Exhibit 10.3

 

Execution Version

 

PLEDGE AGREEMENT

 

PLEDGE AGREEMENT dated as of February 10, 2011, among ROCKWOOD SPECIALTIES
INTERNATIONAL, INC., a Delaware corporation (“Holdings”), ROCKWOOD SPECIALTIES
GROUP, INC., a Delaware corporation (the “Borrower”), the undersigned
Subsidiaries of the Borrower listed on Schedule 1 hereto (each a “Subsidiary
Pledgor” and, collectively, the “Subsidiary Pledgors”; the Borrower, Holdings
and the Subsidiary Pledgors are referred to collectively herein as the
“Pledgors”) and CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as administrative agent
and collateral agent (in such capacity, the “Administrative Agent”) for the
lenders (the “Lenders”) from time to time parties to the Credit Agreement dated
as of February 10, 2011 (as the same may be amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the Borrower,
Holdings, the Lenders, the Administrative Agent, KKR Capital Markets LLC, as
syndication agent (in such capacity, the “Syndication Agent”) for the Lenders,
and Deutsche Bank Securities Inc., Morgan Stanley Senior Funding, Inc. and UBS
Securities LLC, as co-documentation agents (in such capacities, the
“Co-Documentation Agents”) for the Lenders.

 

W I T N E S S E T H:

 

WHEREAS, (a) pursuant to the Credit Agreement, the Lenders have severally agreed
to make Loans to the Borrower and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the Borrower (collectively, the
“Extensions of Credit”) upon the terms and subject to the conditions set forth
therein and (b) one or more Lenders or Affiliates of Lenders may from time to
time enter into Hedge Agreements with the Borrower or any of the Restricted
Subsidiaries;

 

WHEREAS, pursuant to the Guarantee (the “Guarantee”) dated as of the date
hereof, Holdings and each Subsidiary Pledgor has unconditionally and irrevocably
guaranteed, as primary obligor and not merely as surety, to the Administrative
Agent, for the ratable benefit of the Secured Parties the prompt and complete
payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations (as defined below);

 

WHEREAS, each Subsidiary Pledgor is a Domestic Subsidiary of the Borrower;

 

WHEREAS, the proceeds of the Extensions of Credit will be used in part to enable
the Borrower to make valuable transfers to the Subsidiary Pledgors in connection
with the operation of their respective businesses;

 

WHEREAS, each Pledgor acknowledges that it will derive substantial direct and
indirect benefit from the making of the Extensions of Credit;

 

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WHEREAS, it is a condition precedent to the obligation of the Lenders and the
Letter of Credit Issuer to make their respective Extensions of Credit to the
Borrower under the Credit Agreement that the Borrower, Holdings and the
Subsidiary Pledgors shall have executed and delivered this Pledge Agreement to
the Administrative Agent for the ratable benefit of the Secured Parties; and

 

WHEREAS, (a) Holdings is the legal and beneficial owner of all the issued and
outstanding shares of capital stock of the Borrower, (b) the Borrower and the
Subsidiary Pledgors are the legal and beneficial owners of the Equity Interests
described under Schedule 2 hereto and issued by the entities named therein (the
pledged Equity Interests described under (a) and (b) are, together with any
Equity Interests obtained in the future of the issuer of such Pledged Shares
(the “After-acquired Shares”), referred to collectively herein as the “Pledged
Shares”) and (c) each of the Pledgors is the legal and beneficial owner of the
Indebtedness (the “Pledged Debt”) described under Schedule 2 hereto;

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Syndication Agent, the Co-Documentation Agents and the
Lenders and the Letter of Credit Issuer to enter into the Credit Agreement and
to induce the Lenders and the Letter of Credit Issuer to make their respective
Extensions of Credit to the Borrower under the Credit Agreement and to induce
one or more Lenders or Affiliates of Lenders to enter into Hedge Agreements with
the Borrower and/or the Restricted Subsidiaries, the Pledgors hereby agree with
the Administrative Agent, for the ratable benefit of the Secured Parties, as
follows:

 

1.             Defined Terms.

 

(a)           Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement and all terms defined in the Uniform Commercial Code from time to time
in effect in the State of New York (the “NY UCC”) and not defined herein shall
have the meanings specified therein; the term “instrument” shall have the
meaning specified in Article 9 of the NY UCC.

 

(b)           As used herein, the term “Closing Time” means 12:00 p.m. EST on
the Closing Date.

 

(c)           As used herein, the term “Equity Interests” means shares of
capital stock, partnership interests, membership interests in a limited
liability company, beneficial interests in a trust or other equity ownership
interests in a Person of whatever nature, and any warrants, options or other
rights entitling the holder thereof to purchase or acquire any of the foregoing.

 

(d)           As used herein, the term “Obligations” means the collective
reference to (i) the due and punctual payment of (x) the principal of and
premium, if any, and interest at the applicable rate provided in the Credit
Agreement (including interest accruing during the pendency of any bankruptcy,
insolvency, receivership or other similar proceeding, regardless of whether
allowed or allowable in such proceeding) on the Loans, when and as due, whether
at maturity, by acceleration, upon one or more dates set for prepayment or
otherwise, (y) each payment required to be made by the Borrower under the Credit
Agreement in respect of any Letter of Credit, when and as due, including
payments in respect of reimbursement of disbursements, interest thereon and
obligations to provide cash collateral, and (z) all other monetary obligations,
including fees, costs, expenses and indemnities, whether primary,

 

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secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the Borrower or any other Credit Party to any
of the Secured Parties under the Credit Agreement and the other Credit
Documents, (ii) the due and punctual performance of all covenants, agreements,
obligations and liabilities of the Borrower under or pursuant to the Credit
Agreement and the other Credit Documents, (iii) the due and punctual payment and
performance of all the covenants, agreements, obligations and liabilities of
each Credit Party under or pursuant to this Pledge Agreement or the other Credit
Documents, (iv) the due and punctual payment and performance of all obligations
of each Borrower or Restricted Subsidiary under each Hedge Agreement that (x) is
in effect on the Closing Date with a counterparty that is a Lender or an
Affiliate of a Lender as of the Closing Date or (y) is entered into after the
Closing Date with any counterparty that is a Lender or an Affiliate of a Lender
at the time such Hedge Agreement is entered into and (v) the due and punctual
payment and performance of all obligations in respect of overdrafts and related
liabilities owed to the Administrative Agent or its Affiliates arising from or
in connection with treasury, depositary or cash management services or in
connection with any automated clearinghouse transfer of funds.

 

(e)           As used herein, the term “Secured Parties” means (i) the Lenders,
(ii) the Letter of Credit Issuer, (iii) the Swingline Lender, (iv) the
Administrative Agent, (v) the Syndication Agent, (vi) the Co-Documentation
Agents, (vii) each counterparty to a Hedge Agreement the obligations under which
constitute Obligations, (viii) the beneficiaries of each indemnification
obligation undertaken by any Credit Party under any Credit Document and (ix) any
successors, indorsees, transferees and assigns of each of the foregoing.

 

(f)            References to “Lenders” in this Pledge Agreement shall be deemed
to include Affiliates of Lenders that may from time to time enter into Hedge
Agreements with any Borrower or Restricted Subsidiary.

 

(g)           The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Pledge Agreement shall refer to this Pledge Agreement
as a whole and not to any particular provision of this Pledge Agreement, and
Section references are to Sections of this Pledge Agreement unless otherwise
specified.  The words “include”, “includes” and “including” shall be deemed to
be followed by the phrase “without limitation”.

 

(h)           The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

 

2.             Grant of Security.  Each Pledgor hereby transfers, assigns and
pledges to the Administrative Agent for the ratable benefit of the Secured
Parties, and hereby grants to the Administrative Agent for the ratable benefit
of the Secured Parties, a security interest, which security interest shall
attach immediately upon the Closing Time (“Security Interest”), in all of such
Pledgor’s right, title and interest in the following, whether now owned or
existing or hereafter acquired or existing (collectively, the “Collateral”):

 

(a)           the Pledged Shares held by such Pledgor and the certificates
representing such Pledged Shares and any interest of such Pledgor in the entries
on the books of the issuer of the Pledged Shares or any financial intermediary
pertaining to the Pledged Shares and all dividends, cash, warrants, rights,
instruments and other property or proceeds from time to time

 

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received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Pledged Shares, provided that the Pledged Shares under this
Pledge Agreement shall not include more than 65 percent of the issued and
outstanding Equity Interests in any Foreign Subsidiary;

 

(b)           the Pledged Debt and the instruments evidencing the Pledged Debt
owed to such Pledgor, and all interest, cash, instruments and other property or
proceeds from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such Pledged Debt; and

 

(c)           to the extent not covered by clauses (a) and (b) above,
respectively, all proceeds of any or all of the foregoing Collateral.  For
purposes of this Pledge Agreement, the term “proceeds” shall include all
“proceeds” as defined in the NY UCC and shall also include proceeds of any
indemnity or guarantee payable to any Pledgor or the Administrative Agent from
time to time with respect to any of the Collateral.

 

3.             Security for Obligations.  This Pledge Agreement secures the
payment of all Obligations of each Credit Party.  Without limiting the
generality of the foregoing, this Pledge Agreement secures the payment of all
amounts that constitute part of the Obligations and would be owed by any of the
Credit Parties to the Administrative Agent or the Lenders under the Credit
Documents but for the fact that they are unenforceable or not allowable due to
the existence of a bankruptcy, reorganization or similar proceeding involving
any Credit Party.

 

4.             Delivery of the Collateral.  All certificates or instruments, if
any, representing or evidencing the Collateral shall be promptly delivered to
and held by or on behalf of the Administrative Agent pursuant hereto and shall
be in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments or documents of transfer or assignment in blank, all in
form and substance reasonably satisfactory to the Administrative Agent.  The
Administrative Agent shall have the right, at any time after the occurrence and
during the continuance of an Event of Default and without notice to any Pledgor,
to transfer to or to register in the name of the Administrative Agent or any of
its nominees any or all of the Pledged Shares.  Each delivery of Collateral
(including any After-acquired Shares) shall be accompanied by a schedule
describing the securities theretofore and then being pledged hereunder, which
shall be attached hereto as Schedule 2 and made a part hereof, provided that the
failure to attach any such schedule hereto shall not affect the validity of such
pledge of such securities.  Each schedule so delivered shall supersede any prior
schedules so delivered.

 

5.             Representations and Warranties.  Each Pledgor represents and
warrants as follows:

 

(a)           Schedule 2 hereto (i) correctly represents as of the date hereof
(A) the issuer, the certificate number, the Pledgor and the record and
beneficial owner, the number and class and the percentage of the issued and
outstanding Equity Interests of such class of all Pledged Shares and (B) the
issuer, the initial principal amount, the Pledgor and holder, date of and
maturity date of all Pledged Debt and (ii) together with the comparable schedule
to each supplement hereto, includes all Equity Interests, debt securities and
promissory notes required to be pledged hereunder.  Except as set forth on
Schedule 2, the Pledged Shares represent all (or 65 percent in the case of
pledges of Foreign Subsidiaries) of the issued and outstanding Equity Interests
of each class of Equity Interests in the issuer on the date hereof.

 

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(b)           Such Pledgor is the legal and beneficial owner of the Collateral
pledged or assigned by such Pledgor hereunder free and clear of any Lien, except
for the Lien created by this Pledge Agreement.

 

(c)           As of the date of this Pledge Agreement, the Pledged Shares
pledged by such Pledgor hereunder have been duly authorized and validly issued
and, in the case of Pledged Shares issued by a corporation, are fully paid and
non-assessable.

 

(d)           The execution and delivery by such Pledgor of this Pledge
Agreement and the pledge of the Collateral pledged by such Pledgor hereunder
pursuant hereto create a valid and perfected first-priority security interest in
the Collateral, securing the payment of the Obligations, in favor of the
Administrative Agent for the ratable benefit of the Secured Parties.

 

(e)           Such Pledgor has full power, authority and legal right to pledge
all the Collateral pledged by such Pledgor pursuant to this Pledge Agreement and
this Pledge Agreement constitutes a legal, valid and binding obligation of each
Pledgor, enforceable in accordance with its terms, except as enforceability
thereof may be limited by bankruptcy, insolvency or other similar laws affecting
creditors’ rights generally and subject to general principles of equity.

 

(f)            Each of the waivers and consents set forth in this Pledge
Agreement is made voluntarily and unconditionally after consultation with
outside legal counsel and with full knowledge of its significance and
consequences, with the understanding that events giving rise to any defense or
right waived may diminish, destroy or otherwise adversely affect rights which
such Pledgor or any other obligor otherwise may have against the Borrower, the
Administrative Agent, any other Secured Party or any other Person or against any
collateral.

 

6.             Certification of Limited Liability Company, Limited Partnership
Interests and Pledged Debt.  (a) The Equity Interests in any Domestic Subsidiary
that is organized as a limited liability company or limited partnership and
pledged hereunder shall be represented by a certificate and in the
organizational documents of such Domestic Subsidiary, the applicable Pledgor
shall cause the issuer of such interests to elect to treat such interests as a
“security” within the meaning of Article 8 of the Uniform Commercial Code of its
jurisdiction of organization or formation, as applicable, by including in its
organizational documents language substantially similar to the following and,
accordingly, such interests shall be governed by Article 8 of the Uniform
Commercial Code:

 

“The Partnership/Company hereby irrevocably elects that all
partnership/membership interests in the Partnership/Company shall be securities
governed by Article 8 of the Uniform Commercial Code of [jurisdiction of
organization or formation, as applicable].  Each certificate evidencing
partnership/membership interests in the Partnership/Company shall bear the
following legend:  “This certificate evidences an interest in [name of
Partnership/LLC] and shall be a security for purposes of Article 8 of the
Uniform Commercial Code.”  No change to this provision shall be effective until
all outstanding certificates have been surrendered for cancelation and any new
certificates thereafter issued shall not bear the foregoing legend.”

 

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(b)           Each Pledgor will cause any Indebtedness for borrowed money owed
to such Pledgor and required to be pledged hereunder to be evidenced by a duly
executed promissory note that is pledged and delivered to the Administrative
Agent pursuant to the terms hereof.

 

7.             Further Assurances.  Each Pledgor agrees that at any time and
from time to time, at the expense of such Pledgor, it will execute any and all
further documents, financing statements, agreements and instruments, and take
all such further actions (including the filing and recording of financing
statements, fixture filings, mortgages, deeds of trust and other documents),
which may be required under any applicable law, or which the Administrative
Agent or the Required Lenders may reasonably request, in order (x) to perfect
and protect any pledge, assignment or security interest granted or purported to
be granted hereby (including the priority thereof) or (y) to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral.

 

8.             Voting Rights; Dividends and Distributions; Etc.  (a) So long as
no Event of Default shall have occurred and be continuing:

 

(i)            Each Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Collateral or any part thereof for any
purpose not prohibited by or inconsistent with the terms of this Pledge
Agreement or the other Credit Documents; and

 

(ii)           The Administrative Agent shall execute and deliver (or cause to
be executed and delivered) to each Pledgor all such proxies and other
instruments or documents as such Pledgor may reasonably request for the purpose
of enabling such Pledgor to exercise the voting and other rights that it is
entitled to exercise pursuant to paragraph (i) above.

 

(b)           Subject to paragraph (c) below, each Pledgor shall be entitled to
receive and retain and use, free and clear of the Lien of this Pledge Agreement,
any and all dividends, distributions, principal and interest made or paid in
respect of the Collateral to the extent permitted by the Credit Agreement;
provided, however, that any and all noncash dividends, interest, principal or
other distributions that would constitute Pledged Shares or Pledged Debt,
whether resulting from a subdivision, combination or reclassification of the
outstanding Equity Interests of the issuer of any Pledged Shares or received in
exchange for Pledged Shares or Pledged Debt or any part thereof, or in
redemption thereof, or as a result of any merger, consolidation, acquisition or
other exchange of assets to which such issuer may be a party or otherwise, shall
be, and shall be forthwith delivered to the Administrative Agent to hold as,
Collateral and shall, if received by such Pledgor, be received in trust for the
benefit of the Administrative Agent, be segregated from the other property or
funds of such Pledgor and be forthwith delivered to the Administrative Agent as
Collateral in the same form as so received (with any necessary indorsement).

 

(c)           Upon written notice to a Pledgor by the Administrative Agent
following the occurrence and during the continuance of an Event of Default,

 

(i)            all rights of such Pledgor to exercise or refrain from exercising
the voting and other consensual rights that it would otherwise be entitled to
exercise pursuant to

 

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Section 8(a)(i) shall cease, and all such rights shall thereupon become vested
in the Administrative Agent, which shall thereupon have the sole right to
exercise or refrain from exercising such voting and other consensual rights
during the continuance of such Event of Default, provided that, unless otherwise
directed by the Required Lenders, the Administrative Agent shall have the right
from time to time following the occurrence and during the continuance of an
Event of Default to permit the Pledgors to exercise such rights.  After all
Events of Default have been cured or waived and the Borrower has delivered to
the Administrative Agent a certificate to that effect, each Pledgor will have
the right to exercise the voting and consensual rights that such Pledgor would
otherwise be entitled to exercise pursuant to the terms of Section 8(a)(i) (and
the obligations of the Administrative Agent under Section 8(a)(ii) shall be
reinstated);

 

(ii)           all rights of such Pledgor to receive the dividends,
distributions and principal and interest payments that such Pledgor would
otherwise be authorized to receive and retain pursuant to Section 8(b) shall
cease, and all such rights shall thereupon become vested in the Administrative
Agent, which shall thereupon have the sole right to receive and hold as
Collateral (subject to Section 12) such dividends, distributions and principal
and interest payments during the continuance of such Event of Default.  After
all Events of Default have been cured or waived and the Borrower has delivered
to the Administrative Agent a certificate to that effect, the Administrative
Agent shall repay to each Pledgor (unless previously applied to the Obligations)
(and, in any event, without interest) all dividends, distributions and principal
and interest payments that such Pledgor would otherwise be permitted to receive,
retain and use pursuant to the terms of Section 8(b);

 

(iii)          all dividends, distributions and principal and interest payments
that are received by such Pledgor contrary to the provisions of
Section 8(b) shall be received in trust for the benefit of the Administrative
Agent, shall be segregated from other property or funds of such Pledgor and
shall forthwith be delivered to the Administrative Agent as Collateral in the
same form as so received (with any necessary indorsements); and

 

(iv)          in order to permit the Administrative Agent to receive all
dividends, distributions and principal and interest payments to which it may be
entitled under Section 8(b) above, to exercise the voting and other consensual
rights that it may be entitled to exercise pursuant to Section 8(c)(i) above,
and to receive all dividends, distributions and principal and interest payments
that it may be entitled to under Sections 8(c)(ii) and (c)(iii) above, such
Pledgor shall, if necessary, upon written notice from the Administrative Agent,
from time to time execute and deliver to the Administrative Agent, appropriate
proxies, dividend payment orders and other instruments or documents as the
Administrative Agent may reasonably request.

 

9.             Transfers and Other Liens; Additional Collateral; Etc.  Each
Pledgor shall (a) not (i) except as permitted by the Credit Agreement, sell or
otherwise dispose of, or grant any option or warrant with respect to, any of the
Collateral or (ii) create or suffer to exist any consensual Lien upon or with
respect to any of the Collateral, except for the Lien under this Pledge
Agreement, provided that in the event such Pledgor sells or otherwise disposes
of assets permitted by the Credit Agreement and such assets are or include any
of the Collateral, the Administrative Agent shall release such Collateral to
such Pledgor free and clear of the Lien under this Pledge Agreement concurrently
with the consummation of such sale;

 

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(b)           pledge and, if applicable, cause each Domestic Subsidiary to
pledge, to the Administrative Agent for the benefit of the Secured Parties,
immediately upon acquisition thereof, all the capital stock and all evidence of
Indebtedness held or received by such Pledgor or Domestic Subsidiary required to
be pledged hereunder pursuant to Section 9.12 of the Credit Agreement, in each
case pursuant to a supplement to this Pledge Agreement substantially in the form
of Annex A hereto (it being understood that the execution and delivery of such a
supplement shall not require the consent of any Pledgor hereunder and that the
rights and obligations of each Pledgor hereunder shall remain in full force and
effect notwithstanding the addition of any new Subsidiary Pledgor as a party to
this Pledge Agreement); and

 

(c)           defend its and the Administrative Agent’s title or interest in and
to all the Collateral (and in the Proceeds thereof) against any and all Liens
(other than the Lien of this Pledge Agreement), however arising, and any and all
Persons whomsoever.

 

10.           Administrative Agent Appointed Attorney-in-Fact.  Each Pledgor
hereby appoints, which appointment is irrevocable and coupled with an interest,
the Administrative Agent as such Pledgor’s attorney-in-fact, with full authority
in the place and stead of such Pledgor and in the name of such Pledgor or
otherwise, to take any action and to execute any instrument or document, in each
case after the occurrence and during the continuance of an Event of Default,
that the Administrative Agent may deem reasonably necessary or advisable to
accomplish the purposes of this Pledge Agreement, including to receive, indorse
and collect all instruments made payable to such Pledgor representing any
dividend, distribution or principal or interest payment in respect of the
Collateral or any part thereof and to give full discharge for the same.  Each
Secured Party has irrevocably authorized and directed the Administrative Agent
as the agent for such Secured Party to execute and deliver intercreditor
agreements, substantially in the form attached as Exhibit E-1 and E-2 to the
Credit Agreement (with such changes thereto as agreed by the Administrative
Agent in its sole discretion), in connection with any Indebtedness incurred
under Sections 10.1(a), 10.1(f), 10.1(k), 10.1(n), 10.1(o), 10.1(p) or
10.1(r) of the Credit Agreement on their behalf.

 

11.           The Administrative Agent’s Duties.  The powers conferred on the
Administrative Agent hereunder are solely to protect its interest in the
Collateral and shall not impose any duty upon it to exercise any such powers. 
Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Administrative
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Pledged Shares, whether or not the Administrative
Agent or any other Secured Party has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any parties or any other rights pertaining to any Collateral.  The
Administrative Agent shall be deemed to have exercised reasonable care in the
custody and preservation of any Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which the Administrative Agent
accords its own property.

 

12.           Remedies.  If any Event of Default shall have occurred and be
continuing:

 

(a)           The Administrative Agent may exercise in respect of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party upon
default under the NY UCC (whether or not the NY UCC applies to the affected
Collateral) or otherwise available to it at law or in equity and also

 

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may without notice except as specified below, sell the Collateral or any part
thereof in one or more parcels at public or private sale, at any exchange
broker’s board or at any of the Administrative Agent’s offices or elsewhere, for
cash, on credit or for future delivery, at such price or prices and upon such
other terms as are commercially reasonable irrespective of the impact of any
such sales on the market price of the Collateral.  The Administrative Agent
shall be authorized at any such sale (if it deems it advisable to do so) to
restrict the prospective bidders or purchasers of Collateral to Persons who will
represent and agree that they are purchasing the Collateral for their own
account for investment and not with a view to the distribution or sale thereof,
and, upon consummation of any such sale, the Administrative Agent shall have the
right to assign, transfer and deliver to the purchaser or purchasers thereof the
Collateral so sold.  Each purchaser at any such sale shall hold the property
sold absolutely free from any claim or right on the part of any Pledgor, and
each Pledgor hereby waives (to the extent permitted by law) all rights of
redemption, stay and/or appraisal that it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted. 
The Administrative Agent or any Secured Party shall have the right upon any such
public sale, and, to the extent permitted by law, upon any such private sale, to
purchase the whole or any part of the Collateral so sold, and the Administrative
Agent or such Secured Party may subject to (x) the satisfaction in full in cash
of all payments due pursuant to Section 12(b)(i), and (y) the ratable
satisfaction of the Obligations in accordance with Section 12(b)(ii) pay the
purchase price by crediting the amount thereof against the Obligations.  Each
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least ten days’ notice to such Pledgor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification.  The Administrative Agent shall not be obligated to
make any sale of Collateral regardless of notice of sale having been given.  The
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.  To
the extent permitted by law, each Pledgor hereby waives any claim against the
Administrative Agent arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less than the price
that might have been obtained at a public sale, even if the Administrative Agent
accepts the first offer received and does not offer such Collateral to more than
one offeree.

 

(b)           The Administrative Agent shall apply the proceeds of any
collection or sale of the Collateral at any time after receipt as follows:

 

(i)            first, to the payment of all reasonable and documented costs and
expenses incurred by the Administrative Agent in connection with such collection
or sale or otherwise in connection with this Pledge Agreement, the other Credit
Documents or any of the Obligations, including all court costs and the
reasonable fees and expenses of its agents and legal counsel, the repayment of
all advances made by the Administrative Agent hereunder or under any other
Credit Document on behalf of any Pledgor and any other reasonable and documented
costs or expenses incurred in connection with the exercise of any right or
remedy hereunder or under any other Credit Document;

 

(ii)           second, to the Secured Parties, an amount equal to all
Obligations owing to them on the date of any such distribution, and, if such
moneys shall be insufficient to pay such amounts in full, then ratably (without
priority of any one over any other) to such Secured Parties in proportion to the
unpaid amounts thereof; and

 

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(iii)          third, any surplus then remaining shall be paid to the Pledgors
or their successors or assigns or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.

 

Upon any sale of the Collateral by the Administrative Agent (including pursuant
to a power of sale granted by statute or under a judicial proceeding), the
receipt of the Administrative Agent or of the officer making the sale shall be a
sufficient discharge to the purchaser or purchasers of the Collateral so sold
and such purchaser or purchasers shall not be obligated to see to the
application of any part of the purchase money paid over to the Administrative
Agent or such officer or be answerable in any way for the misapplication
thereof.

 

(c)           The Administrative Agent may exercise any and all rights and
remedies of each Pledgor in respect of the Collateral.

 

(d)           All payments received by any Pledgor after the occurrence and
during the continuance of an Event of Default in respect of the Collateral shall
be received in trust for the benefit of the Administrative Agent, shall be
segregated from other property or funds of such Pledgor and shall be forthwith
delivered to the Administrative Agent as Collateral in the same form as so
received (with any necessary indorsement).

 

(e)           Each Pledgor hereby consents to the transfer, at any time after
the occurrence and during the continuance of an Event of Default, of any Pledged
Shares to the Administrative Agent or its designee and to the substitution, at
any time after the occurrence and during the continuance of an Event of Default,
of the Administrative Agent or its designee as a partner, member or shareholder
of the limited liability company, partnership or other entity that issued the
Pledged Shares.

 

13.           Amendments, etc. with Respect to the Obligations; Waiver of
Rights.  Each Pledgor shall remain obligated hereunder notwithstanding, without
any reservation of rights against any Pledgor and without notice to or further
assent by any Pledgor, (a) that any demand for payment of any of the Obligations
made by the Administrative Agent or any other Secured Party may be rescinded by
such party and any of the Obligations continued, (b) that the Obligations, or
the liability of any other party upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended, modified,
accelerated, compromised, waived, surrendered or released by the Administrative
Agent or any other Secured Party, (c) that the Credit Agreement, the other
Credit Documents, the Letters of Credit and any other documents executed and
delivered in connection therewith and the Hedge Agreements and any other
documents executed and delivered in connection therewith and any documents
entered into with the Administrative Agent or any of its Affiliates in
connection with treasury, depositary or cash management services or in
connection with any automated clearinghouse transfer of funds may be amended,
modified, supplemented or terminated, in whole or in part, as the Administrative
Agent (or the Required Lenders, as the case may be, or, in the case of any Hedge
Agreement or documents entered into with the Administrative Agent or any of its
Affiliates in connection with treasury, depositary or cash management services
or in connection with any automated clearinghouse transfer of funds, the party
thereto) may deem advisable from time to time, (d) that any collateral security,
guarantee or right of offset at any time held by the Administrative Agent or any
other Secured Party for the payment of the Obligations may be sold, exchanged,
waived, surrendered or released.  Neither the Administrative Agent nor any other
Secured Party shall

 

10

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

 

have any obligation to protect, secure, perfect or insure any Lien at any time
held by it as security for the Obligations or for this Pledge Agreement or any
property subject thereto.  When making any demand hereunder against any Pledgor,
the Administrative Agent or any other Secured Party may, but shall be under no
obligation to, make a similar demand on the Borrower or any Pledgor or pledgor,
and any failure by the Administrative Agent or any other Secured Party to make
any such demand or to collect any payments from the Borrower or any Pledgor or
pledgor or any release of the Borrower or any Pledgor or pledgor shall not
relieve any Pledgor in respect of which a demand or collection is not made or
any Pledgor not so released of its several obligations or liabilities hereunder,
and shall not impair or affect the rights and remedies, express or implied, or
as a matter of law, of the Administrative Agent or any other Secured Party
against any Pledgor.  For the purposes hereof “demand” shall include the
commencement and continuance of any legal proceedings.

 

14.           Continuing Security Interest; Assignments Under the Credit
Agreement; Release.  (a) This Pledge Agreement shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon
each Pledgor and the successors and assigns thereof, and shall inure to the
benefit of the Administrative Agent and the other Secured Parties and their
respective successors, indorsees, transferees and assigns until all the
Obligations under the Credit Documents shall have been satisfied by payment in
full, the Commitments shall be terminated and no Letters of Credit shall be
outstanding, notwithstanding that from time to time during the term of the
Credit Agreement and any Hedge Agreement the Credit Parties may be free from any
Obligations. This Pledge Agreement and the security interest granted hereby
shall terminate on the first date on which all the Obligations under the Credit
Documents shall have been satisfied by payment in full, the Commitments shall be
terminated and no Letters of Credit shall be outstanding.

 

(b)           A Subsidiary Pledgor shall automatically be released from its
obligations hereunder and the Pledge of such Subsidiary Pledgor shall be
automatically released upon the consummation of any transaction permitted by the
Credit Agreement as a result of which such Subsidiary Pledgor ceases to be a
Domestic Subsidiary of the Borrower.

 

(c)           Upon any sale or other transfer by any Pledgor of any Collateral
that is permitted under the Credit Agreement, or upon the effectiveness of any
written consent to the release of the security interest granted hereby in any
Collateral pursuant to Section 13.1 of the Credit Agreement, the obligations of
such Pledgor with respect to such Collateral and the security interest granted
hereby in such Collateral shall be automatically released and such Collateral
sold free and clear of the Lien and Security Interests created hereby.

 

(d)           In connection with any termination or release pursuant to
paragraph (a), (b) or (c), the Administrative Agent shall execute and deliver to
any Pledgor, at such Pledgor’s expense, all documents that such Pledgor shall
reasonably request to evidence such termination or release.  Any execution and
delivery of documents pursuant to this Section 14 shall be without recourse to
or warranty by the Administrative Agent.

 

15.           Reinstatement.  This Pledge Agreement shall continue to be
effective, or be reinstated, as the case may be, if at any time payment, or any
part thereof, of any of the Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any other Secured Party upon
the insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Pledgor, or upon or as a result of the appointment of a receiver, intervenor

 

11

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

 

or conservator of, or trustee or similar officer for, the Borrower or any other
Pledgor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

 

16.           Notices.  All notices, requests and demands pursuant hereto shall
be made in accordance with Section 13.2 of the Credit Agreement.  All
communications and notices hereunder to any Subsidiary Pledgor shall be given to
it in care of the Borrower at the Borrower’s address set forth in Section 13.2
of the Credit Agreement.

 

17.           Counterparts.  This Pledge Agreement may be executed by one or
more of the parties to this Pledge Agreement on any number of separate
counterparts (including by facsimile or other electronic transmission), and all
of said counterparts taken together shall be deemed to constitute one and the
same instrument.  A set of the copies of this Pledge Agreement signed by all the
parties shall be lodged with the Administrative Agent and the Borrower.

 

18.           Severability.  Any provision of this Pledge Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.  The parties hereto
shall endeavor in good-faith negotiations to replace the invalid, illegal or
unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

 

19.           Integration.  This Pledge Agreement represents the agreement of
each of the Pledgors with respect to the subject matter hereof and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any other Secured Party relative to the subject matter hereof not
expressly set forth or referred to herein or in the other Credit Documents.

 

20.           Amendments in Writing; No Waiver; Cumulative Remedies.

 

(a)           None of the terms or provisions of this Pledge Agreement may be
waived, amended, supplemented or otherwise modified except by a written
instrument executed by the affected Pledgor and the Administrative Agent in
accordance with Section 13.1 of the Credit Agreement.

 

(b)           Neither the Administrative Agent nor any Secured Party shall by
any act (except by a written instrument pursuant to Section 20(a) hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof.  No failure to exercise,
nor any delay in exercising, on the part of the Administrative Agent or any
other Secured Party, any right, power or privilege hereunder shall operate as a
waiver thereof.  No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.  A waiver by the Administrative Agent or
any other Secured Party of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Administrative
Agent or such other Secured Party would otherwise have on any future occasion.

 

12

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

 

(c)           The rights, remedies, powers and privileges herein provided are
cumulative, may be exercised singly or concurrently and are not exclusive of any
other rights or remedies provided by law.

 

21.           Section Headings.  The Section headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.

 

22.           Successors and Assigns.  This Pledge Agreement shall be binding
upon the successors and assigns of each Pledgor and shall inure to the benefit
of the Administrative Agent and the other Secured Parties and their respective
successors and assigns, except that no Pledgor may assign, transfer or delegate
any of its rights or obligations under this Pledge Agreement without the prior
written consent of the Administrative Agent.

 

23.          WAIVER OF JURY TRIAL.  EACH PLEDGOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS PLEDGE AGREEMENT, ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM
THEREIN.

 

24.           Submission to Jurisdiction; Waivers.  Each of the Pledgors hereby
irrevocably and unconditionally:

 

(a)           submits for itself and its property in any legal action or
proceeding relating to this Pledge Agreement, and the other Credit Documents to
which it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of the
State of New York, the courts of the United States of America for the Southern
District of New York and appellate courts from any thereof;

 

(b)           consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;

 

(c)           agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such Pledgor at its
address referred to in Section 16 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

 

(d)           agrees that nothing herein shall affect the right of the
Administrative Agent or any other Secured Party to effect service of process in
any other manner permitted by law or shall limit the right of the Administrative
Agent or any other Secured Party to sue in any other jurisdiction; and

 

(e)           waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section 24 any special, exemplary, punitive or consequential damages.

 

25.          GOVERNING LAW.  THIS PLEDGE AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE

 

13

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

 

GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF NEW YORK.

 

14

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

 

IN WITNESS WHEREOF, each of the undersigned has caused this Pledge Agreement to
be duly executed and delivered by its duly authorized officer as of the day and
year first above written.

 

 

CERAMTEC NORTH AMERICA CORPORATION,

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

 

 

 

 

CHEMETALL CORPORATION,

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

CHEMETALL FOOTE CORP.,

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

 

CHEMETALL US, INC.,

 

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

 

 

 

 

CHEMICAL SPECIALTIES, INC.,

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

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

 

ETEC-DURAWEAR, INC.,

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

 

 

 

 

ETEC TECHNICAL CERAMICS CORP.,

 

 

 

 

By

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

 

EXCALIBUR REALTY COMPANY,

 

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

 

FOOTE CHILE HOLDING COMPANY,

 

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

 

 

 

 

POOL SPA HOLDINGS, INC.,

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

 

 

 

 

ROCKWOOD PIGMENTS NA, INC.,

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

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

 

ROCKWOOD SPECIALTIES INC.,

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

 

 

 

 

ROCKWOOD SPECIALTIES GROUP, INC.,,

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

 

 

 

 

SOUTHERN CLAY PRODUCTS, INC.,

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

 

 

SOUTHERN COLOR N.A., INC.,

 

 

 

by

 

 

 

/s/ Michael W. Valente

 

 

Name: Michael W. Valente

 

 

Title: Assistant Secretary

 

 

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

 

CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH, as Administrative Agent

 

 

 

by

 

 

 

/s/ John Toronto

 

 

Name: John Toronto

 

 

Title: Managing Director

 

 

 

 

 

 

 

by

 

 

 

/s/ Vipul Dhadda

 

 

Name: Vipul Dhadda

 

 

Title: Associate

 

 

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

 

SCHEDULE I

TO THE PLEDGE AGREEMENT

 

SUBSIDIARY PLEDGORS

 

CeramTec North America Corporation

Chemetall Corporation

Chemetall Foote Corp.

Chemetall US, Inc.

Chemical Specialties, Inc.
ETEC-Durawear, Inc.
ETEC Technical Ceramics Corp.

Excalibur Realty Company.

Foote Chile Holding Company

Pool Spa Holdings, Inc.

Rockwood Pigments NA, Inc.
Rockwood Specialties Group,Inc.
Rockwood Specialties Inc..
Southern Clay Products, Inc.
Southern Color N.A., Inc.

 

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

 

 

 

SCHEDULE 2

TO THE PLEDGE AGREEMENT

 

Pledged Shares

 

Pledgor

 

Issuer

 

Class of
Stock

 

Stock
Certificate
No(s)

 

Number of
Shares

 

Percentage of
Issued and
Outstanding
Shares

Rockwood Specialties Group, Inc.

 

CeramTec North America Corporation

 

Common

 

8

 

100

 

100%

Rockwood Specialties Group, Inc.

 

Chemetall Corporation

 

Common

 

5

 

100

 

100%

Chemetall Corporation

 

Chemetall Foote Corp.

 

Common

 

4

 

10

 

100%

Chemetall Corporation

 

Chemetall US, Inc.

 

Common

 

6

 

100

 

100%

Rockwood Specialties Inc.

 

Chemical Specialties, Inc.

 

Common

 

R2

 

100

 

100%

ETEC Technical Ceramics Corporation

 

ETEC-Durawear, Inc.

 

Common

 

1

 

1,000

 

100%

CeramTec North America Corporation

 

ETEC Technical Ceramics Corporation

 

Common

 

3

 

50,000

 

100%

Rockwood Pigments NA, Inc.

 

Excalibur Realty Company

 

Common

 

1

 

100

 

100%

Chemetall Foote Corp.

 

Foote Chile Holding

 

Common

 

1

 

100

 

100%

Rockwood Specialties Inc.

 

Pool Spa Holdings, Inc.

 

Common

 

9

 

30,005

 

100%

Rockwood Specialties Inc.

 

Rockwood Pigments NA, Inc.

 

Common

 

A493

 

100

 

100%

Rockwood Specialties International, Inc.

 

Rockwood Specialties Group, Inc.

 

Common

 

3

 

1,910

 

100%

Rockwood Specialties Group, Inc.

 

Rockwood Specialties Inc.

 

Common

 

16

 

69,250

 

100%

Rockwood Specialties Inc.

 

Southern Clay Products, Inc.

 

Common

 

36

 

5,500

 

100%

Rockwood Pigments NA, Inc.

 

Southern Color N.A., Inc.

 

Common

 

1

 

100

 

100%

Rockwood Specialties Group, Inc.

 

Rockwood Specialties Limited

 

N/A

 

5

 

350,000

 

65%

Rockwood Specialties Group, Inc.

 

Rockwood Italia S.p.A.

 

N/A

 

N/A

 

N/A

 

65%

Rockwood Specialties Group, Inc.

 

Rockwood Industries Spain S.L.

 

N/A

 

N/A

 

N/A

 

65%

Rockwood Specialties Group, Inc.

 

Knight Lux1. S.a.r.l.

 

N/A

 

N/A

 

N/A

 

65%

Rockwood Specialties

 

Chemetall Canada Ltd.

 

N/A

 

N/A

 

N/A

 

65%

Group, Inc.

 

 

 

 

 

 

 

 

 

 

Chemetall US, Inc.

 

Chemetall Mexicana, S.A. de C.V.

 

N/A

 

N/A

 

N/A

 

65%

Chemetall Foote Corp.

 

Foote Minera e Inversiones Ltda.

 

N/A

 

N/A

 

N/A

 

65%

Chemetall Foote Corp.

 

Sociedad Chilena de Litio Ltda.

 

N/A

 

N/A

 

N/A

 

65%

 

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

 

SCHEDULE 1

TO THE PLEDGE AGREEMENT

 

Pledged Debt

 

Pledgor

 

Issuer

 

Initial Principal Amount

 

Maturity Date

 

Rockwood Specialties Group, Inc.

 

Couthern Clay Products, Inc.

 

$

29,000,000

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Knight Lux 1 S.á.r.l.

 

€

519,376,611

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Knight Lux 1 S.á.r.l.

 

€

5,450,000

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Knight Lux 1 S.á.r.l.

 

€

100,000,000

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Knight Lux 1 S.á.r.l.

 

$

13,055,972

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Knight Lux 1 S.á.r.l.

 

€

61,574,875

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Knight Lux 1 S.á.r.l.

 

€

200,000,000

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Chemetall Corporation

 

$

10,800,000

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Chemical Specialties, Inc.

 

$

33,500,000

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Chemetall Foote Corp.

 

$

2,000,000

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Rockwood Pigments NA. Inc.

 

$

49,900,000

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Chemetall US, Inc.

 

$

26,846,922

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Rockwood Specialties Group GmbH

 

$

47,169,675

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Sachtleben LLC

 

$

8,200,000

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Chemetall US, Inc.

 

$

70,001,520

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

CeramTec North America Corporation

 

$

5,609,350

 

Open (Inter-Company)

 

Chemetall Foote Corp.

 

Rockwood Specialties Group, Inc.

 

$

120,000,000

 

Open (Inter-Company)

 

Rockwood Specialties Group, Inc.

 

Rockwood Specialties, Inc.

 

$

180,000,000

 

Open (Inter-Company)

 

Chemetall Corporation

 

Chemetall US, Inc.

 

$

13,500,000

 

Open (Inter-Company)

 

Rockwood Pigments NA, Inc.

 

Southern Color N.A., Inc

 

$

2,400,000

 

Open (Inter-Company)

 

Rockwood Pigments NA. Inc.

 

Excalibur Realty Company

 

$

34,000,000

 

Open (Inter-Company)

 

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SUPPLEMENT NO. [  ] dated as of [            ], to the Pledge Agreement (the
“Pledge Agreement”) dated as of February 10, 2011, among ROCKWOOD SPECIALTIES
INTERNATIONAL, INC., a Delaware corporation (“Holdings”) ROCKWOOD SPECIALTIES
GROUP, INC., a Delaware corporation (the “Borrower”), the Subsidiaries of the
Borrower listed on Schedule 1 thereto (each a “Subsidiary Pledgor” and,
collectively, the “Subsidiary Pledgors”; the Borrower, Holdings and the
Subsidiary Pledgors are referred to collectively herein as the “Pledgors”) and
CREDIT SUISSE AG, CAYMAN ISLANDS BRANCH, as administrative agent and collateral
agent (in such capacity, the “Administrative Agent”) for the lenders (the
“Lenders”) from time to time parties to the Credit Agreement referred to below.

 

A.  Reference is made to (a) the Credit Agreement dated as of February 10, 2011
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Borrower, Holdings, the Lenders, the Administrative
Agent, KKR Capital Markets LLC, as syndication agent (in such capacity, the
“Syndication Agent”) for the Lenders, and Deutsche Bank Securities Inc., Morgan
Stanley Senior Funding, Inc. and UBS Securities LLC, as co-documentation agents
(in such capacities, the “Co-Documentation Agents”) for the Lenders and (b) the
Guarantee dated as of February 10, 2011 (as amended, supplemented or otherwise
modified from time to time, the “Guarantee”), among the Borrower, Holdings, the
Subsidiary Guarantors party thereto and the Administrative Agent.

 

B. Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Pledge Agreement.

 

C.  The Pledgors have entered into the Pledge Agreement in order to induce the
Administrative Agent, the Syndication Agent, the Co-Documentation Agents, the
Lenders and the Letter of Credit Issuer to enter into the Credit Agreement and
to induce the Lenders and the Letter of Credit Issuer to make their respective
Extensions of Credit to the Borrower under the Credit Agreement and to induce
one or more Lenders or Affiliates of Lenders to enter into Hedge Agreements with
the Borrower and/or the Restricted Subsidiaries.

 

D.  The undersigned [Pledgors] [Domestic Subsidiaries] (each an “Additional
Pledgor”) are (a) the legal and beneficial owners of the Equity Interests
described under Schedule 1 hereto and issued by the entities named therein (such
pledged Equity Interests, together with any Equity Interests obtained in the
future of the issuer of such Pledged Shares (the “After-acquired Additional
Pledged Shares”), referred to collectively herein as the “Additional Pledged
Shares”) and (b) the legal and beneficial owners of the Indebtedness (the
“Additional Pledged Debt”) described under Schedule 1 hereto.

 

E.  Section 9.12 of the Credit Agreement and Section 9(b) of the Pledge
Agreement provide that additional Subsidiaries may become Subsidiary Pledgors
under the Pledge Agreement by execution and delivery of an instrument in the
form of this Supplement.  Each undersigned Additional Pledgor is executing this
Supplement in accordance with the

 

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

 

requirements of Section 9(b) of the Pledge Agreement to pledge to the
Administrative Agent for the benefit of the Secured Parties the Additional
Pledged Shares and the Additional Pledged Debt [and to become a Subsidiary
Pledgor under the Pledge Agreement] in order to induce the Lenders and the
Letter of Credit Issuer to make additional Extensions of Credit and as
consideration for Extensions of Credit previously made.

 

Accordingly, the Administrative Agent and each undersigned Additional Pledgor
agree as follows:

 

SECTION 1.  In accordance with Section 9(b) of the Pledge Agreement, each
Additional Pledgor by its signature hereby transfers, assigns and pledges to the
Administrative Agent for the ratable benefit of the Secured Parties, and hereby
grants to the Administrative Agent for the ratable benefit of the Secured
Parties, a security interest in all of such Additional Pledgor’s right, title
and interest in the following, whether now owned or existing or hereafter
acquired or existing (collectively, the “Additional Collateral”):

 

(a)           the Additional Pledged Shares held by such Additional Pledgor and
the certificates representing such Additional Pledged Shares and any interest of
such Additional Pledgor in the entries on the books of the issuer of the
Additional Pledged Shares or any financial intermediary pertaining to the
Additional Pledged Shares and all dividends, cash, warrants, rights, instruments
and other property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Additional Pledged Shares, provided that the Additional Pledged Shares under
this Supplement shall not include more than 65 percent of the issued and
outstanding Equity Interests in any Foreign Subsidiary;

 

(b)           the Additional Pledged Debt and the instruments evidencing the
Additional Pledged Debt owed to such Additional Pledgor, and all interest, cash,
instruments and other property or proceeds from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such Additional Pledged Debt; and

 

(c)           to the extent not covered by clauses (a) and (b) above,
respectively, all proceeds of any or all of the foregoing Additional
Collateral.  For purposes of this Supplement, the term “proceeds” shall include
all “proceeds” as defined in the NY UCC and shall also include proceeds of any
indemnity or guarantee payable to any Additional Pledgor or the Administrative
Agent from time to time with respect to any of the Additional Collateral.

 

For purposes of the Pledge Agreement, (x) the Collateral shall be deemed to
include the Additional Collateral and (y) the After-acquired Pledged Shares
shall be deemed to include the Additional After-acquired Pledge Shares.

 

[SECTION 2.  Each Additional Pledgor by its signature below becomes a Pledgor
under the Pledge Agreement with the same force and effect as if originally named
therein as a Pledgor and each Additional Pledgor hereby agrees to all the terms
and provisions of the Pledge Agreement applicable to it as a Pledgor
thereunder.  Each reference to a “Subsidiary Pledgor” or

 

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a “Pledgor” in the Pledge Agreement shall be deemed to include each Additional
Pledgor.  The Pledge Agreement is hereby incorporated herein by reference.] (1)

 

SECTION [2][3].  Each Additional Pledgor represents and warrants as follows:

 

(a)           Schedule 1 hereto (i) correctly represents as of the date hereof
(A) the issuer, the certificate number, the Pledgor and registered owner, the
number and class and the percentage of the issued and outstanding Equity
Interests of such class of all Additional Pledged Shares and (B) the issuer, the
initial principal amount, the Pledgor and holder, date of and maturity date of
all Additional Pledged Debt and (ii) together with Schedule 2 to the Pledge
Agreement, the comparable schedules to each other Supplement to the Pledge
Agreement, includes all Equity Interests, debt securities and promissory notes
required to be pledged hereunder.  Except as set forth on Schedule 1, the
Pledged Shares represent all (or 65 percent in the case of pledges of Foreign
Subsidiaries) of the issued and outstanding Equity Interests of each class of
Equity Interests of the issuer on the date hereof.

 

(b)           Such Additional Pledgor is the legal and beneficial owner of the
Additional Collateral pledged or assigned by such Additional Pledgor hereunder
free and clear of any Lien, except for the Lien created by this Supplement to
the Pledge Agreement.

 

(c)           As of the date of this Supplement, the Additional Pledged Shares
pledged by such Additional Pledgor hereunder have been duly authorized and
validly issued and, in the case of Additional Pledged Shares issued by a
corporation, are fully paid and non-assessable.

 

(d)           The execution and delivery by such Additional Pledgor of this
Supplement and the pledge of the Additional Collateral pledged by such
Additional Pledgor hereunder pursuant hereto create a valid and perfected
first-priority security interest in the Additional Collateral, securing the
payment of the Obligations, in favor of the Administrative Agent for the ratable
benefit of the Secured Parties.

 

(e)           Such Additional Pledgor has full power, authority and legal right
to pledge all the Additional Collateral pledged by such Additional Pledgor
pursuant to this Supplement and this Supplement constitutes a legal, valid and
binding obligation of each Additional Pledgor, enforceable in accordance with
its terms, except as enforceability thereof may be limited by bankruptcy,
insolvency or other similar laws affecting creditors’ rights generally and
subject to general principles of equity.

 

SECTION [3][4].  This Supplement may be executed by one or more of the parties
to this Supplement on any number of separate counterparts (including by
facsimile or other electronic transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument.  A set of
the copies of this Supplement signed by all the parties shall be lodged with the
Administrative Agent and the Borrower.  This Supplement shall become effective
as to each Additional Pledgor when the Administrative Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of such Additional Pledgor and the Administrative Agent.

 

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(1)  Include for new pledgors only.

 

3

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SECTION [4][5].  Except as expressly supplemented hereby, the Pledge Agreement
shall remain in full force and effect.

 

SECTION [5][6].  THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION [6][7].  Any provision of this Supplement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof and in the Pledge Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.  The parties
hereto shall endeavor in good-faith negotiations to replace the invalid, illegal
or unenforceable provisions with valid provisions the economic effect of which
comes as close as possible to that of the invalid, illegal or unenforceable
provisions.

 

SECTION [7][8].  All notices, requests and demands pursuant hereto shall be made
in accordance with Section 16 of the Pledge Agreement.  All communications and
notices hereunder to each Additional Pledgor shall be given to it in care of the
Borrower at the Borrower’s address set forth in Section 13.2 of the Credit
Agreement.

 

SECTION [8][9].  Each Additional Pledgor agrees to reimburse the Administrative
Agent for its reasonable out-of-pocket expenses in connection with this
Supplement, including the reasonable fees, other charges and disbursements of
counsel for the Administrative Agent.

 

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IN WITNESS WHEREOF, each Additional Pledgor and the Administrative Agent have
duly executed this Supplement to the Pledge Agreement as of the day and year
first above written.

 

 

[NAME OF ADDITIONAL PLEDGOR],

 

 

 

By

 

 

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

CREDIT SUISSE AG,
CAYMAN ISLANDS BRANCH,
as Administrative Agent

 

 

 

 

By

 

 

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

 

By

 

 

 

 

 

 

Name:

 

 

Title:

 

 

5

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SCHEDULE 1 TO

SUPPLEMENT NO. [  ]

TO THE PLEDGE AGREEMENT

 

Pledged Shares

 

Pledgor

 

Issuer

 

Class of
Stock

 

Stock
Certificate
No(s)

 

Number of
Shares

 

Percentage of
Issued and
Outstanding
Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pledged Debt

 

Pledgor

 

Issuer

 

Initial Principal Amount

 

Maturity Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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