exv10w2



 





Exhibit 10.2




Purchase and Sale Agreement




Dated as of September 26, 2007




between




Tronox LLC,

Tronox Pigments (Savannah) Inc.

as Originators,




and




Tronox Funding LLC,

as Buyer





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Table of Contents




	 	 	 	 	 	 	 
	Section	 	Heading	 	Page
	 
	 	 	 	 	 	 
	Section 1.

	 	Definitions and Related Matters
	 	 3

	 
	 	 	 	 	 	 
	Section 1.1.
Section 1.2.

	 	Defined Terms

Other Interpretive Matters
	 	 	3

5	 
	 
	 	 	 	 	 	 
	Section 2.

	 	Agreement to Contribute, Purchase and Sell
	 	 5

	 
	 	 	 	 	 	 
	Section 2.1.
Section 2.2.
Section 2.3.

	 	Contributions and Sales
Purchase Price
No Recourse or Assumption of Obligations
	 	 	5

5

7	 
	 
	 	 	 	 	 	 
	Section 3.

	 	Administration and Collection
	 	 8

	 
	 	 	 	 	 	 
	Section 3.1.
Section 3.2.
Section 3.3.

	 	Collection Agent
Deemed Collections
Responsibilities of Originators
	 	 	8

8

9	 
	 
	 	 	 	 	 	 
	Section 4.

	 	Representations and Warranties
	 	 9

	 
	 	 	 	 	 	 
	Section 4.1.
Section 4.2.

	 	Mutual Representations and Warranties
Additional Representations by Each Originator
	 	 	9

10	 
	 
	 	 	 	 	 	 
	Section 5.

	 	General Covenants
	 	13

	 
	 	 	 	 	 	 
	Section 5.1.

	 	Covenants
	 	 	13	 
	 
	 	 	 	 	 	 
	Section 6.
Section 6.1.
Section 6.2.

	 	Termination of Purchases
Voluntary Termination
Automatic Termination
	 	18
18
18

	 
	 	 	 	 	 	 
	Section 7.
Section 7.1.
Section 7.2
Section 7.3

	 	Indemnification
Originators’ Indemnity
Indemnification Due to Failure to Consummate Purchase
Other Costs
	 	18
18
20
20

	 
	 	 	 	 	 	 
	Section 8.
Section 8.1.
Section 8.2.
Section 8.3.
Section 8.4.
Section 8.5.
Section 8.6.
Section 8.7.
Section 8.8.
Section 8.9.
Section 8.10.

	 	Miscellaneous 20
Amendments, Waivers, etc
Assignment of Agreement
Binding Effect; Assignment
Survival
Costs, Expenses and Taxes
Execution in Counterparts; Integration
Governing Law; Submission to Jurisdiction
No Proceedings
Notice
Entire Agreement
	 	 	20

21

21

21

21

22

22

22

22

23	 
	 
	 	 	 	 	 	 
	Signature

	 	24	 	 	 	 






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    This Purchase and Sale Agreement dated as of September 26, 2007 (this “Agreement”) is
between Tronox LLC, a Delaware limited liability company, Tronox Pigments (Savannah)
Inc., a Georgia corporation (each an “Originator” and collectively, the “Originators”), and
Tronox Funding LLC, a Delaware limited liability company (“Buyer”). The parties agree as
follows:



Section 1. Definitions and Related Matters.




   Section 1.1. Defined Terms. In this Agreement, unless otherwise specified or defined herein:
(a) capitalized terms are used as defined in Schedule I to the Receivables Sale Agreement dated as
of the date hereof (as amended or modified from time to time, the “Second Tier Agreement”) among
Buyer, Originators, Amsterdam Funding Corporation, the committed purchasers party thereto, and ABN
AMRO Bank N.V. as the Agent, as such agreement may be amended or modified from time to time; and
(b) terms defined in Article 9 of the UCC and not otherwise defined herein are used as defined in
such Article 9.




In addition, the following terms will have the meanings specified below:




“Available Funds” is defined in Section 2.2(b) hereof.




    “Closing Date” means the date on which this Agreement and the Second Tier Agreement
become effective in accordance with their terms.




“Collection Agent Fee“ is defined in Section 3.6 of the Second Tier Agreement.




“Excluded Losses” is defined in Section 7.1 hereof.




    “Initial Funding Date” means the date of the first purchase by Buyer from either
Originator under this Agreement as approved by the Agent.




    “Minimum Required Net Worth” means, at any time, the product of (a) 1.00% and (b) the
sum of (i) the aggregate outstanding principal balance of all Receivables (other than
amounts deemed to be uncollectible by the Collection Agent) and (ii) all cash on deposit in
the Buyer’s accounts.




    “Net Worth” means, at any time, an amount equal to the excess of (a) the sum of (i) the
aggregate outstanding principal balance of all Receivables (other than amounts deemed to be
uncollectible by the Collection Agent) and (ii) all cash on deposit in the Buyer’s accounts
over (b) the sum (without duplication) of (i) the Aggregate Investment at such time, (ii)
the estimated Discount and Funding Charges due and payable on the next Settlement Date,
(iii) the estimated fees and other amounts due and payable to the Collection Agent and the
Purchasers on the next Settlement Date and (iii) the aggregate principal amount outstanding
on the Subordinated Notes at such time.



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    “Partial Release” means that certain release from Lehman Commercial Paper Inc., as
Administrative Agent dated as of September 26, 2007 releasing the property conveyed by the
Originators under this Agreement.




    “Receivable Asset” means each account, instrument, chattel paper, general intangible or
similar asset (whether now existing or arising in the future, a “Receivable”) of each
Originator, and any assets related thereto including all collateral securing such
Receivable, all contracts, contract rights and all guarantees or other obligations of such
Receivable and proceeds of such Receivable; provided, however, that (i) “Receivable” shall
not include any obligations of any Seller Entity or any Affiliate of a Seller Entity to pay
for merchandise sold or services rendered and (ii) for purposes of the provisions of
Sections 3 and 5 and elsewhere herein respecting payments on, or other matters in respect
of, Receivables, “Receivable” shall not include any such obligation created at the time any
“Event of Default” is then continuing under Section 8(a) or 8(f) of the Parent Credit
Agreement.




    “Settlement Date” means, with respect to any Settlement Period, the twentieth day of
the immediately succeeding calendar month (or, if such day is not a Business Day, the next
preceding Business Day).




    “Settlement Period” means a calendar month (or, in the case of the first Settlement
Period, the period from the Initial Funding Date to the end of the calendar month in which
the Initial Funding Date occurs).



   Section 1.2. Other Interpretive Matters. In this Agreement, unless otherwise specified: (a)
references to any Section or Annex refer to such Section of, or Annex to, this Agreement, and
references in any Section or definition to any subsection or clause refer to such subsection or
clause of such Section or definition; (b) “herein”, “hereof”, “hereto”, “hereunder” and similar
terms refer to this Agreement as a whole and not to any particular provision of this Agreement; (c)
“including” means including without limitation, and other forms of the verb “to include” have
correlative meanings; (d) the word “or” is not exclusive; and (e) captions are solely for
convenience of reference and shall not affect the meaning of this Agreement.



Section 2. Agreement to Contribute, Purchase and Sell.




   Section 2.1. Contributions and Sales. $1,000 has been contributed by Tronox Worldwide LLC, the
sole equity member of Buyer, as capital to Buyer as of the Initial Funding Date. All of the
Receivables and related Receivable Assets existing at the opening of each Originator’s business on
the Initial Funding Date are hereby sold to Buyer as of the Initial Funding Date so long as no
Event of Default under Section 8(a) or Section 8(f) of the Parent Credit Agreement shall be
continuing on the Initial Funding Date. Additionally, each Originator hereby sells to Buyer all of
its right, title and interest in, to and under the Lock-Boxes. After the Initial Funding Date,
each Receivable and the related Receivable Assets shall be deemed to have been sold to Buyer
immediately (and without further action by any Person) upon the creation of such Receivable in
accordance with the terms hereof so long as no Event of Default under Section 8(a) or Section 8(f)
of the Parent Credit Agreement shall be continuing at the time of



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such creation thereof. The proceeds with respect to each Receivable (including all Collections
with respect thereto) shall be transferred at the same time as such Receivable, whether such
proceeds (or Collections) exist at such time or arise or are acquired thereafter.



   Section 2.2. Purchase Price. (a) The aggregate purchase price for the Receivables sold on any
date shall be the product of (a) the aggregate outstanding principal amount of the Receivables sold
on such date and (b) the Discounted Percentage with respect to such Receivables. “Discounted
Percentage” has the meaning specified in Schedule I attached hereto. Notwithstanding any other
provision in this Agreement, any sale of Receivables hereunder shall be for the fair market value
of such Receivables.



   (b) On the Initial Funding Date, Buyer shall pay each Originator in cash the purchase price
for the Receivables sold on that date. On each Business Day after the Initial Funding Date on
which an Originator sells any Receivables to Buyer pursuant to the terms of Section 2.1, until the
termination of the purchase and sale of Receivables under Section 6 hereof, Buyer shall pay to such
Originator a portion of the purchase price of such Receivables by depositing into such account as
such Originator shall specify immediately available funds from monies then held by or on behalf of
Buyer solely to the extent that such monies do not constitute Collections that are required to be
identified or are deemed to be held by the Collection Agent pursuant to the Second Tier Agreement
for the benefit of, or required to be distributed to, the Agent or the Purchasers pursuant to the
Second Tier Agreement or required to be paid to the Collection Agent as the Collection Agent Fee,
or otherwise necessary to pay current expenses of Buyer (in its reasonable discretion) (such
available monies, the “Available Funds”) and provided that such Originator has paid all amounts
then due by such Originator hereunder. On each Settlement Date, the Collection Agent shall
calculate the amount of the purchase price remaining to be paid by deducting from the purchase
price the Available Funds that have been paid during the corresponding Settlement Period, and such
amount due shall be identified in the Periodic Report for such Settlement Period.



    To the extent that the Available Funds were insufficient to pay the purchase price then due in
full (an “Available Funds Shortfall”), the remaining portion of such purchase price shall be paid
by increasing the principal amount of such Originator’s Subordinated Note, effective as of the last
day of the related Settlement Period in an amount equal to such Available Funds Shortfall, and such
increase in the principal amount of the Subordinated Note shall be deemed to be payment of the
purchase price. Notwithstanding the foregoing, no Originator may increase the principal amount due
and outstanding on a Subordinated Note on any day if such increase would cause the Net Worth of the
Buyer to be less than the Minimum Required Net Worth at such time (after giving effect to all
payments and other transactions impacting the Buyer’s Net Worth on such day). If the Buyer shall
not be able to pay the purchase price for any Receivable, then the Originators shall have the right
to stop selling Receivables to the Buyer under Section 2.1. The Subordinated Notes shall be
payable from time to time as funds are made available to the Buyer under the Second Tier Agreement.
At any time that the Buyer has Available Funds (including, without limitation, the proceeds of any
Incremental Purchase) that are not required to be used to pay the purchase price for new
Receivables under the first paragraph of this Section 2.2(b), Buyer shall apply such amounts on a
pro rata basis to the repayment of the outstanding principal amount of the Subordinated Notes.



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    To the extent that Collections received during any Settlement Period exceed the sum of (i) the
Purchase Price payable for Receivables generated during such Settlement Period, plus (ii) amounts
for which such Collections are required to be applied for such Settlement Period pursuant to the
Second Tier Agreement, such excess shall be treated as a reduction in the principal amount of the
applicable Originator’s Subordinated Note, effective as of the last day of the related Settlement
Period, and, if the principal amount of the Subordinated Note is zero, such excess shall be
refunded to the Buyer.



    Each Originator shall make all appropriate record keeping entries with respect to such
Originator’s Subordinated Note to reflect payments by the Buyer thereon and such Originator’s books
and records shall constitute rebuttable presumptive evidence of the principal amount of and accrued
interest on such Originator’s Subordinated Note. Each Originator shall return Subordinated Note to
the Buyer upon the final payment thereof after the termination of this Agreement pursuant to its
terms. Buyer acknowledges and agrees that each Subordinated Note has been pledged as “Collateral”
under and as defined in the Parent Credit Agreement.



   Section 2.3. No Recourse or Assumption of Obligations. Except as specifically provided in
this Agreement, the contribution, purchase and sale of Receivables under this Agreement shall be
without recourse to the Originators. Each Originator and Buyer intend the transactions hereunder
to constitute true sales of Receivables, and the related Receivables Assets, together with all of
such Originator’s right, title and interest in, to and under the Lock-Boxes by such Originator to
Buyer, providing Buyer with the full risks and benefits of ownership of the Receivables, and the
related Receivables Assets related thereto, together with all of such Originator’s right, title and
interest in, to and under the Lock-Boxes (such that the Receivables, and the related Receivables
Assets related thereto, together with all of such Originator’s right, title and interest in, to and
under the Lock-Boxes would not be property of such Originator’s estate in the event of Originator’s
bankruptcy). If, however, despite the intention of the parties, the conveyances provided for in
this Agreement are determined not to be “true sales” of Receivables from the Originators to Buyer,
then this Agreement shall also be deemed to be a “security agreement” within the meaning of Article
9 of the UCC each and Originator hereby grants to Buyer a “security interest” within the meaning of
Article 9 of the UCC in all of each Originator’s right, title and interest in and to such
Receivables, and the related Receivables Assets related thereto, together with all of such
Originator’s right, title and interest in, to and under the Lock-Boxes (including the proceeds
thereof), now existing and thereafter created, to secure a loan in an amount equal to the aggregate
purchase prices therefor and each of such Originator’s other payment obligations under this
Agreement.



    Buyer shall not have any obligation or liability with respect to any Receivable, nor shall
Buyer have any obligation or liability to any Obligor or other customer or client of an Originator
(including any obligation to perform any of the obligations of such Originator under any
Receivable).



Section 3. Administration and Collection.




   Section 3.1. Collection Agent. The Initial Collection Agent shall be responsible for the
servicing, administration and collection of the Receivables, all on the terms set out in (and



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subject to any rights to terminate the Initial Collection Agent as Collection Agent pursuant to)
the Second Tier Agreement. Pursuant to the terms of the Second Tier Agreement, the Initial
Collection Agent has the right to appoint an Affiliate of the Initial Collection Agent to perform
certain services set forth in Article III of the Second Tier Agreement. The Initial Collection
Agent has appointed each Originator as a sub-collection agent with respect to the Receivables
originated by it.



   Section 3.2. Deemed Collections. If on any day the Outstanding Balance of a Receivable is
reduced or cancelled as a result of any defective or rejected goods or services, any cash discount
or adjustment (including as a result of the application of any special refund or other discounts or
any reconciliation), any setoff or credit (whether such claim or credit arises out of the same, a
related, or an unrelated transaction) or other similar reason not arising from the financial
inability of the Obligor to pay undisputed indebtedness, (i) the applicable Originator shall be
deemed to have received on such day a Collection on such Receivable in the amount of such reduction
or cancellation and (ii) such Receivable shall thereupon be, or be deemed to be reconveyed to
Originator. If on any day any representation, warranty, covenant or other agreement of an
Originator related to a Receivable is not true or is not satisfied, (i) such Originator shall be
deemed to have received on such day a Collection in the amount of the outstanding balance of such
Receivable and (ii) such Receivable shall thereupon be, or be deemed to be reconveyed to such
Originator. Not later than the first Settlement Date after an Originator is deemed pursuant to
this Section 3.2 to have received any Collections, such Originator shall transfer to Buyer, in
immediately available funds, the amount of such deemed Collections; provided, however, that if no
such application is required under the Second Tier Agreement, Buyer and such Originator may agree
to reduce the outstanding principal amount of such Originator’s Subordinated Note in lieu of all or
part of such transfer. To the extent that Buyer subsequently collects any payment with respect to
any such “receivable”, Buyer shall pay such Originator an amount equal to the amount so collected,
such amount to be payable not later than the first Settlement Date after Buyer has so collected
such amount.



   Section 3.3. Responsibilities of Originators. Each Originator shall pay when due all Taxes
payable in connection with the Receivables or their creation or satisfaction. Each Originator
shall perform all of its obligations under agreements related to the Receivables to the same extent
as if interests in the Receivables had not been transferred hereunder. The Agent’s or any
Purchaser’s exercise of any rights hereunder or under the Second Tier Agreement shall not relieve
either Originator from such obligations. Neither the Agent nor any Purchaser shall have any
obligation to perform any obligation of either Originator or any other obligation (other than the
obligation to act in good faith and with commercial reasonableness) or liability in connection with
the Receivables.



Section 4. Representations and Warranties.




   Section 4.1. Mutual Representations and Warranties. Each of the Originators and Buyer
represents and warrants to the other as follows:




    (a) Existence and Power. It is duly organized, validly existing and in good standing
under the laws of its state of organization and has all company power and



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authority and all governmental licenses, authorizations, consents and approvals required to
carry on its business in each jurisdiction in which its business is now conducted, except
where failure to obtain such license, authorization, consent or approval would not have a
material adverse effect on (i) its ability to perform its obligations under, or the
enforceability of, any Transaction Document to which it is a party, (ii) its business or
financial condition, (iii) the interests of Buyer or its assigns under the Transaction
Documents or (iv) the enforceability or collectibility of a material portion of the
Receivables.




    (b) Authorization and No Contravention. Its execution, delivery and performance of
each Transaction Document to which it is a party (i) are within its powers, (ii) have been
duly authorized by all necessary company action, (iii) do not contravene or constitute a
default under: (A) any applicable law, rule or regulation, (B) its organizational documents
or (C) any material agreement, order or other instrument to which it is a party or its
property is subject and (iv) will not result in any Adverse Claim on any Receivable, or any
related Receivables Asset or give cause for the acceleration of any of its indebtedness.




    (c) No Consent Required. Other than the filing of financing statements, no approval,
authorization or other action by, or filings with, any Governmental Authority or other
Person is required in connection with the execution, delivery and performance by it of any
Transaction Document to which it is a party or any transaction contemplated thereby.




    (d) Binding Effect. Each Transaction Document to which it is a party constitutes the
legal, valid and binding obligation of such Person enforceable against that Person in
accordance with its terms, except as limited by bankruptcy, insolvency, or other similar
laws of general application relating to or affecting the enforcement of creditors’ rights
generally and subject to general principles of equity.



   Section 4.2. Additional Representations by Each Originator. Each Originator further
represents and warrants to Buyer as follows:



(a) UCC Representations and Warranties.





    (1) This Agreement creates a valid and continuing ownership or security
interest (as defined in the applicable UCC) in the Receivables, and the related
Receivables Assets and the Lock-Box Accounts in favor of Buyer, which security
interest is prior to all other Adverse Claims, and is enforceable as such against
creditors of and purchasers from each Originator.




    (2) Each Receivable constitutes an “account” within the meaning of the
applicable UCC.




    (3) Each Originator owns and has good and marketable title to the Receivables,
and the related Receivables Assets free and clear of any Adverse Claim, claim, or
encumbrances of any Person.




    (4) Each Originator has caused or will have caused, within ten days, the filing
of all appropriate financing statements in the proper filing office in the
appropriate jurisdictions under applicable law in order to perfect the security
interest in the Receivables, and the related Receivables Assets granted to the Buyer
hereunder.




    (5) Other than the security interest granted to the Buyer pursuant to this
Agreement and the security interest granted pursuant to the Parent Credit Agreement
which has been released pursuant to the Partial Release, neither Originator had
pledged, assigned, sold, granted a security interest in, or otherwise conveyed any
of the Receivables or any related Receivables Assets. Neither Originator has
authorized the filing of nor is aware of any financing statements against such
Originator that include a description of collateral covering the Receivables or any
related Receivables Assets other than any financing statement relating to the
security interest granted to the Buyer hereunder or that has been terminated.
Neither Originator is aware of any judgment or tax lien filings against such
Originator.




    (b) Accuracy of Information. All information furnished by each Originator in writing
in connection with any Transaction Document, or any transaction contemplated thereby, is
true and accurate in all material respects (and was not incomplete by omitting to state a
material fact necessary to make such information not materially misleading). Neither of the
Originators’ jurisdictions of organization have changed within the past 12 months. Neither
Originator has been known by or used any organizational, fictitious or trade name within the
past 12 months other than a name set forth of Exhibit D of the Second Tier Agreement.
Exhibit D of the Second Tier Agreement lists the federal employer identification numbers of
each Originator. Neither Originator has granted any interest in any Lock-Box or Lock-Box
Account to any Person other than the Buyer and, upon delivery to a Lock-Box Bank of the
related Lock-Box Letter, the Buyer will have exclusive ownership and control of such
Lock-Box Account at such Lock-Box Bank.




    (c) No Material Litigation. No litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is pending or, to the knowledge of any Originator,
threatened by or against, any Originator or against any of their respective properties or
revenues (a) with respect to any of the Transaction Documents or any of the transactions
contemplated hereby or thereby that could reasonably be expected to be materially adverse to
the Buyer, or (b) except for the matter described on Schedule 4.1 of the Second Tier
Agreement, that could reasonably be expected to have a Material Adverse Effect.




    (d) No Material Adverse Effect. Since August 31, 2007, there has been no Material
Adverse Effect except for the matter described on Schedule 4.1 of the Second Tier Agreement.




    (e) Accuracy of Exhibits. All information on Exhibits D-F of the Second Tier Agreement
(to the extent describing an Originator) is true and complete, subject to any changes
permitted by, and notified to the Agent in accordance with the Second Tier Agreement.




    (f) Sales by Originator. Each sale by an Originator to Buyer of an interest in
Receivables has been made for “reasonably equivalent value” (as such term is used in Section
548 of the Bankruptcy Code) and not for or on account of “antecedent debt” (as such term is
used in Section 547 of the Bankruptcy Code) owed by an Originator to Buyer.




    (g) Not an Investment Company. Neither Originator is an “investment company” within
the meaning of the Investment Company Act of 1940, as amended from time to time, or any
successor statute.



Section 5. General Covenants.




   Section 5.1. Covenants. Each Originator hereby covenants and agrees to comply with the
following covenants and agreements, unless Buyer (with the consent of the Agent) shall otherwise
consent:




    (a) Financial Reporting. Each Originator shall, and shall cause Parent to, maintain a
system of accounting established and maintained in accordance with GAAP and will furnish to
(or at the direction of) Buyer:




    (i) Annual Financial Statements. Within 120 days after each fiscal year of the
Parent, copies of Parent’s annual audited financial statements (including a
consolidated balance sheet, consolidated statement of operations and consolidated
statement of cash flows, with related footnotes) certified by independent registered
public accountants satisfactory to the Agent and prepared on a consolidated basis in
conformity with GAAP prepared on a consolidated basis in conformity with GAAP as of
the close of such fiscal year for the fiscal year then ended; provided, that so long
as any document described in this subsection is publicly filed with the Securities
and Exchange Commission, it shall not be required to be delivered by the Parent or
any Originator;




    (ii) Quarterly Financial Statements. Within 60 days after each (except the
last) fiscal quarter of each fiscal year of the Parent, copies of its unaudited
financial statements (including at least a consolidated balance sheet as of the
close of such quarter and statements of operations and cash flows for the period
from the beginning of the fiscal year to the close of such quarter) certified by a
Designated Financial Officer and prepared in a manner consistent with the



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financial statements described in clause (i) of this Section 5.l(a), certified by a
Designated Financial Officer thereof and prepared in a manner; provided, that so
long as any document described in this subsection is publicly filed with the
Securities and Exchange Commission, it shall not be required to be delivered by the
Parent or any Originator; and




   (iii) Other Information. With reasonable promptness, such other information
(including non-financial information) as may be reasonably requested by the Buyer.




    (b) Notices. Promptly and in any event within three Business Days after a Responsible
Officer of an Originator obtains knowledge of any of the following, such Originator will
notify Buyer and provide a description of:




    (i) Potential Termination Events. The occurrence of any Potential Termination
Event;




    (ii) Representations and Warranties. The failure of any representations or
warranty herein to be true when made in any material respect;




   (iii) Litigation. (A) the institution of any litigation or proceeding against
or instituted by, any Originator (i) if the litigation or proceeding does not
involve any Environmental Law, in which the amount involved could reasonably be
expected to be $10,000,000 or more and not covered by insurance, (ii) if the
litigation or proceeding involves any Environmental Law, in which the amount
involved that is not covered by insurance could reasonably be expected to be
$50,000,000 or more, or (B) the institution of any litigation or proceeding which
involves any Transaction Document; or




    (iv) Changes in Business. Any change in, or proposed change in, the character
of any Originator’s business that could impair the collectibility or quality of any
Receivable.




    (c) Conduct of Business. Each Originator shall (a)(i) preserve, renew and keep in full
force and effect its corporate or other existence and (ii) take all reasonable action to
maintain all rights, privileges, franchises, Permits and licenses necessary or desirable in
the normal conduct of its business, except, in each case, as otherwise permitted by Section
7.4 of the Parent Credit Agreement (as in effect as of the date hereof) and except, in the
case of clause (ii) above, to the extent that failure to do so could not reasonably be
expected to have a Material Adverse Effect; and (b) comply with (i) all Material Contractual
Obligations (as such term is defined in the Parent Credit Agreement as in effect as of the
date hereof) and (ii) all Permits (as such term is defined in the Parent Credit Agreement as
in effect as of the date hereof), except to the extent that failure to comply therewith
could not, in the aggregate, reasonably be expected to have a Material Adverse Effect.




    (d) Furnishing Information and Inspection of Records. Each Originator will furnish to
Agent such information concerning the Receivables as Agent may reasonably request, subject
to any confidentiality restrictions. Each Originator will permit, at any time during
regular business hours, and upon reasonable notice, Agent (or any representatives thereof)
(i) to examine and make copies of all Records, (ii) to visit the offices and properties of
such Originator or office of any other Person for the purpose of examining the Records and
(iii) to discuss matters relating hereto with any of such Originator’s officers, directors,
employees or independent public accountants having knowledge of such matters, provided, that
prior to a Termination Event, any such examinations or visits in excess of one per calendar
year shall be at Agent’s expense. The Agent may at any time have an independent public
accounting firm conduct an audit of the Records or make test verifications of the
Receivables and Collections in connection with the audit and test verifications conducted on
behalf of the Agent under the Second Tier Agreement; provided, however, prior to a
Termination Event, only one such audit per calendar year shall be at the expense of such
Originator. The Agent will make reasonable efforts to consult with such Originator in
choosing an independent public accounting firm to conduct such audits.




    (e) Keeping Records. (i) Each Originator will have and maintain (A) administrative and
operating procedures (including an ability to recreate Records if originals are destroyed),
(B) adequate facilities, personnel and equipment and (C) all Records and other information
necessary or advisable for collecting the Receivables (including Records adequate to permit
the immediate identification of each new Receivable and all Collections of, and adjustments
to, each existing Receivable). Each Originator will give Buyer prior notice of any change
in such administrative operating procedures which will have a Material Adverse Effect.




    (f) Perfection. (i) Each Originator will at its expense, promptly execute and deliver
all instruments and documents and take all action necessary or requested by the Buyer
(including the filing of financing or continuation statements, amendments thereto or
assignments thereof) to enable the Buyer to exercise and enforce all its rights against the
Receivables and to vest and maintain vested in the Buyer a valid, first priority perfected
ownership interest in the Receivables, the Collections, and proceeds thereof free and clear
of any Adverse Claim. To the extent permitted by applicable law, the Buyer will be
permitted to file any continuation statements, amendments thereto and assignments thereof
without the Buyer’s signature or further approval.




    (ii) Each Originator will not change its name, identity or corporate structure or
relocate its jurisdiction of organization or the Records (to the extent held in tangible
form) except after ten days advance notice to the Buyer and the delivery to the Buyer of all
financing statements, instruments and other documents (including direction letters)
requested by the Buyer.




    (iii) Each Originator will at all times maintain its jurisdiction of organization and
its chief executive offices within a jurisdiction in the USA in which Article 9 of the UCC
is in effect. If either Originator moves its jurisdiction of organization to a location



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that imposes Taxes, fees or other charges to perfect the Buyer’s interests hereunder such
Originator will pay all such amounts and any other costs and expenses incurred in order to
maintain the enforceability of the Transaction Documents, the Sold Interest and the
interests of the Buyer in the Receivables and the related Receivables Assets.




    (g) Payments on Receivables, Accounts. Each Originator will at all times instruct all
Obligors to deliver payments on the Receivables to a Lock-Box. If any such payments or
other Collections are received by an Originator, it shall hold such payments in trust for
the benefit of the Buyer and promptly (but in any event within two Business Days after
receipt) remit such funds at the direction of the Buyer. Each Originator will cause each
Lock-Box Bank to comply with the terms of each applicable Lock-Box Letter. After the
occurrence of a Termination Event or the Liquidity Termination Date, such Originator will
not, and will not permit any Collection Agent or other Person to, commingle Collections or
other funds to which the Buyer is entitled with any other funds provided, however, that
notwithstanding the foregoing, Tronox LLC may permit amounts received with respect to
non-trade receivable related payments from Lockbox #23850 maintained with JPMorgan Chase
Bank, N.A. to be deposited into the same Lock-Box Account as Collections provided that
Tronox LLC shall make reasonable efforts to identify and segregate such amounts from
Collections as soon as possible. Each Originator shall only add a Lock-Box Bank, Lock-Box,
or Lock-Box Account to those listed on Exhibit F of the Second Tier Agreement if the Buyer
has received notice of such addition, a copy of any new Lock-Box Agreement and an executed
and acknowledged copy of a Lock-Box Letter (with such changes as are acceptable to the
Buyer) from any new Lock-Box Bank. Each Originator shall only terminate a Lock-Box Bank or
Lock-Box, or close a Lock-Box Account, upon 30 days advance notice to the Buyer.




    (h) Sales and Adverse Claims Relating to Receivables. Except as otherwise provided
herein, neither Originator will (by operation of law or otherwise) dispose of or otherwise
transfer, or create or suffer to exist any Adverse Claim upon, any Receivable or any
proceeds thereof.




    (i) Extension or Amendment of Receivables. Except as otherwise permitted in the Second
Tier Agreement and in the Credit and Collection Policy and then subject to Section 1.5 of
the Second Tier Agreement, neither Originator will extend, amend, rescind or cancel any
Receivable.




    (j) Performance of Duties. Each Originator will perform its duties or obligations in
accordance with the provisions of each of the Transaction Documents to which it is a party.
Each Originator (at its expense) will (i) fully and timely perform in all material respects
all agreements, if any, required to be observed by it in connection with each Receivable,
(ii) comply in all material respects with the Credit and Collection Policy, and (iii)
refrain from any action that may impair the rights of Buyer in the Receivables, Collections
or Lock-Box Accounts.




    (k) Lock-Box Agreements. Each Originator will deliver a copy of all Lock-Box
Agreements to the Buyer within 30 days of the date hereof.



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Section 6. Termination of Purchases.




   Section 6.1. Voluntary Termination. The purchase and sale of Receivables pursuant to this
Agreement may be terminated by either party, upon at least five Business Days’ prior written notice
to the other party.



   Section 6.2. Automatic Termination. The purchase and sale of Receivables pursuant to this
Agreement shall automatically terminate upon the occurrence of (i) a Bankruptcy Event with respect
to either Originator, (ii) the Liquidity Termination Date, (iii) a rescission by either Originator
of its election to make subordinated loans pursuant to Section 2.2, or (iv) an event which would
prohibit the sale of Receivables pursuant to the Parent Credit Agreement.



Section 7. Indemnification.




   Section 7.1. Originators’ Indemnity. Without limiting any other rights any Person may have
hereunder or under applicable law, each Originator hereby indemnifies and holds harmless Buyer and
its officers, managers, agents and employees (each an “Indemnified Party”) from and against any and
all damages, losses, claims, liabilities, penalties, Taxes, costs and expenses (including
reasonable attorneys’ fees and court costs actually incurred) (all of the foregoing collectively,
the “Indemnified Losses”) at any time imposed on or incurred by any Indemnified Party arising out
of or otherwise relating to any Transaction Document, the transactions contemplated thereby, or any
action taken or omitted by any of the Indemnified Parties, whether arising by reason of the acts to
be performed by such Originator hereunder or otherwise, excluding only Indemnified Losses
(“Excluded Losses”) to the extent (a) a final judgment of a court of competent jurisdiction holds
such Indemnified Losses to the extent resulting from gross negligence or willful misconduct of the
Indemnified Party seeking indemnification to the extent resulting from the breach of a
representation, warranty or covenant by such Indemnified Party, (b) solely due to the credit risk
or financial inability to pay of the Obligor and for which reimbursement would constitute recourse
to such Originator or the Collection Agent for uncollectible Receivables or (c) such Indemnified
Losses include Taxes on, or measured by, the overall net income of such Indemnified Party. Without
limiting the foregoing indemnification, but subject to the limitations set forth in clauses (a),
(b) and (c) of the previous sentence, each Originator shall indemnify each Indemnified Party for
Indemnified Losses relating to or resulting from:




    (i) any representation or warranty made by or on behalf of an Originator under or in
connection with this Agreement, any Periodic Report or any other information or report
delivered by an Originator pursuant to the Transaction Documents, which shall have been
false or incorrect in any material respect when made or deemed made;




    (ii) the failure by an Originator to comply with any applicable law, rule or regulation
related to any Receivable, or the nonconformity of any Receivable with any such applicable
law, rule or regulation;




    (iii) the failure of an Originator to vest and maintain vested in Buyer, a perfected
ownership or security interest in the Receivables and the other property conveyed pursuant
hereto, free and clear of any Adverse Claim;




    (iv) any commingling of funds to which Buyer is entitled hereunder with any other
funds;




    (v) any failure of a Lock-Box Bank to comply with the terms of the applicable Lock-Box
Letter;




    (vi) any dispute, claim, offset or defense (other than discharge in bankruptcy of the
Obligor or financial inability of the Obligor to pay) of the Obligor to the payment of any
Receivable, or any other claim resulting from the sale or lease of goods or the rendering of
services related to such Receivable or the furnishing or failure to furnish any such goods
or services or other similar claim or defense not arising from the financial inability of
any Obligor to pay undisputed indebtedness;




   (vii) any failure of either Originator to perform its duties or obligations in
accordance with the provisions of this Agreement or any other Transaction Document to which
either Originator is a party; or




   (viii) any environmental liability claim, products liability claim or personal injury
or property damage suit or other similar or related claim or action of whatever sort,
arising out of or in connection with any Receivable or any other suit, claim or action of
whatever sort relating to any of either Originator’s obligations under the Transaction
Documents.



   Section 7.2. Indemnification Due to Failure to Consummate Purchase. Each Originator will
indemnify Buyer on demand and hold it harmless against all costs (including, without limitation,
breakage costs) and expenses incurred by Buyer resulting from any failure by such Originator to
consummate a purchase after Buyer has requested a transfer of the applicable Receivables to the
Purchasers under the terms of the Second Tier Agreement.



   Section 7.3. Other Costs. If Buyer becomes obligated to compensate the Purchasers under the
Second Tier Agreement or any other Transaction Document for any costs or indemnities pursuant to
any provision of the Second Tier Agreement or any other Transaction Document, then each Originator
shall, on demand, reimburse Buyer for the amount of any compensation.



Section 8. Miscellaneous.




   Section 8.1. Amendments, Waivers, etc. No amendment of this Agreement or waiver of any
provision hereof or consent to any departure by either party therefrom shall be effective without
the written consent of the party that is sought to be bound. Any such waiver or consent shall be
effective only in the specific instance given. No failure or delay on the part of either party to
exercise, and no delay in exercising, any right hereunder shall operate as a waiver



11









 







thereof; nor shall any single or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by law. Each Originator agrees that the
Purchasers may rely upon the terms of this Agreement, and that the terms of this Agreement may not
be amended, nor any material waiver of those terms be granted, without the consent of the Agent;
provided that such Originator and Buyer may agree to an adjustment of the purchase price for any
Receivable without the consent of the Agent provided that the purchase price paid for any
Receivable shall be an amount not less than adequate consideration that represents fair value for
such Receivable.



   Section 8.2. Assignment of Agreement. Each Originator hereby acknowledges that on the date
hereof Buyer has collaterally assigned for security purposes all of its right, title and interest
in, to and under this Agreement to the Agent for the benefit of the Purchasers pursuant to the
Second Tier Agreement and that the Agent and the Purchasers are third party beneficiaries hereof.
Each Originator hereby further acknowledges that after the occurrence and during the continuation
of a Termination Event all provisions of this Agreement shall inure to the benefit of the Agent and
the Purchasers, including the enforcement of any provision hereof to the extent set forth in the
Second Tier Agreement, but that neither the Agent nor any Purchaser shall have any obligations or
duties under this Agreement. No purchases shall take place hereunder at any time that the Agent
has exercised its right to enforce Buyer’s rights hereunder pursuant to Section 1.8 of the Second
Tier Agreement. Each Originator hereby further acknowledges that the execution and performance of
this Agreement are conditions precedent for the Agent and the Purchasers to enter into the Second
Tier Agreement and that the agreement of the Agent and Purchasers to enter into the Second Tier
Agreements will directly or indirectly benefit each Originator and constitutes good and valuable
consideration for the rights and remedies of the Agent and each Purchaser with respect hereto.



   Section 8.3. Binding Effect; Assignment. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and assigns and shall also, to
the extent provided herein, inure to the benefit of the parties to the Second Tier Agreement. Each
Originator acknowledges that Buyer’s rights under this Agreement are being assigned to the Agent
under the Second Tier Agreement and consents to such assignment and to the exercise of those rights
directly by the Agent, to the extent permitted by the Second Tier Agreement.



   Section 8.4. Survival. The rights and remedies with respect to any breach of any
representation and warranty made by an Originator or Buyer pursuant to Section 4 and the
indemnification provisions of Section 7 shall survive any termination of this Agreement.



   Section 8.5. Costs, Expenses and Taxes. In addition to the obligations of each Originator
under Section 7, each party hereto agrees to pay on demand all costs and expenses incurred by the
other party and its assigns (other than Excluded Losses) in connection with the enforcement of, or
any actual or claimed breach of, this Agreement, including the reasonable fees and expenses of
counsel to any of such Persons incurred in connection with any of the foregoing or in advising such
Persons as to their respective rights and remedies under this Agreement in connection with any of
the foregoing. Each Originator also agrees to pay on demand all stamp



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and other taxes and fees payable or determined to be payable in connection with the execution,
delivery, filing, and recording of this Agreement.



   Section 8.6. Execution in Counterparts; Integration. This Agreement may be executed in any
number of counterparts and by the different parties in separate counterparts, each of which when so
executed shall be deemed to be an original and all of which when taken together shall constitute
one and the same Agreement.



   Section 8.7. Governing Law; Submission to Jurisdiction. This Agreement shall be governed by,
and construed in accordance with, the internal laws (and not the law of conflicts) of the State of
New York. Each Originator hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York state court sitting in New
York, New York for purposes of all legal proceedings arising out of, or relating to, the
Transaction Documents or the transactions contemplated thereby. Each Originator hereby irrevocably
waives, to the fullest extent permitted by law, any objection it may now or hereafter have to the
venue of any such proceeding and any claim that any such proceeding has been brought in an
inconvenient forum. Nothing in this Section 8.7 shall affect the right of Buyer to bring any
action or proceeding against either Originator or its property in the courts of other
jurisdictions.



   Section 8.8. No Proceedings. Each Originator agrees, for the benefit of the parties to the
Second Tier Agreement, that it will not institute against Buyer, or join any other Person in
instituting against Buyer, any proceeding of a type referred to in the definition of Bankruptcy
Event until one year and one day after no investment, loan or commitment is outstanding under the
Second Tier Agreement. In addition, all amounts payable by Buyer to each Originator pursuant to
this Agreement shall be payable solely from funds available for that purpose (after Buyer has
satisfied all obligations then due and owing under the Second Tier Agreement).



   Section 8.9. Notices. Unless otherwise specified, all notices and other communications
hereunder shall be in writing (including by electronic mail, telecopier or other facsimile or
electronic communication), given to the appropriate Person at its address or telecopy number set
forth in the Second Tier Agreement or at such other address or telecopy number as such Person may
specify, and effective when received at the address specified by such Person.



  Section 8.10. Entire Agreement. This Agreement constitutes the entire understanding of the
parties thereto concerning the subject matter thereof. Any previous or contemporaneous agreements,
whether written or oral, concerning such matters are superseded thereby.



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    In Witness Whereof, the parties have caused this Agreement to be executed by their
respective officers thereunto duly authorized, as of the date first above written.



Tronox LLC, as Originator




By /s Melody A. Walke

—

Name: Melody A. Walke

—

Title: Vice President & Treasurer




Tronox Pigments (Savannah) Inc., as

Originator




By /s Melody A. Walke

—

Name: Melody A. Walke

—

Title: Vice President & Treasurer




Tronox Funding LLC, as Buyer




By

/s Melody A. Walke





Name: Melody A. Walke

Title: President




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Schedule I




    The Discounted Percentage applicable to the Receivables purchased on any date from either
Originator under the Purchase and Sale Agreement shall equal a percentage obtained from the
following formula:



100%- (A + B + C)




all determined by the Collection Agent as of on each Reporting Date,




Where:



A = Adjusted Carrying Cost Percentage, which as of such date will equal the amount obtained by
dividing (a) the product of (i) Z, (ii) Days Sales Outstanding for such date and (iii) the Discount
Rate as of, initially, the initial Settlement Date, and thereafter the Reporting Date by (b) 365.



B = 0.75% multiplied by a fraction of which the numerator is Days Sales Outstanding for such date
and the denominator of which is 360.



C = 1/20 of 1%




Z = the sum of Discount Rate plus Used Fee Rate (per Fee Letter) plus Commitment Fee (per Fee
Letter) all divided by the Discount Rate



    “Days Sales Outstanding” means as of any Reporting Date and continuing to but excluding the
next Reporting Date, the number of days calculated by such Originator in accordance with its
customary practices as the three month average days sales outstanding for the three calendar months
immediately preceding such earlier Reporting Date.



    “Discount Rate” means the weighted average interest rate applicable to the Aggregate
Investment pursuant to the Receivables Sale Agreement.



    None of the elements of the above-referenced formula, with respect to any purchase of
Receivables, will be adjusted following the related purchase date.



    With respect to each calculation set forth above with respect to a Reporting Date, such
calculation as calculated on such Reporting Date and included in the applicable Periodic Report
shall remain in effect from and including the related Reporting Date to but excluding the following
Reporting Date.




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