Document:

exv10w5

EXHIBIT 10.5

EXECUTION VERSION

          THIS PARENTAL GUARANTEE AGREEMENT, dated as of August 31, 2010 (this “Parental Guarantee
Agreement”), is made by Berkshire Hathaway Inc., a Delaware corporation (“Berkshire”)
in favor of Continental Casualty Company, an Illinois property and casualty insurance company
(“CCC”), The Continental Insurance Company, a Pennsylvania property and casualty insurance
company (“CIC”), Continental Reinsurance Corporation International, Ltd., a Bermuda
long-term insurance company (“CRCI”), and CNA Insurance Company Limited, a United Kingdom
property and casualty insurance company (“CICL,” and each of CCC, CIC, CRCI and CICL is
individually hereinafter referred to as a “CNA Party” and all of CCC, CIC, CRCI and CICL
are collectively hereinafter referred to as the “CNA Parties”), with respect to certain
obligations of National Indemnity Company, a Nebraska property and casualty insurance company
(“NICO”).

WITNESSETH:

          WHEREAS, the CNA Parties, NICO and Berkshire have entered into that certain Master Transaction
Agreement, dated as of July 14, 2010 (as amended, restated, supplemented or otherwise modified, the
“Master Transaction Agreement”);

          WHEREAS, as contemplated by the Master Transaction Agreement, NICO and the CNA Parties have
entered into the Loss Portfolio Transfer Reinsurance Agreement, dated as of August 31, 2010 (as
amended, restated, supplemented and/or modified from time to time) (the “LPT Reinsurance
Agreement”), which provides that the CNA Parties will cede to NICO, and NICO will reinsure, all
liabilities related to asbestos and pollution claims under the Business Covered (as defined in the
LPT Reinsurance Agreement);

          WHEREAS, as contemplated by the LPT Reinsurance Agreement, NICO, the CNA Parties and Wells
Fargo Bank, National Association, as trustee (the “Trustee”), have entered into the Trust
Agreement, dated as of August 31, 2010 (as amended, restated, supplemented and/or modified from
time to time) (the “Trust Agreement”), which provides that NICO is obligated to establish
the Trust Account (as defined below) for the purpose of satisfying its obligations under the LPT
Reinsurance Agreement; and

          WHEREAS, NICO is a wholly-owned subsidiary of Berkshire and Berkshire shall derive direct or
indirect benefit from the transactions contemplated by the Master Transaction Agreement, the LPT
Reinsurance Agreement and the Transaction Documents;

          WHEREAS, to induce the CNA Parties to enter into the transactions contemplated by the Master
Transaction Agreement, the LPT Reinsurance Agreement and the Transaction Documents, Berkshire has
executed and delivered this Parental Guarantee Agreement; and

 

 

          WHEREAS, the parties hereto desire that the Agent, as representative for the CNA Parties, have
a security interest and continuing lien on Berkshire’s right, title and interest in the Collateral
(as defined below).

          NOW, THEREFORE, in consideration of the foregoing, the covenants and agreements set forth
herein, and other good and valuable consideration, the adequacy and receipt of which are hereby
acknowledged, and intending to be legally bound hereby, Berkshire and the CNA Parties (each
individually, a “Party” and collectively, the “Parties”) hereby agree as follows:

ARTICLE I

DEFINITIONS; CONSTRUCTION

          Section 1.1 Definitions. Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to such terms in the LPT Reinsurance Agreement. The following terms
shall have the following meanings when used in this Parental Guarantee Agreement:

          “Acceleration Event” means the occurrence or continuance of both of the following
events, acts, occurrences or conditions, whether either such event, act, occurrence or condition is
voluntary or involuntary or results from the operation of law or pursuant to or as a result of
compliance by any Person with any judgment, decree, order, rule or regulation of any court or
administrative or governmental body: any (i) Insolvency Event of NICO and (ii) Insolvency
Event of Berkshire, whether such Insolvency Event occurs prior to, concurrently with or subsequent
to the Insolvency Event of NICO referred to in (i).

          “Agent” means CCC, in its capacity as agent for the benefit of the CNA Parties,
together with its successors and assigns.

          “Berkshire” has the meaning set forth in the Preamble.

          “CCC” has the meaning set forth in the Preamble.

          “CIC” has the meaning set forth in the Preamble.

          “CICL” has the meaning set forth in the Preamble.

          “CNA Party” or “CNA Parties” has the meaning set forth in the Preamble.

          “CRCI” has the meaning set forth in the Preamble.

          “Collateral” has the meaning set forth in Section 3.1.

          “Collateral Obligations” has the meaning set forth in Section 2.1(a).

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          “Event of Default” means the occurrence or continuance of all of the following: (i)
any NICO Event of Default, (ii) the failure of Berkshire to perform or pay under the Parental
Guarantee and (iii) any of the following events, acts, occurrences or conditions, whether
such event, act, occurrence or condition is voluntary or involuntary or results from the operation
of law or pursuant to or as a result of compliance by any Person with any judgment, decree, order,
rule or regulation of any court or administrative or governmental body:

          (a) any Insolvency Event of NICO;

          (b) a final arbitration award, court order, decision or judgment with no appeal or
stay pending (1) has been issued against NICO in favor of a CNA Party under the LPT
Reinsurance Agreement or the Trust Agreement and remains unpaid or unperformed by NICO or
(2) has been issued against a CNA Party with respect to an A&P Claim in respect of Business
Covered that NICO has acknowledged in writing its obligation to pay and such claim remains
unpaid by NICO; or

          (c) NICO has acknowledged in writing its obligation to pay or perform an obligation
guaranteed under the Parental Guarantee, and such obligation remains due and unpaid or
unperformed by NICO.

          “Guaranteed Obligations” has the meaning set forth in Section 2.1(a).

          “Insolvency Event” means the occurrence or continuance of any of the following events,
acts, occurrences or conditions, whether such event, act, occurrence or condition is voluntary or
involuntary or results from the operation of law or pursuant to or as a result of compliance by any
Person with any judgment, decree, order, rule or regulation of any court or administrative or
governmental body: (i) a Person shall commence a voluntary case concerning itself under any
insolvency laws or otherwise commence any other proceeding under any bankruptcy, rehabilitation,
liquidation, conservation, dissolution, reorganization, arrangement, adjustment of debt, relief of
debtors, insolvency or similar law of any jurisdiction whether now or hereafter in effect relating
to such Person (any of the foregoing, an “Insolvency Proceeding”); (ii) an involuntary
Insolvency Proceeding is commenced against a Person and such Insolvency Proceeding is not
controverted within ten (10) calendar days, or is not dismissed within thirty (30) calendar days,
after commencement of the case; (iii) a receiver or liquidator is appointed for, or takes charge
of, all or substantially all of the property of a Person; (iv) any order for relief or other order
approving any such case or proceeding is entered; (v) a Person is adjudicated insolvent or
bankrupt; (vi) a Person suffers any appointment of any custodian or the like for it or any
substantial part of its property, which appointment continues undischarged or unstayed for a period
of thirty (30) calendar days; (vii) a Person makes a general assignment for the benefit of
creditors; (viii) a Person shall fail to pay, or shall state that it is unable to pay, or shall be
unable to pay, its debts generally as they become due; (ix) a Person shall call a meeting of its
creditors with a view of arranging a composition or adjustment of its debts; (x) a Person shall by
any act or failure to act consent to, approve of or acquiesce in any of the foregoing; or (xi) any
corporate action is taken by such Person for the purpose of effecting any of the foregoing items
(i)-(x).

          “Interest” has the meaning set forth in Section 2.1(b).

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          “LPT Reinsurance Agreement” has the meaning set forth in the Recitals.

          “Master Transaction Agreement” has the meaning set forth in the Recitals.

          “NICO” has the meaning set forth in the Preamble.

          “NICO Event of Default” means the occurrence or continuance of any of the following
events, acts, occurrences or conditions, whether such event, act, occurrence or condition is
voluntary or involuntary or results from the operation of law or pursuant to or as a result of
compliance by any Person with any judgment, decree, order, rule or regulation of any court or
administrative or governmental body:

          (a) NICO’s failure to pay all Ultimate Net Loss due and owing by NICO, pursuant to and
in accordance with the applicable provisions of the LPT Reinsurance Agreement, subject
always to the LPT Limit;

          (b) NICO’s failure to transfer and assign assets into the Trust Account when required,
including upon the occurrence of a Collateral Triggering Event or a Reinsurance Credit
Event, pursuant to and in accordance with the applicable provisions of the LPT Reinsurance
Agreement and the Trust Agreement;

          (c) NICO’s failure to establish, fund and maintain additional trust accounts and/or
other collateral when required upon the occurrence of a Reinsurance Credit Event, pursuant
to and in accordance with the applicable provisions of the LPT Reinsurance Agreement and
the Trust Agreement.

          “Parental Guarantee” has the meaning set forth in Section 2.1(a).

          “Parental Guarantee Agreement” has the meaning set forth in the Preamble.

          “Party” or “Parties” has the meaning set forth in the Recitals.

          “Person” means and includes any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or political subdivision or
agency, department or instrumentality thereof.

          “Proceeds” means “proceeds” as such term is defined in the UCC.

          “Secured Obligations” means (i) all of NICO’s payment and performance obligations
(whether absolute or contingent, matured or unmatured) arising under or in connection with the LPT
Reinsurance Agreement and the Trust Agreement, (ii) all of Berkshire’s payment and performance
obligations (whether absolute or contingent, matured or unmatured) arising under the Parental
Guarantee with respect to NICO’s obligations under the LPT Reinsurance Agreement and the Trust
Agreement and (iii) reimbursement for all expenses incurred to enforce and exercise any and all
remedies under (A) the LPT Reinsurance Agreement and the Trust Agreement or (B) this Parental
Guarantee Agreement (solely with respect to Berkshire’s payment and performance obligations
(whether absolute or contingent, matured or unmatured) arising under the Parental Guarantee with
respect to NICO’s obligations under the

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LPT Reinsurance Agreement and the Trust Agreement), including, without limitation, all
reasonable attorney’s fees and legal expenses and including, without limitation, any of the
foregoing amounts payable after the commencement of any Insolvency Proceeding, whether or not any
such amounts are allowed in any such proceeding.

          “Securities Intermediary” means Wells Fargo Bank, National Association, acting as
securities intermediary with respect to the Trust Account.

          “Security Entitlement” means “security entitlement” as defined in the UCC.

          “Trigger Events” has the meaning set forth in Section 2.1(b).

          “Trust Account” means the trust account established by the Securities Intermediary
with account number 80460400 in the name of the Trustee, together with any replacements thereof or
substitutions therefor.

          “Trust Agreement” has the meaning set forth in the Recitals.

          “Trustee” has the meaning set forth in the Recitals.

          “UCC” means the Uniform Commercial Code as in effect from time to time in the State of
New York.

ARTICLE II

PARENTAL GUARANTEE

          Section 2.1 Parental Guarantee.

          (a) Berkshire hereby unconditionally and irrevocably guarantees (the “Parental
Guarantee”) NICO’s full and prompt payment and, in the case of the obligations set forth in
(ii) and (iii) below (the “Collateral Obligations”), performance when due of NICO’s
obligations for: (i) the payment of all Ultimate Net Loss due and owing by NICO, pursuant to and
in accordance with the applicable provisions of the LPT Reinsurance Agreement, subject always to
the LPT Limit; (ii) the transfer and assignment of assets into the Trust Account when required,
including upon the occurrence of a Collateral Triggering Event or a Reinsurance Credit Event,
pursuant to and in accordance with the applicable provisions of the LPT Reinsurance Agreement and
the Trust Agreement; (iii) the establishment, funding and maintenance of additional trust accounts
and/or other collateral when required upon the occurrence of a Reinsurance Credit Event, pursuant
to and in accordance with the applicable provisions of the LPT Reinsurance Agreement and the Trust
Agreement; and (iv) the payment of any amounts due and payable to the CNA Parties pursuant to
Section 14.2(c) of the Administrative Services Agreement if the Administrative Services Agreement
is terminated in accordance with Section 14.2(a)(iii) thereof (such obligations, collectively, the
“Guaranteed Obligations”).

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          (b) If NICO, after any of the events listed under (i), (ii) or (iii) below (the “Trigger
Events”) has occurred, has not timely paid (or, in the case of Collateral Obligations,
performed) a Guaranteed Obligation within thirty (30) days after the due date of such Guaranteed
Obligation, the CNA Party may proceed directly and at once, upon written notice to NICO and
Berkshire, against Berkshire to obtain payment (or, in the case of Collateral Obligations,
performance) of the full amount or any portion of the Guaranteed Obligation that is then due and
payable and has not been paid (or, in the case of Collateral Obligations, performed) by NICO,
together with interest on any such payments at the Applicable Interest Rate accrued from the
applicable due date until the date of such payment (“Interest”). Following the occurrence
of a Trigger Event of the type described under (i) below, the CNA Party shall be entitled to so
proceed directly against Berkshire without first proceeding against or joining NICO or any other
Person. Following the occurrence of a Trigger Event of the type described under (ii) or (iii)
below, the CNA Party shall be entitled to so proceed directly against Berkshire with regard to the
Guaranteed Obligation that is the subject of such Trigger Event without first proceeding against or
joining NICO or any other Person. The Trigger Events are as follows:

          (i) any dissolution, liquidation, conservation, rehabilitation, bankruptcy, statutory
reorganization, receivership, compulsory composition or similar statutory or delinquency
proceeding involving NICO;

          (ii) a final arbitration award, court order, decision or judgment with no appeal or
stay pending (A) has been issued against NICO in favor of a CNA Party under the LPT
Reinsurance Agreement, the Trust Agreement or the Administrative Services Agreement and
remains unpaid (or, in the case of Collateral Obligations, unperformed) by NICO, or (B) has
been issued against a CNA Party with respect to an A&P Claim in respect of Business Covered
that NICO has acknowledged in writing its obligation to pay and such claim remains unpaid by
NICO; or

          (iii) NICO has acknowledged in writing its obligation to pay (or, in the case of
Collateral Obligations, perform) a Guaranteed Obligation and such Guaranteed Obligation
remains due and unpaid (or, in the case of Collateral Obligations, unperformed) by NICO.

          (c) The Parental Guarantee is a guarantee of payment (or, in the case of Collateral
Obligations, performance) and not of collection merely, and upon the occurrence of a Trigger Event
and any failure of NICO to pay (or, in the case of Collateral Obligations, perform) a Guaranteed
Obligation as set forth above any CNA Party, may, at its option, proceed directly and at once, with
written notice, against Berkshire to collect and recover the full amount of NICO’s liability to pay
(or, in the case of Collateral Obligations, perform) such Guaranteed Obligation (or any portion
thereof) then due and owing, together with any applicable Interest, and otherwise enforce the
Collateral Obligations. The Parental Guarantee is a continuing guaranty and the obligations of
Berkshire hereunder are and shall be absolute under any and all circumstances, irrespective of, and
Berkshire hereby waives, any defense it may have relating to: (i) any lack of validity, regularity
or enforceability of this Parental Guarantee Agreement, the

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LPT Reinsurance Agreement, the Trust Agreement or the Administrative Services Agreement, (ii)
any change in time or place of payment of or other term of the Guaranteed Obligation, or any other
amendment or waiver of or consent to departure from this Parental Guarantee Agreement, the LPT
Reinsurance Agreement, the Trust Agreement or the Administrative Services Agreement, (iii) except
with respect to whether a Trigger Event has occurred, any change, restructuring or termination of
the corporate structure or existence of NICO, or any dissolution, liquidation, conservation,
rehabilitation, bankruptcy, statutory reorganization, receivership, compulsory composition, or
similar statutory or delinquency proceeding affecting NICO or any of its assets or any resulting
release or discharge of any obligation of NICO under the LPT Reinsurance Agreement, the Trust
Agreement or the Administrative Services Agreement or (iv) in the case of a Trigger Event of the
type described in Section 2.1(b)(ii) or Section 2.1(b)(iii), any defense, set-off
or other circumstance which might otherwise constitute a defense available to Berkshire or NICO.
Notwithstanding anything contained herein to the contrary, nothing in this Parental Guarantee
Agreement shall preclude Berkshire from asserting a valid claim or valid defense to the effect that
the Guaranteed Obligation has been paid, discharged or satisfied in full in accordance with the
terms of the LPT Reinsurance Agreement, the Trust Agreement or the Administrative Services
Agreement, as applicable. Except as otherwise expressly set forth in this Parental Guarantee
Agreement, Berkshire hereby expressly waives promptness, diligence, demand, notice of dishonor,
non-payment, non-performance or other default with respect to the Guaranteed Obligations, or any
requirements that any right or power be exhausted or any action taken against NICO. To the extent
that Berkshire shall have made any payments under this Parental Guarantee Agreement, any rights to
subrogation which Berkshire may have as a result of any such payment shall be deferred, postponed
and subordinated to the prior indefeasible payment in full of the Guaranteed Obligations. If all
or any part payment applied to the Guaranteed Obligation is or must be recovered, rescinded or
returned to NICO, Berkshire or any other Person because of a dissolution, liquidation,
conservation, rehabilitation, bankruptcy, statutory reorganization, receivership, compulsory
composition, or similar proceeding affecting any Party, such Guaranteed Obligation shall be deemed
to have continued in existence and this Parental Guarantee Agreement shall continue in effect as to
such Guaranteed Obligation, all as though such payment had not been made.

          (d) Berkshire shall pay on demand all fees and out-of-pocket expenses (including reasonable
attorneys’ fees and expenses) incurred by the CNA Parties in any way relating to the successful
enforcement of the rights of the CNA Parties hereunder. The CNA Parties shall pay on demand all
fees and out-of-pocket expenses (including reasonable attorneys’ fees and expenses) incurred by
Berkshire in any way relating to its defense of an unsuccessful action by the CNA Parties
hereunder. Notwithstanding anything to the contrary in this Section 2.1(d), the CNA
Parties shall not be entitled to be reimbursed hereunder for the costs or out-of-pocket expenses
incurred in connection with any notice or demand required under Section 2.1(b) to the
extent that such demand is not disputed or objected to by Berkshire.

          (e) For the avoidance of doubt, but subject to Section 2.1(d), the payment (or, in the
case of Collateral Obligations, performance) of a Guaranteed Obligation by Berkshire
pursuant to this Parental Guarantee Agreement shall be deemed to satisfy NICO’s obligation to
perform or pay such Guaranteed Obligation for any purpose, including under the LPT

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Reinsurance Agreement, the Trust Agreement or the Administrative Services Agreement, as applicable.
None of the CNA Parties shall be entitled to obtain payment (or, in the case of Collateral
Obligations, performance) of a Guaranteed Obligation from NICO under the LPT Reinsurance Agreement,
the Trust Agreement or the Administrative Services Agreement or withdraw funds from the Trust
Account or any replacement or successor thereof or substitution therefor to satisfy a Guaranteed
Obligation to the extent that such Guaranteed Obligation has theretofore been paid or performed in
full by Berkshire under this Parental Guarantee Agreement. In furtherance of the foregoing, the
CNA Parties hereby agree that any amounts paid by Berkshire under this Parental Guarantee Agreement
shall be in satisfaction of any amounts due and payable (but unpaid) by NICO under the LPT
Reinsurance Agreement, the Trust Agreement or the Administrative Services Agreement, as applicable.

ARTICLE III

TRUST ACCOUNT; GRANT OF SECURITY INTEREST

          Section 3.1 Grant of Security Interest. As security for the prompt and complete payment,
reimbursement and performance when due in full of all the Secured Obligations, Berkshire hereby
grants to the Agent for the benefit of the CNA Parties, a security interest in and continuing lien
on all of Berkshire’s right, title and interest in, to and under the following, in each case,
whether now owned or existing or hereafter acquired or arising, and wherever located (all of which
being hereinafter collectively called the “Collateral”):

               (a) the Trust Account;

               (b) all Security Entitlements carried in the Trust Account; and

               (c) all Proceeds of any or all of the foregoing.

          Section 3.2 Registration of Securities, Etc. All securities and other financial assets
credited to the Trust Account that are in registered form or that are payable to or to the order of
Berkshire shall be (i) registered in the name of, or payable to or to the order of, the Trustee or
(ii) endorsed to or to the order of the Trustee or in blank; and in no case will any financial
asset credited to the Trust Account be registered in the name of, or payable to or to the order of,
Berkshire or endorsed to or to the order of Berkshire, except to the extent the foregoing have been
specially endorsed to or to the order of the Trustee or in blank.

          Section 3.3 Successor Trust Account. Except as otherwise set forth in Section 3.4,
in the event a successor trust account is established, (i) such account shall be established with
either the Securities Intermediary or another “securities intermediary” (as defined in the UCC)
reasonably acceptable to Berkshire and the Agent, (ii) the Parties shall amend this Parental
Guarantee Agreement to include such successor trust account and securities intermediary with whom
such successor trust account is established, and such securities intermediary shall enter into this
Parental Guarantee Agreement, as amended (solely for the purposes of Articles III-VII), or
a form of agreement reasonably acceptable to Berkshire and the

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Agent prior to or contemporaneously with the establishment of the successor trust account and (iii)
financing statements shall be amended to identify the successor trust account, all in a manner
reasonably satisfactory to the Agent.

          Section 3.4 Reinsurance Credit Event Trust Accounts. Concurrently with the modification of
the Trust Account and/or the creation of new trust accounts as a result of a Reinsurance Credit
Event, Berkshire and the Securities Intermediary will enter into agreements substantially in the
form of this Parental Guarantee Agreement with each of the respective CNA Parties, granting to such
CNA Party a security interest in and continuing lien on all of Berkshire’s right, title and
interest in, to and under the following, in each case, whether now owned or existing or hereafter
acquired or arising, and wherever located: (i) the modified Trust Account or the new trust account
created as a result of the Reinsurance Credit Event for which such CNA Party is the sole
beneficiary; (ii) all Security Entitlements carried in such trust account and (iii) all Proceeds of
any or all of the foregoing.

ARTICLE IV

DUTIES OF THE SECURITIES INTERMEDIARY

          Section 4.1 No Other Entitlement Orders. Without the prior written consent of the Agent,
Berkshire shall not enter into any agreement under which it (i) grants a security interest or lien
on any or all of the Collateral and/or (ii) agrees to cause the Securities Intermediary to comply
with “entitlement orders” (as defined in the UCC) originated by any Person other than the Agent or
the entitlement holder with respect to any property credited to the Trust Account. Berkshire shall
promptly notify the Agent if any Person requests Berkshire to enter into any such agreement as
described in this Section 4.1 or otherwise asserts or seeks to assert a lien, encumbrance
or adverse claim against any portion or all of the property credited to the Trust Account (and in
that connection, Berkshire represents and warrants to the Agent that it has not heretofore received
any such request or assertion with respect to the Trust Account) and that it will promptly notify
the Agent of the occurrence of any such events.

          Section 4.2 Removal of the Securities Intermediary by the Agent.

     (a) If Berkshire and/or its Affiliates, either individually or in the aggregate, shall
acquire more than ten percent (10%) of the outstanding voting stock of the Securities
Intermediary, the Securities Intermediary may be removed by the Agent by delivery to the
Securities Intermediary and Berkshire of a written notice of removal, effective upon
receipt by the Securities Intermediary and Berkshire of such notice. Notwithstanding the
foregoing, no such removal by the Agent shall be effective until (i) another “securities
intermediary” (as defined in the UCC) reasonably acceptable to Berkshire and the Agent
shall have been duly appointed by the Agent, (ii) such securities intermediary has entered
into an agreement substantially in the form of this Parental Guarantee Agreement or a form
reasonably acceptable to Berkshire and the Agent prior to or contemporaneously with the
appointment of the new securities intermediary and (iii)

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financing statements shall be amended to identify such securities intermediary, all in a
manner reasonably satisfactory to the Agent.

     (b) If the Securities Intermediary is removed by the Agent pursuant to Section
4.2(a), the CNA Parties shall pay any amounts charged by the new securities
intermediary for its services as contemplated by this Parental Guarantee Agreement that are
greater than the total amount of fees charged by the Securities Intermediary under this
Parental Guarantee Agreement.

ARTICLE V

REMEDIES; RIGHTS UPON DEFAULT, ETC.

          Section 5.1 Rights and Remedies Generally. If an Event of Default has occurred and is
continuing, then and in every such case, the Agent may exercise, in addition to all other rights
and remedies granted to them in this Parental Guarantee Agreement and in any other instrument or
agreement securing, evidencing or relating to the Secured Obligations, all rights and remedies of a
secured party under the UCC or any other applicable law.

          Section 5.2 Acceleration. Upon the occurrence and continuance of an Acceleration Event,
the Secured Obligations shall be automatically due and payable with all additional interest from
time to time accrued thereon, without further action by the Agent or any other person. For the
avoidance of doubt, for purposes of this Section 5.2, the amount of Secured Obligations
with respect to the Trust Account shall be the Security Amount or the Required Amount applicable to
the Trust Account in effect at the time of the Acceleration Event.

ARTICLE VI

BERKSHIRE WARRANTIES; POWER OF ATTORNEY

          Section 6.1 Berkshire Warranties. Berkshire’s exact legal name (as indicated in the public
record of Berkshire’s jurisdiction of organization) is as set forth on the signature block to this
Parental Guarantee Agreement. Berkshire’s jurisdiction of organization is the State of Delaware and
the organizational identification number assigned by the State of Delaware to Berkshire is 2908471.
The location of Berkshire’s chief executive office is the address provided in Section 7.12
as the address for notice to Berkshire. Berkshire will not, except upon 30 days prior written
notice to the Agent and delivery to the Agent of all additional financing statements and other
documents reasonably requested by the Agent to maintain the validity, perfection and priority of
the security interest provided for herein, (i) change its jurisdiction of organization or (ii)
change its name. If Berkshire changes the address of its chief executive office, it shall promptly
provide written notice to the Agent of such new address.

          Section 6.2 The Agent’s Appointment as Attorney-in-Fact. Berkshire hereby irrevocably
constitutes and appoints the Agent and any officers or agents thereof, with full power of
substitution, as its true and lawful attorneys-in-fact with full irrevocable power and authority in
the place and stead of Berkshire and in the name of Berkshire or in their own names,

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from time to time in the Agent’s discretion, for the purpose of carrying out the terms of this
Parental Guarantee Agreement, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary or desirable to accomplish the purposes of this
Parental Guarantee Agreement. Notwithstanding the foregoing, the Agent agrees that the power of
attorney provided for in this Section 6.2 shall only become effective upon the occurrence
and continuance of an Event of Default.

ARTICLE VII

MISCELLANEOUS PROVISIONS

          Section 7.1 Entire Agreement.

               This Parental Guarantee Agreement, the LPT Reinsurance Agreement and the Transaction Documents
and any other documents delivered pursuant hereto or thereto, constitute the entire agreement among
the Parties and their respective Affiliates with respect to the subject matter hereof and supersede
all prior negotiations, discussions, writings, agreements and understandings, oral and written,
among the Parties with respect to the subject matter hereof and thereof.

          Section 7.2 Waiver and Amendment.

               This Parental Guarantee Agreement may be amended, superseded, canceled, renewed or extended,
and the terms hereof may be waived, only by an instrument in writing signed by the Parties hereto,
or, in the case of a waiver, by the Party waiving compliance. No delay on the part of any Party in
exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise thereof or the exercise
of any other such right, power or privilege. No waiver of any breach of this Parental Guarantee
Agreement shall be held to constitute a waiver of any other or subsequent breach.

          Section 7.3 Successors and Assigns.

               The rights and obligations of the Parties under this Parental Guarantee Agreement shall not be
subject to assignment without the prior written consent of the other Parties, and any attempted
assignment without the prior written consent of the other Parties shall be invalid ab initio. The
terms of this Parental Guarantee Agreement shall be binding upon, inure to the benefit of and be
enforceable by and against the successors and permitted assigns of the Parties.

          Section 7.4 Construction; Interpretation.

               The Parties have participated jointly in the negotiation and drafting of this Parental
Guarantee Agreement. In the event of an ambiguity or question of intent or interpretation arises,
this Parental Guarantee Agreement shall be construed as if drafted jointly by the Parties and no
presumption or burden of proof shall arise favoring or disfavoring either Party by virtue of the
authorship of any of the provisions of this Parental Guarantee Agreement. When a reference is
made to a Section such reference shall be to a Section of this Parental

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Guarantee Agreement unless otherwise indicated. Whenever the words “include”, “includes” or
“including” are used in this Parental Guarantee Agreement, they shall be deemed to be followed by
the words “without limitation.” The term “Parental Guarantee Agreement,” means this Parental
Guarantee Agreement as amended or supplemented, and the words “hereof,” “herein,” “hereto,”
“hereunder” and other words of similar import shall refer to this Parental Guarantee Agreement in
its entirety and not to any particular Section or provision of this Parental Guarantee Agreement.
Reference to any Applicable Law means such Applicable Law as amended, modified, codified, replaced
or reenacted, and all rules and regulations promulgated thereunder. References to a Person are
also to its successors and permitted assigns.

          Section 7.5 Governing Law and Jurisdiction.

               This Parental Guarantee Agreement shall be governed by and construed in accordance with the
laws of the State of New York applicable to contracts entered into therein, without reference to
principles of choice of law or conflicts of laws (other than Section 5-1401 of the New York General
Obligations Law). Any action, suit or proceeding arising out of or relating to this Parental
Guarantee Agreement shall be brought by the Parties solely in the United States District Court for
the Southern District of New York, provided that if said court determines that it does not have
subject matter jurisdiction then said action, suit or proceeding may be brought in the supreme
court of the State of New York for New York County; and the Parties each hereby irrevocably submit
to the exclusive jurisdiction of such courts for such purpose and any appellate courts thereof.
Each Party hereto agrees that service of any process, summons, notice or document by U.S.
registered mail addressed to such party shall be effective service of process for any action, suit
or proceeding brought against such party in such court. Each Party hereto irrevocably and
unconditionally waives any objection to the laying of venue of any such action, suit or proceeding
brought in any such court and any claim that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum. Each Party hereto agrees that final judgment
in any such action, suit or proceeding brought in any such court shall be conclusive and binding
upon such Party and may be enforced in any other courts to whose jurisdiction such Party may be
subject, by suit upon such judgment.

          Section 7.6 No Third Party Beneficiaries.

               Nothing in this Parental Guarantee Agreement is intended or shall be construed to give any
Person, other than the Parties hereto, any legal or equitable right, remedy or claim under or in
respect of this Parental Guarantee Agreement or any provision contained herein.

          Section 7.7 Counterparts.

               This Parental Guarantee Agreement may be executed by the Parties in separate counterparts,
each of which when so executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument binding upon all of the Parties notwithstanding the
fact that all Parties are not signatory to the original or the same counterpart. Each counterpart
may consist of a number of copies hereof each signed by less than all, but together signed by all
of the Parties. Each counterpart may be delivered by facsimile transmission, which transmission
shall be deemed delivery of an originally executed document.

12

 

          Section 7.8 Severability.

               Any term or provision of this Parental Guarantee Agreement which is invalid or unenforceable
in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity
or unenforceability without rendering invalid or unenforceable the remaining terms and provisions
of this Parental Guarantee Agreement or affecting the validity or enforceability of any of the
terms or provisions of this Parental Guarantee Agreement in any other jurisdiction, so long as the
economic or legal substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any Party. If any provision of this Parental Guarantee Agreement is so broad
as to be unenforceable, that provision shall be interpreted to be only so broad as is enforceable.
In the event of such invalidity or unenforceability of any term or provision of this Parental
Guarantee Agreement, the Parties shall use their commercially reasonable efforts to reform such
terms or provisions to carry out the commercial intent of the Parties as reflected herein, while
curing the circumstance giving rise to the invalidity or unenforceability of such term or
provision.

          Section 7.9 Specific Performance.

               Each of the Parties acknowledges and agrees that the other Party would be irreparably damaged
in the event that any of the provisions of this Parental Guarantee Agreement were not performed or
complied with in accordance with their specific terms or were otherwise breached, violated or
unfulfilled. Accordingly, each of the Parties agrees that the other Party shall be entitled to an
injunction or injunctions to prevent noncompliance with, or breaches or violations of, the
provisions of this Parental Guarantee Agreement by the other Party and to enforce specifically this
Parental Guarantee Agreement and the terms and provisions hereof in any action instituted in
accordance with Section 7.5, in addition to any other remedy to which such Party may be
entitled, at law or in equity. In the event that any action is brought in equity to enforce the
provisions of this Parental Guarantee Agreement, no Party will allege, and each Party hereby waives
the defense or counterclaim, that there is an adequate remedy at law. The Parties further agree
that (i) by seeking the remedies provided for in this Section 7.9, a Party shall not in any
respect waive its right to seek any other form of relief that may be available to a Party under
this Parental Guarantee Agreement, including monetary damages in the event that this Parental
Guarantee Agreement has been terminated or in the event that the remedies provided for in this
Section 7.9 are not available or otherwise are not granted and (ii) nothing contained in
this Section 7.9 shall require any Party to institute any action for (or limit any Party’s
right to institute any action for) specific performance under this Section 7.9 before
exercising any other remedies under this Parental Guarantee Agreement that may be available then or
thereafter nor shall the commencement of any action pursuant to this Section 7.9 or
anything contained in this Section 7.9 restrict or limit any Party’s right to pursue any
other remedies under this Parental Guarantee Agreement that may be available then or thereafter.

          Section 7.10 Waiver of Jury Trial.

               EACH OF THE PARTIES HEREBY WAIVES TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW ANY RIGHT
IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS PARENTAL GUARANTEE AGREEMENT OR

13

 

THE TRANSACTIONS CONTEMPLATED BY THIS PARENTAL GUARANTEE AGREEMENT. EACH OF THE PARTIES HEREBY (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTIES HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTIES WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE
FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT HAS BEEN INDUCED TO ENTER INTO THIS PARENTAL
GUARANTEE AGREEMENT AND THE TRANSACTIONS CONTEMPLATED BY THIS PARENTAL GUARANTEE AGREEMENT, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION
7.10.

          Section 7.11 Incontestability.

               In consideration of the mutual covenants and agreements contained herein, each Party does
hereby agree that this Parental Guarantee Agreement, and each and every provision hereof, is and
shall be enforceable by and between them according to its terms, and each Party does hereby agree
that it shall not contest in any respect the validity or enforceability hereof.

          Section 7.12 Notice.

               Any notice, request, demand, waiver, consent, approval or other communication required or
permitted to be given by any Party hereunder shall be in writing and shall be delivered personally,
sent by facsimile transmission, sent by registered or certified mail, postage prepaid, or sent by a
standard overnight courier of national reputation with written confirmation of delivery. Any such
notice shall be deemed given when so delivered personally, or if sent by facsimile transmission, on
the date received (provided that any notice received after 5:00 p.m. (addressee’s local time) shall
be deemed given at 9:00 a.m. (addressee’s local time) on the next Business Day), or if mailed, on
the date shown on the receipt therefor, or if sent by overnight courier, on the date shown on the
written confirmation of delivery. Such notices shall be given to the following address:

	 	 	 

	To CNA Parties:

	 	CNA Financial Corporation
	 

	 	333 S. Wabash Avenue
	 

	 	Chicago, IL 60604
	 

	 	Attention: Jonathan D. Kantor
	 

	 	Executive Vice President,
	 

	 	General Counsel and Secretary
	 

	 	Fax: (312) 817-0511
	 
	 	 
	With a copy to:

	 	CNA Financial Corporation
	 

	 	333 S. Wabash Avenue
	 

	 	Chicago, IL 60604
	 

	 	Attention: Michael P. Warnick
	 

	 	Senior Vice President and Deputy General Counsel
	 

	 	Fax: (312) 755-2479

14

 

	 	 	 

	To Berkshire:

	 	Berkshire Hathaway Inc.
	 

	 	3555 Farnam Street
	 

	 	Suite 1440
	 

	 	Omaha, NE 68131
	 

	 	Attention: Chief Financial Officer
	 

	 	Fax: (402) 346-3375
	 
	 	 
	To NICO:

	 	 National Indemnity Company
	 

	 	100 First Stamford Place
	 

	 	Stamford, Connecticut 06902
	 

	 	Attention: General Counsel
	 

	 	Fax: (203) 363-5221
	 
	 	 
	With a copy to:

	 	National Indemnity Company
	 

	 	3024 Harney Street
	 

	 	Omaha, NE 68131
	 

	 	Attention: Treasurer
	 

	 	Fax: (402) 916-3030

Any of the CNA Parties, Berkshire or NICO may change its notice provisions hereunder on fifteen
(15) calendar days’ advance notice in writing to each of such other Persons.

(The remainder of this page has been intentionally left blank.)

15

 

          IN WITNESS WHEREOF, the Parties hereby execute this Parental Guarantee Agreement as of the day
and year first set forth above.

	 	 	 	 	 
	 	BERKSHIRE HATHAWAY INC.

 	 
	 	By:  	/s/ Marc D. Hamburg
 	 
	 	 	Name:  	Marc D. Hamburg 	 
	 	 	Title:  	Senior Vice President 	 
	 
	 	CONTINENTAL CASUALTY COMPANY, as Agent for the

CNA Parties (as defined herein)

 
	 	By:  	/s/ Lawrence J. Boysen
 	 
	 	 	Name:  	Lawrence J. Boysen 	 
	 	 	Title:  	Senior Vice President and
Corporate Controller 	 
	 
	 	THE CONTINENTAL INSURANCE COMPANY

 	 
	 	By:  	/s/ Lawrence J. Boysen
 	 
	 	 	Name:  	Lawrence J. Boysen 	 
	 	 	Title:  	Senior Vice President and Corporate
Controller 	 
	 
	 	CONTINENTAL REINSURANCE CORPORATION

INTERNATIONAL, LTD.

 	 
	 	By:  	/s/ Lawrence J. Boysen
 	 
	 	 	Name:  	Lawrence J. Boysen 	 
	 	 	Title:  	Chairman of the Board and
President 	 
	 

[Signature Page to Parental Guarantee Agreement]

 

 

	 	 	 	 	 
	 	CNA INSURANCE COMPANY LIMITED

 	 
	 	By:  	/s/ Lawrence J. Boysen
 	 
	 	 	Name:  	Lawrence J. Boysen 	 
	 	 	Title:  	Authorized Representative 	 
	 
	 	CONTINENTAL CASUALTY COMPANY

 	 
	 	By:  	/s/ Lawrence J. Boysen
 	 
	 	 	Name:  	Lawrence J. Boysen 	 
	 	 	Title:  	Senior Vice President and
Corporate Controller 	 
	 

[Signature Page to Parental Guarantee Agreement]exv10w1

Exhibit 10.1

EXECUTION VERSION

PLAN SUPPORT AGREEMENT

          This PLAN SUPPORT AGREEMENT (the “Agreement”) is made and entered into as of August
27, 2010 by and among the following parties:

          (a) Tronox Incorporated and its affiliated debtors and debtors in possession (collectively,
“Tronox”);

          (b) the Official Committee of Unsecured Creditors (the “Creditors’ Committee”);

          (c) the undersigned holders (collectively, the “Noteholders”) of the 9.5% senior
unsecured Notes due December 1, 2012 (the “Unsecured Notes”), issued pursuant to that
certain indenture, dated as of November 28, 2005, by and among Tronox Worldwide LLC and Tronox
Finance Corp. as issuers, Tronox Incorporated and certain domestic subsidiaries thereof as
guarantors, and Citibank, N.A. as indenture trustee;

          (d) Michael E. Carroll, in his sole capacity as a member of Creditors’ Committee and holder of
a Tort Claim,1 who, with and through counsel, has been active in Term Sheet (defined
herein) negotiations and has made the judgment that the treatment proposed for Tort Claims in the
Term Sheet (assuming the treatment in the First Amended Plan, as defined herein, is consistent with
his understanding of the treatment agreed to among the Parties) is fair and reasonable under the
circumstances of the Tronox chapter 11 cases;

          (e) Rio Algom Mining, LLC, in its sole capacity as a member of the Creditors’ Committee, with
respect to Sections 3(a)(v) and 3(a)(vi) only; and

          (f) the undersigned attorneys for certain parties, as representatives (the
“Representatives”) of such parties, provided, that the Representatives shall be obligated
only with respect to Section 9 hereof.

          Each party named above, with the exception of the Representatives, is a “Party”, and
collectively, the “Parties”.

RECITALS

          WHEREAS, on January 12, 2009, Tronox commenced voluntary cases under chapter 11 of 11 U.S.C.
§§ 101-1532 (the “Bankruptcy Code”) in the United States Bankruptcy Court for the Southern
District of New York (the “Bankruptcy Court”);

          WHEREAS, based on various factors, which Tronox has extensively considered, Tronox has
determined that the consummation of a standalone reorganization through a chapter 11 plan is in the
best interests of its estates and all stakeholders;

 

			
	1	 	Capitalized terms used but not defined herein
shall have the meaning ascribed to such terms in the Equity Commitment
Agreement annexed hereto as Exhibit A. If there are any discrepancies
between this Plan Support Agreement and the Equity Commitment Agreement, the
Equity Commitment Agreement shall prevail.

 

 

          WHEREAS, the members of the Creditors’ Committee and the Noteholders each hold a claim or
claims against Tronox, as defined in section 101(5) of the Bankruptcy Code (each such claim, a
“Claim”);

          WHEREAS, on July 7, 2010, Tronox filed the Proposed Joint Plan of Reorganization of Tronox
[Docket No. 1706] (the “Proposed Plan”) and the Disclosure Statement related thereto
[Docket No. 1707] (the “Proposed Disclosure Statement”);

          WHEREAS, with support of the Parties, Tronox now desires to revise the Proposed Plan and the
Proposed Disclosure Statement related thereto and to file, obtain confirmation of, and consummate a
revised chapter 11 plan of reorganization in accordance with the terms and conditions set forth in
the term sheet annexed hereto as Attachment 1 to Exhibit A, as such term sheet may
be amended from time to time in accordance with the terms of this Agreement (the “Term
Sheet”, and such revised plan of reorganization, the “First Amended Plan”);

          WHEREAS, in connection with the restructuring transactions contemplated by the First Amended
Plan, the Backstop Parties have agreed to purchase (a) New Common Stock not otherwise purchased by
Eligible Holders in the Rights Offering and (b) New Convertible Preferred Stock, each in accordance
with the terms and conditions set forth in that certain Equity Commitment Agreement, dated as of
August 27, 2010 and attached hereto as Exhibit A (the “Equity Commitment
Agreement”);

          WHEREAS, the Parties have engaged in good faith negotiations with each other and with the
objective of reaching an agreement with regard to the First Amended Plan and the Term Sheet;

          WHEREAS, each Party has reviewed, or has had the opportunity to review, this Agreement and the
Term Sheet with the assistance of professional legal advisors of its own choosing;

          WHEREAS, each Party desires to support the First Amended Plan, to the extent consistent in all
material respects with the Term Sheet; and

          WHEREAS, subject to the execution of definitive documentation and appropriate approvals by the
Bankruptcy Court of the First Amended Plan and the revised disclosure statement related thereto (as
the same may be amended pursuant to this Agreement from time to time in accordance with this
Agreement, the “Amended Disclosure Statement”), each of which shall be consistent with the
Term Sheet, the following sets forth the agreement between the Parties concerning their respective
obligations.

AGREEMENT

          NOW THEREFORE, in consideration of the promises and the mutual covenants and agreements set
forth herein, and for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, the Parties hereby agree as follows:

2

 

     1. Term Sheet and Plan of Reorganization.

          The Term Sheet is incorporated herein by reference and is made part of this Agreement as if
fully set forth herein. The general terms and conditions of the First Amended Plan are set forth
in the Term Sheet; provided, however, that the Term Sheet is supplemented by the
terms and conditions of this Agreement. In the event of any inconsistencies between the terms of
this Agreement and the Term Sheet, the terms of this Agreement shall govern.

     2. Effectuating the Plan.

               To implement the First Amended Plan, the Parties have agreed, on the terms and conditions set
forth herein, that Tronox shall use reasonable best efforts to confirm and take effective the First
Amended Plan, and without limiting the foregoing, shall use its reasonable best efforts to take all
actions necessary and appropriate to:

               (a) on or prior to two Business Days after the execution of this Agreement, and in any event
concurrently with the filing of the Equity Commitment Agreement Motion (as defined below), file a
motion (the “PSA Motion”) with the Bankruptcy Court, seeking the entry of an order, the
terms of which shall be satisfactory to the signatories hereto, approving this Agreement and
authorizing the Parties entering into, and performing under, this Agreement (the “PSA Approval
Order”);

               (b) on or prior to two Business Days after the execution of the Equity Commitment Agreement,
and in any event concurrently with the filing of the PSA Motion, file a motion (the “Equity
Commitment Agreement Motion”) with the Bankruptcy Court, seeking the entry of an order, the
terms of which shall be satisfactory to the Backstop Parties (as such term is defined in the Equity
Commitment Agreement) approving the Equity Commitment Agreement and authorizing the parties thereto
to enter into, and perform under, the Equity Commitment Agreement (the “Equity Commitment
Agreement Approval Order”), it being understood that the PSA Motion and Equity Commitment
Agreement Motion seek separate relief but can be combined into one pleading;

               (c) obtain the entry of each of the PSA Approval Order and the Equity Commitment Agreement
Approval Order no later than September 17, 2010;

               (d) file an amended Disclosure Statement for the First Amended Plan and seek entry of a
Bankruptcy Court Order approving the Disclosure Statement for the First Amended Plan (the
“Disclosure Statement Order”) as expeditiously as practicable under the Bankruptcy Code and
the Bankruptcy Court’s local rules (such federal and local rules, the “Bankruptcy Rules”)
but, in any event, have the Disclosure Statement Order entered on or prior to September 30, 2010;

               (e) solicit the requisite acceptances of the First Amended Plan in accordance with sections
1125 and 1126 of the Bankruptcy Code and the terms of the Disclosure Statement Order;

3

 

               (f) seek confirmation of the First Amended Plan as expeditiously as practicable under the
Bankruptcy Code and the Bankruptcy Rules, and, in any event, have an order confirming the First
Amended Plan entered on or prior to November 30, 2010; and

               (g) consummate the First Amended Plan as expeditiously as practicable in accordance with its
terms and the terms of this Agreement but in no event shall the Effective Date (as that term is
defined in the First Amended Plan) be later than December 31, 2010.

     3. Commitments of the Parties to this Agreement.

          (a) Support of First Amended Plan.

          As long as a Termination Event (as defined herein) has not occurred, or has occurred but has
been duly waived or cured in accordance with the terms hereof, each Party hereto agrees for itself,
that it will:

	 	i.	 	promptly upon execution of this Agreement,
negotiate in good faith to prepare the Definitive Restructuring
Documentation, which shall contain provisions consistent with this
Agreement and the Term Sheet and such other provisions as are mutually
acceptable to the Parties;
	 
	 	ii.	 	subject to Section 3(a)(v), from and after the
date hereof, not support any other plan of reorganization or any other
equity commitment agreement other than the Equity Commitment Agreement
or take 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,
including but not limited to the consummation of the Equity Commitment
Agreement;
	 
	 	iii.	 	from and after the date hereof, agree not to
directly or indirectly propose, sponsor, support, or solicit votes in
favor of any other plan of reorganization other than the First Amended
Plan;
	 
	 	iv.	 	agree, if applicable, to permit disclosure in
the Amended Disclosure Statement and any filings by Tronox with the
United States Securities and Exchange Commission of the contents of
this Agreement;
	 
	 	v.	 	following receipt of the Amended Disclosure
Statement and other related solicitation materials approved by the
Bankruptcy Court, vote all Claims that it holds or controls, if any, in
favor of the First Amended Plan by delivering its duly executed and
timely

4

 

	 	 	 	completed ballot or ballots accepting the First Amended Plan to
the balloting agent for the First Amended Plan, and it shall not
thereafter withdraw or change such vote so long as the First Amended
Plan, the Amended Disclosure Statement and this Agreement are not
modified except in accordance with this Agreement; provided
however, members of the Creditors’ Committee, including members
that are Parties to this Agreement, may vote in favor of any plan of
reorganization other than the First Amended Plan and not be in
violation of the commitments set forth in this Agreement;
	 
	 	vi.	 	not object to or otherwise commence any
proceeding or take any other action opposing any of the terms of this
Agreement, the Equity Commitment Agreement, the Amended Disclosure
Statement or the First Amended Plan; and
	 
	 	vii.	 	in the case of the Creditors’ Committee,
recommend to its members and constituents that they vote in favor of
the First Amended Plan;

	 	 	 	provided, that nothing contained in this Agreement shall be deemed to
prevent Tronox, the Creditors’ Committee or any other Party hereto from taking
or failing to take any action that it is obligated to take (or fail to take) in
the performance of any fiduciary or similar duty which Tronox, the Creditors’
Committee or such other Party owes to any other person or entity.

          (b) Transfers of Claims.

          Each Noteholder may sell, assign, transfer, hypothecate or otherwise dispose of, directly or
indirectly (each such transfer, a “Transfer”), all or any of its Claims (or any right
related thereto and including any voting rights associated with such Claims, provided, that the
transferee thereof (i) agrees in writing, prior to such Transfer, to assume the rights and
obligations of the selling Party under this Agreement and (ii) promptly delivers such writing to
Tronox (each such transferee becoming, upon the Transfer, a Party hereunder). Any sale, transfer
or assignment of a Claim that does not comply with the procedure set forth in the first sentence of
this Subsection 3(b) shall be deemed void ab initio.

          (c) Representations of the Noteholders.

          Each Noteholder represents, with respect to itself only, that, as of the date hereof:

	 	i.	 	it is the owner and/or the investment advisor
or manager for the owner of such Claims set forth opposite its name on
Schedule 1 hereto (collectively, the “Noteholders’ Relevant
Claims”);
	 
	 	ii.	 	it has made no prior assignment, sale,
participation, grant, conveyance, or other transfer of, and has not
entered into any other

5

 

	 	 	 	agreement to assign, sell, participate, grant,
or otherwise transfer, in whole or any part, any portion of its right,
title or interest in the Relevant Claims; and
	 
	 	iii.	 	Except as otherwise set forth on its respective
signature page, it has full power to vote the aggregate principal
amount of the Relevant Claims.

Nothing in (b) and (c) above is intended in any way to expand or limit any obligations of the
Backstop Parties (with respect to claims trading or otherwise) as set forth in the Equity
Commitment Agreement and the Equity Commitment Agreement shall control.

          (d) Covenant of the Noteholders and the Company regarding amendments to the Equity Commitment
Agreement.

          The Noteholders and the Company covenant that, provided the Equity Commitment Agreement has
not terminated and the Creditors’ Committee is in compliance with its obligations under this
Agreement, the Creditors’ Committee shall have the rights set forth in Section 21 of the Equity
Commitment Agreement.

     4. Mutual Representations, Warranties, and Covenants.

     Each Party makes the following representations and warranties, solely with respect to itself,
to each of the other Parties:

          (a) Enforceability.

          Subject to the provisions of sections 1125 and 1126 of the Bankruptcy Code, and except as set
forth herein, this Agreement is a legal, valid and binding obligation of such Party, enforceable
against it in accordance with its terms, except as enforcement may be limited by applicable laws
relating to or limiting creditors’ rights generally or by equitable principles relating to
enforceability.

          (b) No Consent or Approval.

          Except as expressly provided in this Agreement, no consent or approval is required by any
other entity for it to carry out the provisions of this Agreement.

          (c) Power and Authority.

          It has all requisite power and authority to enter into this Agreement and to carry out the
transactions contemplated by, and perform its respective obligations under, this Agreement and the
First Amended Plan.

          (d) Authorization.

          The execution and delivery of this Agreement and the performance of its obligations hereunder
have been duly authorized by all necessary action on its part.

6

 

          (e) No Conflicts.

          The execution, delivery and performance of this Agreement does not and shall not: (a) violate
any provision of law, rule or regulations applicable to it or any of its subsidiaries; (b) violate
its certificate of incorporation, bylaws or other organizational documents or those of any of its
subsidiaries; or (c) 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 or any of its
subsidiaries is a party.

     5. No Waiver of Participation and Preservation of Rights.

     This Agreement and the First Amended Plan are part of a proposed settlement of disputes among
the Parties. Without limiting the foregoing sentence in any way, if the transactions contemplated
by this Agreement or otherwise set forth in the First Amended Plan are not consummated as provided
herein, if a Tronox Termination Event or Agreement Termination Event occurs, or if this Agreement
is otherwise terminated for any reason, the Parties each fully reserve any and all of their
respective rights, remedies, claims and interests.

     6. Acknowledgement.

     This Agreement and the First Amended Plan and the transactions contemplated herein and therein
are the product of negotiations between the Parties and their respective representatives. This
Agreement is not and shall not be deemed to be a solicitation of votes for the acceptance of a plan
of reorganization for the purposes of sections 1125 and 1126 of the Bankruptcy Code or otherwise.
Tronox will not solicit acceptances of the First Amended Plan from any holder of a Claim in any
manner inconsistent with the Bankruptcy Code or applicable nonbankruptcy law.

     7. Termination.

          (a) This Agreement shall expire automatically without any further required action or notice
upon the occurrence of (x) any Tronox Termination Event; provided, however, solely
in the case of the occurrence of an event described in clauses (i) or (ii) of the definition of
“Tronox Termination Event,” this Agreement shall not terminate pursuant to this clause (x) unless
and until Noteholders representing more than thirty-three percent (33%) of the aggregate amount of
all Noteholders’ Relevant Claims are then in breach of any material covenant, representation,
warranty or other provision set forth in clause (i) or (ii) of the definition of “Tronox
Termination
Event,” or (y) any Agreement Termination Event, unless the occurrence of such Agreement
Termination Event is waived in writing by Noteholders representing more than sixty-six and
two-thirds (66 2/3%) of the aggregate amount of all Noteholders’ Relevant Claims. Upon the
termination of this Agreement, any and all acceptances in favor of the First Amended Plan by the
Parties prior to such expiration shall be deemed, for all purposes, to be null and void and shall
not be considered or otherwise used in any manner by Tronox in connection with this Agreement.

7

 

          (b) Termination Events.

          The term “Tronox Termination Event,” wherever used in this Agreement, means any of the
following events (whatever the reason for such Tronox Termination Event and whether it is voluntary
or involuntary):

	 	i.	 	(A) A Noteholder shall have breached any
material covenant or provision of this Agreement; (B) Tronox shall have
delivered written notice to the other Parties of any such Noteholder
breach; and (C) any such breach shall have remained uncured by the
breaching Noteholder for a period of five (5) business days from the
receipt of such notice;
	 
	 	ii.	 	(A) Any representation or warranty in this
Agreement made by a Noteholder shall have been untrue in any material
respect when made or shall have become untrue in any material respect,
(B) Tronox shall have delivered written notice to the other Parties of
any such Noteholder breach, and (C) any such breach shall have remained
uncured by the breaching Noteholder for a period of five (5) business
days from the receipt of such notice;
	 
	 	iii.	 	There shall have been issued any order, decree,
or ruling by any court or governmental body having jurisdiction
restraining or enjoining the consummation of or rendering illegal the
transactions contemplated by this Agreement.

               The term “Agreement Termination Event,” wherever used in this Agreement, means any of
the following events (whatever the reason for such Agreement Termination Event and whether it is
voluntary or involuntary):

	 	i.	 	(A) Any Party other than a Noteholder shall
have breached any material covenant or provision of this Agreement, (B)
any non-breaching Party shall have delivered written notice to the
other Parties of any such breach, and (C) such breach shall have
remained uncured by such breaching Party for a period of five (5)
business days from the receipt of such notice;
	 
	 	ii.	 	(A) Any representation or warranty in this
Agreement made by a Party other than a Noteholder shall have been
untrue in any
material respect when made or shall have become untrue in any
material respect, (B) any non-breaching Party shall have delivered
written notice to the other Parties of any such breach, and (C) such
breach shall have remained uncured by such breaching Party for a
period of five (5) business days from the receipt of such notice;
	 
	 	iii.	 	(A) Any material term or condition of any of
the Definitive Restructuring Documentation shall be (whether due to an
order of

8

 

	 	 	 	the Bankruptcy Court or otherwise) materially different and
adverse to any Party than as agreed by the Parties except to the extent
such materially different and adverse term or condition is agreed by
each such adversely affected Party, (B) any Party shall have delivered
written notice to the other Parties of any such event, and (C) such
event shall have remained uncured for a period of five (5) business
days;
	 
	 	iv.	 	The Creditors’ Committee shall have breached
any provision of Section 3(a) of this Agreement other than Section
3(a)(v);
	 
	 	v.	 	There shall have been issued or reinstated any
suspension order or similar order by a court or other governmental body
of competent jurisdiction that adversely affects the benefits intended
to be received by the Parties hereunder, or prevents Tronox from
consummating the transactions contemplated by this Agreement, and (A)
such proceeding or order was issued or reinstated at the request or
with the acquiescence of Tronox or any of its affiliates or (B) in all
other circumstances, such order shall not have been stayed, reversed,
or vacated within fifteen (15) days after such issuance or
reinstatement;
	 
	 	vi.	 	Unless Tronox, the Noteholders, and the
Creditors’ Committee agree otherwise:

	 	a.	 	Tronox shall not have obtained,
and the Court shall have not entered the PSA Approval Order on
or before September 17, 2010;
	 
	 	b.	 	the governmental entities set
forth on Schedule 1 shall not have executed the
Environmental Claims Settlement Agreement (subject to any notice
and comment period required under applicable law) on or prior to
September 23, 2010;
	 
	 	c.	 	the Confirmation Order shall not
have been entered by the Bankruptcy Court on or before November
30, 2010; and
	 
	 	d.	 	the Effective Date of the First
Amended Plan and the transactions contemplated by the First
Amended Plan shall not have occurred or been consummated,
respectively, on or before December 31, 2010;

	 	vii.	 	Upon the written consent of the Parties;
	 
	 	viii.	 	The Equity Commitment Agreement shall have
been terminated pursuant to the terms thereof;

9

 

	 	ix.	 	The Bankruptcy Court shall have granted relief
that is inconsistent with the Term Sheet, the Equity Commitment
Agreement, the PSA Approval Order, the Equity Commitment Agreement
Approval Order or the First Amended Plan and adverse, in any material
respect, to any Party;
	 
	 	x.	 	A trustee or examiner with enlarged powers
shall have been appointed under sections 1104 or 1105 of the Bankruptcy
Code for service in the Chapter 11 Cases; and
	 
	 	xi.	 	One or more of the Chapter 11 Cases shall have
been converted to a case under chapter 7 of the Bankruptcy Code or
otherwise dismissed.

          A Tronox Termination Event and an Agreement Termination Event shall each be a “Termination
Event”.

     8. Miscellaneous Terms.

          (a) Binding Obligation; Assignment.

          Binding Obligation. Subject to the provisions of sections 1125 and 1126 of the Bankruptcy
Code, this Agreement is a legally valid and binding obligation of the Parties, enforceable in
accordance with its terms, and shall inure to the benefit of the Parties and their representatives.
Nothing in this Agreement, express or implied, shall give to any entity, other than the Parties
and their respective members, officers, directors, agents, financial advisors, attorneys,
employees, partners, Affiliates, successors, assigns, heirs, executors, administrators and
representatives, any benefit or any legal or equitable right, remedy or claim under this Agreement.

          Assignment. No rights or obligations of any Party under this Agreement may be assigned or
transferred to any other entity except as provided in Section 3(b) hereof.

          (b) Further Assurances.

          The Parties agree to execute and deliver such other instruments and perform such acts, in
addition to the matters herein specified, as may be reasonably appropriate or necessary,
from time to time, to effectuate the agreements and understandings of the Parties, whether the
same occurs before or after the date of this Agreement.

          (c) Headings.

          The headings of all sections of this Agreement are inserted solely for the convenience of
reference and are not a part of and are not intended to govern, limit or aid in the construction or
interpretation of any term or provision hereof.

10

 

          (d) Governing Law.

          THIS AGREEMENT IS TO BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN SUCH STATE, WITHOUT GIVING EFFECT TO
THE CHOICE OF LAWS PRINCIPLES THEREOF. By its execution and delivery of this Agreement, each of
the Parties hereto hereby irrevocably and unconditionally agrees for itself that any legal action,
suit or proceeding with respect to any matter under or arising out of or in connection with this
Agreement or for recognition or enforcement of any judgment rendered in any such action, suit or
proceeding, shall be brought exclusively in the Bankruptcy Court. By execution and delivery of this
Agreement, each of the Parties hereto hereby irrevocably accepts and submits itself to the
exclusive jurisdiction of each such court, generally and unconditionally, with respect to any such
action, suit or proceeding.

          (e) Specific Performance.

     The Parties hereby acknowledge that the rights of the Parties under this Agreement are unique
and that remedies at law for breach or threatened breach of any provision of this Agreement would
be inadequate and, in recognition of this fact, agree that, in the event of a breach or threatened
breach of the provisions of this Agreement, in addition to any remedies at law, the Parties shall,
without posting any bond, be entitled to obtain equitable relief in the form of specific
performance, a temporary restraining order, a temporary or permanent injunction or any other
equitable remedy which may then be available and the Parties hereby waive any objection to the
imposition of such relief.

          (f) Complete Agreement, Interpretation and Modification.

	 	 	 	 	 
	 	i.	 	Complete Agreement. This Agreement, the Equity
Commitment Agreement and the other agreements, exhibits and other
documents referenced herein and therein constitute the complete
agreement between the Parties with respect to the subject matter hereof
and supersede all prior agreements, oral or written, between or among
the Parties with respect thereto.
	 	 	 
	 	ii.	 	Interpretation. This Agreement is the product
of negotiation by and among the Parties. Any Party enforcing or
interpreting this Agreement shall interpret it in a neutral manner.
There shall be no presumption concerning whether to interpret this
Agreement for or
against any Party by reason of that Party having drafted this
Agreement, or any portion thereof, or caused it or any portion
thereof to be drafted.
	 	 	 
	 	iii.	 	Modification of this Agreement and the Term
Sheet. This Agreement (including the Term Sheet) may only be modified,
altered, amended or supplemented, or otherwise deviated from by waiver
(including, without limitation, any waiver of any of the Termination
Events), consent or otherwise, by an agreement in

11

 

	 	 	writing signed by
Tronox and each other Party hereto; provided, however, that with
respect to the Noteholders, the agreement of at least sixty-six and 2/3
percent (66 2/3%) of the aggregate amount of all Relevant Claims of the
Noteholders shall be sufficient to bind all Noteholders; provided,
further, however, that Tronox may make technical and non-material
modifications to the First Amended Plan without the consent of the
Parties.

          (g) Conditions to Effectiveness.

          This Agreement shall become effective upon the satisfaction of the following conditions
precedent (unless waived by the Parties in their respective sole discretion):

	 	i.	 	Each Party hereto shall have duly executed and
delivered a counterpart to this Agreement to each other Party hereto;
	 
	 	ii.	 	The Bankruptcy Court shall have entered the PSA
Approval Order;
	 
	 	iii.	 	The Bankruptcy Court shall have entered the
Equity Commitment Agreement Approval Order; and
	 
	 	iv.	 	Counsel to the Noteholders shall confirm in
writing that the Noteholders hold Claims that collectively represent at
least fifty-nine percent (58%) in aggregate outstanding principal
amount of the Unsecured Notes as of the date this Agreement is
executed.

          (h) Execution of this Agreement.

          This Agreement may be executed and delivered (by facsimile or otherwise) in any number of
counterparts, each of which, when executed and delivered, shall be deemed an original, and all of
which together shall constitute the same agreement. Except as expressly provided in this
Agreement, each individual executing this Agreement on behalf of a Party has been duly authorized
and empowered to execute and deliver this Agreement on behalf of said Party.

          (i) Settlement Discussions.

          This Agreement, the First Amended Plan and the Term Sheet are part of a proposed settlement of
a dispute between the Parties. Nothing herein shall be deemed an
admission of any kind. Pursuant to Federal Rule of Evidence 408 and any applicable state
rules of evidence, this Agreement and all negotiations relating thereto shall not be admissible
into evidence in any proceeding other than a proceeding to enforce the terms of this Agreement.

          (j) Consideration.

          Tronox and the other Parties hereby acknowledge that no consideration, other than that
specifically described herein and in the First Amended Plan and the Term Sheet, shall be due or
paid to any Party for its agreement to vote to accept the First Amended Plan in accordance with

12

 

the
terms and conditions of this Agreement, other than Tronox’s representations, warranties and
agreement to use its commercially reasonable best efforts to obtain approval of the Amended
Disclosure Statement and to seek to confirm and consummate the First Amended Plan.

          (k) Notices.

     All notices hereunder shall be deemed given if in writing and delivered, if sent by facsimile,
courier or by registered or certified mail (return receipt requested) to the following addresses
and facsimile numbers (or at such other addresses or facsimile numbers as shall be specified by
like notice):

	 	i.	 	If to Tronox, to:
	 
	 	 	 	Tronox Incorporated

3301 NW 150th Street

Oklahoma City, Oklahoma 73134

Attention: General Counsel
	 
	 	 	 	with copies (which shall not constitute notice) to:
	 
	 	 	 	Kirkland & Ellis LLP

601 Lexington Avenue

New York, New York 10022

Attention: Jonathan S. Henes, Esq. and Patrick J. Nash, Jr., Esq.
	 
	 	ii.	 	If to a Noteholder or a transferee thereof:
	 
	 	 	 	to the addresses or facsimile numbers set forth below following such
Noteholder’s signature (or as directed by any transferee thereof)
	 
	 	 	 	with a copy (which shall not constitute notice) to:
	 
	 	 	 	Milbank, Tweed, Hadley & McCloy LLP

One Chase Manhattan Plaza

New York, New York 10005

Attention: Thomas C. Janson, Esq.
	 
	 	iii.	 	If to Michael E. Carroll, to:
	 
	 	 	 	Montgomery, McCracken, Walker & Rhoads, LLP

123 South Broad Street, 25th Floor

Philadelphia, Pennsylvania 19109

Attention: Natalie Ramsey, Esq.

13

 

	 	iv.	 	If to the Creditors’ Committee, to:
	 
	 	 	 	Paul, Weiss, Rifkind, Wharton & Garrison LLP

1285 Avenue of the Americas

New York, New York 10022

Attention: Brian Hermann, Esq. and Elizabeth McColm, Esq.
	 
	 	v.	 	If to Rio Algom, to:
	 
	 	 	 	Polsinelli Shughart PC

3636 N Central Ave., Suite 1200

Phoenix, AZ 85012

Attention: Anthony W. Merrill, Esq.

Any notice given by delivery, mail or courier shall be effective when received. Any notice given
by facsimile or email shall be effective upon oral or machine confirmation of transmission.

          (l) Time of the Essence.

The Parties agree that time is of the essence with respect to each and every term and provision of
this Agreement.

          (m) Acknowledgement of Substantial Contribution of the Noteholders.

     The Parties hereby agree and acknowledge that, to date, the Noteholders have made a
“substantial contribution” (within the meaning of Section 503(b)(3)(D) of the Bankruptcy Code) in
the Company’s bankruptcy cases by, among other things, (x) engaging in legal, business and other
due diligence, negotiation and documentation of the Equity Commitment Agreement, the Term Sheet,
this Agreement and all related documents, (y) providing the Company with the capability to
successfully conclude the negotiations with the Governmental Entities and to advance the First
Amended Plan, and (z) executing and delivering a definitive Equity Commitment Agreement, all of
which enabled the Parties to pursue the First Amended Plan as a materially superior alternative to
both the proposed auction of the assets of Tronox and the Proposed Plan and provided material and
demonstrable value to the Company’s bankruptcy cases, estates and creditors.

     9. Representatives.

          (a) Representation.

          Each Representative acknowledges that it is the attorney or representative for the owner of
such Claims set forth on its respective signature page (each a “Client”).

14

 

          (b) Support of First Amended Plan.

          As long as a Termination Event has not occurred, or has occurred but has been duly waived or
cured in accordance with the terms hereof, each Representative agrees for itself that it shall use
reasonable best efforts to recommend that its Client, or Clients, as the case may be (x) vote in
favor of the plan; and (y) not object to or otherwise commence any proceeding or take any other
action opposing any of the terms of this Agreement, the Amended Disclosure Statement or the First
Amended Plan.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

15

 

     IN WITNESS WHEREOF, the Parties have entered into this Agreement on the day and year first
above written.

	 	 	 	 	 
	 	Tronox Incorporated

 	 
	 	By:  	 	 
	 	 	Title:                         	 	 
	 	 	 	 	 
	 

[Signature Page Plan Support Agreement]

 

 

	 	 	 	 	 
	 	[INSERT PARTY NAME HERE]

 	 
	 	By:  	 	 
	 	 	Title:                        	 	 
	 	 	 	 	 
	 

[Signature Page Plan Support Agreement]

 

 

Attachment 1

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

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