn: General Counsel
with a copy (which shall not constitute notice) to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Attn:   Jonathan S. Henes, Esq.
            Patrick J. Nash, Jr., Esq.

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16. Legend. Each certificate evidencing Unsubscribed Shares or shares of New
Convertible Preferred Stock, if any, and each certificate issued in exchange for
or upon the transfer of any such securities shall be stamped or otherwise
imprinted with a legend in substantially the following form:
“THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ORIGINALLY ISSUED ON
[INSERT DATE OF ISSUANCE], HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”), OR ANY OTHER SECURITIES LAW, AND
MAY NOT BE SOLD OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT UNDER THE ACT OR AN EXEMPTION FROM REGISTRATION THEREUNDER.”
The legend set forth above shall be removed from the certificates evidencing any
such securities at any time after the restrictions described in such legend
cease to be applicable.
17. Assignment; Third Party Beneficiaries. Neither this Agreement nor any of the
rights, interests or obligations under this Agreement may be assigned by any of
the parties (whether by operation of Law or otherwise) without the prior written
consent of the other parties hereto. Notwithstanding the previous sentence, this
Agreement, or any Backstop Party’s obligations hereunder, may be assigned,
delegated or transferred, in whole or in part, by a Backstop Party to any of its
Affiliates; provided that any such assignee assumes the obligations of the
Backstop Party hereunder and agrees in writing to be bound by the terms of this
Agreement in the same manner as the Backstop Party. Notwithstanding the
foregoing or any other provisions herein, no such assignment will relieve the
assigning Backstop Party of its obligations hereunder if such assignee fails to
perform such obligations. Except as provided in Section 9 with respect to the
Indemnified Parties, this Agreement (including the documents and instruments
referred to in this Agreement) is not intended to and does not confer upon any
person other than the parties hereto any rights or remedies under this
Agreement. Notwithstanding the foregoing or any other provisions herein to the
contrary, a Backstop Party may not assign any of its rights or obligations under
this Agreement, to the extent such assignment would affect the securities Laws
exemptions applicable to the transactions contemplated by this Agreement.
18. Prior Negotiations; Entire Agreement. This Agreement (including the exhibits
hereto and the documents and instruments referred to in this Agreement, which
are incorporated herein by reference and made part of this Agreement as if fully
set forth herein) constitutes the entire agreement of the parties hereto and
supersedes all prior agreements, arrangements or understandings, whether written
or oral, among the parties hereto with respect to the subject matter of this
Agreement, except that (i) the parties hereto acknowledge that any
confidentiality agreements heretofore executed between or among the parties
hereto will continue in full force and effect, and (ii) nothing herein shall
affect any unfulfilled obligations, including expense reimbursement and
indemnification obligations under the Equity Commitment Agreement dated as of
December 20, 2009 by and among the Company and the parties thereto. In the event
of any inconsistencies between the Term Sheet and the operative provisions of
this Agreement, the operative terms of this Agreement shall prevail.

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19. GOVERNING LAW; VENUE. THIS AGREEMENT WILL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK, THE PARTIES HERETO
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF, AND VENUE IN, THE UNITED
STATES BANKRUPTCY COURT FOR THE SOUTHERN DISTRICT OF NEW YORK AND WAIVES ANY
OBJECTION BASED ON FORUM NON CONVENIENS.
20. Counterparts. This Agreement may be executed in any number of counterparts,
all of which will be considered one and the same agreement and will become
effective when counterparts have been signed by each of the parties and
delivered to the other party (including via facsimile or other electronic
transmission), it being understood that each party need not sign the same
counterpart.
21. Waivers and Amendments. This Agreement and related exhibits may be amended,
modified, superseded, cancelled, renewed or extended only by a written
instrument signed by the parties hereto, with the consent of the Creditors’
Committee (solely with respect to terms related to treatment of creditors under
the First Amended Plan), and subject, to the extent required, to the approval of
the Bankruptcy Court; provided that the consent rights of the Creditors’
Committee shall immediately terminate if the Creditors’ Committee supports any
other plan of reorganization or any other equity commitment agreement other than
this Agreement or takes any action that is inconsistent with, or could
reasonably be expected to prevent, delay or impede solicitation, confirmation or
consummation of the First Amended Plan or any document filed with the Bankruptcy
Court in furtherance of soliciting or confirming the First Amended Plan or
consummating the transactions contemplated thereby and in the Term Sheet,
including but not limited to the consummation of this Agreement. The terms of
this Agreement may be waived only by the parties hereto waiving compliance, and
subject, to the extent required, to the approval of the Bankruptcy Court. No
delay on the part of any party hereto in exercising any right, power or
privilege pursuant to this Agreement will operate as a waiver thereof, nor will
any waiver on the part of any party of any right, power or privilege pursuant to
this Agreement, nor will any single or partial exercise of any right, power or
privilege pursuant to this Agreement, preclude any other or further exercise
thereof or the exercise of any other right, power or privilege pursuant to this
Agreement. The rights and remedies provided pursuant to this Agreement are
cumulative and are not exclusive of any rights or remedies which any party
hereto otherwise may have at law or in equity.
22. Headings. The headings in this Agreement are for reference purposes only and
will not in any way affect the meaning or interpretation of this Agreement.
23. Specific Performance. The parties hereto acknowledge and agree that any
breach of the terms of this Agreement would give rise to irreparable harm for
which money damages would not be an adequate remedy, and, accordingly, the
parties hereto agree that, in addition to any other remedies, each party hereto
will be entitled to enforce the terms of this Agreement by a decree of specific
performance without the necessity of proving the inadequacy of money damages as
a remedy and without the necessity of posting bond.

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24. Interpretation.
     (a) The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term and vice
versa, and words denoting either gender shall include both genders as the
context requires. Where a word or phrase is defined herein, each of its other
grammatical forms shall have a corresponding meaning.
     (b) The terms “hereof,” “herein” and “herewith” and words of similar import
shall, unless otherwise stated, be construed to refer to this Agreement as a
whole and not to any particular provision of this Agreement.
     (c) When a reference is made in this Agreement to a Section, paragraph,
Exhibit or Schedule, such reference is to a Section, paragraph, Exhibit or
Schedule to this Agreement unless otherwise specified.
     (d) The word “include,” “includes”, and “including” when used in this
Agreement shall be deemed to include the words “without limitation”, unless
otherwise specified.
     (e) Except with respect to Sections 4 and 5 hereof and any defined terms
used therein, reference to any Law means such Law as amended, modified,
codified, replaced or reenacted, and all rules and regulations promulgated
thereunder.
[Signature Pages Follow]

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     In WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the date first written above.

            TRONOX INCORPORATED
      By:           Name:   Michael J. Foster        Title:   Vice President,
Secretary and
General Counsel     

[Signature Page of Equity Commitment Agreement]

 

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BACKSTOP PARTIES:
[Signature Page of Equity Commitment Agreement]

 

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Attachment A
to
Equity Commitment Agreement
CERTAIN DEFINITIONS
The following terms used herein, including in the preamble, recitals, exhibits
and schedules hereto, shall have the following meanings:
          “Adverse Proceeding” means any action, suit, proceeding, hearing (in
each case, whether administrative, judicial or otherwise), governmental
investigation or arbitration (whether or not purportedly on behalf of the
Company or any of its Subsidiaries) at law or in equity, or before or by any
Governmental Authority, domestic or foreign (including any environmental
claims), whether pending or, to the knowledge of the Company or any of its
Subsidiaries, threatened against or affecting the Company or any of its
Subsidiaries or any property of the Company or any of its Subsidiaries.
          “Affiliate” when used with reference to another Person means any
Person, directly or indirectly, through one or more intermediaries, Controlling,
Controlled by, or under common Control with, such other Person, and with respect
to any Backstop Party, shall include any managed funds or accounts managed or
advised by such Backstop Party or an Affiliate of such Backstop Party.
          “Agreement” has the meaning set forth in the introduction hereto.
          “Allowed” means, with respect to the Claim of any creditor seeking to
and otherwise permitted to participate in the Rights Offering under this
Agreement: (i) a Claim that is listed in any Schedule filed in the Chapter 11
Cases by Tronox prior to the date hereof as neither disputed, contingent nor
unliquidated, and as to which Tronox or any other party in interest has not
filed an objection; (ii) a Claim that has been allowed by a Final Order on or
prior to the Rights Expiration Date; (iii) a Claim that is Allowed in any
stipulation that is approved by the Company, the Required Backstop Parties, the
Creditors’ Committee and the Bankruptcy Court on or prior to the Rights
Expiration Date or (iv) a Claim as to which a proof of claim has been timely
filed in the Chapter 11 Cases and as to which no objection has been filed by any
party in interest on or prior to the Rights Expiration Date; provided, for the
sake of clarity, that a Claim that is temporarily allowed for voting purposes
shall not be deemed “Allowed” for purposes of this definition on account of so
being allowed.
          “Amended Disclosure Statement” has the meaning set forth in
Section 6(a).
          “Anadarko Litigation” means the adversary proceeding pending in the
Bankruptcy Court captioned Tronox Incorporated, et al. v. Anadarko Petroleum
Corporation, et al., Adversary Proceeding No. 09-01198 (ALG).
          “Anadarko Litigation Trust” means the trust to be established by the
Debtors pursuant to the First Amended Plan for the benefit of holders of
Environmental Claims and Tort Claims, to which the Debtors will contribute their
rights to the Anadarko Litigation.

 

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          “Available Cash” means, as of any date of determination, the sum of
(a) the aggregate amount of unrestricted cash and cash equivalents included in
the consolidated balance sheet of the relevant entity as of such date (excluding
any proceeds in various escrow accounts and reinvestment accounts created or
maintained pursuant to the Credit Agreement) that, in each case, are free and
clear of all Liens (other than Permitted Liens); and (b) the aggregate amount of
cash and cash equivalents included in the Working Capital Escrow Account created
or maintained pursuant to the Credit Agreement as of such date.
          “Backstop Commitment” has the meaning set forth in Section 1(d).
          “Backstop Consideration” has the meaning set forth in Section 3(a)(i).
          “Backstop Parties” has the meaning set forth in the introduction
hereto.
          “Bankruptcy Code” means the United States Bankruptcy Code, 11 U.S.C.
§§ 101 et seq.
          “Bankruptcy Court” means the Bankruptcy Court for the Southern
District of New York administering the Chapter 11 Proceedings.
          “Bonding Requirements” means standby letters of credit, guarantees,
indemnity bonds and other credit support instruments issued by third parties on
behalf of any Tronox Party regarding the Business (other than any letters of
credits, guarantees, indemnity bonds or other support instruments issued for
workers’ compensation or any other insurance purposes).
          “Business” means the business of the Tronox Parties, as currently
conducted, including (i) worldwide, the business of developing, researching,
processing, manufacturing, distributing, marketing and selling the Products, and
(ii) in Australia, the business of mining of, and exploration for, raw materials
required to produce the Products, but disregarding, in each case, the
Environmental Trust Assets and the Nevada Assets.
          “Business Day” means each Monday, Tuesday, Wednesday, Thursday and
Friday that is not a day on which banking institutions in New York City are
generally authorized or obligated by Law or executive order to close.
          “Cash Backstop Consideration” has the meaning set forth in
Section 3(a)(i).
          “Chapter 11 Cases” means (a) when used with reference to a particular
Debtor, the case pending for that Debtor under chapter 11 of the Bankruptcy Code
in the Bankruptcy Court and (b) when used with reference to all Debtors, the
procedurally consolidated cases pending for the Debtors under chapter 11 of the
Bankruptcy Code in the Bankruptcy Court.
          “Claim” means any claim (as such term is defined in section 101(5) of
the Bankruptcy Code) against the Debtors.
          “Company” has the meaning set forth in the introduction hereto.
          “Competing Transaction” has the meaning set forth in Section 14.

 

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          “Confirmation Order” has the meaning set forth in Section 8(a)(i).
          “Contract” means any written or oral agreement, contract, lease
(including the Leases), sublease, indenture, mortgage, instrument, guaranty,
loan or credit agreement, note, bond, customer order, purchase order, sales
order, franchise, dealer and distributorship agreement, supply agreement,
development agreement, joint venture agreement, promotion agreement, license
agreement, contribution agreement, partnership agreement or other arrangement,
understanding, permission or commitment that, in each case, is legally binding.
          “Contractual Obligation” means, as applied to any Person, any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
          “Control” means, when used with reference to any Person, the power to
direct the management or policies of such Person, directly or indirectly, by or
through stock or other equity ownership, agency or otherwise, or pursuant to or
in connection with any Contract; and the terms “Controlling” and “Controlled”
shall have meanings correlative to the foregoing.
          “Credit Agreement” means the Senior Secured Super-Priority
Debtor-in-Possession and Exit Credit and Guaranty Agreement, dated as of
December 20, 2009, and entered into by and among Tronox Worldwide, the Company,
certain Subsidiaries of Tronox Worldwide, the Lenders party thereto from time to
time, Goldman Sachs Lending Partners LLC, as sole lead arranger and sole
bookrunner, Syndication Agent, Administrative Agent and as Collateral Agent, as
amended from time to time.
          “Creditors’ Committee” has the meaning set forth in the recitals
hereto.
          “Competing Transaction” has the meaning set forth in Section 14.
          “Cure Amount” with respect to any Contract shall be the cash amounts
required to cure any monetary defaults on the part of the Tronox Debtors
pursuant to section 365 of the Bankruptcy Code, as ultimately determined by the
Bankruptcy Court.
          “Debtors” means collectively, the Company; Tronox Luxembourg S.ar.l;
Cimarron Corporation; Southwestern Refining Company, Inc.; Transworld Drilling
Company; Triangle Refineries, Inc.; Triple S, Inc.; Triple S Environmental
Management Corporation; Triple S Minerals Resources Corporation; Triple S
Refining Corporation; Tronox LLC; Tronox Finance Corp.; Tronox Holdings, Inc.;
Tronox Pigments (Savannah) Inc.; and Tronox Worldwide.
          “Decree” means any judgment, decree, ruling, injunction, assessment,
attachment, undertaking, award, charge, writ, code, regulation, rule, executive
order, administrative order or any other restriction or any other order of any
Governmental Authority.
          “Determination Date” has the meaning set forth in Section 1(e).
          “Dilutive Rights” has the meaning set forth in Section 4(c).

 

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          “Easements” means those easements, servitudes, surface use rights and
rights-of-way appurtenant to the Land and used in connection with the Business
as it is currently being conducted, together with all pipelines, utility assets
and other facilities situated thereon.
          “ECA Order” means an order of the Bankruptcy Court approving this
Agreement.
          “Effective Date” has the meaning set forth in the recitals hereto.
          “Eligible Holder” has the meaning set forth in the recitals hereto.
          “Employee Benefit Plan” means any “employee benefit plan” as defined
in Section 3(3) of ERISA (other than a Multiemployer Plan), and any other
material benefit plan, program, or arrangement currently sponsored, maintained
or contributed to by, or required to be contributed to by, the Company, any of
its Subsidiaries or, solely with respect to any Employee Benefit Plan covered
under Title IV of ERISA, any of their respective ERISA Affiliates, or with
respect to which the Company, any of its Subsidiaries or, solely with respect to
any Employee Benefit Plan covered under Title IV of ERISA, any of their
respective ERISA Affiliates has or could have any liability.
          “Employment Arrangement” means any employment, termination, change in
control, retention, severance or other similar plan, agreement or arrangement
that the Company or any of its Subsidiaries maintains or is a party to, or with
respect to which the Company or any of its Subsidiaries has or could have any
liability.
          “Environmental Claims” means all civil claims asserted by any
Government Environmental Entity against, and other civil responsibilities,
obligations or liabilities of, the Company with respect to the Owned Sites and
Other Sites, relating to or arising under any Environmental Law, including
claims for restoration, corrective action or remediation of environmental or
natural resource conditions or issues, the treatment of which Environmental
Claims is to be set forth in the Environmental Claims Settlement Agreement.
          “Environmental Claims Settlement Agreement” means the agreement
(together with all appendices and exhibits thereto) to be entered into among the
Company, the United States and certain other Government Environmental Entities
regarding the Company’s liability for the Environmental Claims and the treatment
of and responsibility for the Owned Sites, the Other Sites and the Nevada Assets
after the Effective Date, which agreement shall be consistent with the Term
Sheet in all material respects.
          “Environmental Law” means, whenever in effect, all federal, tribal,
state and local statutes, regulations, ordinances and similar provisions having
the force or effect of law; all judicial and administrative orders and
determinations and all common law concerning public health and safety, worker
health and safety and pollution or protection of the environment, including the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
42 U.S.C. §§ 9601 et seq., the Resource Conservation and Recovery Act of 1976,
42 U.S.C. § 6901 et seq., and any state, local or tribal equivalents.

 

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          “Environmental Response Trusts” means the trusts to be established by
the Company on the Effective Date, to which the Company will contribute a
portion of $270 million in cash, the Owned Sites and the Nevada Assets.
          “Environmental Settlement Documents” means the Environmental Claims
Settlement Agreement and the Environmental Response Trust Agreements.
          “Environmental Trust Assets” means all Owned Sites and related assets
that are to be identified in the Environmental Claims Settlement Agreement and
which will be transferred to the Environmental Response Trusts on the Effective
Date; provided, however, that the Company may, at its expense and in accordance
with applicable health and safety requirements and under the supervision of the
United States and the relevant state, remove certain equipment and other assets
related to the Debtors’ operations from each of the Savannah, GA, Soda Springs,
ID and Mobile, AL sites and transfer such equipment and assets to alternate
locations to be determined by the Company.
          “Environmental, Health and Safety Requirements” means all applicable
domestic, foreign federal, provincial, state, supranational and local
administrative, civil and criminal Laws, Permits, Decrees, and all common law
(at law or in equity), in each case, concerning or relating to workplace health
and safety or to pollution, preservation, remediation or the protection of the
environment or natural resources, or the emission of greenhouse gases.
          “Equity Backstop Consideration” has the meaning set forth in
Section 3(a)(i).
          “ERISA” means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor thereto.
          “ERISA Affiliate” means, as applied to any Person, (i) any corporation
which is a member of a controlled group of corporations within the meaning of
Section 414(b) of the Internal Revenue Code of which that Person is a member;
(ii) any trade or business (whether or not incorporated) which is a member of a
group of trades or businesses under common control within the meaning of Section
414(c) of the Internal Revenue Code of which that Person is a member; and (iii)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Internal Revenue Code of which that Person, any corporation
described in clause (i) above or any trade or business described in clause
(ii) above is a member. Any former ERISA Affiliate of the Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of the Company
or any such Subsidiary within the meaning of this definition with respect to the
period such entity was an ERISA Affiliate of the Company or such Subsidiary and
with respect to liabilities arising after such period for which the Company or
such Subsidiary could be liable under the Internal Revenue Code or ERISA.
          “ERISA Event” means (i) a “reportable event” within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (excluding those for which the provision for 30-day notice to the
PBGC has been waived by regulation); (ii) the failure to meet the minimum
funding standard of Section 412 of the Internal Revenue Code with respect to any
Pension Plan (whether or not waived in accordance with Section 412(c) of the
Internal Revenue Code) or the failure to make by its due date a required

 

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installment under Section 430(j) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by the Company, any of its Subsidiaries or any of their respective
ERISA Affiliates from any Pension Plan with two or more contributing sponsors or
the termination of any such Pension Plan resulting in liability to the Company,
any of its Subsidiaries or any of their respective Affiliates pursuant to
Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to
terminate any Pension Plan; (vi) the imposition of liability on the Company, any
of its Subsidiaries or any of their respective ERISA Affiliates pursuant to
Sections 4062(e) or 4069 of ERISA or by reason of the application of Section
4212(c) of ERISA; (vii) the withdrawal of the Company, any of its Subsidiaries
or any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefore, or the receipt by the
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
notice from any Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or
has terminated under Section 4041A or 4042 of ERISA; (viii) the occurrence of an
act or omission which could give rise to the imposition on the Company, any of
its Subsidiaries or any of their respective ERISA Affiliates of fines,
penalties, taxes or related charges under Chapter 43 of the Internal Revenue
Code or under Section 409, Section 502(c), (i) or (l), or Section 4071 of ERISA
in respect of any Employee Benefit Plan; (ix) the assertion of a material claim
(other than routine claims for benefits) against any Employee Benefit Plan other
than a Multiemployer Plan or the assets thereof, or against the Company, any of
its Subsidiaries or any of their respective ERISA Affiliates in connection with
any Employee Benefit Plan; (x) receipt from the Internal Revenue Service of
notice of the failure of any Pension Plan (or any other Employee Benefit Plan
intended to be qualified under Section 401(a) of the Internal Revenue Code) to
qualify under Section 401(a) of the Internal Revenue Code, or the failure of any
trust forming part of any Pension Plan to qualify for exemption from taxation
under Section 501(a) of the Internal Revenue Code; or (xi) the imposition of a
lien pursuant to Section 430(k) of the Internal Revenue Code or ERISA or a
violation of Section 436 of the Internal Revenue Code.
          “Estate” means, as to each Debtor, the estate created for that Debtor
in its Chapter 11 Case pursuant to section 541 of the Bankruptcy Code.
          “Exchange Act” means the Securities Exchange Act of 1934, 15 U.S.C. §§
78a et seq.
          “Exit Financing” has the meaning set forth in Section 8(b)(iv).
          “Exit Revolver” has the meaning set forth in Section 8(b)(iv).
          “Exxaro Joint Venture Interest” means all of the Tiwest Joint Venture
Participants’ rights, title and undivided interest in and under the joint
venture arrangements referred to in the definition of Tiwest Joint Venture,
being a fifty percent undivided interest.

 

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          “Exxaro Sands” has the meaning set forth in the definition of Tiwest
Joint Venture.
          “Final Order” means, as applicable, an order or judgment of the
Bankruptcy Court or other court of competent jurisdiction with respect to the
relevant subject matter, which has not been reversed, stayed, modified, or
amended, and as to which the time to appeal, seek certiorari, or move for a new
trial, re-argument, or rehearing has expired and no appeal, petition for
certiorari, or motion for a new trial, re-argument, or rehearing has been timely
filed or if an appeal, petition for certiorari or motion for a new trial,
reargument or rehearing has been timely filed, such appeal, petition or motion
is no longer pending and any right to appeal, petition for certiorari, new
trial, reargue or rehear shall have been waived in writing in form and substance
satisfactory to the Required Backstop Parties, or as to which any appeal that
has been taken, any petition for certiorari, or motion for a new trial, review,
re-argument, or rehearing that has been or may be filed has been resolved by the
highest court to which the order or judgment was appealed or from which
certiorari was sought.
          “First Amended Plan” has the meaning set forth in Section 6(a).
          “Fiscal Year” means the fiscal year of the Company and its
Subsidiaries, ending on December 31 of each calendar year.
          “GAAP” means, subject to the limitations on the application thereof
set forth in Section 1.2 of the Credit Agreement, United States generally
accepted accounting principles in effect as of the date of determination
thereof.
          “General Unsecured Claim” means any Unsecured Claim that is not an
Intercompany Claim, an Environmental Claim, a Tort Claim or an Indirect
Environmental Claim.
          “Governmental Authority” means any foreign, federal, state,
provincial, local, national or other government, governmental department,
commission, board, bureau, court, agency or instrumentality or political
subdivision thereof or any entity, officer or examiner exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to any government or any court, in each case whether associated with a state of
the United States, the United States, or a foreign entity or government.
          “Government Environmental Entity” means federal, state, local, or
tribal Governmental Units asserting claims or having regulatory authority or
responsibilities with respect to Environmental Laws.
          “Governmental Unit” means a governmental unit as defined in section
101(27) of the Bankruptcy Code.
          “Historical Financial Statements” means (i) the audited financial
statements of the Company and its Subsidiaries for the Fiscal Year ended
December 31, 2007, (ii) the unaudited financial statements of the Company and
its Subsidiaries for each of the fiscal quarters ended March 31, June 30 and
September 30, 2008, and (iii) the Historical Monthly Statements, and in each
case, certified by the chief financial officer, chief executive officer or chief
restructuring officer of the Company, that they fairly present, in all material
respects, the financial condition of

 

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the Company and its Subsidiaries as at the dates indicated and the results of
their operations and their cash flows for the periods indicated.
          “Historical Monthly Statements” means the unaudited financial
statements of the Company and its Subsidiaries as of the most recent month ended
after the date of the most recent audited financial statements and at least
30 days prior to the closing date of the Replacement DIP Facility, consisting of
a balance sheet and the related consolidated statements of income, stockholders’
equity and cash flows, for each month ended after December 31, 2008 and
certified by the chief financial officer, chief executive officer or chief
restructuring officer of the Company, that they fairly present, in all material
respects, the financial condition of the Company and its Subsidiaries as at the
dates indicated and the results of their operations and their cash flows for the
periods indicated.
          “Holder Pro Rata Share” has the meaning set forth in the recitals
hereto.
          “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of
1976 (15 U.S.C. §§ 15c-15h, 18a).
          “Indemnified Party” has the meaning set forth in Section 9(a).
          “Indemnifying Party” has the meaning set forth in Section 9(a).
          “Indirect Environmental Claim” means Claims of private parties for
breach of contract, indemnification, contribution, reimbursement or cost
recovery related to environmental monitoring or remediation, including Claims
for contribution or direct costs under any Environmental Law.
          “Insurance Schedule” has the meaning set forth in Section 4(y).
          “Intellectual Property” shall mean, the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under the United States, multinational or foreign Laws or otherwise,
including without limitation, copyrights, copyright licenses, patents, patent
licenses, trademarks, trademark licenses, trade secrets, and trade secret
licenses, and the right to sue or otherwise recover for any past, present and
future infringement, dilution, misappropriation, or other violation or
impairment thereof, including the right to receive all proceeds therefrom,
including without limitation license fees, royalties, income, payments, claims,
damages and proceeds of suit, now or hereafter due and/or payable with respect
thereto.
          “Intercompany Claim” means any Claim held by a Debtor against another
Debtor or any Claim held by an affiliate (as defined in section 101(2) of the
Bankruptcy Code) against a Debtor.
          “Internal Revenue Code” means the Internal Revenue Code of 1986, as
amended to the date hereof and from time to time hereafter, and any successor
statute.
          “IT Systems” means (a) hardware, (b) software, (c) networks
infrastructure, and (d) all other information technology (including any such
technology embedded, contained, or

 

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used in connection with any plant, machinery and equipment), in each of clauses
(a) through (d), used or held for use in the operation of the Business.
          “Knowledge” of a Person (and other words of similar import) means the
actual knowledge after reasonable inquiry of, (i) with respect to the Company,
Dennis Wanlass, Michael Foster, John Hatmaker, Nik Pottala, John Romano, David
Marshall or Gary Barton, (ii) with respect to each site operated by the Tronox
Parties, the plant or operations manager of such site if such Person is an
employee of any Tronox Party, provided that, in the case of this clause (ii),
such Person’s knowledge after reasonable inquiry shall be limited to the conduct
of business and operations at such site, (iii) with respect solely to the Tronox
Parties’ IT Systems, Nik Pottala, and (iv) with respect to Tiwest, the Tiwest
Joint Venture, the Tiwest Joint Venture Participants and Tronox Australia, each
of the individuals listed in subclause (i) above, Robert Kirton.
          “Land” means all of the real property owned (including owned jointly
or as tenants in common) by any Tronox Party or Tiwest, which is used or held
for use in connection with the operation of the Business.
          “Law” means any law, statute, rule, regulation, ordinance and other
pronouncement having the effect of law of the United States, any foreign country
or any domestic or foreign state, county, city or other political subdivision or
of any Governmental Authority.
          “Leased Real Property” means all of the land, buildings, structures,
improvements, fixtures or other real property interests in which any Tronox
Party or Tiwest holds an interest (including held jointly) pursuant to the
Leases.
          “Leases” means all of the leases, subleases, licenses, sublicenses,
concessions and other Contracts, including all amendments, extensions, renewals,
guaranties and other agreements with respect thereto, pursuant to which any
Tronox Party or Tiwest holds any interest in real property that is used or held
for use in connection with the operation of the Business.
          “Liability” means any liability, indebtedness, guaranty, claim, loss,
damage, deficiency, assessment, responsibility or obligation of whatever kind or
nature (whether known or unknown, whether asserted or unasserted, whether
absolute or contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, whether due or to become due, whether determined or determinable,
whether choate or inchoate, whether secured or unsecured, whether matured or not
yet matured).
          “Lien” means any mortgage, deed of trust, hypothecation, contractual
restriction, pledge, lien, encumbrance, interest, charge, security interest,
put, call, other option, right of first refusal, right of first offer,
servitude, right of way, easement, lease, license, tenancy, occupancy, covenant,
condition, restriction, royalty, conditional sale or installment contract,
finance lease involve substantially the same effect, security agreement or other
encumbrance or restriction on the use, transfer or ownership of any property of
any type (including real property, tangible property and intangible property,
including Intellectual Property). For the avoidance of doubt,

 

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the definition of Lien shall not be deemed to include the grant of any license
by any Tronox Party of Intellectual Property.
          “Litigation” means any dispute, action, cause of action, suit, claim,
investigation, mediation, audit, demand, hearing or proceeding, whether civil,
criminal, administrative or arbitral, whether at law or in equity and whether
before any Governmental Authority or arbitrator.
          “Management Equity Plan” means an equity compensation plan for
management of the Company, the form of which shall be included in the Plan
Supplement and the terms of which shall be reasonably acceptable to the Company,
the Creditors’ Committee and the Required Backstop Parties.
          “Material Adverse Effect” means a material adverse effect on and/or
material adverse developments with respect to (i) the business, operations,
properties, assets or financial condition of the Company and its Subsidiaries,
in each case taken as a whole (other than those events typically resulting from
the filing of the Chapter 11 Cases, the announcement of the filing of the
Chapter 11 Cases, those events typically resulting from the emergence from the
Chapter 11 Cases, or any other events disclosed in the Company’s filings with
the SEC prior to or on the date hereof); or (ii) the ability of the Company or
any of its Subsidiaries, in each case taken as a whole, to fully and timely
perform their obligations under this Agreement, the First Amended Plan and any
other document contemplated hereby or thereby.
          “Material Contract” has the meaning set forth in Section 4(m).
          “Multiemployer Plan” means any Employee Benefit Plan which is a
“multiemployer plan” as defined in Section 3(37) of ERISA.
          “Nevada Assets” means (a) the Debtors’ interest in Basic Management,
Inc., (b) the Debtors’ interest in the Landwell Company, LP and (c) that certain
140 acre parcel of land wholly-owned by the Debtors and contiguous to the
Debtors’ Henderson, Nevada facility. For the avoidance of doubt, the Nevada
Assets do not include the Henderson, Nevada facility, which facility (but not
the real property on which it is located) is included in the Retained Assets and
which the Tronox Parties will continue to own and operate after the Effective
Date.
          “New Common Stock” has the meaning set forth in the recitals hereto.
          “New Convertible Preferred Stock” has the meaning set forth in the
recitals hereto.
          “Non-Defaulting Backstop Commitment Fee” has the meaning set forth in
Section 11(b).
          “Offered Share” has the meaning set forth in the recitals hereto.
          “Ordinary Course of Business” means the ordinary course of business
consistent with past custom and practice of the Tronox Parties and the Tiwest
Joint Venture, including, for the avoidance of doubt, the custom and practice of
the Tronox Parties and the Tiwest Joint

 

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Venture prior to and following the commencement of the Chapter 11 Cases, to the
extent consistent with the Bankruptcy Code and orders issued by the Bankruptcy
Court.
          “Organizational Documents” means (i) with respect to any corporation
or company, its certificate, memorandum or articles of incorporation,
organization or association, as amended, and its by-laws, as amended, (ii) with
respect to any limited partnership, its certificate or declaration of limited
partnership, as amended, and its partnership agreement, as amended, (iii) with
respect to any general partnership, its partnership agreement, as amended, and
(iv) with respect to any limited liability company, its articles of
organization, as amended, and its operating agreement, as amended. In the event
any term or condition of this Agreement requires any Organizational Document to
be certified by a secretary of state or similar governmental official, the
reference to any such “Organizational Document” shall only be to a document of a
type customarily certified by such governmental official.
          “Owned Real Property” means the Land, together with all buildings,
structures, improvements and fixtures located thereon, and all Easements and
other rights and interests appurtenant thereto.
          “Other Sites” means the sites not owned by the Debtors as of the
Petition Date and which Other Sites are to be identified in the Other Sites
exhibit to the Environmental Claims Settlement Agreement.
          “Owned Sites” means the domestic real property owned by the Debtors
(other than the Hamilton, Mississippi facility and the Oklahoma City, Oklahoma
Technical Center, which real property is included in the Retained Assets) and
which Owned Sites shall be identified in the Owned Sites exhibit to the
Environmental Claims Settlement Agreement as real property being transferred to
the Environmental Response Trusts on the Effective Date.
          “PBGC” means the Pension Benefit Guaranty Corporation or any successor
thereto.
          “Pension Plan” means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
          “Permit” means any franchise, approval, permit, license, order,
registration, certificate, variance, consent, authorization, exemption, emission
allowance or similar right issued, granted, given or otherwise obtained from or
by any Governmental Authority, under the authority thereof or pursuant to any
applicable Law.
          “Permitted Liens” means:
          (a) Liens in favor of the secured parties under the Credit Agreement;
          (b) Liens for taxes not yet due or, if due, if obligations with
respect to such taxes are being contested in good faith by appropriate
proceedings and reserves in accordance with GAAP with respect thereto have been
provided on the consolidated books of the Company;

 

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          (c) statutory Liens of landlords, banks (and rights of set-off), of
carriers, warehousemen, mechanics, repairmen, workmen and materialmen, and other
Liens imposed by Law (other than any such Lien imposed pursuant to Section
430(k) of the Internal Revenue Code or ERISA or a violation of Section 436 of
the Internal Revenue Code), in each case incurred in the Ordinary Course of
Business (i) for amounts not yet overdue or (ii) for amounts that are overdue
and that (in the case of any such amounts overdue for a period in excess of five
days) are being contested in good faith by appropriate proceedings, so long as
such reserves or other appropriate provisions, if any, as shall be required by
GAAP shall have been made for any such contested amounts;
          (d) Liens incurred in the Ordinary Course of Business in connection
with workers’ compensation, unemployment insurance and other types of social
security, or to secure the performance of tenders, statutory obligations, surety
and appeal bonds, bids, leases, government contracts, trade contracts,
performance and return-of-money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money or other indebtedness), so long
as no foreclosure, sale or similar proceedings have been commenced with respect
to any portion of the secured assets on account thereof;
          (e) easements, rights-of-way, restrictions, encroachments, and other
minor defects or irregularities in title, in each case which do not and will not
interfere in any material respect with the ordinary conduct of the business of
the Company or any of its Subsidiaries;
          (f) any interest or title of a lessor or sublessor under any lease of
real estate permitted under the Credit Agreement;
          (g) Liens solely on any cash earnest money deposits made by the
Company or any of its Subsidiaries in connection with any letter of intent or
purchase agreement permitted under the Credit Agreement;
          (h) purported Liens evidenced by the filing of precautionary
Creditors’ Committee financing statements relating solely to operating leases of
personal property entered into in the Ordinary Course of Business;
          (i) Liens in favor of customs and revenue authorities arising as a
matter of Law to secure payment of customs duties in connection with the
importation of goods;
          (j) any zoning or similar Law or right reserved to or vested in any
governmental office or agency to control or regulate the use of any real
property;
          (k) non-exclusive outbound licenses of patents, copyrights, trademarks
and other Intellectual Property rights granted by the Company or any of its
Subsidiaries in the Ordinary Course of Business consistent with past practice;
          (l) Liens described in Schedule 4(p)(i);
          (m) Liens consisting of customary rights of set-off for bankers liens
on amounts on deposit at banks or other financial institutions, to the extent
arising by operation of Law or otherwise, incurred in the Ordinary Course of
Business;

 

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          (n) judgment Liens in respect of judgments that do not constitute an
Event of Default under the Credit Agreement;
          (o) Liens of a collection bank arising in the Ordinary Course of
Business under §4-208 of the Uniform Commercial Code in effect in the relevant
jurisdiction; and
          (p) Liens otherwise permitted under the Credit Agreement.
          “Person” means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and Governmental Authorities.
          “Plan Support Documents” means, collectively, the Environmental
Response Trust Agreements, the Environmental Claims Settlement Agreement, the
agreement forming the Anadarko Litigation Trust and any other definitive
documentation related to the Plan.
          “Post-Petition” means the time period beginning immediately upon the
filing of the Chapter 11 Cases.
          “Preferred Stock COD” has the meaning set forth in the recitals
hereto.
          “Preferred Stock Commitment” has the meaning set forth in
Section 2(a).
          “Preferred Stock Commitment Percentage” has the meaning set forth in
the recitals hereto.
          “Preferred Stock Offering” has the meaning set forth in the recitals
hereto.
          “Proceedings” has the meaning set forth in Section 9(b).
          “Products” means the products developed, researched, manufactured
(including mining and exploring for raw materials for manufacture), distributed,
marketed or sold by the Business, including those set forth on
http://www.tronox.com/products/index.htm.
          “Projections” has the meaning set forth in Section 4(a).
          “Public Reporting Date” has the meaning set forth in Section 6(h).
          “Purchase Notice” has the meaning set forth in Section 1(e).
          “Purchase Price” has the meaning set forth in the recitals hereto.
          “Real Estate Asset” means, at any time of determination, any interest
(fee, leasehold or otherwise) then owned by the Company or any of its
Subsidiaries in any real property.

 

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          “Record Date” means the date fixed by the Bankruptcy Court for the
solicitation of acceptances and rejections of the First Amended Plan.
          “Registration Rights Agreement” has the meaning set forth in
Section 6(d).
          “Replacement DIP Facility” means the credit facility provided to the
Debtors pursuant to the Credit Agreement.
          “Required Backstop Parties” has the meaning set forth in Section 6(a).
          “Retained Assets” means all assets of the Company and its
Subsidiaries, and all of their rights, title and interest in any nature of
property of any kind, wherever located, as specified in sections 541 of the
Bankruptcy Code, other than the Environmental Trust Assets and the Nevada
Assets. For the avoidance of doubt, the Retained Assets include the Company’s
(a) Hamilton, Mississippi facility; (b) Oklahoma City, Oklahoma Technical
Center; and (c) Henderson, Nevada facility (but not the real property upon which
such facility sits); and (d) certain equipment and other assets related to the
Company’s operations from each of the Savannah, GA, Soda Springs, ID and Mobile,
AL sites, to be removed from such sites at the discretion of the Company.
          “Right” has the meaning set forth in the recitals hereto.
          “Rights Exercise Period” has the meaning set forth in Section 1(b).
          “Rights Expiration Date” means the expiration date of the Rights
Offering, as set forth in the Rights Offering Procedures to be filed for
approval by the Bankruptcy Court simultaneously with the motion to approve this
Agreement.
          “Rights Offering” has the meaning set forth in the recitals hereto.
          “Rights Offering Commitment Percentage” has the meaning set forth in
the recitals hereto.
          “Rights Procedures” has the meaning set forth in Section 1(a).
          “Rights Subscription Form” has the meaning set forth in Section 1(b).
          “Satisfaction Notice” has the meaning set forth in Section 1(e).
          “Secured” means when referring to a Claim: (a) secured by a Lien on
property in which the Estate has an interest, which Lien is valid, perfected,
and enforceable pursuant to applicable law or by reason of a Bankruptcy Court
order, or that is subject to setoff pursuant to section 553 of the Bankruptcy
Code, to the extent of the value of the creditor’s interest in the Estate’s
interest in such property or to the extent of the amount subject to setoff, as
applicable, as determined pursuant to section 506(a) of the Bankruptcy Code or
(b) otherwise allowed as such pursuant to the First Amended Plan.

 

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          “Securities” means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
“securities” or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
          “Securities Act” means the Securities Act of 1933, 15 U.S.C. §§
77a-77aa.
          “Subscription Agent” means the subscription agent for the Rights
Offering.
          “Subsidiary” means with respect to any Person, any corporation,
partnership, limited liability company, association, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof; provided, that in determining the percentage of ownership interests of
any Person controlled by another Person, no ownership interest in the nature of
a “qualifying share” of the former Person shall be deemed to be outstanding.
          “Superior Transaction” has the meaning set forth in Section 14.
          “Tax” or “Taxes” means (a) all United States federal, state or local
or non-United States income, gross receipts, license, payroll, employment,
excise, severance, stamp, occupation, premium, windfall profits, environmental
(including taxes under Section 59A of the IRC), customs duties, capital stock,
franchise, profits, withholding, social security (or similar), unemployment,
disability, real property, personal property, ad valorem, escheat, sales, use,
transfer, registration, value added, GST, alternative or add-on minimum,
estimated or other tax of any kind whatsoever, whether computed on a separate or
consolidated, unitary or combined basis or in any other manner, including any
interest, penalty or addition thereto, whether or not disputed, and
(b) Liability for items within clause (a) of any other Person by Contract,
operation of Law (including Treasury Regulations Section 1.1502-6) or otherwise.
          “Taxing Authority” means, with respect to any Tax, a Governmental
Authority that imposes such Tax, and the agency (if any) charged with the
collection of such Tax for such entity, including, without limitation, any
Governmental Authority that imposes, or is charged with collecting, Social
Security or similar charges or premiums.
          “Tax Return” means any return, declaration, report, claim for refund
or information return or statement relating to Taxes, including any schedule or
attachment thereto, and including any amendment thereof.
          “Term Sheet” means the term sheet attached hereto as Exhibit B,
containing the terms of the proposed restructuring.

 

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          “Tiwest” means Tiwest Pty Ltd, ACN 009 343 364, a Western Australia
company.
          “Tiwest Joint Venture” means the joint venture arrangement governed by
(a) that certain Cooljarloo Mining Joint Venture Agreement, dated as of
November 3, 1988, by and among Yalgoo Minerals Pty. Ltd. (“Yalgoo”), Tronox
Australia and the other parties thereto, as amended by that certain Amending
Deed to the Cooljarloo Mining Joint Venture Agreement, dated as of March 26,
1991, by and among Yalgoo, Tronox Australia and the other parties thereto;
(b) that certain Processing Joint Venture Agreement, dated as of November 3,
1988, by and among Yalgoo, Tronox Australia and the other parties thereto, as
amended by that certain Amending Deed to the Processing Joint Venture Agreement,
dated as of March 26, 1991, by and among Yalgoo, Tronox Australia and the other
parties thereto as further amended by the Supplemental Deed to Processing Joint
Venture Agreement, dated June 30, 2008, by and among Yalgoo, Tronox Australia,
Exxaro Australia Sands Pty Ltd (“Exxaro Sands”) and the other parties; (c) that
certain Jurien Exploration Joint Venture Agreement, dated as of March 9, 1989,
by and among Exxaro Sands, Tific Pty Ltd (“Tific”), Tronox Australia and the
other parties thereto; (d) that certain Co operation Deed, dated as of
November 3, 1988, by and among Exxaro Sands, Tronox Australia and the other
parties thereto; (e) that certain Operations Management Agreement, dated as of
December 16, 1988, by and among Yalgoo, Tronox Australia and the other parties
thereto, as amended by that certain Supplemental Deed to the Operations
Management Agreement dated as of July 23, 2008 by and among Yalgoo, Tronox
Australia and the other parties thereto; (f) that certain Development Agreement,
dated March 25, 2008, by and among Tronox LLC, Tronox Australia, Yalgoo, Exxaro
Sands and other parties thereto; (g) that certain Mineral Sands (Cooljarloo)
Mining and Processing Agreement, dated November 8, 1988 by and among the State
of Western Australia Yalgoo Tronox Australia and other parties thereto;
(h) those certain other documents, agreements and amendments entered into from
time and time in connection with any of the foregoing agreements; pursuant to
which agreements the parties operate a chloride process titanium dioxide plant
located in Kwinana, Western Australia, a mining venture in Cooljarloo, Western
Australia, and a mineral separation plant and a synthetic rutile processing
facility in Muchea, Western Australia; (i) those certain other documents
relating to or concerning exploration ventures at Jurien, Dongara and elsewhere
in Western Australia; (j) those certain other documents relating to or
concerning an office building in Bentley, Western Australia for the purpose of
providing certain corporate services; (k) that certain Bunbury Port Authority
Lease of Port Facilities Bunbury, dated October 1, 2004, by and between Bunbury
Port Authority and Tiwest; and (1) that certain Russell Park, Henderson
Warehouse Lease, dated November 3,2007, by and between ISPT Pty Ltd and Tiwest.
          “Tiwest Joint Venture Documents” means the documents and agreements
referred to in the definition “Tiwest Joint Venture”, together with all
documents and agreements entered into from time to time in connection with the
Tiwest Joint Venture and either referred to in any of those agreements or
otherwise relating or ancillary to the Tiwest Joint Venture.
          “Tiwest Joint Venture Interests” means all of Tronox Australia’s
rights, title and interest in, to and under the Tiwest Joint Venture, including
the Tiwest Shares.
          “Tiwest Joint Venture Participants” means Yalgoo, Senbar Holdings Pty
Limited, a Western Australian corporation, Synthetic Rutile Holdings Pty
Limited, Western Australian

 

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corporation, Pigment Holdings Pty Limited, a Western Australian corporation and
Tific, a Western Australian corporation.
          “Tiwest Shares” means 50 B and 50 D ordinary fully paid shares in the
capital of Tiwest, representing fifty percent of all of the ordinary fully paid
issued shares in the capital of Tiwest.
          “Tort Claim” means non-governmental Claims against the Debtors,
whether such Claims are known or unknown, whether by contract, tort or statute,
whether existing or hereinafter arising, for death, bodily injury, sickness,
disease, medical monitoring or other personal physical injuries or damage to
property to the extent caused or allegedly caused directly or indirectly by the
presence of or exposure to any product or toxin manufactured or disposed of, or
other property owned, operated or used for disposal by, the Debtors or any
entity (as such term is defined in section 101(15) of the Bankruptcy Code) for
whose products or operations the allegedly has liability, including all such
Claims relating to the Owned Sites, the Other Sites, the Environmental Trust
Assets, the Nevada Assets or the Retained Assets to the extent owned, operated
or used for disposal by, the Debtors prior to the Effective Date and not by the
Debtors after the Effective Date. For the avoidance of doubt, Tort Claims do not
include claims against the Debtors brought directly by a past or present
employee of the Debtors under an applicable workers’ compensation statute.
          “Transaction Expenses” has the meaning set forth in Section 3(b)(i).
          “Tronox Australia” means Tronox Western Australia Pty Ltd (ACN 009 331
195), a Western Australia company.
          “Tronox Parties” means the Tronox Debtors and each of their
Subsidiaries.
          “Tronox Worldwide” means Tronox Worldwide LLC, a Delaware limited
liability company.
          “Unsecured Claim” means any Claim that is neither Secured nor entitled
to priority under the Bankruptcy Code or any order of the Bankruptcy Court.
          “Unsubscribed Shares” means the Offered Shares not purchased by
Eligible Holders in the Rights Offering on or before the Rights Expiration Date
and any fractional shares not exercisable pursuant to the Rights Procedures,
aggregated and rounded up.
          “Voting Deadline” means the time and date on which all votes with
respect to the First Amended Plan must be received by the Company, as further
described in the First Amended Plan.
          “WARN Act” has the meaning set forth in Section 4(o)(i).
          “Yalgoo” has the meaning set forth in the definition of Tiwest Joint
Venture.

 

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Exhibit A
to
Equity Commitment Agreement
PREFERRED STOCK COD

 

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CERTIFICATE OF DESIGNATIONS, PREFERENCES,
AND RELATIVE, PARTICIPATING, OPTIONAL AND
OTHER SPECIAL RIGHTS
OF
SERIES A SENIOR CONVERTIBLE PREFERRED STOCK
OF
TRONOX INCORPORATED
 
Pursuant to Section 151(g) of the
General Corporation Law of the State of Delaware
 
     The undersigned, [Michael J. Foster, the Vice President, General Counsel
and Secretary] of Tronox Incorporated (the “Corporation”), a corporation
organized and existing under the General Corporation Law of the State of
Delaware (the “DGCL”), certifies that pursuant to a meeting of the board of
directors of the Corporation (the “Board of Directors”) and the authority
expressly granted to and vested in the Board of Directors by the [Amended
Certificate of Incorporation] of the Corporation (as amended from time to time,
the “Certificate of Incorporation”) which authorizes the issuance by the
Corporation of up to 600,000 shares of preferred stock, par value $0.01 per
share (the “Preferred Stock”) and in accordance with the provisions of Section
151(g) of the DGCL, the Board of Directors on • duly adopted the following
resolution, which resolution remains in full force and effect on the date
hereof:
     RESOLVED, that pursuant to Article •, Section • of the Certificate of
Incorporation, the Board of Directors hereby designates, creates, authorizes and
provides for the issuance of Series A Senior Convertible Preferred Stock, par
value $0.01 per share, with an initial issue price of $25.00 per share,
consisting of 600,000 shares on the terms and with the voting powers,
designations, preferences, and relative, participating, optional or other
special rights and such qualifications, limitations or restrictions set forth
herein (in addition to those set forth in the Certificate of Incorporation).
     Capitalized terms used herein but not defined have the meanings ascribed to
them in Section 10 below.

     
 
   
 
  [Michael J. Foster, Vice President, General Counsel and Secretary]

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          Section 1. Dividends.
          1.1. General Obligation. Holders of the Series A Senior Convertible
Preferred Stock (the “Series A Preferred”) shall be entitled to receive, when
and as declared by the Board of Directors and out of funds legally available
therefor under the DGCL, preferential dividends in cash as provided in this
Section 1. Dividends shall be cumulative, shall accrue on each share of the
Series A Preferred (each, a “Share”) on a daily basis based on the actual number
of days elapsed and a 360-day year at the rate of the Preferred Return of the
Liquidation Value and shall compound quarterly on each Dividend Payment Date (as
defined below). Dividends shall accrue on the Series A Preferred from and
including the date of issuance of each such Share (the “Issue Date”) to and
including the first to occur of (i) the date on which the Liquidation Value of
such Share is paid to the holder thereof in connection with the liquidation of
the Corporation or the redemption of such Share by the Corporation, (ii) the
date on which such Share is converted into shares of Conversion Stock hereunder
or (iii) the date on which such Share is otherwise acquired by the Corporation.
Such dividends shall accrue whether or not they have been declared and whether
or not there are profits, surplus or other funds of the Corporation legally
available for the payment of dividends, and such dividends shall be cumulative
such that all accrued and unpaid dividends shall be fully paid or declared with
funds irrevocably set apart for payment before any dividends may be declared or
paid with respect to any Junior Securities. The date on which the Corporation
initially issues any Share shall be deemed to be its “Issue Date” regardless of
the number of times transfer of such Share is made on the stock records
maintained by or for the Corporation and regardless of the number of
certificates which may be issued to evidence such Share.
          1.2. Dividend Payment Dates. All dividends which have accrued on the
Series A Preferred shall be payable in cash on March 31, June 30, September 30
and December 31 of each year (each such date, a “Dividend Payment Date”),
beginning as of the first Dividend Payment Date occurring after the Issue Date,
in each case as and when declared by the Board of Directors, to holders of
record of the Shares on the March 15, June 15, September 15 or December 15, as
the case may be, immediately preceding such Dividend Payment Date. The dividend
payment period for any dividend payable on a Dividend Payment Date shall be the
period beginning on the immediately preceding Dividend Payment Date (or on the
Issue Date in the case of the first dividend payment period) and ending on the
day preceding such applicable Dividend Payment Date. If any date on which a
payment of a dividend or any other amount is due in respect of the Series A
Preferred is not a business day, then such payment shall be made on the next day
that is a business day. To the extent not paid on the Dividend Payment Dates,
all dividends which have accrued on each Share outstanding during the
three-month period (or other period in the case of the initial Dividend Payment
Date) ending upon each such Dividend Payment Date shall be accumulated and shall
remain accumulated dividends with respect to such Share until paid to the holder
thereof.
          1.3. Distribution of Partial Dividend Payments. Except as otherwise
provided herein, if at any time the Corporation pays less than the total amount
of dividends then accrued with respect to the Series A Preferred, then such
payment shall be distributed pro rata among the

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holders thereof based upon the aggregate accrued and unpaid dividends on Shares
held by each such holder.
          1.4. Participating Dividends. In addition to any other dividends
accruing or declared hereunder, in the event that the Corporation declares or
pays any dividend upon the Common Stock, the Corporation shall also declare and
pay to the holders of the Series A Preferred at the same time that it declares
and pays such dividends to the holders of the Common Stock, a dividend in an
amount per Share (such amount, the “Deemed Conversion Dividend”) equal to the
product of (i) the per share dividend declared and paid in respect of each share
of Common Stock and (ii) the number of shares of Common Stock into which such
Share of Series A Preferred is convertible at the then-current Conversion Price.
Any dividend or distribution payable on the Series A Preferred pursuant to this
Section 1.4 shall be paid in the same form of consideration (whether cash,
securities or any other form of property or assets, as the case may be) as the
corresponding dividend or distribution on the Common Stock. Dividends payable
pursuant to this Section 1.4 shall be payable on the same date that dividends
are payable to holders of shares of Common Stock. No dividends shall be payable
to holders of shares of Common Stock unless the full dividends contemplated by
Section 1.4 are paid at the same time in respect of the Series A Preferred.
          Section 2. Liquidation.
          Upon any liquidation, dissolution or winding up of the Corporation
(whether voluntary or involuntary), each holder of Series A Preferred shall be
entitled to be paid, before any distribution or payment is made upon any Junior
Securities, an amount in cash equal to the greater of (i) the aggregate
Liquidation Value of all Shares held by such holder or (ii) the amount to which
such holder would be entitled to receive upon such liquidation, dissolution or
winding up if all of such holder’s Series A Preferred were converted into
Conversion Stock immediately prior to such event, and the holders of Series A
Preferred shall not be entitled to any further payment with respect to their
Shares. If upon any such liquidation, dissolution or winding up of the
Corporation, the assets of the Corporation to be distributed among the holders
of the Series A Preferred are insufficient to permit payment to such holders of
the aggregate amount which they are entitled to be paid under this Section 2,
then the entire assets available to be distributed to the Corporation’s
stockholders shall be distributed pro rata among such holders based upon the
aggregate Liquidation Value of the Series A Preferred held by each such holder.
Not less than 30 days prior to the payment date stated therein, the Corporation
shall deliver written notice of any such liquidation, dissolution or winding up
to each record holder of Series A Preferred, setting forth in reasonable detail
the amount of proceeds to be paid with respect to each Share and each share of
Common Stock in connection with such liquidation, dissolution or winding up. For
purposes of this Section 2, the merger or consolidation of the Corporation with
any other Person, including a merger or consolidation in which the holders of
the Series A Preferred receive cash, securities or other property for their
Shares, or the sale, lease or exchange for cash, securities or other property of
all or substantially all of the assets of the Corporation, in each case shall
not constitute a liquidation, dissolution or winding-up of the Corporation.

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          Section 3. Priority of Series A Preferred on Dividends and
Redemptions.
          3.1. Redemptions. So long as any Share remains outstanding, without
the prior written consent of the holders of at least a majority of the
outstanding Shares, the Corporation shall not, nor shall it permit any
Subsidiary to, redeem, purchase or otherwise acquire directly or indirectly any
Junior Securities or set aside any funds for such purpose; provided that the
foregoing restriction shall not apply to (i) the purchase or repurchase of
Junior Securities from any employee, officer, director, manager or consultant
of, or other person performing services for, the Corporation or any of its
Subsidiaries (or such person’s estate or current or former spouse) pursuant to
any agreement under which the Corporation or any of its Subsidiaries has the
right or obligation to purchase or repurchase Junior Securities from such person
in connection with the termination of such person’s employment with, or
cessation of services for, the Corporation or any of its Subsidiaries or the
breach of any restrictive covenant in any agreement entered between the
Corporation or any of its Subsidiaries, on the one hand, and such person, on the
other hand; or (ii) the purchase or redemption of Junior Securities within
60 days after the Corporation has complied with the Repurchase Offer provisions
of Section 4.5 with respect to such repurchase or redemption.
          3.2. Dividends. If at any time the Corporation shall have failed to
pay in full in cash all dividends which have accrued on any outstanding Share at
the times such dividends are due and payable, the Corporation shall not,
directly or indirectly, pay or declare any dividend or make any distribution
upon any Junior Securities or set aside any funds for such purpose unless prior
to or concurrently with such payment, declaration, distribution or setting aside
of any funds, all accrued and unpaid dividends that have become due and payable
on all outstanding Shares shall have been or be declared and paid or set aside
for payment; provided that the foregoing restriction shall not apply to any
declaration or payment of a dividend or other distribution in connection with
any stockholders’ rights plan.
          Section 4. Redemptions.
          4.1. Mandatory Redemptions. The Corporation shall, without premium or
penalty, redeem all of the Shares then outstanding on [to insert the date that
is six years from the Issue Date]; provided that if the Corporation is not
permitted under applicable law to pay any portion of the Redemption Value for
any Share being redeemed, then the Corporation shall pay such unpaid amount to
the holder of such Share as soon thereafter as funds of the Corporation are
legally available for such payment. Upon any such redemption, the Corporation
shall pay a price per such Share equal to the Redemption Value thereof.
          4.2. Optional Redemptions. The Corporation may at any time and from
time to time on or after the date that is three years from the Issue Date redeem
all or any portion of the Shares then outstanding at the then applicable
Redemption Value. In addition, the Corporation may at any time and from time to
time on or after the date that is two years from the Issue Date but prior to the
date that is three years from the Issue Date redeem all or any portion of the
Shares then outstanding at the then applicable Redemption Value if (i) the
Common Stock is at such time listed on the New York Stock Exchange or The NASDAQ
National Market, and (ii) the Current Market Price of the Common Stock shall
have been no less than $40.11 (as such amount shall be adjusted for stock
splits, reverse stock splits and similar occurrences) for a

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period of 30 consecutive Trading Days ending on the third Trading Day prior to
the date of any notice of redemption delivered pursuant to this Section 4.2 and
Section 4.4.
          4.3. Redemption Payments. For each Share which is to be redeemed
hereunder, the Corporation shall be obligated on the Redemption Date to pay to
the holder thereof (upon surrender by such holder at the Corporation’s principal
office of the certificate representing such Share) an amount in cash in
immediately available funds equal to the Redemption Value of such Share. If the
funds of the Corporation legally available for redemption of Shares on any
Redemption Date are insufficient to redeem the total number of Shares to be
redeemed pursuant to Section 4.1 or Section 4.2, as applicable, on such date,
then those funds which are legally available shall be used to redeem the maximum
possible number of Shares pro rata among the holders of the Shares to be
redeemed pursuant to Section 4.1 or Section 4.2, as applicable, based upon the
aggregate Redemption Value of such Shares held by each such holder. At any time
thereafter when additional funds of the Corporation are legally available for
the redemption of Shares, such funds shall immediately be used to redeem the
balance of the Shares which the Corporation has become obligated to redeem on
any Redemption Date but which it has not redeemed. Except as otherwise provided
herein, if at any time the Corporation redeems less than the total amount of the
Shares outstanding pursuant to Section 4.1 or Section 4.2, then the Corporation
shall redeem such Shares pro rata among the holders thereof based upon the
number of Shares held by each such holder.
          4.4. Notice of Redemption. Except as otherwise provided herein, the
Corporation shall give written notice of each redemption of Series A Preferred
to each record holder thereof not more than 60 nor less than 30 days prior to
the date on which such redemption is to be made. If fewer than the total number
of Shares represented by any certificate are redeemed, then a new certificate
representing the number of unredeemed Shares shall be issued to the holder
thereof without cost to such holder within five business days after surrender of
the certificate representing the redeemed Shares.
          4.5. Repurchase at the Option of Holders upon Certain Events.
          (i) Material Action. Prior to the Corporation taking any Material
Action, the Corporation shall give written notice (the “Material Action Notice”)
of such Material Action to each record holder of Series A Preferred not more
than 60 nor less than 30 days prior to the date on which such Material Action is
proposed to be taken, which Material Action Notice shall set forth the Material
Action to be taken in reasonable detail, and each holder of Series A Preferred
shall have the right to require the Corporation to repurchase all or any portion
of such holder’s Shares at the Repurchase Price (as defined below) pursuant to
the terms of this Section 4.5.
          (ii) Repurchase Offer. Within five days following delivery of (A) a
Fundamental Change Notice in connection with a Fundamental Change which requires
that the Corporation makes a repurchase offer pursuant to Section 6.2(iv), or
(B) a Material Action Notice pursuant to Section 4.5(i), the Corporation shall
be required to effect an Offer to Purchase (as defined below) and deliver an
offer notice (an “Offer Notice”) to each holder of Shares in accordance with
Section 4.5(iii). For the avoidance of doubt, the Fundamental Change Notice or
Material Action Notice, as applicable, may include and incorporate the Offer
Notice. In addition to the requirements of Section 4.5(iii), such Offer Notice
shall provide that each holder of Series

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A Preferred has the right to require the Corporation to repurchase for cash all
or any portion of such holder’s Shares at a repurchase price per Share equal to
the Repurchase Price, in accordance with the procedures set forth in
Section 4.5(iii). Notwithstanding the foregoing, in connection with any
Fundamental Change, the Corporation shall not be required to make an Offer to
Purchase upon a Fundamental Change if a third party that is party to the
Fundamental Change transaction makes an Offer to Purchase in the manner, at the
times and otherwise in compliance with the requirements set forth in
Sections 4.5(ii) and 4.5(iii) and purchases all Shares validly tendered and not
withdrawn pursuant to such Offer to Purchase. If any shares of Series A
Preferred that are required to be repurchased on the Repurchase Date (as defined
below) pursuant to the provisions of this Section 4.5(ii) and Section 4.5(iii)
are not so repurchased (whether or not any contractual or other restrictions
apply to such repurchase and whether or not funds are legally available
therefor), then the Repurchase Price with respect to such shares of Series A
Preferred that are not so repurchased shall increase by 2% until such shares of
Series A Preferred are repurchased in full in accordance with the provisions of
this Section 4.5(ii) and Section 4.5(iii).
          (iii) Offer to Purchase Provisions. In the event that the Corporation
shall be required to commence an offer to all holders of Series A Preferred to
repurchase Shares pursuant to Section 4.5(ii) (an “Offer to Purchase”), it shall
follow the procedures specified below:
          (a) The Offer to Purchase shall remain open for a period of 20
business days following its commencement and no longer, except to the extent
that a longer period is required by applicable law (the “Offer Period”). No
later than five business days after the termination of the Offer Period (the
“Repurchase Date”), the Corporation shall purchase all shares of Series A
Preferred validly tendered in response to the Offer to Purchase. Payment for any
shares of Series A Preferred so repurchased shall be made in the same manner as
dividend payments are made. If the Repurchase Date is on or after a dividend
record date and on or before the related Dividend Payment Date of such dividend,
then any accrued and unpaid dividends shall be paid to the Person in whose name
the applicable shares of Series A Preferred are registered at the close of
business on such record date, and no additional dividends shall be payable to
holders of Series A Preferred who validly tender such Shares pursuant to the
Offer to Purchase.
          (b) The Offer Notice shall contain all instructions and materials
necessary to enable such holders to tender Shares pursuant to such Offer to
Purchase. The Offer to Purchase shall be made to all holders of shares of
Series A Preferred. The Offer Notice, which shall govern the terms of the Offer
to Purchase, shall state:

  (1)   whether the Offer to Purchase is being made pursuant to Section 4.5 or
Section 6.2(iv), and the length of time the Offer to Purchase shall remain open;
    (2)   the Repurchase Price per Share and the Repurchase Date;     (3)   that
any shares of Series A Preferred not validly tendered or accepted for payment
shall continue to accrue dividends;

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  (4)   that, unless the Corporation defaults in making payment on the
Repurchase Date, any shares of Series A Preferred accepted for payment pursuant
to the Offer to Purchase shall cease to accrue dividends after the Repurchase
Date;     (5)   that holders of Series A Preferred electing to have Shares
purchased pursuant to the Offer to Purchase may elect to have any or all of such
Shares purchased;     (6)   that holders of Series A Preferred electing to have
any Shares purchased pursuant to the Offer to Purchase shall be required to
surrender the Shares, with any additional documents reasonably requested by the
Corporation, or transfer such Shares by book-entry transfer, to the Corporation
at the address specified in the notice at least three days before the Repurchase
Date;     (7)   that holders of Series A Preferred shall be entitled to withdraw
their election at any time prior to the expiration of the Offer Period by
delivering to the Corporation a notice in accordance with Section 12 setting
forth the name of the holder of Series A Preferred, the number of Shares such
holder delivered for repurchase and a statement that such holder is withdrawing
such holder’s election to have such shares of Series A Preferred repurchased;  
  (8)   that holders of Series A Preferred whose Shares were repurchased only in
part shall be issued new shares of Series A Preferred equal in liquidation
preference to the unpurchased portion of the shares of Series A Preferred
surrendered (or transferred by book-entry transfer); and     (9)   any other
information required by applicable law.

          (c) On the Repurchase Date, the Corporation shall accept for payment
all Shares validly tendered pursuant to the Offer to Purchase, and shall provide
notice to the holders of Series A Preferred stating that such shares of Series A
Preferred were accepted for payment by the Corporation in accordance with the
terms of Section 4.5(ii). The Corporation shall promptly (but in any case not
later than two business days after the Repurchase Date) deliver to each
tendering holder of Series A Preferred by wire transfer of immediately available
funds an amount equal to the Repurchase Price multiplied by the number of Shares
validly tendered by such holder and accepted by the Corporation for purchase,
and the Corporation shall promptly issue new shares of Series A Preferred, and
the Company shall mail or deliver such new shares of Series A Preferred to such
holder, in an amount equal to any unpurchased portion of the Shares
surrendered..

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          (d) The Corporation shall comply with the provisions of Section 13(e)
and 14(d) of the United States Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder (collectively, the “Exchange Act”), and any
other applicable provisions of law in connection with the Offer to Purchase.
          (e) Notwithstanding any other provision herein, the Corporation shall
be entitled to consummate the Material Action contemplated in the Material
Action Notice if it complies with the provisions set forth in this Section 4.5.
          4.6. Dividends After Redemption or Repurchase. No Share shall be
entitled to any dividends accruing after the date on which the Redemption Value
or the Repurchase Price, as applicable, of such Share is paid to the holder of
such Share. On such date, all rights of the holder of such Share shall cease,
and such Share shall no longer be deemed to be issued and outstanding.
          4.7. Redeemed, Repurchased or Otherwise Acquired Shares. Any Shares
which are redeemed, repurchased or otherwise acquired by the Corporation shall
be canceled and retired to authorized but unissued shares and shall not be
reissued, sold or transferred.
          4.8. Determination of the Number of Each Holder’s Shares to be
Redeemed. Except as otherwise provided herein, the number of Shares to be
redeemed from each holder thereof in redemptions by the Corporation under this
Section 4 shall be the number of Shares determined by multiplying the aggregate
Redemption Value of the Shares to be redeemed times a fraction, the numerator of
which shall be the aggregate Redemption Value of the Shares then held by such
holder and the denominator of which shall be the aggregate Redemption Value of
all Shares then outstanding; provided that no fractional Shares may be redeemed.
          Section 5. Voting Rights.
          5.1. Except as otherwise provided herein and as otherwise required by
applicable law, the Series A Preferred shall have no voting rights; provided
that each holder of Series A Preferred shall be entitled to notice of all
stockholders meetings at the same time and in the same manner as notice is given
to all stockholders entitled to vote at such meetings.
          5.2. So long as any shares of Series A Preferred are outstanding, the
vote or consent of the holders of at least a majority of the outstanding shares
of Series A Preferred, voting as a single, separate class, given in person or by
proxy, either in writing without a meeting or by vote at any meeting called for
the purpose, shall be necessary for effecting or validating, whether or not such
approval is required by Delaware law any amendment, alteration or repeal
(including by means of a merger, consolidation or otherwise) of any provision of
the Certificate of Incorporation or by-laws of the Corporation (including this
Certificate of Designations) (collectively, the “Governing Documents”) that
would alter or change the rights, preferences or privileges of the Series A
Preferred so as to affect them adversely; provided, however, that (i) any
creation or issuance, or any increase in the authorized or issued amount, of any
Junior Securities shall not, in and of itself, be deemed to adversely affect the
voting powers, preferences or special rights of the Series A Preferred Stock,
and holders of Series A Preferred shall have no right to vote solely by reason
of such an increase, creation or issuance and (ii) the Corporation

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shall be entitled to amend or alter the Governing Documents (other than this
Certificate of Designations) without the consent of any holder of shares of
Series A Preferred if (A) such amendment or alteration is required to implement
a Material Action and (B) such amendment or alteration is described in
reasonable detail in the Material Action Notice delivered in connection with
such Material Action. The holders of Series A Preferred shall have one vote per
Share on any matter on which holders of Series A Preferred Stock are entitled to
vote as a single, separate class.
          Section 6. Conversion.
          6.1. Conversion Procedure.
          (i) At any time and from time to time, any holder of Series A
Preferred may convert all or any portion of the Series A Preferred (including
any fraction of a Share) held by such holder into a number of shares of
Conversion Stock computed by dividing the Liquidation Value as of the Conversion
Date (as defined below) of the Shares to be converted by the Conversion Price
then in effect.
          (ii) Except as otherwise provided herein, each conversion of Series A
Preferred shall be deemed to have been effected as of the close of business on
the date (the “Conversion Date”) on which the certificate or certificates
representing the Series A Preferred to be converted have been surrendered for
conversion at the principal office of the Corporation. At the time any such
conversion has been effected, the rights of the holder of the Shares converted
as a holder of Series A Preferred shall cease, and the Person or Persons in
whose name or names any certificate or certificates for shares of Conversion
Stock are to be issued upon such conversion shall be deemed to have become the
holder or holders of record of the shares of Conversion Stock represented
thereby.
          (iii) The conversion rights of any Share subject to redemption
hereunder shall terminate at the close of business on the Redemption Date for
such Share unless the Corporation has failed to pay to the holder thereof in
cash the full Redemption Value of such Share on such date, in which case the
conversion rights shall continue until such Redemption Value is actually paid in
full.
          (iv) Notwithstanding any other provision hereof, if a conversion of
Series A Preferred is to be made in connection with a Public Offering or a
Fundamental Change or other transaction affecting the Corporation, then the
conversion of any Shares may, at the election of the holder thereof, be
conditioned upon the consummation of such event or transaction, in which case
such conversion shall not be deemed to be effective until immediately prior to
such consummation, and shall be conditioned upon such consummation.
          (v) As soon as possible after a conversion of Series A Preferred has
been effected (but in any event within five business days in the case of
subsection (a) below), the Corporation shall deliver to the converting holder:

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          (a) a certificate or certificates representing the number of shares of
Conversion Stock issuable by reason of such conversion in such name or names and
such denomination or denominations as the converting holder has specified; and
          (b) a certificate representing any Shares which were represented by
the certificate or certificates delivered to the Corporation in connection with
such conversion but which were not converted.
          (vi) The issuance of certificates for shares of Conversion Stock upon
conversion of Series A Preferred shall be made without charge to the holders of
such Series A Preferred for any issuance tax in respect thereof or other cost
incurred by the Corporation in connection with such conversion and the related
issuance of shares of Conversion Stock. Upon conversion of each Share, the
Corporation shall take all such actions as are reasonably necessary in order to
insure that the Conversion Stock issuable with respect to such conversion shall
be validly issued, fully paid and nonassessable, free and clear of all taxes,
liens, charges and encumbrances with respect to the issuance thereof.
          (vii) The Corporation shall not close its books against the transfer
of Series A Preferred or of Conversion Stock issued or issuable upon conversion
of Series A Preferred in any manner which interferes with the timely conversion
of any share of Series A Preferred. The Corporation shall assist and cooperate
with any holder of Series A Preferred required to make any governmental filings
or obtain any governmental approval prior to or in connection with any
conversion of Series A Preferred hereunder (including, without limitation,
making any governmental filings required to be made by the Corporation).
          (viii) The Corporation shall at all times reserve and keep available
out of its authorized but unissued shares of Conversion Stock, solely for the
purpose of issuance upon the conversion of the Series A Preferred, such number
of shares of Conversion Stock issuable upon the conversion of all outstanding
Series A Preferred. All shares of Conversion Stock which are so issuable shall,
when issued, be duly and validly issued, fully paid and nonassessable and free
from all taxes, liens, charges and encumbrances. The Corporation shall take all
such actions as may be necessary to assure that all such shares of Conversion
Stock may be so issued without violation of any applicable law or governmental
regulation or any requirements of any domestic securities exchange upon which
shares of Conversion Stock may be listed (except for official notice of issuance
which shall be immediately delivered by the Corporation upon each such
issuance). The Corporation shall not take any action which would cause the
number of authorized but unissued shares of Conversion Stock to be less than the
number of such shares required to be reserved hereunder for issuance upon
conversion of the Series A Preferred.
          6.2. Conversion Price.
          (i) If on or after the Issue Date, the Corporation issues or sells, or
in accordance with Section 6.3 is deemed to have issued or sold, any shares of
Common Stock for a consideration per share less than the Reference Price in
effect immediately prior to the time of such issue or sale, then immediately
upon such issue or sale or deemed issue or sale the Conversion Price shall be
reduced to the Conversion Price determined by dividing (a) the sum of (1) the
product derived by multiplying the Conversion Price in effect immediately prior
to such

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issue or sale by the number of shares of Common Stock Deemed Outstanding
immediately prior to such issue or sale, plus (2) the consideration, if any,
received by the Corporation upon such issue or sale, by (b) the number of shares
of Common Stock Deemed Outstanding immediately after such issue or sale.
          (ii) Notwithstanding the foregoing, there shall be no adjustment in
the Conversion Price as a result of any issue or sale (or deemed issue or sale)
of shares of Common Stock, or options to purchase such Common Stock, to
employees, directors, consultants, other service providers or vendors of the
Corporation and any of its Subsidiaries pursuant to stock option plans and stock
ownership plans approved by the Board of Directors.
          (iii) If on or after the Issue Date, a Company Offer shall expire,
then and in each such event the Conversion Price in effect immediately prior to
the close of business on the date of the last time (the “Expiration Time”)
tenders could have been made pursuant to such Company Offer shall be decreased
by multiplying such Conversion Price by a fraction (not to be greater than 1):
          (a) the numerator of which shall be equal to (1) the product of
(A) the Current Market Price per share of the Common Stock on the date of the
Expiration Time and (B) the number of shares of Common Stock outstanding
(including any tendered shares) on the Expiration Time less (2) the fair market
value (as determined in good faith by the Board of Directors, whose
determination shall be conclusive) of the aggregate consideration payable to
stockholders for all shares validly tendered and not withdrawn as of the
Expiration Time and accepted for purchase by the Corporation pursuant to such
Company Offer (the shares so accepted for purchase, being referred to as the
“Purchased Shares”); and
          (b) the denominator of which shall be equal to the product of (1) the
Current Market Price per share of the Common Stock on the date of the Expiration
Time and (2) the number of shares of Common Stock outstanding (including any
tendered shares) on the Expiration Time less the number of Purchased Shares.
Any adjustment under this Section 6.2(iii) shall become effective immediately
prior to the opening of business on the day after the Expiration Time.
          (iv) Fundamental Changes.
          (a) If a Fundamental Change shall occur or is expected to occur at any
time prior to the date that is three years after the Issue Date, then the
Corporation shall deliver to each holder of the Series A Preferred, not less
than 30 days nor more than 60 days prior to the anticipated effective date for
the consummation of the Fundamental Change (such effective date, the
“Fundamental Change Effective Date”), a notice (the “Fundamental Change
Notice”), which Fundamental Change Notice shall:

  (1)   state the event constituting the Fundamental Change and anticipated
Fundamental Change Effective Date;

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  (2)   state the purchase price to be paid with respect to each share of Common
Stock in connection with the Fundamental Change;     (3)   state the number of
Additional Shares to be issued upon conversion of each Share in connection with
a conversion pursuant to Section 6.2(iv)(c);     (4)   state the amount of
dividends accrued and unpaid per Share as of the anticipated Fundamental Change
Effective Date;     (5)   state the number of shares of Common Stock each Share
can be converted to upon conversion thereof;     (6)   state that the Shares
must be surrendered to the Corporation to convert the Shares; and     (7)  
state the CUSIP number of the Shares, if applicable.

          (b) Upon the receipt of a Fundamental Change Notice, each holder of
Shares may elect to (1) have the Corporation repurchase all of such holder’s
Shares at the Repurchase Price as set forth in Section 4.5, (2) convert all or
some of such holder’s Shares in connection with such Fundamental Change pursuant
to Section 6, and/or (3) continue to hold all or some of such holder’s Shares.
Any such election shall be conditional upon the occurrence of the Fundamental
Change described in the Fundamental Change Notice. If a holder of Series A
Preferred fails to timely submit such holder’s election, then such holder shall
be deemed to have elected to continue to hold such holder’s Shares pursuant to
clause (3) above.
          (c) If a holder of Shares elects to convert any of such holder’s
Shares in connection with, and effective upon, the Fundamental Change described
in the Fundamental Change Notice, then the number of shares of Common Stock to
be obtained upon such conversion of each such Share to be converted shall be
increased, if at all, by a number of shares of Common Stock as described below
(the “Additional Shares”).
          (d) The number of Additional Shares, if any, each Share is entitled to
in connection with a conversion pursuant to Section 6.2(iv)(b) shall be
determined by reference to the table attached as Schedule A hereto, based on the
Fundamental Change Effective Date and the price (the “Share Price”) paid (or
deemed paid) per share of Common Stock in the Fundamental Change. If the holders
of the Common Stock receive only cash in a Fundamental Change, then the Share
Price will be the cash amount paid per share of Common Stock. Otherwise, the
Share Price shall be the average of the Current Market Price of the Common Stock
over the five consecutive Trading Day period ending on, and including, the
Trading Day immediately preceding the Fundamental Change Effective Date.

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          (e) The Share Prices set forth in the column headings of the table in
Schedule A hereto shall be adjusted as of any date on which the Conversion Price
of the Shares is otherwise adjusted. The adjusted Share Prices shall equal the
Share Prices applicable immediately prior to such adjustment, multiplied by a
fraction, the numerator of which is the Conversion Price as adjusted, and the
denominator of which is the Conversion Price immediately prior to such
adjustment giving rise to the Share Price adjustment. The number of Additional
Shares set forth in such table shall be adjusted in the same manner as the
Conversion Price as set forth in Section 6.4.
          (f) The exact Share Prices and Fundamental Change Effective Dates may
not be set forth in the table in Schedule A, in which case:

  (1)   if the Share Price is between two Share Price amounts in the table or
the Fundamental Change Effective Date is between two Fundamental Change
Effective Dates in the table, then the number of Additional Shares to be issued
to with respect to each Share if converted pursuant to this Section 6.2(iv) will
be determined by a straight-line interpolation between the Conversion Price set
forth for the higher and lower Share Price amounts and the earlier and later
Fundamental Change Effective Dates, as applicable, based on a 360-day year;    
(2)   if the Share Price is less than $14.46 per share (subject to adjustment as
set forth in clause (e) of this Section 6.2(iv)), then no Additional Shares will
be issued; and     (3)   if the Share Price is greater than $[__] per share
(subject to adjustment as set forth in clause (e) of this Section 6.2(iv)), then
no Additional Shares will be issued.

          (v) In case of any reclassification of the Common Stock, any
consolidation of the Corporation with, or merger of the Corporation into, any
other entity, any merger of another entity into the Corporation (other than a
merger that does not result in any reclassification, conversion, exchange or
cancellation of outstanding shares of Common Stock of the Corporation), any sale
or transfer of all or substantially all of the assets of the Corporation or any
compulsory share exchange, pursuant to which share exchange the Common Stock is
converted into other securities, cash or other property, then lawful provision
shall be made as part of the terms of such transaction whereby the holder of
each Share then outstanding shall have the right thereafter, during the period
such share shall be convertible, to convert such Share only into the kind and
amount of securities, cash and other property receivable upon the
reclassification, consolidation, merger, sale, transfer or share exchange by a
holder of the number of shares of Common Stock of the Corporation into which a
Share might have been converted immediately prior to the reclassification,
consolidation, merger, sale, transfer or share exchange, together with any
Additional Shares, assuming that such holder of Common Stock failed to exercise
rights of election, if any, as to the kind or amount of securities, cash or
other property receivable upon consummation of such transaction. As a condition
to any such transaction, the Corporation or

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the Person formed by the consolidation or resulting from the merger or which
acquires such assets or which acquires the Corporation’s shares, as the case may
be, shall make provisions in its certificate or articles of incorporation or
other constituent document to (a) establish such right and (b) ensure that any
such transaction does not, in and of itself, effect the holders’ rights to the
Liquidation Value. The certificate or articles of incorporation or other
constituent document shall provide for adjustments which, for events subsequent
to the effective date of the certificate or articles of incorporation or other
constituent document, shall be as nearly equivalent as may be practicable to the
adjustments provided for in this Section 6.
          6.3. Effect on Conversion Price of Certain Events. For purposes of
determining the adjusted Conversion Price under Section 6.2, subject to the
exceptions set forth in Section 6.2(ii), the following shall be applicable:
          (i) Issuance of Rights or Options. If the Corporation in any manner
grants or sells any Options and the price per share for which Common Stock is
issuable upon the exercise of such Options, or upon conversion or exchange of
any Convertible Securities issuable upon exercise of such Options, is less than
the Reference Price in effect immediately prior to the time of the granting or
sale of such Options, then the total maximum number of shares of Common Stock
issuable upon the exercise of such Options or upon conversion or exchange of the
total maximum amount of such Convertible Securities issuable upon the exercise
of such Options shall be deemed to be outstanding and to have been issued and
sold by the Corporation at the time of the granting or sale of such Options for
such price per share. For purposes of this Section 6.3, the “price per share for
which Common Stock is issuable” shall be determined by dividing (A) the total
amount, if any, received or receivable by the Corporation as consideration for
the granting or sale of such Options, plus the minimum aggregate amount of
additional consideration payable to the Corporation upon exercise of all such
Options, plus in the case of such Options which relate to Convertible
Securities, the minimum aggregate amount of additional consideration, if any,
payable to the Corporation upon the issuance or sale of such Convertible
Securities and the conversion or exchange thereof, by (B) the total maximum
number of shares of Common Stock issuable upon the exercise of such Options or
upon the conversion or exchange of all such Convertible Securities issuable upon
the exercise of such Options. No further adjustment of the Conversion Price
shall be made when Convertible Securities are actually issued upon the exercise
of such Options or when Common Stock is actually issued upon the exercise of
such Options or the conversion or exchange of such Convertible Securities.
          (ii) Issuance of Convertible Securities. If the Corporation in any
manner issues or sells any Convertible Securities and the price per share for
which Common Stock is issuable upon conversion or exchange thereof is less than
the Reference Price in effect immediately prior to the time of such issue or
sale, then the maximum number of shares of Common Stock issuable upon conversion
or exchange of such Convertible Securities shall be deemed to be outstanding and
to have been issued and sold by the Corporation at the time of the issuance or
sale of such Convertible Securities for such price per share. For the purposes
of this Section 6.3, the “price per share for which Common Stock is issuable”
shall be determined by dividing (A) the total amount received or receivable by
the Corporation as consideration for the issue or sale of such Convertible
Securities, plus the minimum aggregate amount of additional

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consideration, if any, payable to the Corporation upon the conversion or
exchange thereof, by (B) the total maximum number of shares of Common Stock
issuable upon the conversion or exchange of all such Convertible Securities. No
further adjustment of the Conversion Price shall be made when Common Stock is
actually issued upon the conversion or exchange of such Convertible Securities,
and if any such issue or sale of such Convertible Securities is made upon
exercise of any Options for which adjustments of the Conversion Price had been
or are to be made pursuant to other provisions of this Section 5, no further
adjustment of the Conversion Price shall be made by reason of such issue or
sale.
          (iii) Change in Option Price or Conversion Price. If the purchase
price provided for in any Options, the additional consideration, if any, payable
upon the conversion or exchange of any Convertible Securities or the rate at
which any Convertible Securities are convertible into or exchangeable for Common
Stock changes at any time, the Conversion Price in effect at the time of such
change shall be immediately adjusted to the Conversion Price which would have
been in effect at such time had such Options or Convertible Securities still
outstanding provided for such changed purchase price, additional consideration
or conversion or exchange rate, as the case may be, at the time initially
granted, issued or sold.
          (iv) Treatment of Expired Options and Unexercised Convertible
Securities. Upon the expiration of any Option or the termination of any right to
convert or exchange any Convertible Security without the exercise of any such
Option or right, the Conversion Price then in effect hereunder shall be adjusted
immediately to the Conversion Price which would have been in effect at the time
of such expiration or termination had such Option or Convertible Security, to
the extent outstanding immediately prior to such expiration or termination,
never been issued.
          (v) Calculation of Consideration Received. If any Common Stock, Option
or Convertible Security is issued or sold or deemed to have been issued or sold
for cash, then the consideration received therefor shall be deemed to be the
amount received by the Corporation therefor (net of discounts, commissions and
related expenses). If any Common Stock, Option or Convertible Security is issued
or sold for a consideration other than cash, then the amount of the
consideration other than cash received by the Corporation shall be the fair
value of such consideration, except where such consideration consists of
securities, in which case the amount of consideration received by the
Corporation shall be the Current Market Price thereof as of the date of receipt.
If any Common Stock, Option or Convertible Security is issued to the owners of
the non-surviving entity in connection with any merger in which the Corporation
is the surviving corporation, then the amount of consideration therefor shall be
deemed to be the fair value of the portion of the net assets of the
non-surviving entity that is attributable to such Common Stock, Option or
Convertible Security, as the case may be. The fair value of any consideration or
net assets other than cash and securities (and, if applicable, the portions
thereof attributable to any such stock or securities) shall be determined in
good faith by the Board of Directors.
          (vi) Integrated Transactions. In case any Option is issued in
connection with the issue or sale of other securities of the Corporation,
together comprising one integrated transaction in which no specific
consideration is allocated to such Option by the parties thereto, the Option
shall be deemed to have been issued for a consideration of $.01.

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          (vii) Treasury Shares. The number of shares of Common Stock
outstanding at any given time shall not include shares owned or held by or for
the account of the Corporation or any of its Subsidiaries, and the disposition
of any shares so owned or held shall be considered an issuance or sale of Common
Stock.
          (viii) Record Date. If the Corporation takes a record of the holders
of Common Stock for the purpose of entitling them (a) to receive a dividend or
other distribution payable in Common Stock, Options or in Convertible Securities
or (b) to subscribe for or purchase Common Stock, Options or Convertible
Securities, then such record date shall be deemed to be the date of the issue or
sale of the shares of Common Stock deemed to have been issued or sold upon the
declaration of such dividend or upon the making of such other distribution or
the date of the granting of such right of subscription or purchase, as the case
may be.
          (ix) Rights Plan. To the extent that the Corporation has a rights plan
in effect on the Conversion Date with respect to any shares of Series A
Preferred or Common Stock, each share of Common Stock issued upon conversion of
the Series A Preferred shall be entitled to receive the appropriate number of
rights, if any, and the certificates representing the Common Stock issued upon
such conversion shall bear such legends, if any, in each case as may be provided
by the terms of any stockholders’ rights plan, as the same may be amended from
time to time. If, however, on the Conversion Date, the rights have separated
from the shares of Common Stock in accordance with the provisions of the
applicable stockholders’ rights plan and the holders of the Series A Preferred
would not be entitled to receive any rights in respect of Common Stock issuable
upon conversion of the Series A Preferred, then the Conversion Price shall be
equally and ratably adjusted at the time of the separation, subject to
readjustment in the event of the expiration, termination or redemption of such
rights. For the avoidance of doubt, if on the Conversion Date, any such rights
have already separated from the shares of Series A Preferred in accordance with
the provisions of the applicable stockholders’ rights plan, such rights shall
not be cancelled by virtue of the conversion of Series A Preferred into shares
of Common Stock.
          6.4. Subdivision or Combination of Common Stock. If the Corporation at
any time subdivides (by any stock split, stock dividend, recapitalization or
otherwise) one or more classes of its outstanding shares of Common Stock into a
greater number of shares, then the Conversion Price in effect immediately prior
to such subdivision shall be proportionately reduced, and if the Corporation at
any time combines (by reverse stock split or otherwise) one or more classes of
its outstanding shares of Common Stock into a smaller number of shares, then the
Conversion Price in effect immediately prior to such combination shall be
proportionately increased.
          6.5. Notices.
          (i) Immediately upon any adjustment of the Conversion Price, the
Corporation shall give written notice thereof to all holders of Series A
Preferred, setting forth in reasonable detail and certifying the calculation of
such adjustment.
          (ii) The Corporation shall give written notice to all holders of
Series A Preferred at least 20 days prior to the date on which the Corporation
closes its books or takes a

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record (a) with respect to any dividend or distribution upon Common Stock,
(b) with respect to any pro rata subscription offer to holders of Common Stock
or (c) for determining rights to vote with respect to any dissolution or
liquidation.
          6.6. Certain Determinations. For purposes of any computation of any
adjustment required under this Section 5: (i) adjustments shall be made
successively whenever any event giving rise to such an adjustment shall occur;
(ii) except as provided herein, if any event occurs that would trigger an
adjustment to the Conversion Price pursuant to this Section 5 under more than
one subsection hereof, such event, to the extent fully taken into account in a
single adjustment, shall not result in multiple adjustments hereunder; (iii) all
adjustments to the Conversion Price pursuant to this Section 5 shall be
calculated to the nearest 1/10,000th of a share of Common Stock; and (iv) except
as otherwise provided in Section 6.2(iv), no adjustment to the Conversion Price
shall be made if holders of Series A Preferred may participate in the
transaction that would otherwise give rise to an adjustment, as a result of
holding the Series A Preferred, without having to convert the Series A
Preferred, as if they held the full number of shares of Common Stock into which
a share of the Series A Preferred may then be converted.
          Section 7. Preemptive Rights.
          The Series A Preferred shall not be entitled to any preemptive or
subscription rights in respect of any securities of the Corporation or any of
its Subsidiaries.
          Section 8. Registration of Transfer.
          The Corporation shall keep at its principal office a register for the
registration of Series A Preferred. Upon the surrender of any certificate
representing Series A Preferred at such place, the Corporation shall, at the
request of the record holder of such certificate, execute and deliver (at the
Corporation’s expense) a new certificate or certificates in exchange therefor
representing in the aggregate the number of Shares represented by the
surrendered certificate. Each such new certificate shall be registered in such
name and shall represent such number of Shares as is requested by the holder of
the surrendered certificate and shall be substantially identical in form to the
surrendered certificate, and dividends shall accrue on the Series A Preferred
represented by such new certificate from the date to which dividends have been
fully paid on such Series A Preferred represented by the surrendered
certificate.
          Section 9. Replacement.
          Upon receipt of evidence reasonably satisfactory to the Corporation
(an affidavit of the registered holder shall be satisfactory) of the ownership
and the loss, theft, destruction or mutilation of any certificate evidencing
Shares, and in the case of any such loss, theft or destruction, upon receipt of
indemnity reasonably satisfactory to the Corporation, or, in the case of any
such mutilation upon surrender of such certificate, the Corporation shall (at
its expense) execute and deliver in lieu of such certificate a new certificate
of like kind representing the number of Shares of such class represented by such
lost, stolen, destroyed or mutilated certificate and dated the date of such
lost, stolen, destroyed or mutilated certificate, and dividends shall accrue on
the Series A Preferred represented by such new certificate from the date to
which dividends have been fully paid on such lost, stolen, destroyed or
mutilated certificate.

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          Section 10. Definitions.
          “Affiliate” of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For purposes of this definition, “control,”
as used with respect to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management or
policies of such Person, whether through the ownership of voting securities, by
agreement or otherwise. For purposes of this definition, the terms
“controlling,” “controlled by” and “under common control with” have correlative
meanings.
          “Common Stock” means, collectively, the Corporation’s Common Stock and
any capital stock of any class of the Corporation hereafter authorized which is
not limited to a fixed sum or percentage of par or stated value in respect to
the rights of the holders thereof to participate in dividends or in the
distribution of assets upon any liquidation, dissolution or winding up of the
Corporation.
          “Company Offer” means any tender offer (including any exchange offer)
as amended from time to time made by the Corporation or any of its Subsidiaries
for the purchase (including the acquisition pursuant to an exchange offer) of
all or any portion of the outstanding shares of Common Stock.
          “Common Stock Deemed Outstanding” means, at any given time, the number
of shares of Common Stock actually outstanding at such time, plus the number of
shares of Common Stock deemed to be outstanding pursuant to Sections 6.3(i) and
6.3(ii) hereof, whether or not the Options or Convertible Securities are
actually exercisable at such time.
          “Conversion Price” with respect to the Shares shall initially be
$24.46, subject to adjustment from time to time pursuant to Section 6.2 and
Section 6.4 in order to prevent dilution of the conversion rights granted under
Section 5.
          “Conversion Stock” means shares of the Corporation’s Common Stock, par
value $0.01 per share; provided that if there is a change such that the
securities issuable upon conversion of the Series A Preferred are issued by an
entity other than the Corporation or there is a change in the type or class of
securities so issuable, then the term “Conversion Stock” shall mean one share of
the security issuable upon conversion of the Series A Preferred if such security
is issuable in shares, or shall mean the smallest unit in which such security is
issuable if such security is not issuable in shares.
          “Convertible Securities” means any stock or securities (other than
Options) directly or indirectly convertible into or exchangeable for Common
Stock.
          “Current Market Price” of the Common Stock (or other relevant capital
stock or equity interest) on any date of determination means the closing sale
price or, if no closing sale price is reported, the last reported sale price of
the shares of the Common Stock (or other relevant capital stock or equity
interest) on the New York Stock Exchange or The NASDAQ National Market on such
date, as applicable, if the Common Stock is listed on either such national stock
exchange. If the Common Stock (or other relevant capital stock or equity
interest)

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is not traded on the New York Stock Exchange or The NASDAQ National Market on
any date of determination, then the Closing Price of the Common Stock (or other
relevant capital stock or equity interest) on such date of determination means
the closing sale price as reported in the composite transactions for the
principal United States national or regional securities exchange on which the
Common Stock (or other relevant capital stock or equity interest) is so listed,
or, if no closing sale price is reported, the last reported sale price on the
principal United States national or regional securities exchange on which the
Common Stock (or other relevant capital stock or equity interest) is so listed,
or if the Common Stock (or other relevant capital stock or equity interest) is
not so listed on a United States national or regional securities exchange, then
the last quoted bid price for the Common Stock (or other relevant capital stock
or equity interest) in the over-the-counter market as reported by Pink Sheets
LLC or similar organization, or, if that bid price is not available, then the
market price of the Common Stock (or other relevant capital stock or equity
interest) on that date as determined by a nationally recognized independent
investment banking firm retained by the Corporation for this purpose.
          “Fundamental Change” means the occurrence after the original issuance
of the Series A Preferred Stock of any of the following events:
          (i) a “person” or “group” within the meaning of Section 13(d)(3) of
the Exchange Act becomes the direct or indirect “beneficial owner,” as defined
in Rule 13d-3 under the Exchange Act, of shares of the Common Stock or other
capital stock of the Corporation representing more than 50% of the voting power
of the Common Stock entitled to vote generally in the election of directors and
either (a) such person or group files a Schedule 13D or Schedule TO or any other
schedule, form or report under the Exchange Act disclosing such beneficial
ownership or (b) the Corporation otherwise becomes aware of any such person or
group; provided, however, that in no event shall such filing or ownership
resulting solely from (i) the Initial Holders taking actions after the Issue
Date as a result of which they are deemed to be a group within the meaning of
Section 13(d)(3) of the Exchange Act, or (ii) the acquisition by an Initial
Holder of Shares from other Initial Holders, in each case occurring within
12 months from the Issue Date, constitute a Fundamental Change;
          (ii) the first day on which a majority of the members of the Board of
Directors does not consist of Continuing Directors (as defined below);
          (iii) the Corporation merges or consolidates with or into any other
Person, or any Person merges with the Corporation, other than a merger,
consolidation or other transaction in which, immediately after such merger,
consolidation or other transaction, the holders of more than 50% of the total
voting power of all shares the Corporation’s capital stock entitled to vote
generally in the election of directors immediately prior to the transaction(s)
own or control, directly or indirectly, more than 50% of the total voting power
of all shares of capital stock entitled to vote generally in elections of
directors of the surviving entity or any parent thereof;
          (iv) the Corporation or any one or more Subsidiaries thereof conveys,
transfers, sells or otherwise disposes in a single transaction or a series of
related transactions (including any spin-off or in-kind distribution) all or
substantially all of the net book value of the properties and assets of the
Corporation and its Subsidiaries on a consolidated basis to any Person or group
of Persons (other than to the Corporation and its wholly-owned Subsidiaries); or

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          (v) the Corporation’s stockholders approve any plan or proposal for
the Corporation’s liquidation, dissolution or winding up.
For purposes of this definition, “Continuing Director” means a director who
either was a member of the Board of Directors on [to insert date of emergence
from bankruptcy], or who becomes a member of the Board of Directors subsequent
to that date and whose initial election, appointment or nomination for election
by the Corporation’s stockholders is duly approved by a majority of the
Continuing Directors on the Board of Directors at the time of such approval,
either by a specific vote or by approval of the proxy statement issued by the
Corporation on behalf of the Board of Directors in which such individual is
named as a nominee for director.
          “Initial Holder” means (i) any holder of Shares issued on the Issue
Date and (ii) each Affiliate of such holder who acquires Shares from such holder
on or after the Issue Date.
          “Junior Securities” means any capital stock or other equity securities
of the Corporation; provided that the term “Junior Securities” shall not include
(i) the Series A Preferred or (ii) any other class or series of the
Corporation’s capital stock which (a) is senior to or pari passu with the
Series A Preferred with respect to preference and priority on dividends,
redemptions and liquidations as permitted by the terms of the Series A Preferred
hereunder or (b) approved by a vote of the holders of the Series A Preferred as
provided hereunder.
          “Liquidation Value” of any Share as of any particular date shall be
equal to $25.00, plus all accrued and unpaid dividends thereon to such date.
          “Material Action” means the taking, after the original issuance of the
Series A Preferred Stock, of any of the following actions, or the occurrence of
any of the following events:
          (i) any amendment or alteration (including by means of a merger,
consolidation or otherwise) of the Governing Documents to authorize, create or
issue, or increase the authorized amount of, any shares of, or any securities
convertible into or exercisable or exchangeable for shares of, any class or
series of the Corporation’s capital stock ranking prior to or on a parity with
the Series A Preferred in the payment of dividends or in the distribution of
assets on any liquidation, dissolution, or winding-up of the Corporation,
thereby adversely affecting the rights, preferences or limitations of the
Series A Preferred;
          (ii) the redemption, purchase or other acquisition, directly or
indirectly, of any Junior Securities or pari passu securities or the setting
aside of any funds for such purpose, except as expressly permitted by
Section 3.1 or 3.2, or
          (iii) the direct or indirect payment or declaration of any dividend or
the making of any distribution upon any Junior Securities or the setting aside
of any funds for such purpose, except as expressly permitted by Section 3.1 or
3.2.
          “Options” means any rights, warrants or options to subscribe for or
purchase Common Stock or Convertible Securities.

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          “Person” means an individual, a partnership, a corporation, a limited
liability company, a limited liability, an association, a joint stock company, a
trust, a joint venture, an unincorporated organization and a governmental entity
or any department, agency or political subdivision thereof.
          “Preferred Return” means 8.00% per annum; provided, that if the
Corporation shall default in the payment in full when due on any Dividend
Payment Date of any dividends or in the payment on any Redemption Date of the
full redemption price, the Preferred Return shall increase by 2.00% for any
period in which such dividends are not paid or until the full redemption price
is paid in full, as the case may be.
          “Public Offering” means any offering by the Corporation of its capital
stock or equity securities to the public pursuant to an effective registration
statement under the United States Securities Act of 1933, as then in effect, or
any comparable statement under any similar federal statute then in force.
          “Redemption Date” as to any Share means the date specified in the
notice of any redemption at the Corporation’s option or the date on which the
Corporation is required to redeem such Share; provided that no such date shall
be a Redemption Date unless the Redemption Value of such Share is actually paid
in full on such date, and if not so paid in full, the Redemption Date shall be
the date on which such amount is fully paid.
          “Redemption Value” as to any Share means:
          (i) in a mandatory redemption pursuant to Section 4.1, an amount equal
to the Liquidation Value thereof;
          (ii) in a redemption in connection with a Fundamental Change, an
amount equal to (1) 1.01 multiplied by (2) the Liquidation Value thereof; and
          (iii) in an optional redemption pursuant to Section 4.2: (A) if such
optional redemption occurs on or after the date that is two years from the Issue
Date but prior to the date that is three years from the Issue Date, an amount
equal to (1) 1.06 multiplied by (2) the Liquidation Value thereof; (B) if such
optional redemption occurs on or after the date that is three years from the
Issue Date but prior to the date that is four years from the Issue Date, an
amount equal to (1) 1.04 multiplied by (2) the Liquidation Value thereof; (C) if
such optional redemption occurs on or after the date that is four years from the
Issue Date but prior to the date that is five years from the Issue Date, an
amount equal to (1) 1.02 multiplied by (2) the Liquidation Value thereof; and
(D) if such optional redemption occurs on or after the date that is five years
from the Issue Date but prior to the date that is six years from the Issue Date,
an amount equal to the Liquidation Value thereof; provided, that in the event
that the Corporation defaults in the payment when due of any portion of the
applicable Redemption Value as to any Share pursuant to Section 4.3, then the
Redemption Value with respect to such Share shall increase by 2.00%.
          “Reference Price” means the lower of the then current Conversion Price
and the Current Market Price.

21

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          “Repurchase Price” as to any Share at any date means an amount equal
to (i) 1.01 multiplied by (ii) the Liquidation Value thereof on such date.
          “Subsidiary” means, with respect to any Person, any corporation,
limited liability company, partnership, association or other business entity of
which (i) if a corporation, a majority of the total voting power of shares of
stock entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of the other
Subsidiaries of that Person or a combination thereof, or (ii) if a limited
liability company, partnership, association or other business entity, a majority
of the partnership or other similar ownership interest thereof is at the time
owned or controlled, directly or indirectly, by any Person or one or more
Subsidiaries of that person or a combination thereof. For purposes hereof, a
Person or Persons shall be deemed to have a majority ownership interest in a
limited liability company, partnership, association or other business entity if
such Person or Persons shall be allocated a majority of limited liability
company, partnership, association or other business entity gains or losses or
shall be or control the managing general partner of such limited liability
company, partnership, association or other business entity.
          “Trading Day” means a day on which the shares of Common Stock: (i) are
not suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business; and (ii) have
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock.
          Section 11. Amendment and Waiver.
          No amendment, modification, alteration, repeal or waiver of any
provision of Section 1 through Section 15, inclusive, shall be binding or
effective without the prior written consent of the holders of at least a
majority of the Series A Preferred outstanding at the time such action is taken.
          Section 12. Notices.
          Except as otherwise expressly provided hereunder, all notices referred
to herein shall be in writing and shall be delivered by registered or certified
mail, return receipt requested and postage prepaid, or by reputable overnight
courier service, charges prepaid, and shall be deemed to have been given when so
mailed or sent (i) to the Corporation, at its principal executive offices, and
(ii) to any stockholder, at such holder’s address as it appears in the stock
records of the Corporation (unless otherwise indicated by any such holder).
          Section 13. Severability.
          Whenever possible, each provision hereof shall be interpreted in a
manner as to be effective and valid under applicable law, but if any provision
hereof is held to be prohibited by or invalid under applicable law, then such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating or otherwise adversely affecting the remaining
provisions hereof. If a court of competent jurisdiction should determine that a

22

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provision hereof would be valid or enforceable if a period of time were extended
or shortened or a particular percentage were increased or decreased, then such
court may make such change as shall be necessary to render the provision in
question effective and valid under applicable law.
          Section 14. Headings.
          The headings of the various sections and subsections hereof are for
convenience of reference only and shall not affect the interpretation of any of
the provisions hereof.
          Section 15. Taxes. The Corporation shall pay any and all stock
transfer, documentary, stamp and similar taxes that may be payable in respect of
any issuance or delivery of shares of Series A Preferred or shares of Common
Stock or other securities issued on account of Series A Preferred pursuant
hereto or certificates representing such shares or securities. The Corporation
shall not, however, be required to pay any such tax that may be payable, on
account of the transfer of such Series A Preferred, in respect of the issuance
or delivery of shares of Series A Preferred, shares of Common Stock or other
securities in a name other than that in which the shares of Series A Preferred
with respect to which such shares or other securities are issued or delivered
were registered, or in respect of any payment to any Person other than a payment
to the registered holder thereof, and shall not be required to make any such
issuance, delivery or payment unless and until the Person otherwise entitled to
such issuance, delivery or payment has paid to the Corporation the amount of any
such tax or has established, to the satisfaction of the Corporation, that such
tax has been paid or is not payable. Nothing herein shall prevent the
Corporation from utilizing or otherwise taking advantage of any exemption from
such taxes available pursuant to applicable law, including Section 1146(a) of
Title 11 of the United States Code, and holders of shares of Series A Preferred
shall agree to cooperate with the Corporation to the extent reasonably requested
by the Corporation in taking advantage of any such exemption.

23

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Schedule A
to
Certificate of Designations, Preferences,
and Relative, Participating, Optional and Other Special Rights
of Series A Senior Convertible Preferred Stock of Tronox Incorporated

--------------------------------------------------------------------------------

 

Exhibit B
to
Equity Commitment Agreement
TERM SHEET

 

--------------------------------------------------------------------------------

 

EXECUTION VERSION
Tronox Incorporated
RESTRUCTURING PROPOSAL1
This term sheet (“Term Sheet”) constitutes an exhibit to the Equity Commitment
Agreement (the “Equity Commitment Agreement”) entered into between Tronox
Incorporated (together with its affiliate debtor subsidiaries, collectively
“Tronox”, and as reorganized debtors, “Reorganized Tronox”) and sets forth the
principal terms of a proposed restructuring (the “Restructuring”) of Tronox to
be implemented pursuant to a First Amended Joint Proposed Plan of Reorganization
to be filed in their pending chapter 11 bankruptcy cases (the “Chapter 11
Cases”) in the United States Bankruptcy Court for the Southern District of New
York (the “Bankruptcy Court”).

     
Implementation of the Restructuring:
  The Restructuring shall be effected pursuant to the First Amended Plan and the
definitive documentation for the Restructuring, including the documentation for
the Rights Offering, and such other documentation as is necessary or desirable
in connection with the Restructuring as set forth in the First Amended Plan
(collectively, the “Definitive Restructuring Documentation”). The Parties2 shall
mutually agree upon and seek approval of the Definitive Restructuring
Documentation on an expedited basis, subject, in the case of the Government
Environmental Entities, to approval and public notice provisions, which shall
reflect the terms and conditions set forth herein and such other customary terms
and conditions as shall be acceptable to the Parties (and, to the extent the
terms and conditions are inconsistent with the terms of the Replacement DIP
Agreement or adversely affect the interests, liens, rights, remedies, benefits
or other protections of any or all of the Replacement DIP Agent and the Lenders
under the Credit Documents, the Replacement DIP Agent).
 
   
 
  The Definitive Restructuring Documentation will include, among other things,
various environmental settlement documents (including the Environmental Claims
Settlement Agreement and related exhibits and appendices) concerning the
resolution of Environmental Claims that shall be submitted for the approval of
officials authorized on behalf of the Government Environmental Entities that
have, or have asserted, Environmental Claims. The Environmental Settlement
Documents shall then be submitted to the Bankruptcy Court for approval
contemporaneously with, but subject to, public notice and public comment
procedures under applicable environmental law.
 
   
 
  The Equity Commitment Agreement contains terms and conditions concerning
(a) the $15 million New Convertible Preferred Stock, (b) the Rights Offering and
(c) the Backstop Consideration (as each such term is defined herein). The Equity
Commitment Agreement shall be submitted to the Bankruptcy Court for approval on
an expedited basis so that it is approved on the same day as or prior to the
hearing on Tronox’s Disclosure Statement. On the date of execution of the Equity
Commitment Agreement by the Backstop Parties and Tronox, Tronox will issue a
press release which makes public all material non-public information provided to
the Backstop Parties, such that, immediately following such disclosure, no
Backstop Party will be prohibited from trading in Tronox’s securities by virtue
of having been provided information by Tronox and its

 

1   Capitalized terms used but not defined herein shall have the meaning
ascribed to such terms in the Equity Commitment Agreement. If there are any
discrepancies between this Term Sheet and the Equity Commitment Agreement, the
Equity Commitment Agreement shall prevail.   2   The Parties shall be Tronox,
the Creditors’ Committee, the United States, the Nevada Department of
Environmental Protection and the Colorado River Authorities, and the Backstop
Parties.

 

--------------------------------------------------------------------------------

 

     
 
  advisors (whether directly or indirectly through the Backstop Parties’
advisors).
 
   
 
  Tronox shall continuously consult with the legal and financial advisors of the
other Parties, and shall not undertake any material action with respect to the
Restructuring or otherwise without first consulting with such advisors. For so
long as the Equity Commitment Agreement is in effect, Tronox shall also consult
with the Backstop Parties or their advisors on all material business matters,
including matters relating to environmental remediation, Hedging and the Kwinana
Investment (each as defined in the Replacement DIP Credit Agreement), and the
entry into any material contract.
 
   
Plan Financing Sources/Funding of Reorganized Tronox
  The proceeds from the Exit Facility, the purchase of New Common Stock pursuant
to the Rights Offering, the purchase of the New Common Stock pursuant to the
Equity Commitment Agreement if the Rights Offering is not fully subscribed, and
the purchase of the New Convertible Preferred Stock to be issued on the
Effective Date shall be used by Reorganized Tronox to: (i) fund the
Environmental Response Trusts, Tort Claims Trust and Anadarko Litigation Trust,
and to make certain payments with respect to Claims of Government Environmental
Entities; (ii) provide working capital to Reorganized Tronox after the Effective
Date; and (iii) provide cash sufficient for Tronox to make distributions to
creditors under the First Amended Plan in accordance with this Term Sheet.  
Exit Financing:
 
On the Effective Date, Reorganized Tronox will have no more than $468.1 million
in funded debt, as follows:
 
   
 
 
•    $425 million in loans outstanding under a senior secured term loan
facility, either under an amended Replacement DIP Facility having converted into
an Exit Facility per its terms, or under a new credit facility (the “Term
Facility”);
 
   
 
 
•    $43.1 in loans funded under an asset-based revolving credit facility of
$125 million (with an additional $28 million face amount in issued letters of
credit) (such facility, the “Revolving Facility”, and together with the Term
Facility, the “Exit Financing”).
 
   
 
  The terms of the Exit Financing shall be reasonably satisfactory to the
Creditors’ Committee and the Backstop Parties, and shall in no event be less
favorable to Tronox than the terms and conditions of the Replacement DIP
Facility (as converted to an Exit Facility per its terms). The Creditors’
Committee and the Backstop Parties shall be consulted on all matters relating to
the Exit Financing.

2 

--------------------------------------------------------------------------------

 

     
New Money Investments and Backstop Consideration:
  $15 million New Convertible Preferred Stock: On the Effective Date, the
Backstop Parties will fund $15 million in Cash and, in exchange, Reorganized
Tronox will issue to the Backstop Parties shares of the New Convertible
Preferred Stock, with an aggregate liquidation preference of $15 million.
Dividends on the New Convertible Preferred Stock will accrue at a rate of 8% per
annum payable quarterly in Cash. The Convertible Preferred Stock may be
converted into shares of New Common Stock at the election of the Holders thereof
at an $850 million total enterprise valuation (which represents 3.9% of the New
Common Stock if converted on the Effective Date, subject to dilution by shares
issued in connection with the Management Equity Plan and exercise of the New
Warrants). The additional terms of the New Convertible Preferred Stock are set
forth in the Preferred Stock Certificate of Designations attached as Exhibit A
to the Equity Commitment Agreement.
 
   
 
  $170 million Backstopped Rights Offering: Pursuant to the terms of the Equity
Commitment Agreement, the purchasers party to the Equity Commitment Agreement
(the “Backstop Parties”) have agreed to purchase New Common Stock not otherwise
purchased by Eligible Holders (as defined below) in the Rights Offering, which
will provide for the Sale of New Common Stock of Reorganized Tronox on the
following terms:
 
   
 
 
•    Reorganized Tronox will raise up to $170 million in cash in exchange for an
aggregate of up to 78.4% of the New Common Stock issued on the Effective Date,
subject to dilution by shares issued in connection with the Management Equity
Plan, conversion of the New Convertible Preferred Stock and exercise of the New
Warrants.
 
   
 
 
•    Eligible Holders will have rights to purchase New Common Stock based upon a
$700 million setup enterprise valuation.
 
   
 
  Backstop Consideration: In connection with the Rights Offering, the Backstop
Parties shall be entitled to a fee of 6% of the aggregate Offered Shares, being
705,394 shares of New Common Stock (the “Equity Backstop Consideration”),
representing 4.7% of the New Common Stock issued on the Effective Date, subject
to dilution by shares issued in connection with the Management Equity Plan,
conversion of the New Convertible Preferred Stock and exercise of the New
Warrants. In the event the Equity Commitment Agreement is terminated without the
Rights Offering having been consummated (for reasons other than a breach by any
Backstop Party), the Backstop Parties shall (with certain exceptions as set
forth in the Equity Commitment Agreement) be entitled to a cash termination fee
equal to 6% of $185 million (the aggregate purchase price of the Offered Shares
and the New Convertible Stock) or $11.1 million (the “Cash Backstop
Consideration” and together with the Equity Backstop Consideration, the
“Backstop Consideration”), payable by Tronox as an administrative expense.
 
   
 
  Equity Commitment Agreement: The Equity Commitment Agreement will be finalized
and executed on or before August 27, and Tronox will file a motion on the same
day to obtain Bankruptcy Court approval, on an expedited basis, of the terms and
conditions set forth in the Equity Commitment Agreement, including but not
limited to payment of the Backstop Consideration, and will use reasonable best
efforts to ensure that such motion is heard by the Bankruptcy Court no later
than September 16, 2010.

3

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Rights Offering
   
 
   
Right to Subscribe:
  All Eligible Holders will have a right to participate in the Rights Offering
on a pro rata basis based on their respective Allowed Claims with respect to
Tronox (subject to rounding requirements), provided, however, that for holders
of Indirect Environmental Claims, their respective Allowed Claim for purposes of
participation in the Rights Offering shall be limited to 50% of such Allowed
Claim. The aggregate purchase price for the shares of New Tronox Common Stock
issuable upon exercise of the Rights shall be $170 million. The Rights will not
be transferable; provided, however, the right to receive shares distributable on
account of exercised Rights shall be transferable with and non-severable from
the underlying Claim against Tronox to which such Rights relate.
 
   
 
  “Eligible Holder” means any Person who, as of the record date of the Rights
Offering, is (A) a holder of a General Unsecured Claim against Tronox in excess
of $250 and/or (B) a holder of an Indirect Environmental Claim against Tronox in
excess of $500, provided, in each case, that such Claim has been Allowed on or
before the Rights Expiration Date.
 
   
Treatment of Claims against Tronox
  The First Amended Plan shall provide for the following treatment of Claims
filed against, and Equity Interests in, Tronox in the Chapter 11 Cases and such
other terms not inconsistent with this Term Sheet, as shall be acceptable to the
Parties.
 
   
Replacement DIP
Facility
Claims:
  On the Effective Date, the Replacement DIP Facility (as it may be amended with
the consent of the Backstop Parties and the Credit Committee) shall convert into
an Exit Facility as per its terms or shall be repaid in full.
 
   
Administrative
Claims:
  Unless otherwise agreed to by the holder of an Allowed Administrative Claim
and Tronox (with the consent of the Creditors’ Committee and the Required
Backstop Parties), Allowed Administrative Claims (other than any Environmental
Claims that are administrative Claims, which shall be addressed exclusively
pursuant to the Environmental Claims Settlement Agreement) shall be paid in full
in cash on the Effective Date or, if not yet Allowed on the Effective Date,
within 30 days after such Claim becomes Allowed.
 
   
Priority Tax and Non-Tax Claims:
  Allowed Priority Tax Claims and Non-Tax Claims will be paid in full in cash on
the Effective Date, or as soon thereafter as practicable.
 
   
Other Secured Claims
  All other secured Claims shall be paid in full on the Effective Date (or, if
payment is not then due, shall be paid in accordance with its terms) or
otherwise left unimpaired.
 
   
Intercompany Claims
  At the option of Tronox or Reorganized Tronox (with the consent of the
Creditors’ Committee and the Backstop Parties), all Intercompany Claims shall be
reinstated, cancelled, eliminated or contributed to the capital of the obligor
entity.
 
   
Pension Claims
  All qualified pension obligations of Tronox prior to the Effective Date shall
be assumed by Reorganized Tronox, including the Tronox Incorporated Retirement
Plan.

4

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General Unsecured Claims (Class 3):
  Holders of Allowed General Unsecured Claims against Tronox (which include the
Unsecured Notes Claims but do not include Environmental Claims, Tort Claims or
Indirect Environmental Claims) will receive:
 
   
 
 
•    their pro rata share of the GUC Pool, which consists of New Common Stock
equal to 16.9% of the shares of New Common Stock to be issued on the Effective
Date, subject to dilution by shares issued in connection with the Management
Equity Plan, conversion of the New Convertible Preferred Stock and exercise of
the New Warrants; and
 
   
 
 
•    Rights to purchase New Common Stock pursuant to the terms of the Rights
Offering, as described above.
 
   
Tort Claims (Class 4):
  Holders of Allowed Class 4 Tort Claims will receive a Distribution from the
Tort Claims Trust in accordance with the Tort Claims Trust Distribution
Procedures. On the Effective Date, Tronox will establish the Tort Claims Trust
(to be administered by the Tort Claims Trustee, The Garretson Firm Resolution
Group, Inc., pursuant to the Tort Claims Trust Agreement) and transfer to the
Tort Claims Trust the following consideration:
 
   
 
 
•    The right to 12% of the proceeds of the Anadarko Litigation (together with
any other fee sharing or other arrangements to be agreed upon in good faith by
the United States and holders of Tort Claims, which agreement shall be reflected
in the Anadarko Litigation Trust Agreement);
 
   
 
 
•    The Funded Tort Claims Trust Amount, which shall be $12.5 million in cash;
 
   
 
 
•    The Tort Claims Insurance Assets, which shall include (a) the net proceeds
of any insurance settlements (after deduction of counsel’s contingency fee only)
and (b) rights to proceeds under any unliquidated policy providing coverage for
Tort Claims.
 
   
 
  The Tort Claims Trust Distributable Amount will be distributed in accordance
with the Tort Claims Trust Agreement according to the following parameters
(subject to allocation adjustments to be agreed among representatives for the
Tort Claims Trust recipients) :
 
   
 
 
•                  % subject to adjustment by agreement among representatives of
the Holders of Allowed Indirect Environmental Claims and representatives of
other Tort Claims Trust recipients, but in no event greater than 6.25%, to
Holders of Allowed Indirect Environmental Claims if the aggregate amount of
Allowed Indirect Environmental Claims is equal to or greater than $40 million;
if the aggregate Allowed amount of such Allowed Indirect Environmental Claims is
less than $40 million, then the                 % shall be proportionally
reduced (for example, if the aggregate Allowed amount of said Claims is
$20 million, then Allowed Indirect Environmental Claims shall be allocated
                % of the Tort Claims Trust Distributable Amount);
 
   
 
 
•    6.25% to Holders of Asbestos Claims and Future Tort Claimants

5 

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•    6.25% to Holders of Property Damage Claims if the aggregate Allowed amount
of said Property Damage Claims is equal to or greater than $50 million; if the
aggregate Allowed amount of such Claims is less than $50 million, then the 6.25%
shall be proportionally reduced (for example, if the aggregate Allowed amount of
such Property Damage Claims is $25 million, then the Property Damage Claims
shall be allocated 50% of 6.25%, or 3.125%, of the Tort Claims Trust
Distributable Amount). To the extent Allowed, the Claims filed by Mt. Canaan
Church shall fall within the pool allocated to Property Damage Claims.
 
   
 
 
•    The remaining Tort Claims Trust Distributable Amount will be distributed to
Holders of Non-Asbestos Toxic Exposure Claims.
 
   
 
  The sole recourse of Holders of Tort Claims shall be to the Tort Claims Trust,
and such Holders shall have no right at any time to assert Tort Claims against
Reorganized Tronox.
 
   
 
  Workers Compensation Claims will be expressly excluded from the definition of
Tort Claims and will not share in the Tort Claims Distributable Amount.
Reorganized Tronox will assume responsibility for ongoing administration and
payment of Workers’ Compensation Claims in the ordinary course and such Claims
shall be unimpaired.
 
   
 
  Any Tort Claim that is not subject to an objection filed by Tronox or any
other party in interest as of the date that is thirty (30) days before the
Voting Deadline shall be entitled to vote on the First Amended Plan in
accordance with the Solicitation Procedures. Final determinations on the
allowance or disallowance of Tort Claims for distribution purposes shall be made
in accordance with the Tort Claims Trust Distribution Procedures.
 
   
Environmental
Claims (Class 5):
  Holders of Class 5 Environmental Claims shall be entitled to treatment of
their Environmental Claims and shall receive such consideration as is provided
in the Environmental Claims Settlement Agreement. On the Effective Date, Tronox
will establish the Environmental Response Trusts and transfer to or for the
benefit of such Environmental Response Trusts and/or certain of the Government
Environmental Entities the following consideration:
 
   
 
 
•    The right to 88% of the proceeds of the Anadarko Litigation, in accordance
with the Anadarko Litigation Trust Agreement;
 
   
 
 
•    The Funded Environmental Amount, which shall be $270 million in Cash;
 
   
 
 
•    The Nevada Assets;3 and

 

3   “Nevada Assets” means (a) Tronox’s interest in Basic Management, Inc.,
(b) Tronox’s interest in the Landwell Company, LP and (c) that certain 140 acre
parcel of land wholly-owned by Tronox and contiguous to Tronox’s Henderson,
Nevada facility. For the avoidance of doubt, the Nevada Assets do not include
the Henderson, Nevada facility, which facility (but not the real property on
which it is located) is included in the Retained Assets and which Reorganized
Tronox will continue to own and operate after the Effective Date.

6

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•    The Environmental Insurance Assets.4
 
   
 
  In connection with the First Amended Plan, Tronox, the United States and the
applicable Government Environmental Entities will enter into the Environmental
Claims Settlement Agreement regarding the Environmental Claims.
 
   
 
  The Environmental Claims Settlement Agreement will govern the operation of the
Environmental Response Trusts and the role of the United States and the relevant
Government Environmental Entities in approving funding of environmental
activities, including response or remedial actions, corrective action, closure,
post-closure care and restoration for the duration of the Environmental Response
Trusts. Tronox and Reorganized Tronox shall have no responsibility or
involvement with respect to the Environmental Response Trusts once they are
established and funded in accordance with the First Amended Plan; provided,
that, to the extent an orderly and complete transfer of files and information
related to sites transferred to the Environmental Response Trusts has not yet
been completed, Tronox and Reorganized Tronox, as applicable, agree to use
commercially reasonable efforts to complete such transfer. The Environmental
Claims Settlement Agreement shall be submitted for public notice and comment as
required under federal environmental law and, where applicable, state
environmental law of the state in which the applicable property is located.
 
   
 
  The Environmental Claims Settlement Agreement shall (a) contain covenants not
to sue or assert (or, for certain states, to the extent allowable under
applicable state and federal law, releases of) any Environmental Claims against
Tronox, Reorganized Tronox and any successors in interest (including any Claims
and actions pursuant to sections 106 and 107 of CERCLA), (b) provide that
Tronox, Reorganized Tronox and any successors in interest shall have protection
from contribution actions or Claims with respect to the Owned Sites and the
Other Sites (including pursuant to section 113 of CERCLA) and (c) provide for
Reorganized Tronox to have access to the Expert Liability Report being prepared
in connection with the Anadarko Litigation, as well as the expert drafting such
report (it being understood that (c) may be included in a different document, as
applicable, including the Anadarko Litigation Trust Agreement). With respect to
the Owned Sites and Other Sites covered by the Environmental Settlement
Agreement, each such covenant and provision shall be similar to those in the
recent Asarco LLC, et al. (Case No. 05-21207) bankruptcy as set forth in the
Amended Settlement Agreement regarding Miscellaneous Federal and State
Environmental Sites and the Amended Consent Decree (the “Miscellaneous

 

4   “Environmental Insurance Assets” means (a) the cash equivalent, in an
aggregate amount of 100% of certain financial assurance letters of credit and
surety bonds and (b) to the extent applicable, available insurance policies and
other rights to reimbursement or contribution for response actions (whether
contractual or otherwise) held by Tronox and related to the Environmental
Claims, including (i) Forrest Products Division Pollution Legal Liability and
Cost Cap Insurance, Commerce & Industry Insurance Company (AIG) (Chartis) Policy
Number PLS/CCC 5295422 — Pre Existing Conditions; (ii) Policy Number PLS 5295423
— New Conditions; (iii) Henderson, NV, Pollution Legal Liability Select Clean-Up
Cost Cap Insurance Policy, American International Specialty Lines Insurance
Company (Chartis), Policy Number 6190315, (iv) The BMI, et al., Pollution
Clean-Up and Legal Liability Policy, American International Specialty Lines
Insurance Company (Chartis), Policy Number 267-9176; provided, however, that any
payments made by Chartis under the Chartis Policies on account of reimbursement
claims made by Tronox for expenditures prior to the Effective Date shall be
excluded from “Environmental Insurance Assets” and remain the property of
Reorganized Tronox.

7 

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  Settlement”) and Settlement Agreement Establishing a Custodial Trust for
certain Owned Sites in Alabama, Arizona, Arkansas, Colorado, Illinois, Indiana,
New Mexico, Ohio, Oklahoma, Utah and Washington (“Multi State Custodial Trust
Agreement), including in the sections entitled “Covenants Not to Sue” and
“Contribution Protection,” but excluding any provisions in paragraph 30 of the
Miscellaneous Settlement or paragraph 12(i) of the Multi-State Custodial Trust
Agreement.
 
   
 
  Notwithstanding anything to the contrary in this Term Sheet, nothing in the
First Amended Plan or Confirmation Order shall release, nullify, or preclude any
liability of Reorganized Tronox as the owner or operator of a property of
Reorganized Tronox with respect to any properties owned or operated after the
Effective Date (other than with respect to Henderson, Nevada as set forth in the
section entitled “Henderson, Nevada Plant”) and the Confirmation Order shall so
provide.
 
   
Indirect
Environmental
Claims
  Holders of Allowed Indirect Environmental Claims will have their Allowed Claim
split for purposes of sharing in the distributions to holders of General
Unsecured Claims and holders of Tort Claims as follows:
(Class 6):
   
 
   
 
 
•    50% of the amount of each Allowed Indirect Environmental Claim will be
treated in accordance with the treatment provided to Class 3 General Unsecured
Claims, and will receive its pro rata share of (i) New Common Stock allocated to
the GUC Pool and (ii) rights to participate in the Rights Offering; and
 
   
 
 
•    50% of the amount of each holder’s Allowed Indirect Environmental Claim
will receive its pro rata share of 12.5% (subject to the proportional reduction
described above) of the Tort Claims Trust Distributable Amount.
 
   
Convenience
Class (Class 7)
  A “convenience” class consisting of (i) Allowed General Unsecured Claims in
amounts less than $250 and (ii) 50% of Allowed Indirect Environmental Claims in
amounts less than $500, shall be created, which shall entitle holders of such
Claims (who are ineligible to participate in the Rights Offering) to receive
payment in cash on the Effective Date on account of and in full satisfaction of
their Claims in an amount equal to 89.0% of such Allowed Convenience Claims or
such other percentages as shall be acceptable to Tronox, the Backstop Parties
and the Creditors’ Committee, to be funded by the Backstop Parties through the
purchase of the shares of New Tronox Common Stock to which the holders belonging
to the convenience class would otherwise have been entitled, in lieu of
receiving a distribution of New Tronox Common Stock. Holders of relevant Claims
in excess of the amount set forth above shall not have the option of electing to
reduce their Claims in order to be placed in the convenience class.
 
   
Equity Interests
in Tronox
Incorporated (Class
8):
  For settlement purposes only, Equity Interests will have the opportunity to
vote on the First Amended Plan. If Class 8 votes to accept the First Amended
Plan, Holders of Equity Interests shall receive their pro rata share of New
Warrants to be issued on the Effective Date, which shall be convertible into 5%
of the New Common Stock to be issued on the Effective Date at an implied total
enterprise value for Reorganized Tronox of $1.5 billion. If Class 8 votes to
reject the First Amended Plan, Equity Interests will receive no distributions.

8

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Settlement and Releases
  Except with respect to Environmental Claims, which shall be treated as set
forth herein and in the Environmental Claims Settlement Agreement, all
distributions to be made pursuant to the Restructuring will be in full
satisfaction of, and represent a settlement of, all disputes and claims,
including all lender intercreditor agreements and interests of and between the
parties receiving such distributions and including litigation claims, whether
known or unknown, arising between or among such parties. Pursuant to section
1123 of the Bankruptcy Code and Bankruptcy Rule 9019, and in consideration for
the classification, Distributions, releases, and other benefits provided under
the First Amended Plan, upon the Effective Date, the provisions of the First
Amended Plan shall constitute a good faith compromise and settlement of all
Claims and Equity Interests and controversies resolved pursuant to the First
Amended Plan.
 
   
 
  The First Amended Plan shall contain customary releases, indemnifications, and
exculpations.
 
   
 
  Nothing in the First Amended Plan, the Plan Supplement or any document related
thereto shall in any way release any claim against or liability of the following
parties, who are not Released Parties: Lehman Brothers Holdings Inc., Ernst &
Young LLP, Kerr-McGee Corporation and Anadarko Petroleum Corporation and their
officers, directors, employees, advisors, attorneys, professionals, accountants,
investment bankers, consultants, agents and other representatives (including
their respective officers, directors, employees, members and professionals) in
their capacity as such, whether such Claims or liabilities be direct or
indirect, fixed or contingent, including the Claims asserted in the Anadarko
Litigation.
 
   
 
  For the avoidance of doubt, nothing in the First Amended Plan, the Plan
Supplement or any document related thereto shall in any way release any
individuals who were former directors or officers of Tronox or their
subsidiaries and also were or currently are directors or officers of Kerr-McGee
Corporation and/or Anadarko Petroleum Corporation.
 
   
2010 Management Bonus Plan
  The First Amended Plan will provide for assumption of the cash compensation
plan presented by Tronox to the Backstop Parties and referred to as the “2010
Bonus Plan.”
 
   
Governance
   
 
   
     Board of Directors:
  The New Board shall consist of seven (7) directors and shall include the Chief
Executive Officer of Reorganized Tronox Incorporated and six other directors who
shall each be an “independent director” within the meaning of the rules of the
New York Stock Exchange. The members of the Board shall be selected by the
Backstop Parties in consultation with Tronox and the Creditors’ Committee, and
subject to background checks reasonably satisfactory to Tronox and the
Creditors’ Committee; provided that the Creditors’ Committee shall have
unconditional veto rights with respect to the selection of two of the directors.

9

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     Registration
Rights Agreement:
  The Backstop Parties and holders of New Convertible Preferred Stock shall be
entitled to registration rights pursuant to the Registration Rights Agreement,
which shall be in substantially the form attached as Exhibit F to the Equity
Commitment Agreement, which form of agreement will also be filed with the
Bankruptcy Court as part of the Plan Supplement. On the Effective Date,
Reorganized Tronox and the Backstop Parties will execute the final form of
Registration Rights Agreement. Any changes to the form of Registration Rights
Agreement included as Exhibit F to the Equity Commitment Agreement must be
reasonably acceptable to Tronox, the Backstop Parties and the Creditors’
Committee.
 
   
     Listing of Common Stock:
  The Parties shall use commercially reasonable efforts to cause as soon as
possible after the Effective Date, the shares of New Common Stock to be listed
on the NYSE or the NASDAQ Stock Market.
 
   
Conditions Precedent
  The consummation of the Restructuring pursuant to the First Amended Plan will
be subject to customary and appropriate conditions precedent, including the
following:
 
   
     General Conditions
   
 
   
     Documentation:
  All documentation and pleadings prepared in connection with the Restructuring,
including the First Amended Plan, the Definitive Restructuring Documentation,
and any documents, motions, pleadings, orders or the like prepared or filed in
connection with the Chapter 11 Cases shall be in form and substance satisfactory
to the Parties; and where Court approval is required for a Definitive
Restructuring Document, such approval shall have been obtained.
 
   
     Government Consent:
  On or before September 23, 2010, the Environmental Settlement Documents shall
have been executed, subject to any applicable public notice and comment
proceedings and procedures or other regulatory approval requirements.
 
   
     Other Consents:
  To the extent any other consent or waiver is required to be obtained to effect
the Restructuring, such consent or waiver shall have been obtained and shall be
in full force and effect.
 
   
     Management Equity Plan and New Management Agreements
  The First Amended Plan will provide that on the Effective Date, Reorganized
Tronox will (a) adopt the Management Equity Plan, which shall provide for the
issuance of certain equity-based awards and (b) enter into New Management
Agreements. It will be a condition precedent to the Effective Date of the First
Amended Plan that the terms of the Management Equity Plan and New Management
Agreements are reasonably acceptable to Tronox, the Creditors’ Committee and the
Required Backstop Parties.

10

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     Conditions to the Obligations of the Backstop Parties
   
 
   
     BMI Contract
  Tronox shall have assumed its current agreements or entered into a new long
term contract with BMI to provide Tronox access to water and power transmission
assets at current rates.
 
   
     CRC Contract
  Tronox shall have assumed its agreements with the Colorado River Commission,
and such agreements shall continue in full force and effect after the Effective
Date.
 
   
     Available Funds
  On the Effective Date, immediately prior to giving effect to the transactions
contemplated hereby and by the First Amended Plan (including the payment in full
of all Allowed Administrative Expenses and Allowed Priority Claims (as such
terms are to be defined in the First Amended Plan)), the Tronox Parties shall
have Available Cash equal to or greater than the amounts set forth on Schedule
8(b)(viii) to the Equity Commitment Agreement as the “Cash Balance,” as
applicable to the Effective Date, or such other lower amount as shall be agreed
to by the Required Backstop Parties. To the extent the Effective Date occurs
after December 31, 2010, the Company shall provide an updated schedule setting
forth the projected Cash Balance reasonably acceptable to the Required Backstop
Parties.
 
   
 
  On the Effective Date, the amount of capital expenditures made by the Company
for the Kwinana Investment (as defined in the Credit Agreement) shall not exceed
amounts set forth on Schedule 8(b)(viii) to the Equity Commitment Agreement.
 
   
 
  Financing Fees, Allowed Administrative Expenses, Priority Claims and Cure
Claims (as such terms are defined in the First Amended Plan) paid on the
Effective Date shall not exceed $32,500,000; it being agreed that Financing Fees
shall include fees payable to potential lenders in conjunction with the Exit
Financing.
 
   
 
  Settlement Escrow Account and Cash Collateralized Letters of Credit released
prior to or on the Effective Date shall in the aggregate equal or exceed
$58,000,000.

11

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     Claims Amounts
  On the Effective Date, (A) the aggregate amount of Allowed General Unsecured
Claims (other than allowed Indirect Environmental Claims and Claims with respect
to the Unsecured Notes) shall not exceed $80 million; (B) the aggregate amount
of Allowed Indirect Environmental Claims shall not exceed $80 million; and
(C) there shall be no material unresolved Indirect Environmental Claims, which,
individually or in the aggregate, after having been resolved, reasonably could
cause the final aggregate amount of Allowed Indirect Environmental Claims to
exceed $80 million; provided however, that the conditions in clauses (A) and
(B) above shall be deemed to be met so long as the aggregate amount of allowed
General Unsecured Claims and Allowed Indirect Environmental Claims does not
exceed $140 million.
 
   
     Provision of Information
  The Backstop Parties shall have been provided (a) a schedule of all workers
compensation claims to be assumed by Tronox, together with the letters of
credit, bonds or other instruments collateralizing such claims, and (b) a
schedule of environmental reimbursements, letters of credit and sureties to be
contributed to the Environmental Settlement Trusts.
 
   
     Savannah, Georgia Sulfuric Acid
Facility
  Prior to the Effective Date, the Savannah, Georgia sulfuric acid facility
shall have been (i) transferred to an Environmental Response Trust at no
material cost to Tronox, (ii) sold in a sale pursuant to section 363 of the
Bankruptcy Code, which sale shall have been approved by a Final Order of the
Bankruptcy Court and shall have been consummated, or (iii) shut down, having no
remaining employees or production.
 
   
Other Features of the Restructuring
   
 
   
     Lease of Henderson, Nevada Plant
  Tronox and the applicable Environmental Response Trust shall have entered into
lease agreements relating to the Henderson, Nevada facility on terms
satisfactory to the Required Backstop Parties, the Creditors’ Committee and the
relevant Government Environmental Entity, which terms shall specify that
Reorganized Tronox is not responsible for costs of any environmental remedial
action or restoration associated with the presence or releases of hazardous
substances from or at any portion of the Henderson facility prior to the
Effective Date and all areas affected by natural migration of such substances
therefrom, except to the extent exacerbated by any act or omission of
Reorganized Tronox after the Effective Date. Notwithstanding the nominal rent
set forth in the lease, the rent for the Henderson facility can be set at up to
$10.5 million for the first term; provided, that such amount shall be deducted
from the Funded Environmental Amount and allocated and paid on account of the
lease on the Effective Date.
 
   
 
  Reorganized Tronox shall exercise commercially reasonable due care at the
Henderson facility and shall comply with all applicable local, state and federal
laws and regulations. Nothing in the previous sentence shall require Reorganized
Tronox to clean up existing contamination in or under the ground except to the
extent exacerbated by any act or omission of Reorganized Tronox after the
Effective Date. Reorganized Tronox recognizes that the implementation of
response actions at the Henderson facility may interfere with Reorganized
Tronox’s use of the property, and may require commercially reasonable
accommodation from Tronox. Reorganized Tronox agrees to cooperate fully with the
EPA, the Nevada Division of Environmental Protection

12

--------------------------------------------------------------------------------

 

     
 
  (the “NDEP”), and other relevant state agencies in the implementation of
response actions at the Henderson facility and further agrees to comply with
regulatory requirements related to all such response actions. The EPA and the
NDEP, consistent with their responsibilities under applicable law, will use
reasonable efforts to minimize any interference with Reorganized Tronox’s
operations by such entry and response at the Henderson facility.
 
   
 
  The leases shall contain customary provisions relating to indemnity by a
tenant with respect to the operation of the tenant at the leased property
following the Effective Date. For the avoidance of doubt, Reorganized Tronox
shall have liability as an operator of the Henderson facility and shall be
responsible for related response action, if any, to the extent such liability or
responsibility relates to releases of hazardous substances from any portion of
the Henderson facility due to any act or omission of Reorganized Tronox after
the Effective Date.
 
   
     Dilution
  The New Common Stock issued in connection with the First Amended Plan and the
Rights Offering will be subject to dilution by New Common Stock issued after the
Effective Date, including upon issuance of New Common Stock pursuant to the
Management Equity Plan, conversion of the New Convertible Preferred Stock and
exercise of the New Warrants.
 
   
     Charter Documents
  All charter documents of Reorganized Tronox will be satisfactory to the
Required Backstop Parties and the Creditors’ Committee. The Certificate of
Incorporation of Reorganized Tronox Incorporated shall include appropriate
super-majority provisions with respect to certain material actions (subject to
customary carve-outs and limitations), such as issuance and redemption of equity
securities and options, amendments to the charter documents, changes to the
number of directors, sales or transfers of all or substantially all assets of
Reorganized Tronox, recapitalizations and reorganizations, and affiliate
transactions. Such super-majority provisions shall cease to be effective on the
date Reorganized Tronox Incorporated becomes a public reporting company.
 
   
     Fees & Expenses
  Tronox shall pay the fees and expenses of the legal counsel and financial
advisors to the Backstop Parties as set forth in the Equity Commitment
Agreement. The Parties agree that the transactions contemplated hereby comprise
an Alternative Transaction under the Gleacher engagement letter.
 
   
 
  Tronox recognizes that the efforts of Creditors’ Committee member Michael E.
Carroll contributed substantially to this case in connection with the support of
the Restructuring contemplated hereby by holders of Tort Claims. Accordingly,
Tronox agrees that, on the Effective Date, subject to supporting documentation
being provided to counsel to the Backstop Parties, Tronox and the Creditors
Committee, Tronox shall pay all reasonable fees and expenses of Mr. Carroll’s
counsel, Montgomery, McCracken, Walker & Rhoads, LLP, for services rendered and
to be rendered in connection therewith up to a maximum of $200,000.

13

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Plan Milestones:
  The plan milestones are set forth in the Equity Commitment Agreement, and
shall include among other deadlines:
 
   
 
  August 27, 2010: Tronox to file motion on an expedited basis to have Equity
Commitment Agreement approved.
 
   
 
  September 3, 2010: Deadline for Tronox to file First Amended Plan and
Disclosure Statement.
 
   
 
  September 17, 2010: Deadline for order entered by the Bankruptcy Court
approving the Equity Commitment Agreement.
 
   
 
  September 23, 2010: Environmental Settlement Agreement (and related exhibits)
to be completed on or prior to September 23, 2010.
 
   
 
  September 30, 2010: Deadline for order entered by the Bankruptcy Court
approving the Disclosure Statement.
 
   
 
  November 30, 2010: Deadline for order entered by the Bankruptcy Court
confirming the First Amended Plan and entry of the Confirmation Order.
 
   
 
  December 31, 2010: Equity Commitment expires; Deadline for Plan Effective
Date.

14

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Exhibit C
to
Equity Commitment Agreement
RIGHTS PROCEDURES

 

--------------------------------------------------------------------------------

 

UNITED STATES BANKRUPTCY COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK

                  
 
         
 
    )      
In re
    )     Chapter 11
 
    )      
TRONOX INCORPORATED, et al.,1
    )     Case No. 09-10156 (ALG)
 
    )      
Debtors.
    )     Jointly Administered
 
    )      
 
         

RIGHTS OFFERING PROCEDURES
On August [__], 2010, Tronox Incorporated and certain of its affiliates, as
debtors and debtors in possession (collectively, “Tronox”) filed the First
Amended Proposed Joint Plan of Reorganization of Tronox, et al. Pursuant to
Chapter 11 of the Bankruptcy Code (as may be amended from time to time, the
“Plan”) and the Disclosure Statement Regarding the First Amended Joint Plan of
Reorganization of Tronox Incorporated, et al. Pursuant to Chapter 11 of the
Bankruptcy Code (as may be amended from time to time, the “Disclosure
Statement”). Capitalized terms used but not otherwise defined herein shall have
the meanings set forth in the Plan.
     On [__________] [__], 2010, the Bankruptcy Court entered an order (the
“Solicitation Procedures Order”) approving, among other things, the adequacy of
the Disclosure Statement and use thereof in the solicitation of votes for the
Plan and these procedures for participating in the rights offering (the “Rights
Offering”) contemplated by, and to be implemented pursuant to, Article [ ] of
the Plan.
     All questions relating to these procedures, other documents associated with
the Rights Offering or the requirements for participating in the Rights Offering
should be directed to Kurtzman Carson Consultants LLC (the “Subscription
Agent”), the rights offering agent retained by Tronox in these Chapter 11 Cases
at:
Kurtzman Carson Consultants
2335 Alaska Avenue
El Segundo, California 90245
(866) 967-0675
 

1   The debtors in these chapter 11 cases include: Tronox Luxembourg S.ar.l;
Tronox Incorporated; Cimarron Corporation; Southwestern Refining Company, Inc.;
Transworld Drilling Company; Triangle Refineries, Inc.; Triple S, Inc.; Triple S
Environmental Management Corporation; Triple S Minerals Resources Corporation;
Triple S Refining Corporation; Tronox LLC; Tronox Finance Corp.; Tronox
Holdings, Inc.; Tronox Pigments (Savannah) Inc.; and Tronox Worldwide LLC.

 

--------------------------------------------------------------------------------

 

1. Rights Offering Overview
     Under the Plan, each Holder of a Class 3 General Unsecured Claim in excess
of $250 or Class 6 Indirect Environmental Claim in excess of $500, whose Claim
has been Allowed as of the Record Date (as defined below) (an “Initial Eligible
Holder”) or whose claim becomes Allowed after the Record Date but on or before
the Rights Expiration Date (a “Subsequent Eligible Holder” and collectively with
the Initial Eligible Holders, the “Eligible Holders”), has the right, but not
the obligation, to purchase up to its New Common Stock Pro Rata Share (as
defined below) of an aggregate of 11,756,570 shares of New Common Stock (the
“Rights Offering”). In order to exercise its right to purchase shares of New
Common Stock (the “Subscription Rights”), an Eligible Holder must complete the
enclosed rights offering subscription exercise form (the “Rights Exercise
Form”), which is being sent concurrently to each Initial Eligible Holder
entitling such holder to exercise its Subscription Rights and will be sent to
each Subsequent Eligible Holder as described in Section 3 below, and make the
representations and warranties contained therein. The Rights Exercise Form
indicates the price per share of New Common Stock (the “Rights Exercise Price”)
payable in connection with such an exercise. Any reference to “Subscription
Purchase Price” shall mean the Rights Exercise Price multiplied by the number of
shares of New Common Stock such Eligible Holder has properly elected to purchase
in accordance with and subject to these procedures and the Rights Exercise Form.
     “New Common Stock Pro Rata Share” of an Eligible Holder means the ratio
(expressed as a percentage) of such holder’s Rights Participation Claim Amount
(as defined below) to the aggregate amount of all Rights Participation Claim
Amounts available to Eligible Holders as of the date fixed by the Bankruptcy
Court for the solicitation of acceptances and rejections of the Plan (the
“Record Date”) subject to adjustment as set forth below.
     “Rights Participation Claim Amount” means, (a) in the case of an Unsecured
Notes Claim, the principal amount thereof plus prepetition accrued interest; and
(b) in the case of any other General Unsecured Claim (other than the Unsecured
Notes Claims) and Indirect Environmental Claims, the amount of such Claim that
is Allowed (i) as of the Record Date for Initial Eligible Holders and (ii) as of
the date a Claim becomes Allowed, for Subsequent Eligible Holders (it being
understood that the Claim must be Allowed before the Rights Expiration Date). If
a Claim is subject to any dispute by the Holder thereof and is not finally
determined (with any right to appeal having expired or having been irrevocably
waived) as of five calendar days prior to the Rights Expiration Date, then the
Allowed amount of such Claim shall be deemed to be zero for the purposes of
calculating the Rights Participation Amount, and (ii) for holders of Indirect
Environmental Claims allowed for voting purposes, their respective Allowed Claim
for purposes of participation in the Rights Offering shall be limited to 50% of
their Allowed Claim.
     The Subscription Rights will not be transferable. Only (i) Initial Eligible
Holders that are entitled to exercise Subscription Rights on the Record Date and
Subscription Nominees (as defined below) of such Initial Eligible Holders and
(ii) Subsequent Eligible Holders that receive Subscription Forms on account of
their claims becoming Allowed after the Record Date, may submit completed Rights
Exercise Forms. If an Allowed Claim is transferred after rights have been
allocated, the transferee must receive the benefit of any exercise of the
related Subscription Rights and the benefit of such Subscription Rights are not
separable from the underlying Allowed Claim. Fractional shares shall not be
issued; rather, the number of shares of New

2

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Common Stock available for purchase shall be rounded down to the nearest whole
number, and no compensation shall be paid in cash in respect of such fractional
shares. Each Subscription Right can be exercised for one share of New Common
Stock.
     Notwithstanding anything contained in the Plan to the contrary, under no
circumstances shall any Holder of a General Unsecured Claim, Indirect
Environmental Claim or Unsecured Notes Claim that is not entitled to vote on the
Plan pursuant to the Disclosure Statement Order have any Rights Participation
Claim Amount with respect to any such Claim.
2. The Equity Backstop
     The Rights Offering will be backstopped by certain members of an Ad Hoc
Group of Holders of Unsecured Notes (the “Backstop Parties”). Each of the
Backstop Parties has, severally and not jointly, agreed pursuant to an equity
commitment agreement among the Backstop Parties and the Company (the “Equity
Commitment Agreement”), to subscribe for, and purchase, all shares of New Common
Stock that are not purchased by other Eligible Holders pursuant to the Rights
Offering (the “Unsubscribed Shares”). The Backstop Parties will receive certain
consideration in return for the provided commitment. The consideration will be
an aggregate of 705,394 shares of New Common Stock. In the event that the Equity
Commitment Agreement is terminated under certain circumstances, the Backstop
Parties shall be entitled to a cash termination fee of $11.1 million.
3. Commencement/Expiration of the Rights Offering
     The Rights Offering shall commence on the day upon which the Rights
Exercise Forms are first mailed or made available to Eligible Holders (the
“Rights Commencement Date”). The Rights Offering shall expire at 5:00 p.m.
(Pacific Time) on [•], 2010, the “Rights Expiration Date”). Each Eligible Holder
intending to participate in the Rights Offering must affirmatively make a
binding election to exercise its Subscription Rights on or prior to the Rights
Expiration Date in accordance with the provisions set forth in Section 4 below
and in the Rights Exercise Form and submit payment for the shares of New Common
Stock underlying such Subscription Rights on or prior to the Rights Expiration
Date in accordance with the provisions of Section 4 below; provided that each
Backstop Party shall make any payments in connection with the Rights Offering
directly to Tronox on the Effective Date.
     To facilitate the exercise of the Subscription Rights, (i) on the Rights
Commencement Date, Tronox will mail or cause to be mailed a Rights Exercise Form
to each Initial Eligible Holder or its intermediary as of the Record Date and
(ii) Tronox will mail or cause to be mailed a Rights Exercise Form, to each
Subsequent Eligible Holder and within five Business Days of the Rights
Expiration Date for any Subsequent Eligible Holders, together with instructions
for the proper completion, due execution and timely delivery of the Rights
Exercise Form to the Subscription Agent.
     Given that Holders of Unsecured Notes Claims are holding their Claims
through the facilities of The Depository Trust Company (“DTC”), Tronox will
furnish or cause to be furnished Rights Exercise Forms to the record holders of
such Claims, including, without limitation, brokers, banks, dealers, or other
agents or nominees (the “Subscription Nominees”). Each Subscription Nominee will
be entitled to receive sufficient copies of the Rights Exercise

3

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Form and Disclosure Statement for distribution to the beneficial owners of the
Unsecured Notes Claims for whom such Subscription Nominee holds such Claims.
4. Exercise of Subscription Rights
     Each Eligible Holder that elects to participate in the Rights Offering (in
such capacity, a “Participating Eligible Holder”) must affirmatively make a
binding, irrevocable election to exercise its Subscription Rights before the
Rights Expiration Date.
     Each Eligible Holder (other than the Backstop Parties) is entitled to
participate in the Rights Offering solely to the extent of its Rights
Participation Claim Amount. Each Eligible Holder may exercise all or any portion
of such holder’s Subscription Rights pursuant to the procedures outlined below.
Exercise by Eligible Holders
     To exercise the Subscription Rights, each Eligible Holder (excluding
Eligible Holders that hold Unsecured Notes Claims) must (i) return a duly
completed Rights Exercise Form to the Subscription Agent and (ii) pay to the
Subscription Agent, by wire transfer of immediately available funds or bank
cashier’s check, the Subscription Purchase Price, so that both the Rights
Exercise Form and payment of the Subscription Purchase Price are actually
received by the Subscription Agent prior to the Rights Expiration Date in
accordance with these procedures.
     For a beneficial Holder of an Unsecured Notes Claim to exercise its
Subscription Rights, such Holder must return a duly completed Rights Exercise
Form to its Subscription Nominee or otherwise instruct its Subscription Nominee
as to its instructions for the Subscription Rights in accordance with procedures
established by its Subscription Nominee, which, in turn, must comply with
clauses (i) and (ii) of the immediately preceding paragraph.
     For purposes of this Rights Offering, Wilmington Trust Corporation, in its
capacity as Indenture Trustee, shall not constitute a Subscription Nominee and
shall have no responsibility with respect to sending any Rights Offering
information or collecting any Rights Exercise Forms.
Deemed Representations and Acknowledgements
     Any Holder exercising any Subscription Rights is deemed to have made the
following representations and acknowledgements:
     (i) Such Holder recognizes and understands that the Subscription Rights are
not transferable and that the benefit of the Subscription Rights are not
separable from the claim with respect to which the Subscription Rights have been
granted. The Holder acknowledges that the Subscription Rights are not
transferable and can only be exercised by an Eligible Holder.
     (ii) Such Holder represents and warrants that it will not accept a
distribution of New Common Stock, if at such time, it does not own the Rights
Claim and by accepting a distribution of New Common Stock, such Holder will be
deemed to be the owner of the Rights Claim. Such

4

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Holder further agrees that if it transfers its Rights Claim after the Record
Date, the benefit of the rights related thereto must be transferred as well and
cannot be transferred independently.
Failure to Exercise Subscription Rights
     Unexercised Subscription Rights will be cancelled on the Rights Expiration
Date. If, on or prior to the Rights Expiration Date, the Subscription Agent for
any reason does not receive from an Eligible Holder or its Subscription Nominee
(i) a duly completed Rights Exercise Form (or if such Rights Exercise Form is
incomplete or otherwise deficient), and (ii) payment of the Subscription
Purchase Price for any such Eligible Holder, such Eligible Holder shall be
deemed to have relinquished and waived its right to participate in the Rights
Offering.
     Any attempt to exercise Subscription Rights after the Rights Expiration
Date shall be null and void and Tronox shall not be obligated to honor any such
purported exercise received by the Subscription Agent after the Rights
Expiration Date regardless of when the documents relating thereto were sent.
     The method of delivery of the Rights Exercise Form and any other required
documents is at each Holder’s option and sole risk, and delivery will be
considered made only when actually received by the Subscription Agent. If
delivery is by mail, registered mail with return receipt requested, properly
insured, in encouraged and strongly recommended. In all cases, you should allow
sufficient time to ensure timely delivery prior to 5:00 p.m. (Pacific Time) on
the Rights Expiration Date.
Payment for Subscription Rights
     On the Rights Commencement Date or at such later date described above,
Tronox shall deliver or cause to be delivered to each Eligible Holder, along
with the Rights Exercise Form and Disclosure Statement, a notice setting forth
the number of shares of New Common Stock such Eligible Holder is entitled to
purchase, such Holder’s total Subscription Purchase Price and instructions for
payment of such Holder’s Subscription Purchase Price.
     If, on or prior to the Rights Expiration Date set forth in such
instructions, the Subscription Agent for any reason does not receive on behalf
of the Eligible Holder immediately available funds by wire transfer or bank
cashier’s check in an amount equal to the total Subscription Purchase Price for
such Eligible Holder’s Subscription Rights, such Eligible Holder shall be deemed
to have relinquished and waived its Subscription Rights.
Disputes, Waivers, and Extensions
     Any and all disputes concerning the timeliness, viability, form and
eligibility of any exercise of Subscription Rights shall be addressed in good
faith by Tronox in consultation with the Creditors’ Committee and the Backstop
Parties, the determinations of which shall be final and binding. Tronox, in
consultation with the Creditors’ Committee and the Backstop Parties, and subject
to Bankruptcy Court approval, may (i) waive any defect or irregularity, or
permit a defect or irregularity to be corrected, within such times as they may
determine in good faith to be appropriate, or (ii) reject the purported exercise
of any Subscription Rights for which the Rights Exercise Form and/or payment
includes defects or irregularities.

5

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     Rights Exercise Forms shall be deemed not to have been properly completed
until all irregularities have been waived or cured within such time as Tronox
determine in its discretion reasonably exercised in good faith. Tronox reserves
the right, but is under no obligation, to give notice to any Eligible Holder
regarding any defect or irregularity in connection with any purported exercise
of Subscription Rights by such Eligible Holder and Tronox may, but is under no
obligation, to permit such defect or irregularity to be cured; provided,
however, that none of Tronox (including any of its respective officers,
directors, employees, agents or advisors), the Subscription Agent, the
Creditors’ Committee or the Backstop Parties shall incur any liability for
failure to give such notification.
     Tronox, with the approval of the Bankruptcy Court, the Creditors’ Committee
and the Backstop Parties, may (i) extend the duration of the Rights Offering or
adopt additional detailed procedures to more efficiently administer the
distribution and exercise of the Subscription Rights; and (ii) make such other
changes to the Rights Offering including which creditors constitute Eligible
Holders.
Funds
     The payments made in order to acquire New Common Stock pursuant to the
Rights Offering (the “Rights Offering Funds”) shall be deposited when made and
held by the Subscription Agent in escrow pending the Effective Date in an
account or accounts (a) which shall be separate and apart from the Subscription
Agent’s general operating funds and any other funds subject to any lien or any
cash collateral arrangements and (b) which segregated account or accounts will
be maintained for the purpose of holding the money for administration of the
Rights Offering until the Effective Date. The Subscription Agent shall not use
the Rights Offering Funds for any purpose other than to release the funds as
directed by Tronox on the Effective Date and shall not encumber or permit the
Rights Offering Funds to be encumbered by any lien or similar encumbrance. No
interest will be paid to Participating Eligible Holders on account of any
amounts paid in connection with their exercise of Subscription Rights under any
circumstances.
     Notwithstanding anything to the contrary herein, each Backstop Party shall
make all payments in connection with the Rights Offering directly to Tronox on
the Effective Date.
     All exercises of Subscription Rights are subject to and conditioned upon
confirmation of the Plan and the occurrence of the Effective Date of the Plan.
In the event the current Plan is not confirmed and consummated, any payment of
the Subscription Purchase Price made to and held by the Subscription Agent will
be promptly refunded, without interest, to each respective Participating
Eligible Holder.
     Notwithstanding anything to the contrary herein, each Backstop Party shall
make all payments in connection with the Rights Offering directly to Tronox on
the Effective Date.
Participating Eligible Holder Release
     Upon the Effective Date of the Plan, each Participating Eligible Holder
shall be deemed by virtue of its election to exercise Subscription Rights, to
have waived and released, to the fullest extent permitted under applicable law,
all rights, claims or causes of action against

6

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Tronox, the Reorganized Tronox Debtors, the Creditors’ Committee, the Backstop
Parties and the Subscription Agent, and each of their respective affiliates,
officers, directors, counsel and advisors arising out of or related to the
receipt, delivery, disbursements, calculations, transmission or segregation of
cash, Subscription Rights and shares of New Common Stock in connection with the
Rights Offering, except to the extent such claims arise from bad faith, gross
negligence or willful misconduct.
5. Registration Rights Agreement
     The New Common Stock will be issued to the Participating Eligible Holders
without registration under the Securities Act of 1933, as amended, in reliance
upon the exemption from registration provided by Section 1145 of the Bankruptcy
Code. The Unsubscribed Shares will be issued to the Backstop Parties without
registration under the Securities Act in reliance upon the exemption from
registration provided by Section 4(2) of the Securities Act. There is no public
market for the New Common Stock and there are no guarantees that Tronox will be
able to meet the eligibility requirements of any stock exchange or that a public
market for the New Common Stock will ever develop.
     On the Effective Date, Reorganized Tronox and the Backstop Parties will
execute a Registration Rights Agreement, which shall provide that the Backstop
Parties and holders of New Convertible Preferred Stock shall be entitled to
registration rights. The Plan will provide that such Registration Rights
Agreement shall constitute valid and binding obligations of Reorganized Tronox
with respect to each holder of New Common Stock or Convertible Preferred Stock
intended to benefit therefrom. Please refer to Section [ ] of the Disclosure
Statement and Article [ ] of the Plan for a more detailed discussion regarding
the issuance of the New Common Stock.
6. Transfer Restriction
     The Subscription Rights will not be transferable and will not be listed or
quoted on any public or over-the-counter exchange or quotation system. Only
(i) Initial Eligible Holders that are entitled to exercise such Subscription
Rights on the Record Date and Subscription Nominees of such Initial Eligible
Holders and (ii) Subsequent Eligible Holders that receive Subscription Forms on
account of their claims becoming Allowed after the Record Date, may submit
completed Rights Exercise Forms. If an Allowed Claim is transferred after rights
have been allocated the transferee must receive the benefit of any exercise of
the related Subscription Rights and the benefit of such Subscription Rights are
not separable from the underlying Allowed Claim. Fractional shares shall not be
issued; rather, the number of shares of New Common Stock available for purchase
shall be rounded down to the nearest whole number, and no compensation shall be
paid in cash in respect of such fractional shares. Each Subscription Right can
be exercised for one share of New Common Stock.
7. Subsequent Adjustments
     The New Common Stock Pro Rata Share is subject to adjustment upon Allowance
of Claims after the Record Date. If, as of the Rights Expiration Date, the
amount of an Initial Eligible Holder’s Allowed Claims from which the
Subscription Rights arise either increase or decrease from the amounts of such
underlying claims as of the Record Date or if there are

7

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Subsequent Eligible Holders subsequent to the Record Date, (i) Eligible Holders
of new claims or claims that have increased will be given Subscription Rights to
exercise within five Business Days of the Rights Expiration Date and Holders of
such Claims will have 10 Business Days to exercise them and (ii) Eligible
Holders of claims that have subsequently been reduced will receive, to the
extent they have submitted a subscription price and such subscription price is
greater than the maximum subscription price payable on account of such reduced
claim, a refund without interest of the difference between such amounts and be
permitted to subscribe for the remainder. The Rights delivered in connection
with sub-part-(i) of the previous sentence will be based on the aggregate amount
of Allowed Unsecured Claims held by Eligible Holders as of the Rights Expiration
Date (the “Updated Allowed Amount”). If as a result, more than all of the New
Common Stock subject to the Rights Offering has been subscribed for, each
properly exercising Eligible Holder shall have the Subscription Rights which it
may exercise reduced on a pro rata basis based on the Updated Allowed Amount.
The difference between the price actually paid by such exercising Eligible
Holder and the Rights Exercise Price that such Eligible Holder is required to
pay after giving effect to the reduction, if any, shall be refunded, without
interest, as soon as reasonably practicable but no later than five days after
the Effective Date.
8. Rights Offering Conditioned Upon Confirmation of The Plan; Reservation of
Subscription Rights
     All exercises of Subscription Rights are subject to and conditioned upon
the confirmation of the Plan and the occurrence of the Effective Date of the
Plan. Notwithstanding anything contained herein, the Disclosure Statement or the
Plan to the contrary, Tronox and the Reorganized Tronox Debtors reserve the
right, in consultation with the Creditors’ Committee and the Backstop Parties,
to modify these procedures or adopt additional detailed procedures if necessary
in the Tronox Debtor’s business judgment to more efficiently administer the
distribution and exercise of the Subscription Rights or comply with applicable
law.
9. Inquiries And Transmittal Of Documents; Subscription Agent
     Questions relating to these procedures, properly completing the Rights
Exercise Form or any of the requirements for exercising Subscription Rights or
otherwise participate in the Rights Offering, should be directed to the
Subscription Agent at:
Kurtzman Carson Consultants
2335 Alaska Avenue
El Segundo, California 90245
(866) 967-0675
     All documents relating to the Rights Offering are available from the
Subscription Agent as set forth herein. In addition, such documents, together
with all papers filed in these chapter 11 cases, are available on the Debtors’
restructuring website (http://www.kccllc.net/tronox) free of charge.

8

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These procedures and the subscription instructions should be read carefully and
must be strictly followed. The risk of non-delivery of any documents sent or
payments remitted to the Subscription Agent in connection with the exercise of
Subscription Rights lies solely with Eligible Holders, and shall not fall on
Tronox, Reorganized Tronox Debtors or any of their respective officers,
directors, employees, agents or advisors, including the Subscription Agent,
under any circumstance whatsoever.

9

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Exhibit D
to
Equity Commitment Agreement
RIGHTS SUBSCRIPTION FORMS

 

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Exhibit E
to
Equity Commitment Agreement
GLEACHER & COMPANY SECURITIES, INC. ENGAGEMENT LETTER

 

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Exhibit F
to
Equity Commitment Agreement
FORM OF REGISTRATION RIGHTS AGREEMENT

 

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REGISTRATION RIGHTS AGREEMENT
among
TRONOX, INC.
and
EACH OF THE STOCKHOLDERS
of
TRONOX, INC.
PARTY HERETO
Dated as of                                         , 2010
 
 

 

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TABLE OF CONTENTS

              Page  
1. Definitions
    2  
 
       
2. Registration
    5  
 
       
3. Demand Registration
    6  
 
       
4. Piggyback Registration
    8  
 
       
5. Registration Procedures
    9  
 
       
6. Registration Expenses
    13  
 
       
7. Underwriting Requirements
    13  
 
       
8. Indemnification; Liquidated Damages
    14  
 
       
9. Rule 144 Information
    17  
 
       
10. Miscellaneous
    18  

i

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REGISTRATION RIGHTS AGREEMENT
     This REGISTRATION RIGHTS AGREEMENT, dated as of [______], 2010 (this
“Agreement”), is entered into among TRONOX, INC., a Delaware corporation (the
“Company”), and the Holders. Capitalized terms not otherwise defined herein have
the meanings set forth in Section 1.
W I T N E S S E T H :
     WHEREAS, on January 11, 2009 the Company and certain of its direct and
indirect subsidiaries each filed a voluntary petition in the United States
Bankruptcy Court for the Southern District of New York (the “Bankruptcy Court”)
initiating cases under chapter 11 of title 11 of the United States Code (the
“Bankruptcy Code”);
     WHEREAS, the First Amended Joint Plan of Reorganization of Tronox
Incorporated, et al., as confirmed on [___________], 2010 by an order of the
Bankruptcy Court entered on [___________], 2010 (the “Plan”), provides that the
Company shall issue to unsecured creditors of the Company and its subsidiaries
shares of Common Stock;
     WHEREAS, the shares of Common Stock to be issued to unsecured creditors of
the Company and its subsidiaries pursuant to the Plan, including pursuant to a
rights offering (the “Rights Offering”) in which the Company shall issue Common
Stock to the purchasers thereof who properly and timely subscribe in the Rights
Offering. The shares of Common Stock issued in the Rights Offering are being
issued in reliance upon Section 1145 of the Bankruptcy Code (“Section 1145”)
without registration under the Securities Act or any state securities laws;
     WHEREAS, notwithstanding the provisions of Section 1145, resales of the
Shares may be required to be registered under the Securities Act and applicable
state securities laws, depending upon the status of a Holder or the intended
method of distribution of the Shares; and
     WHEREAS, the Company and the Backstop Parties have entered into that
certain Equity Commitment Agreement dated as of August [__], 2010 (the
“Commitment Agreement”), pursuant to which the Backstop Parties agreed to
purchase (i) any shares of Common Stock purchasable upon the exercise of Rights
which are not so purchased in the Rights Offering (“Unsubscribed Shares”) and
(ii) Series A Convertible Preferred Stock, par value $0.01 per share of the
Company (the “Preferred Stock”), in each case without registration under the
Securities Act or any state securities laws in reliance upon the exemption from
registration under the Securities Act provided by Section 4(2) thereof;
     WHEREAS, the Unsubscribed Shares purchased by the Backstop Holders and the
shares of Common Stock issued pursuant to Section 3(a) of the Commitment
Agreement will be “restricted securities” within the meaning of Rule 144 under
the Securities Act and resale of such shares may be required to be registered
under the Securities Act and applicable state securities laws;
     WHEREAS, in order to induce the Holders (including the Backstop Holders) to
complete the transactions contemplated by the Plan, on the effective date of the
Plan, the Company is

1

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granting to the Holders certain rights to cause the Company to register the
Shares and certain other Registrable Securities, on the terms and subject to the
conditions set forth herein.
     NOW, THEREFORE, in consideration of the premises set forth herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto, intending to be legally bound hereby, agree as
follows:
1. Definitions. As used in this Agreement, the following terms have the
following meanings:
     “Affiliate” means, with respect to any specified Person, any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
“control” when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms “controlling” and “controlled” have meanings correlative to the
foregoing.
     “Agreement” has the meaning set forth in the introduction.
     “Bankruptcy Code” has the meaning set forth in the preamble.
     “Backstop Holder” means the Holders that are parties to the Commitment
Agreement.
     “Bankruptcy Court” has the meaning set forth in the preamble.
     “Business Day” means any day (other than a day which is a Saturday, Sunday
or legal holiday in the States of New York) on which banks are open for business
in the States of New York.
     “Capital Stock” means, with respect to any Person, any and all shares,
interests, participations or other equivalents (however designated) of corporate
stock issued by such person, including each class of common stock and preferred
stock of such person.
     “Company” has the meaning set forth in the preamble.
     “Commitment Agreement” has the meaning set forth in the preamble.
     “Common Stock” means the Company’s common stock, par value $0.01 per share.
     “Company” has the meaning set forth in the introduction.
     “Delay Period” has the meaning set forth in Section 3(d).
     “Demand Notice” has the meaning set forth in Section 3(a)(i).
     “Demand Registration” has the meaning set forth in Section 3(b).
     “Effectiveness Period” has the meaning set forth in Section 3(c).

2

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     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and
the rules and regulations of the SEC promulgated thereunder.
     “Free Writing Prospectus” shall have the meaning set forth in Rule 405
under the Securities Act.
     “Holder” means each person identified as a Holder on the signature pages
hereto who is the record or beneficial owner of Registrable Securities, together
with their respective successors and permitted assigns who become parties to
this Agreement.
     “Indemnified Party” shall have the meaning set forth in Section 8(c).
     “Indemnifying Party” shall have the meaning set forth in Section 8(c).
     “Initial Outstanding Amount” has the meaning set forth in Section 3(a).
     “Inspectors” has the meaning set forth in Section 5(j).
     “Interruption Period” has the meaning set forth in Section 5.
     “Losses” has the meaning set forth in Section 8(a).
     “Marketing Materials” has the meaning set forth in Section 8(a).
     “No-Action Relief” means the written concurrence from the SEC with the
Company’s position regarding its financial statements set forth in its letter
dated [ ], 2010 to the Office of Chief Accountant of the Division of Corporate
Finance of the SEC.
     “Outside Date” has the meaning set forth in Section 8(e).
     “Person” means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
     “Piggyback Registration” has the meaning set forth in Section 4(a).
     “Plan” has the meaning set forth in the preamble.
     “Preferred Stock” has the meaning set forth in the preamble.
     “Prospectus” means the prospectus included in any Registration Statement
(including a prospectus that discloses information previously omitted from a
prospectus filed as part of an effective registration statement in reliance upon
Rule 430A), as amended or supplemented by any prospectus supplement, with
respect to the terms of the offering of any portion of the Registrable
Securities covered by such Registration Statement and all other amendments and
supplements to such prospectus, including post-effective amendments, and all
material incorporated by reference or deemed to be incorporated by reference in
such prospectus, including any Free Writing Prospectus.

3

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     “Records” has the meaning set forth in Section 5(j).
     “Registrable Securities” means (i) the Shares, (ii) any shares of Preferred
Stock, and (iii) any additional shares of Common Stock acquired by any Holder
after the date hereof, including upon conversion of any shares of Preferred
Stock, and any shares of Common Stock or Preferred Stock issued or distributed
by way of a dividend, stock split or other distribution in respect of the Shares
or the Preferred Stock or acquired by way of any rights offering or similar
offering made in respect of the Shares or the Preferred Stock, in each case, if
such shares of Common Stock or Preferred Stock would, in the hands of such
Holder, not be freely transferable in accordance with the intended method of
disposition (x) in accordance with Section 1145 or (y) under Rule 144 under the
Securities Act, without regard to any information, volume, manner of sale or
holding period restriction under Rule 144 under the Securities Act. As to any
particular Registrable Securities, once issued, such securities shall cease to
be Registrable Securities when (i) a registration statement with respect to the
sale of such Registrable Securities shall have become effective under the
Securities Act and such securities shall have been disposed of in accordance
with such registration statement, (ii) they shall have been distributed pursuant
to Rule 144 under the Securities Act and are no longer “restricted securities”,
or (iii) they shall have ceased to be outstanding.
     “Registration” means registration under the Securities Act of an offering
of Registrable Securities pursuant to a Demand Registration or a Piggyback
Registration.
     “Registration Date” has the meaning set forth in Section 2(a).
     “Registration Failure” has the meaning set forth in Section 8(e).
     “Registration Statement” means any registration statement of the Company
filed under the Securities Act that covers resales of any of the Registrable
Securities pursuant to the provisions of this Agreement, including the related
Prospectus, all amendments and supplements to such registration statement,
including pre- and post-effective amendments, all exhibits thereto and all
material incorporated by reference or deemed to be incorporated by reference in
such registration statement. The term “Registration Statement” shall also
include any registration statement filed pursuant to Rule 462(b) to register
additional securities in connection with any offering.
     “Rights Offering” has the meaning set forth in the preamble.
     “road show” means any “road show” as defined in Rule 433 under the
Securities Act, including an electronic road show.
     “SEC” means the Securities and Exchange Commission or any other
governmental agency at the time administering the Securities Act.
     “Section 1145” has the meaning set forth in the preamble.
     “Securities Act” means the Securities Act of 1933, as amended, and the
rules and regulations of the SEC promulgated thereunder.

4

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     “Shares” means the shares of Common Stock to be issued pursuant to the Plan
(which, for the avoidance of doubt, shall include all shares of Common Stock
issued in connection with the Rights Offering or pursuant to the Commitment
Agreement).
     “Shelf Registration” has the meaning set forth in Section 2(b).
     “underwritten registration” or “underwritten offering” means a registration
under the Securities Act in which securities of the Company are sold to an
underwriter for reoffering to the public.
     “Unsubscribed Shares” has the meaning set forth in the preamble.
2. Registration.
     (a) The Company shall, as soon as practicable after obtaining audited
financial statements as are required to be filed with the SEC pursuant to
Section 13(a) of the Exchange Act, but in any event not later than September 30,
2011 file to register its shares of Common Stock pursuant to the Exchange Act
and file, after such registration becomes effective, all reports and other
information necessary to satisfy the reporting requirements under the Exchange
Act (the date on which the Company’s registration under the Exchange Act is thus
effected is referred to herein as the “Registration Date”).
     (b) As soon as practicable after the Registration Date or earlier, at the
option of the Company, the Company shall notify in writing all Holders of the
intent of the Company to file a Registration Statement relating to all
Registrable Securities, to provide for the sale by the holders thereof of the
Registrable Securities from time to time on a delayed or continuous basis
pursuant to Rule 415 under the Securities Act (a “Shelf Registration”).
     (c) Notwithstanding anything herein, the Company shall include in the Shelf
Registration Statement (i) all Registrable Securities then known to the Company
and (ii) any other Registrable Securities held by a Holder which any Holder
notifies the Company should be included in such Registration Statement. Any
Holder wishing not to have its Registrable Securities (or any portion thereof)
included in the Shelf Registration shall provide a written notice thereof to the
Company within ten (10) Business Days after the receipt of the Company’s notice
pursuant to Section 2(b). In the event that a Holder subsequently notifies the
Company that it wishes to include Registrable Securities in the Registration
Statement, the Company shall promptly amend the Registration Statement, if it
has not been declared effective to include such Registrable Securities. If such
Registrable Securities were held by a Registrable Holder at the filing of the
Shelf Registration and should have been included pursuant to the terms hereof,
the Company shall amend the Registration Statement to include such Registrable
Securities (including, if necessary, by filing a Registration Statement that
will be part of the same Prospectus pursuant to Rule 429 under the Securities
Act).
     (d) Any Holder wishing not to have its Registrable Securities (or any
portion thereof) included in the Shelf Registration shall provide a written
notice thereof to the Company within ten (10) Business Days after the receipt of
the Company’s notice pursuant to Section 2(b).

5

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     (e) Within fifteen (15) days after the Registration Date, the Company shall
file with the SEC, and the Company shall use its commercially reasonable efforts
to cause to be declared effective as promptly as practicable thereafter, the
Shelf Registration with respect to all Registrable Securities other than those
excluded by the Holders pursuant to Section 2(d).
     (f) The Company shall use commercially reasonable efforts to keep the
Registration Statement filed pursuant to this Section 2 continuously effective
and usable for the resale of the Registrable Securities covered thereby for a
period of three (3) years from the date on which the SEC declares such
Registration Statement effective, or until such earlier date as all of the
Registrable Securities covered by such Registration Statement have been sold
pursuant to such Registration Statement. If any Registrable Securities remain
issued and outstanding after three (3) years following the initial effective
date of such Shelf Registration, upon the request of Holder(s) of at least ten
percent (10%) of the Registrable Securities then outstanding, the Company shall,
prior to the expiration of such Shelf Registration, file a new Shelf
Registration and shall thereafter use its commercially reasonable efforts to
cause to be declared effective as promptly as practical, such new Shelf
Registration.
3. Demand Registration.
     (a) (i) Provided that the Company does not have the Registration Statement
filed pursuant to Section 2 effective and usable to such Holder or group of
Holders requesting a Demand Registration under this Section, at any time after
the date that the Company becomes a registrant under the Exchange Act, any
Holder or group of Holders holding, in the aggregate, ten percent (10%) or more
of the Registrable Securities issued and outstanding immediately following the
effective date of the Plan (the “Initial Outstanding Amount”), shall have the
right, by written notice given to the Company (a “Demand Notice”), to request
the Company to register under and in accordance with the provisions of the
Securities Act all or any portion of the Registrable Securities designated by
such Holder(s); provided, however, that (x) the Registrable Securities requested
to be registered constitute at least ten percent (10%) of the Initial
Outstanding Amount, and (y) prior to the time the Company is eligible to use
Form S-3 for the registration of Registrable Securities for resale, such
Holder(s), in the aggregate, shall only be entitled to three (3) Demand
Registrations pursuant to the provisions of this Section 3(a)(i) unless any
Demand Registration does not become effective or is not maintained in effect for
the respective periods set forth in Section 3(c), in which case the relevant
Holder(s) will be entitled to an additional Demand Registration pursuant hereto.
Following the time that the Company becomes eligible for use of Form S-3 (or any
successor form), any Holder or group of Holders holding, in the aggregate, ten
percent (10%) or more of the Initial Outstanding Amount, shall have the right to
request the Company to register under and in accordance with the provisions of
the Securities Act all or any portion of the Registrable Securities designated
by such Holder(s); provided, however, that such Registrable Securities represent
at least ten percent (10%) of the Initial Outstanding Amount, provided, however,
that there shall be no more than five (5) Demand Registrations pursuant to this
Agreement.
     (ii) Upon receipt of a Demand Notice, the Company shall promptly (and in
any event within ten (10) Business Days from the date of receipt of such Demand
Notice), notify all other Holders of the receipt of such Demand Notice and allow
them the opportunity to include Registrable Securities held by them in the
proposed registration by submitting their own Demand

6

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Notice. In connection with any Demand Registration in which more than one Holder
participates, in the event that such Demand Registration involves an
underwritten offering and the managing underwriter or underwriters participating
in such offering advise in writing the Holders of Registrable Securities to be
included in such offering that the total number of Registrable Securities to be
included in such offering exceeds the amount that can be sold in (or during the
time of) such offering without delaying or jeopardizing the success of such
offering (including the price per share of the Registrable Securities to be
sold), then the Registrable Securities to be offered shall be distributed
amongst the participating Holders pro rata according to each Holder’s overall
percentage of ownership in the Company. In the event of such a pro-rata
distribution, to the extent that any Holder (or Holders) has not submitted a
Demand Notice, or withdraws from the underwriting, then those Shares that would
have been allocated pro-rata to the non-participating Holder if they had
participated shall be distributed amongst the participating Holders, pro rata
according to each participating Holder’s overall percentage of ownership in the
Company.
     (b) The Company, within forty-five (45) days of the date on which the
Company receives a Demand Notice given by Holders in accordance with
Section 3(a), shall file with the SEC, and the Company shall thereafter use its
commercially reasonable efforts to cause to be declared effective as promptly as
practicable, a Registration Statement on the appropriate form for the
registration and sale, in accordance with the intended method or methods of
distribution, of the total number of Registrable Securities specified by the
Holders in such Demand Notice (a “Demand Registration”). Any Demand Registration
may, at the request of the Holders submitting the Demand Notice, be a Shelf
Registration.
     (c) The Company shall use commercially reasonable efforts to keep each
Registration Statement filed pursuant to this Section 3 continuously effective
and usable for the resale of the Registrable Securities covered thereby (i) in
the case of a Registration that is not a Shelf Registration, for a period of one
hundred twenty (120) days from the date on which the SEC declares such
Registration Statement effective and (ii) in the case of a Shelf Registration,
for a period of three (3) years from the date on which the SEC declares such
Registration Statement effective, in either case (x) until such earlier date as
all of the Registrable Securities covered by such Registration Statement have
been sold pursuant to such Registration Statement, and (y) as such period may be
extended pursuant to this Section 3. The time period for which the Company is
required to maintain the effectiveness of any Registration Statement shall be
extended by the aggregate number of days of all Delay Periods and all
Interruption Periods occurring with respect to such Registration and such period
and any extension thereof is hereinafter referred to as the “Effectiveness
Period”.
     (d) The Company shall be entitled to postpone the filing of any
Registration Statement otherwise required to be prepared and filed by the
Company pursuant to this Section 3, or suspend the use of any effective
Registration Statement under this Section 3, for a reasonable period of time (a
“Delay Period”), if the Board of Directors of the Company determines in the
Board of Directors’ reasonable judgment and in good faith that the registration
and distribution of the Registrable Securities covered or to be covered by such
Registration Statement would materially interfere with any pending material
financing, acquisition, disposition, or corporate reorganization or other
material corporate development involving the Company or any of its subsidiaries
or would require premature disclosure thereof and promptly gives the Holders

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written notice of such determination, containing a general statement of the
reasons for such postponement and an approximation of the period of the
anticipated delay; provided, however, that (i) the aggregate number of days
included in all Delay Periods during any consecutive twelve (12) months shall
not exceed the aggregate of (x) sixty (60) days minus (y) the number of days
occurring during all Interruption Periods during such consecutive twelve
(12) months and (ii) a period of at least forty-five (45) days shall elapse
between the termination of any Delay Period or Interruption Period and the
commencement of the immediately succeeding Delay Period. If the Company shall so
postpone the filing of a Registration Statement, the Holders of Registrable
Securities to be registered shall have the right to withdraw the request for
registration by giving written notice from the Holders of a majority of the
Registrable Securities that were to be registered to the Company within
forty-five (45) days after receipt of the notice of postponement or, if earlier,
the termination of such Delay Period (and, in the event of such withdrawal, such
request shall not be counted for purposes of determining the number of requests
for registration to which the Holders of Registrable Securities are entitled
pursuant to this Section 3). The Company shall not be entitled to initiate or
continue a Delay Period unless it shall (A) concurrently prohibit sales by all
other security holders under registration statements covering securities held by
such other security holders and (B) in accordance with the Company’s policies
from time to time in effect, forbid purchases and sales in the open market by
directors and executive officers of the Company.
     (e) The Company shall not include any securities (whether for its own
account or otherwise) that are not Registrable Securities in any Registration
Statement filed pursuant to this Section 3 without the prior written consent of
the Holders of a majority in number of the Registrable Securities covered by
such Registration Statement. Any such securities so included shall be subject to
the cut-back provisions of Section 3(a)(ii).
     (f) Holders of a majority in number of the Registrable Securities to be
included in a Registration Statement pursuant to this Section 3 may, at any time
prior to the effective date of the Registration Statement relating to such
Registration, revoke such request by providing a written notice to the Company
revoking such request. Any such Demand Request so withdrawn shall not be counted
for purposes of determining the number of requests for registration to which the
Holders of Registrable Securities are entitled pursuant to this Section 3 if the
Holders of Registrable Securities who revoked such request reimburse the Company
for all its out-of-pocket expenses incurred in the preparation, filing and
processing of the Registration Statement; provided, however, that, if such
revocation was based on (i) the Company’s failure to comply in any material
respect with its obligations hereunder or (ii) the institution by the Company of
a Delay Period or the occurrence of any Interruption Period, such reimbursement
shall not be required.
4. Piggyback Registration.
     (a) Right to Piggyback. If at any time the Company proposes to file a
registration statement under the Securities Act with respect to a public
offering by the Company for its own account or for the account of any other
Person who is a holder of securities of the same type as the Registrable
Securities (other than a registration statement (i) on Form S-8 or Form S-4 or
any successor forms thereto, or (ii) filed solely in connection with a dividend
reinvestment plan or an employee benefit plan covering only officers or
directors of the Company or its Affiliates), then

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the Company shall give written notice of such proposed filing to the Holders at
least fifteen (15) days before the anticipated filing date. Such notice shall
offer the Holders the opportunity to register such amount of Registrable
Securities as they may request (a “Piggyback Registration”). Subject to
Section 4(b), the Company shall include in each such Piggyback Registration all
Registrable Securities with respect to which the Company has received written
requests for inclusion therein within ten (10) days after notice has been given
to the Holders. Each Holder shall be permitted to withdraw all or any portion of
the Registrable Securities of such Holder from a Piggyback Registration at any
time prior to the effective date of such Piggyback Registration.
     (b) Priority on Piggyback Registrations. The Company shall permit the
Holders to include all such Registrable Securities on the same terms and
conditions as any similar securities, if any, of the Company or any other
persons included therein. Notwithstanding the foregoing, if the Company or the
managing underwriter or underwriters participating in such offering advise the
Holders in writing that the total amount of securities requested to be included
in such Piggyback Registration exceeds the amount which can be sold in (or
during the time of) such offering without delaying or jeopardizing the success
of the offering (including the price per share of the securities to be sold),
then the amount of securities to be offered for the account of the Holders and
other holders of securities who have piggyback registration rights with respect
thereto shall be reduced (to zero if necessary) pro rata on the basis of the
number of Common Stock equivalents requested to be registered by each such
Holder or other holder participating in such offering.
     (c) Right To Abandon. Nothing in this Section 4 shall create any liability
on the part of the Company to the Holders if the Company in its sole discretion
should decide not to file a registration statement proposed to be filed pursuant
to Section 4(a) or to withdraw such registration statement subsequent to its
filing, regardless of any action whatsoever that a Holder may have taken,
whether as a result of the issuance by the Company of any notice hereunder or
otherwise. Any such determination not to file or to withdraw a registration
statement shall not affect the obligations of the Company to pay or to reimburse
all Registration Expenses pursuant to Section 6.
5. Registration Procedures. In connection with the registration obligations of
the Company pursuant to and in accordance with Sections 2, 3 and 4 (and subject
to Sections 2, 3 and 4), the Company shall use commercially reasonable efforts
to effect such registration to permit the sale of such Registrable Securities in
accordance with the intended method or methods of disposition thereof, and
pursuant thereto the Company shall as expeditiously as possible:
     (a) prepare and file with the SEC a Registration Statement for the sale of
the Registrable Securities on any form for which the Company then qualifies or
which counsel for the Company shall deem appropriate in accordance with such
Holders’ intended method or methods of distribution thereof, and, subject to the
Company’s right to terminate or abandon a registration pursuant to Section 4(c),
use commercially reasonable efforts to cause such Registration Statement to
become effective and remain effective as provided herein;
     (b) prepare and file with the SEC such amendments (including post-effective
amendments) to such Registration Statement, and such supplements to the related
Prospectus, as

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may be required by the rules, regulations or instructions applicable under the
Securities Act during the applicable period in accordance with the intended
methods of disposition specified by the Holders of the Registrable Securities
covered by such Registration Statement, make generally available earnings
statements satisfying the provisions of Section 11(a) of the Securities Act
(provided that the Company shall be deemed to have complied with this Section if
it has complied with Rule 158 under the Securities Act), and cause the related
Prospectus as so supplemented to be filed pursuant to Rule 424 under the
Securities Act; provided, however, that before filing a Registration Statement
or Prospectus, or any amendments or supplements thereto (other than reports
required to be filed by it under the Exchange Act that are incorporated or
deemed to be incorporated by reference into the Registration Statement and the
Prospectus except to the extent that such reports related primarily to the
offering), the Company shall furnish to the Holders of Registrable Securities
covered by such Registration Statement and their counsel for review and comment,
copies of all documents required to be filed;
     (c) notify the Holders of any Registrable Securities covered by such
Registration Statement promptly and (if requested) confirm such notice in
writing, (i) when a Prospectus or any Prospectus supplement or post-effective
amendment has been filed, and, with respect to such Registration Statement or
any post-effective amendment, when the same has become effective, (ii) of any
request by the SEC for amendments or supplements to such Registration Statement
or the related Prospectus or for additional information regarding the Company or
the Holders, (iii) of the issuance by the SEC of any stop order suspending the
effectiveness of such Registration Statement or the initiation of any
proceedings for that purpose, (iv) of the receipt by the Company of any
notification with respect to the suspension of the qualification or exemption
from qualification of any of the Registrable Securities for sale in any
jurisdiction or the initiation or threatening of any proceeding for such
purpose, and (v) of the happening of any event that requires the making of any
changes in such Registration Statement, Prospectus or documents incorporated or
deemed to be incorporated therein by reference so that they will not contain any
untrue statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not misleading;
     (d) use commercially reasonable efforts to prevent the issuance of any
order suspending the effectiveness of such Registration Statement or the
qualification or exemption from qualification of any Registrable Securities for
sale in any jurisdiction in the United States, and to obtain the lifting or
withdrawal of any such order at the earliest practicable time;
     (e) furnish to the Holder such number of copies of the preliminary
prospectus, any amended preliminary prospectus, any Free Writing Prospectus,
each final Prospectus and any post-effective amendment or supplement thereto, as
such Holder may reasonably request in order to facilitate the disposition of the
Registrable Securities of such Holder covered by such Registration Statement in
conformity with the requirements of the Securities Act;
     (f) prior to any public offering of Registrable Securities covered by such
Registration Statement, use its commercially reasonable efforts to register or
qualify such Registrable Securities for offer and sale under the securities or
“Blue Sky” laws of such jurisdictions as the Holders of such Registrable
Securities shall reasonably request in writing; provided, however, that the
Company shall in no event be required to qualify generally to do business as a
foreign corporation or as a dealer in any jurisdiction where it is not at the
time required to be so qualified

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or to execute or file a general consent to service of process in any such
jurisdiction where it has not theretofore done so or to take any action that
would subject it to general service of process or taxation in any such
jurisdiction where it is not then subject;
     (g) upon the occurrence of any event contemplated by Section 5(c)(v),
prepare a supplement or post-effective amendment to such Registration Statement
or the related Prospectus or any document incorporated or deemed to be
incorporated therein by reference and file any other required document so that,
as thereafter delivered to the purchasers of the Registrable Securities being
sold thereunder (including upon the termination of any Delay Period), such
Prospectus will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading;
     (h) use commercially reasonable efforts to cause all Registrable Securities
covered by such Registration Statement to be listed on each securities exchange
or automated interdealer quotation system, if any, on which similar securities
issued by the Company are then listed or quoted, or, if none, on such securities
exchange or automated interdealer quotation system reasonably selected by the
Company;
     (i) if such offering is an underwritten offering, make available for
inspection by any Holder of Registrable Securities included in such Registration
Statement, any underwriter participating in any offering pursuant to such
Registration Statement, and any attorney, accountant or other agent retained by
any such Holder or underwriter (collectively, the “Inspectors”), all financial
and other records and other information, pertinent corporate documents and
properties of any of the Company and its subsidiaries and affiliates
(collectively, the “Records”), as shall be reasonably necessary to enable them
to exercise their due diligence responsibilities; provided, however, that the
Records that the Company determines, in good faith, to be confidential and which
it notifies the Inspectors in writing are confidential shall not be disclosed to
any Inspector unless such Inspector signs a confidentiality agreement reasonably
satisfactory to the Company, which shall permit the disclosure of such Records
in such Registration Statement or the related Prospectus if (i) necessary to
avoid or correct a material misstatement in or material omission from such
Registration Statement or Prospectus or (ii) the release of such Records is
ordered pursuant to a subpoena or other order from a court of competent
jurisdiction; provided further, however, that (A) any decision regarding the
disclosure of information pursuant to subsection (i) shall be made only after
consultation with counsel for the applicable Inspectors and the Company and
(B) with respect to any release of Records pursuant to subsection (ii), each
Holder of Registrable Securities agrees that it shall, promptly after learning
that disclosure of such Records is sought in a court having jurisdiction, give
notice to the Company so that the Company, at the Company’s expense, may
undertake appropriate action to prevent disclosure of such Records;
     (j) not later than the effective date of a Registration Statement, the
Company shall provide to the Holders the CUSIP number for all Registrable
Securities; and
     (k) if such offering is an underwritten offering, enter into such
agreements (including an underwriting agreement in form, scope and substance as
is customary in underwritten offerings) and take all such other appropriate and
reasonable actions requested by the Holders of

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a majority of the Registrable Securities being sold in connection therewith
(including those reasonably requested by the managing underwriters) in order to
expedite or facilitate the disposition of such Registrable Securities, and in
such connection, (i) use commercially reasonable efforts to obtain opinions of
counsel to the Company and updates thereof (which counsel and opinions (in form,
scope and substance) shall be reasonably satisfactory to the managing
underwriters, addressed to each of the underwriters as to the matters
customarily covered in opinions requested in underwritten offerings and such
other matters as may be reasonably requested by the underwriters, (ii) use
commercially reasonable efforts to obtain “cold comfort” letters and updates
thereof from the independent certified public accountants of the Company (and,
if necessary, any other independent certified public accountants of any
subsidiary of the Company or of any business acquired by the Company for which
financial statements and financial data are, or are required to be, included in
the Registration Statement), addressed to each selling Holder of Registrable
Securities covered by the Registration Statement (unless such accountants shall
be prohibited from so addressing such letters by applicable standards of the
accounting profession) and each of the underwriters, such letters to be in
customary form and covering matters of the type customarily covered in “cold
comfort” letters in connection with underwritten offerings, (iii) if requested
and if an underwriting agreement is entered into, provide indemnification
provisions and procedures customary for underwritten public offerings, but in
any event no less favorable to the indemnified parties than the provisions set
forth in Section 8, and (iv) provide for the reasonable participation and
cooperation by the management of the Company with respect thereto, including
participation by management in road shows, investor meetings and other customary
cooperation. The above shall be done at each closing under such underwriting or
similar agreement, or as and to the extent required thereunder.
     The Company may require each Holder of Registrable Securities covered by a
Registration Statement to furnish such information regarding such Holder and
such Holder’s intended method of disposition of such Registrable Securities as
it may from time to time reasonably request in writing. If any such information
is not furnished within a reasonable period of time after receipt of such
request, the Company may exclude such Holder’s Registrable Securities from such
Registration Statement. Notwithstanding the foregoing, in no event shall any
Holder be required to provide any information about its investors unless
required by the SEC to do so.
     Each Holder of Registrable Securities covered by a Registration Statement
agrees that, upon receipt of any notice from the Company of the happening of any
event of the kind described in Section 5(c)(ii), 5(c)(iii), 5(c)(iv) or 5(c)(v),
that such Holder shall discontinue disposition of any Registrable Securities
covered by such Registration Statement or the related Prospectus until receipt
of the copies of the supplemented or amended Prospectus contemplated by
Section 5(g), or until such Holder is advised in writing by the Company that the
use of the applicable Prospectus may be resumed, and has received copies of any
amended or supplemented Prospectus or any additional or supplemental filings
which are incorporated, or deemed to be incorporated, by reference in such
Prospectus (such period during which disposition is discontinued being an
“Interruption Period”) and, if requested by the Company, the Holder shall
deliver to the Company (at the expense of the Company) all copies then in its
possession, other than permanent file copies then in such holder’s possession,
of the Prospectus covering such Registrable Securities at the time of receipt of
such request.

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     Each Holder of Registrable Securities covered by a Registration Statement
further agrees not to utilize any material other than the applicable current
preliminary prospectus, Free Writing Prospectus, road show or Prospectus in
connection with the offering of such Registrable Securities.
6. Registration Expenses. Whether or not any Registration Statement is filed or
becomes effective, the Company shall pay all costs, fees and expenses incident
to the Company’s performance of or compliance with this Agreement, including
(i) all registration and filing fees, including FINRA filing fees, (ii) all fees
and expenses of compliance with securities or “Blue Sky” laws, including
reasonable fees and disbursements of counsel in connection therewith, (iii)
printing expenses (including expenses of printing certificates for Registrable
Securities and of printing prospectuses if the printing of prospectuses is
requested by the Holders or the managing underwriter, if any) and the expenses
ordinarily paid by issuers in connection with a road show, (iv) messenger,
telephone and delivery expenses, (v) fees and disbursements of counsel for the
Company, (vi) fees and disbursements of all independent certified public
accountants of the Company (including expenses of any “cold comfort” letters
required in connection with this Agreement) and all other persons retained by
the Company in connection with such Registration Statement, (vii) the reasonable
fees and disbursements of one counsel, other than the Company’s counsel,
selected by Holders of a majority of the Registrable Securities being
registered, to represent all such Holders, (viii) in the event of an
underwritten offering, the expenses of the Company and the underwriters
associated with any “road show” which are customarily paid or reimbursed by
issuers, and (ix) all other costs, fees and expenses incident to the Company’s
performance or compliance with this Agreement. Notwithstanding the foregoing,
the fees and expenses of any persons retained by any Holder, other than one
counsel for all such Holders, and any discounts, commissions or brokers’ fees or
fees of similar securities industry professionals and any transfer taxes
relating to the disposition of the Registrable Securities by a Holder, will be
payable by such Holder and the Company will have no obligation to pay any such
amounts.
7. Underwriting Requirements.
     (a) Subject to Section 7(c), any Holder shall have the right, by written
notice, to request that any Demand Registration provide for an underwritten
offering but the Company shall be under no obligation to conduct more than two
(2) underwritten offerings hereunder.
     (b) In the case of any underwritten offering pursuant to a Demand
Registration, the Holders of a majority of the Registrable Securities to be
disposed of in connection therewith shall select the institution or institutions
that shall manage or lead such offering, which institution or institutions shall
be reasonably satisfactory to the Company. In the case of any underwritten
offering pursuant to a Piggyback Registration, the Company shall select the
institution or institutions that shall manage or lead such offering.
     (c) In the case of any Piggyback Registration that is an underwritten
offering, no Holder shall be entitled to participate in an underwritten offering
unless and until such Holder has entered into (i) an underwriting or other
agreement with such institution or institutions for such offering, and
(ii) powers of attorney and custody agreements, in each case in such form as the
Company and such institution or institutions shall reasonably determine;
provided, that no holder of Registrable Securities included in any underwritten
registration shall be required to

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make any representation or warranties to the Company or the underwriters (other
than representations and warranties regarding such holder and such holder’s
ownership of the shares to be sold pursuant to such underwriting, such holder’s
stabilization activities, and with respect to information provided in writing by
such holder expressly for use in any Registration Statement) or to undertake any
indemnification or contribution obligations to the Company or any underwriter
with respect thereto, other than as specifically provided in Section 8.
8. Indemnification; Liquidated Damages
     (a) Indemnification by the Company. The Company shall, without limitation
as to time, indemnify and hold harmless, to the fullest extent permitted by law,
each Holder of Registrable Securities whose Registrable Securities are covered
by a Registration Statement or Prospectus, the officers, directors and agents
and employees of each of them, each Person who controls each such Holder (within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act) and the officers, directors, agents and employees of each such controlling
person, to the fullest extent lawful, from and against any and all losses,
claims, damages, liabilities, judgment, costs (including costs of investigation
or preparation and reasonable attorneys’ fees) and expenses (collectively,
“Losses”), as incurred, arising out of or based upon (w) any untrue or alleged
untrue statement of a material fact contained in such Registration Statement or
Prospectus or in any amendment or supplement thereto, any preliminary
prospectus, any Free Writing Prospectus, any information the Company has filed
or is required to file pursuant to Rule 433(d) under the Securities Act, or any
other material or information provided to or made available to investors by, or
with the approval of, the Company in connection with the offering, including any
road show for the offering (collectively, “Marketing Materials”), or (x) any
omission or alleged omission of a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as the
same are based upon information furnished in writing to the Company by or on
behalf of such Holder expressly for use in the Marketing Materials; provided,
however, that the Company shall not be liable to any such Holder to the extent
that any such Losses arise out of or are based upon an untrue statement or
alleged untrue statement or omission or alleged omission made in any preliminary
prospectus if (i) having previously been furnished by or on behalf of the
Company with copies of the Prospectus, such Holder failed to send or deliver a
copy of the Prospectus with or prior to the delivery of written confirmation of
the sale of Registrable Securities by such Holder to the person asserting the
claim from which such Losses arise and (ii) the Prospectus would have corrected
in all material respects such untrue statement or alleged untrue statement or
such omission or alleged omission; and provided further, however, that the
Company shall not be liable in any such case to the extent that any such Losses
arise out of or are based upon an untrue statement or alleged untrue statement
or omission or alleged omission in the Prospectus, if (A) such untrue statement
or alleged untrue statement, omission or alleged omission is corrected in all
material respects in an amendment or supplement to the Prospectus, (B) having
previously been furnished by or on behalf of the Company with copies of the
Prospectus as so amended or supplemented, such Holder thereafter fails to
deliver such Prospectus as so amended or supplemented, prior to or concurrently
with the sale of Registrable Securities, and (C) such losses relate to sales
during an Interruption Period or Delay Period.
     (b) Indemnification by Holder of Registrable Securities. In connection with
any Registration Statement in which a Holder is participating, such Holder shall
furnish to the

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Company in writing such information as the Company reasonably requests for use
in connection with the Marketing Materials and agrees to indemnify, severally
and not jointly with the other Holders and to the full extent permitted by law,
the Company, its directors, officers, agents or employees, each Person who
controls the Company (within the meaning of Section 15 of the Securities Act and
Section 20 of the Exchange Act) and the directors, officers, agents or employees
of such controlling Persons, from and against all Losses arising out of or based
upon (x) any untrue or alleged untrue statement of a material fact contained in
the Marketing Materials or (y) any omission or alleged omission of a material
fact required to be stated therein or necessary to make the statements therein
not misleading, to the extent, but only to the extent, that such untrue or
alleged untrue statement or omission or alleged omission is based upon and is
consistent with information so furnished in writing by or on behalf of such
Holder to the Company expressly for use in such Marketing Materials. No Holder
shall be held liable for any damages in excess of the total amount of proceeds
received by such Holder from the sale of the Registrable Securities sold by such
Holder (net of all underwriting discounts and commissions) under that particular
Registration Statement.
     (c) Conduct of Indemnification Proceedings. If any Person shall be entitled
to indemnity hereunder (an “Indemnified Party”), such Indemnified Party shall
give prompt notice to the party from which such indemnity is sought (the
“Indemnifying Party”) of any claim or of the commencement of any proceeding with
respect to which such Indemnified Party seeks indemnification or contribution
pursuant hereto; provided, however, that the delay or failure to so notify the
Indemnifying Party shall not relieve the Indemnifying Party from any obligation
or liability except to the extent that the Indemnifying Party has been
materially prejudiced by such delay or failure. The Indemnifying Party shall
have the right, exercisable by giving written notice to an Indemnified Party
promptly after the receipt of written notice from such Indemnified Party of such
claim or proceeding, to assume, at the Indemnifying Party’s expense, the defense
of any such claim or proceeding, with counsel reasonably satisfactory to such
Indemnified Party; provided, however, that (i) an Indemnified Party shall have
the right to employ separate counsel in any such claim or proceeding and to
participate in the defense thereof, but the fees and expenses of such counsel
shall be at the expense of such Indemnified Party unless: (1) the Indemnifying
Party agrees to pay such fees and expenses; (2) the Indemnifying Party fails
promptly to assume the defense of such claim or proceeding or fails to employ
counsel reasonably satisfactory to such Indemnified Party; or (3) the named
parties to any proceeding (including impleaded parties) include both such
Indemnified Party and the Indemnifying Party, and such Indemnified Party shall
have been advised by counsel that there may be one or more legal defenses
available to it that are in addition to or are inconsistent with those available
to the Indemnifying Party or that a conflict of interest is likely to exist
among such Indemnified Party and any other indemnified parties (in which case
the Indemnifying Party shall not have the right to assume the defense of such
action on behalf of such Indemnified Party); and (ii) subject to subsection
(3) above, the Indemnifying Party shall not, in connection with any one such
claim or proceeding or separate but substantially similar or related claims or
proceedings in the same jurisdiction, arising out of the same general
allegations or circumstances, be liable for the fees and expenses of more than
one firm of attorneys (together with appropriate local counsel) at any time for
all of the indemnified parties. Whether or not such defense is assumed by the
Indemnifying Party, such Indemnified Party shall not be subject to any liability
for any settlement made without its consent, which consent shall not be
unreasonably withheld, conditioned or delayed. The Indemnifying Party shall not
consent to entry of any judgment or

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enter into any settlement that does not include as an unconditional term thereof
the giving by the claimant or plaintiff to such Indemnified Party of a release,
in form and substance reasonably satisfactory to the Indemnified Party, from all
liability in respect of such claim or litigation for which such Indemnified
Party would be entitled to indemnification hereunder.
     (d) Contribution. If the indemnification provided for in this Section 8 is
applicable in accordance with its terms but is legally unavailable to an
Indemnified Party in respect of any Losses, then each applicable Indemnifying
Party, in lieu of indemnifying such Indemnified Party, shall contribute to the
amount paid or payable by such Indemnified Party as a result of such Losses, in
such proportion as is appropriate to reflect the relative fault of the
Indemnifying Party, on the one hand, and such Indemnified Party, on the other
hand, in connection with the actions, statements or omissions that resulted in
such Losses as well as any other relevant equitable considerations. The relative
fault of such Indemnifying Party, on the one hand, and Indemnified Party, on the
other hand, shall be determined by reference to, among other things, whether any
action in question, including any untrue statement of a material fact or
omission or alleged omission to state a material fact, has been taken by, or
relates to information supplied by, such Indemnifying Party or Indemnified
Party, and the parties’ relative intent, knowledge, access to information and
opportunity to correct or prevent any such action, statement or omission. The
amount paid or payable by a party as a result of any Losses shall be deemed to
include any legal or other fees or expenses incurred by such party in connection
with any investigation or proceeding. The parties hereto agree that it would not
be just and equitable if contribution pursuant to this Section 8(d) were
determined by pro rata allocation or by any other method of allocation that does
not take account of the equitable considerations referred to in the immediately
preceding paragraph. Notwithstanding the provisions of this Section 8(d), an
Indemnifying Party that is a Holder shall not be required to contribute any
amount which is in excess of the amount by which the total proceeds received by
such Holder from the sale of the Registrable Securities sold by such Holder (net
of all underwriting discounts and commissions) exceeds the amount of any damages
that such Indemnifying Party 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.
     (e) Liquidated Damages. Notwithstanding anything to the contrary herein, if
(i) the Company does not receive No-Action Relief from the SEC, and the Shelf
Registration is not filed as provided for in Section 2(e) on or before
September 30, 2011, (ii) the Company receives No-Action Relief on or prior to
June 29, 2011 and the Shelf Registration as provided for in Section 2(e) is not
declared effective by the SEC on or before the later of (a) 90 days after
receiving such No-Action Relief or (b) June 30, 2011, (iii) the effectiveness of
the Shelf Registration is not continuously maintained for the period specified
in Section 2(f) (other than as a result of any Delay Periods or Interruption
Periods permitted under this Agreement); or (iv) the aggregate number of days in
all Delay Periods and Interruption Periods occurring during any twelve
(12) month period exceeds sixty (60) days (any such event, in clauses
(i) through (iv) immediately above (a “Registration Failure”), then the Company
shall be obligated to pay to each Holder of Registrable Securities, as
liquidated damages and not as a penalty, an amount

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equal to $[__]1 multiplied by the number of Registrable Securities held by such
Holder on such day (as certified in writing by such Holders) for each day that a
Registration Failure is continuing and has not been cured. Such payment shall be
made by wire transfer to an account designated by the Holder on the first day of
each month following the date on which such amounts become payable and shall
continue to be made on the first day of each subsequent month for which amounts
have accrued under this Section 8(e) until all amounts due have been paid. The
Company shall not be required to make any payment to any Holder until it
receives a certification as to the number of Registrable Securities held by such
Holder at such time. The parties agree that in the event that a Registration
Failure occurs the Holders of Registrable Securities will suffer damages and
that the amount of such damages will be difficult to estimate. Accordingly, each
party agrees that the receipt of the liquidated damages provided for in this
Section 8(e) are reasonable and shall be the sole measure of damages of the
Registered Holders in the event that a Registration Failure occurs; provided,
that nothing shall prevent a Holder of Registrable Securities from seeking
specific performance of the Company’s obligations hereunder as provided in
Section 10(f). Notwithstanding the foregoing, the aggregated amount of such
liquidated damages payable by the Company under this Agreement shall not exceed
$2,000,000.
9. Rule 144 Information. With a view to making available the benefits of certain
rules and regulations of the Commission which may at any time permit the sale of
the Registrable Securities to the public without registration, after such time
as a registration statement relating to the Common Stock has been declared
effective under either the Securities Act or the Exchange Act, the Company
agrees to use its commercially reasonable efforts to:
     (a) Make and keep public information available, as those terms are
understood and defined in Rule 144 under the Securities Act, at all times after
the earlier of (i) such time as a registration statement relating to the Common
Stock has been declared effective under either the Securities Act or the
Exchange Act or (ii) the date that the Company becomes subject to the periodic
reporting requirements under Section 13 or 15(d) of the Exchange Act, for so
long as the Company remains subject to the periodic reporting requirements under
Section 13 or 15(d) of the Exchange Act.
     (b) Use its commercially reasonable efforts to file with the Commission in
a timely manner all reports and other documents required of the Company under
the Securities Act and the Exchange Act (at any time it is subject to such
reporting requirements).
     (c) Furnish to any Holder forthwith upon request a written statement by the
Company as to its compliance with the reporting requirements of Rule 144 under
the Securities Act (at any time after ninety (90) days after the effective date
of the first registration statement filed by the Company for an offering of its
securities to the general public), and of the Securities Act and the Exchange
Act (at any time after it has become subject to the reporting requirements of
the Exchange Act), a copy of the most recent annual or quarterly report of the
Company, and such
 

1   Calculated by multiplying (i) 5% by (ii) the per Share value based on the
midpoint of the range of the Plan Value, and dividing the product by 365.

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other reports and documents of the Company and other information as such Holder
may reasonably request in availing itself of any rule or regulation of the
Commission allowing such Holder to sell any such securities without
registration.
10. Miscellaneous.
     (a) Limitations on Subsequent Registration Rights. After the date of this
Agreement, the Company shall not grant registration rights with respect to any
securities of the same class, or securities that are convertible into or
exchangeable or exercisable for the same class, as the Registrable Securities
which (i) permit any other person to register securities on terms which are more
advantageous in any respect to the persons holding such other securities than
the rights granted to the Holders of Registrable Securities hereunder, or
(ii) permit the inclusion of securities in any Registration Statement (other
than one requested by the holders of such securities) unless the rights to
include such other securities are junior or secondary to the rights granted to
the Holders of the Registrable Securities hereunder
     (b) Termination. This Agreement and the obligations of the Company and the
Holders hereunder (other than with respect to Section 8) shall terminate on the
first date on which no Registrable Securities remain outstanding. In addition,
the obligations of the Company and of any Holder, other than those obligations
contained in Section 8, shall terminate with respect to the Company and such
Holder when such Holder no longer holds any Registrable Securities.
     (c) Notices. All notices, requests, waivers and other communications made
pursuant to this Agreement shall be in writing and shall be deemed to have been
effectively given (i) when personally delivered to the party to be notified;
(ii) when sent by confirmed facsimile to the party to be notified at the number
set forth below; (iii) when sent by email to the party to be notified at the
email address set forth below; (iv) three (3) Business Days after deposit in the
United States mail postage prepaid by certified or registered mail return
receipt requested and addressed to the party to be notified as set forth below;
or (v) one (1) Business Day after deposit with a national overnight delivery
service, postage prepaid, addressed to the party to be notified as set forth
below with next-business-day delivery guaranteed, in each case as follows:
In the case of the Company, to:
Tronox, Inc.
3301 N.W. 150th Street
Oklahoma City, Oklahoma 73134
Attention: Michael J. Foster
Telephone: 405.775.5171
M: 405.802.4185
Facsimile: 405.302.4706
e-mail: michael.foster@tronox.com

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With a copy (which shall not constitute notice) to:
Kirkland & Ellis LLP
601 Lexington Avenue
New York, NY 10022
Attention: Christian O. Nagler
Telephone: 212-446-4660
Facsimile:
Email: Christian.Nagler@kirkland.com
In the case of the Backstop Holders:
To the names and addresses set forth on the signature pages hereto.
With a copy (which copy shall not constitute notice) to:
Milbank, Tweed, Hadley & McCloy llp
1 Chase Manhattan Plaza
New York, New York 10005
Attention: Thomas C. Janson
Telephone: (212) 530-5000
Facsimile: (212) 530-5219
Email: tjanson@milbank.com
In the case of any other Holder, to such Holder at its address set forth in the
stock ledger of the Company.
     (d) Separability. If any provision of this Agreement shall be declared to
be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect.
     (e) Assignment. This Agreement shall be binding upon and inure to the
benefit of the parties hereto and their respective heirs, devisees, legatees,
legal representatives, successors and assigns. The rights to cause the Company
to register Registrable Securities pursuant to Sections 2, 3 and 4 may be
assigned in connection with any transfer or assignment by a Holder of
Registrable Securities, provided, that: (i) such transfer may otherwise be
effected in accordance with applicable securities laws; (ii) such transfer is
effected in compliance with the restrictions on transfer contained in this
Agreement and in any other agreement between the Company and the Holder; and
(iii) such assignee or transferee executes this Agreement and is (A) an
affiliate of the Holder (B) a partner or member of the Holder or an affiliate of
the Holder or (C) holds (after giving effect to such transfer) (I) at least one
percent (1%) of the issued and outstanding shares or (II) all shares of
Registrable Securities held by a Holder prior to such transfer if transferred to
a single entity. No transfer or assignment will divest a Holder or any
subsequent owner of any rights or powers hereunder unless all Registrable
Securities are transferred or assigned.

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     (f) Specific Performance. The Company acknowledges and agrees that
(a) irreparable damages would occur in the event that any of the provisions of
this Agreement are not performed in accordance with their specific terms or are
otherwise breached and (b) remedies at law would not be adequate to compensate
the non-breaching party. Accordingly, the Company agrees that each Holder of
Registrable Securities shall have the right, in addition to any other rights and
remedies existing in its favor, to an injunction or injunctions to prevent
breaches of this Agreement and to enforce its rights hereunder. The right to
equitable relief, including an injunction, shall not be limited by any other
provision of this Agreement. In any action or proceeding against it seeking an
injunction or other equitable relief to enforce the provisions of this
Agreement, the Company hereby (i) waives and agrees not to assert any defense
that an adequate remedy exists at law or that a Holder of Registrable Securities
would not be irreparably harmed and (ii) waives and agrees not to seek any
requirement for the posting of any bond or other security in connection with any
such action or proceeding.
     (g) Entire Agreement. This Agreement represents the entire agreement of the
parties and shall supersede any and all previous contracts, arrangements or
understandings between the parties hereto with respect to the subject matter
hereof.
     (h) Amendments and Waivers. Except as otherwise provided herein, the
provisions of this Agreement may not be amended, modified or supplemented, and
waivers or consents to departures from the provisions hereof may not be given,
unless (i) the Company has obtained the written consent of Holders of at least a
majority in number of the Registrable Securities then outstanding, or (ii) such
changes are not adverse to any Holder.
     (i) Publicity. No public release or announcement concerning the
transactions contemplated hereby shall be issued by any party without the prior
consent of the Company and any other party mentioned in such release or
announcement, except to the extent that such issuing party is advised by counsel
that such release or announcement is necessary or advisable under applicable law
or the rules or regulations of any securities exchange, in which case the party
required to make the release or announcement shall to the extent practicable
provide the Company and any such other party with an opportunity to review and
comment on such release or announcement in advance of its issuance.
     (j) Expenses. Whether or not the transactions contemplated hereby are
consummated, except as otherwise provided herein, all costs and expenses
incurred in connection with the execution of this Agreement shall be paid by the
party incurring such costs or expenses, except as otherwise set forth herein.
     (k) Interpretation.
          (i) The headings contained in this Agreement are for reference
purposes only and shall not affect in any way the meaning or interpretation of
this Agreement.
          (ii) The meaning assigned to each term defined herein shall be equally
applicable to both the singular and the plural forms of such term and vice
versa, and words denoting either gender shall include both genders as the
context requires. Where a word or

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phrase is defined herein, each of its other grammatical forms shall have a
corresponding meaning.
          (iii) The terms “hereof”, “herein” and “herewith” and words of similar
import shall, unless otherwise stated, be construed to refer to this Agreement
as a whole and not to any particular provision of this Agreement.
          (iv) When a reference is made in this Agreement to a Section,
paragraph, Exhibit or Schedule, such reference is to a Section, paragraph,
Exhibit or Schedule to this Agreement unless otherwise specified.
          (v) The word “include”, “includes”, and “including” when used in this
Agreement shall be deemed to include the words “without limitation”, unless
otherwise specified.
          (vi) A reference to any party to this Agreement or any other agreement
or document shall include such party’s predecessors, successors and permitted
assigns.
     (l) Counterparts. This Agreement may be executed in two or more
counterparts, all of which shall be one and the same agreement, and shall become
effective when counterparts have been signed by each of the parties and
delivered to each other party.
     (m) Governing Law. This Agreement shall be construed, interpreted, and
governed in accordance with the internal laws of the State of New York.
     (n) Calculation of Time Periods. Except as otherwise indicated, all periods
of time referred to herein shall include all Saturdays, Sundays and holidays;
provided, however, that if the date to perform the act or give any notice with
respect to this Agreement shall fall on a day other than a Business Day, such
act or notice may be timely performed or given if performed or given on the next
succeeding Business Day.
     (o) FWP Consent. No Holder shall use a Holder Free Writing Prospectus
without the prior written consent of the Company, which consent shall not be
unreasonably withheld.
[Signature Pages Follow]

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          IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed and delivered by its duly authorized officer as of the
date first above written.

            [TRONOX INC.]
      By:           Name:           Title:        

[Signature Page to Registration Rights Agreement]

 

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              BACKSTOP HOLDER
 
       
 
  By:    
 
       
 
      Name:
 
      Title:
 
       
 
  Address:    
 
       
 
       
 
       
 
       
 
       

[Signature Page to Registration Rights Agreement]