exv10w2






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




 









 







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 the






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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



10









 




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;



11









 





               (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.







12









 








     (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





13









 







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






14









 







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






15









 







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



16









 




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).







17









 








     (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



18









 




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,



19









 




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.







20









 







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.



21









 





     (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



22









 




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.



23









 





     (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).



24









 





     (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



25









 




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;



26









 





               (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



27









 




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.





28












 




          (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.



29









 







          (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.



30









 







          (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.



31









 







          (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).



32









 





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




33









 








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



34









 





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



35









 





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:



36









 




          (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;




37









 







          (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



38









 








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




39









 








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.



40









 








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.




41









 








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.




42









 








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]





43









 








     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]





 









 








BACKSTOP PARTIES:




[Signature Page of Equity Commitment Agreement]





 











 





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.







 









 








          “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.







 









 








          “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).







 









 








          “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.







 









 








          “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






 









 







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.







 









 








          “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






 









 







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






 









 







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,






 









 







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






 









 







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;







 









 








          (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;







 









 








          (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.







 









 








          “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.







 









 








          “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.







 









 








          “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






 









 







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.







 









 






Exhibit A

to

Equity Commitment Agreement




PREFERRED STOCK COD






 









 





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]






1









 






          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






2









 







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.







3









 








          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





4









 







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


5









 







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;




6









 






	 	(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..



7









 






          (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



8









 






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:



9









 








          (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



10









 






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;




11









 






	 	(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.



12









 






          (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



13









 






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



14









 






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.



15









 







          (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



16









 






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.



17









 







          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)



18









 






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



19









 







          (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.



20









 







          “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









 







          “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









 






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









 





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









 






	 	 	 

	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









 






	 	 	 

	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 









 






	 	 	 

	 

	 	•    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









 










	 	 	 

	 

	 	•   
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 









 










	 	 	 

	 

	 	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











 





	 	 	 

	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









 






	 	 	 

	     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









 






	 	 	 

	     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









 






	 	 	 

	     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









 






	 	 	 

	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











 








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









 




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









 




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









 




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









 





     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









 




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









 




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









 









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












 








Exhibit D

to

Equity Commitment Agreement




RIGHTS SUBSCRIPTION FORMS






 









 








Exhibit E

to

Equity Commitment Agreement




GLEACHER & COMPANY SECURITIES, INC. ENGAGEMENT LETTER






 









 








Exhibit F

to

Equity Commitment Agreement




FORM OF REGISTRATION RIGHTS AGREEMENT






 









 





 






REGISTRATION RIGHTS AGREEMENT




among



TRONOX, INC.



and



EACH OF THE STOCKHOLDERS



of



TRONOX, INC.

PARTY HERETO



Dated as
of
                                        ,
2010


 


 






 









 





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









 





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









 




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).



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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









 





     “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









 





     “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









 





     (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









 




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



7









 




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



8









 




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



9









 







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



10









 







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



11









 







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.



12









 





     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



13









 




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



14









 







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



15









 







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



16









 







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.




17









 









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




18









 




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.



19









 





     (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




20









 







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]




21









 





          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]





 









 





	 	 	 	 	 

	 	 	BACKSTOP HOLDER
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Name:
	 

	 	 	 	Title:
	 
	 	 	 	 
	 

	 	Address:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 





[Signature Page to Registration Rights Agreement]