Exhibit 10.1

 

EXECUTION VERSION

 

 

AMENDED AND RESTATED CREDIT AGREEMENT

 

Dated as of June 15, 2009

 

among

 

ROCKWOOD SPECIALTIES GROUP, INC.,
as US Borrower

 

ROCKWOOD SPECIALTIES LIMITED,
as UK Borrower

 

ROCKWOOD SPECIALTIES INTERNATIONAL, INC.,
as a Guarantor

 

The Several Lenders
from Time to Time Parties Hereto

 

CREDIT SUISSE,
as Administrative Agent

 

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

 

CREDIT SUISSE,

UBS SECURITIES LLC

and

GOLDMAN SACHS CREDIT PARTNERS L.P.,

as Joint Lead Arrangers and Joint Bookrunners

 

 

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

 

TABLE OF CONTENTS

 

 

 

Page

SECTION 1.

Definitions

1

1.1.

Defined Terms

1

1.2.

Exchange Rates

61

1.3.

Redenomination of Certain Foreign Currencies

62

 

 

 

SECTION 2.

Amount and Terms of Credit

63

2.1.

Commitments

63

2.2.

Minimum Amount of Each Borrowing; Maximum Number of Borrowings

68

2.3.

Notice of Borrowing

68

2.4.

Disbursement of Funds

70

2.5.

Repayment of Loans; Evidence of Debt

71

2.6.

Conversions and Continuations

75

2.7.

Pro Rata Borrowings

77

2.8.

Interest

77

2.9.

Interest Periods

78

2.10.

Increased Costs, Illegality, etc.

79

2.11.

Compensation

82

2.12.

Change of Lending Office

82

2.13.

Notice of Certain Costs

83

2.14.

Incremental Facilities

83

2.15.

Incremental Refinancing Facilities

85

 

 

 

SECTION 3.

Letters of Credit

88

3.1.

Letters of Credit

88

3.2.

Letter of Credit Requests

89

3.3.

Letter of Credit Participations

90

3.4.

Agreement to Repay Letter of Credit Drawings

92

3.5.

Increased Costs

94

3.6.

Successor Letter of Credit Issuer

94

3.7.

Defaulting Lenders and Letters of Credit

95

 

 

 

SECTION 4.

Fees; Commitments

96

4.1.

Fees

96

4.2.

Voluntary Reduction of Revolving Credit Commitments and Extended Revolving
Credit Commitments

97

4.3.

Mandatory Termination of Commitments

98

 

 

 

SECTION 5.

Payments

99

5.1.

Voluntary Prepayments

99

5.2.

Mandatory Prepayments

100

5.3.

Method and Place of Payment

104

5.4.

Net Payments

105

5.5.

Computations of Interest and Fees

108

 

 

 

SECTION 6.

Conditions Precedent to Initial Borrowing

109

6.1.

Credit Documents

109

 

i

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

 

6.2.

Collateral

110

6.3.

Legal Opinions

112

6.4.

Receipt of Senior Subordinated Notes and Senior Subordinated Loan Agreement
Proceeds

113

6.5.

Equity Contributions

113

6.6.

Closing Certificates

113

6.7.

Corporate Proceedings of Each Credit Party

113

6.8.

Corporate Documents

114

6.9.

Fees

114

6.10.

Escrow Agreements; Acquisition

114

6.11.

Patriot Act

114

 

 

 

SECTION 7.

Conditions Precedent to All Credit Events; Certain Funds Period; Clean-Up
Period; Conditions Precedent to Restatement Date

115

7.1.

No Default; Representations and Warranties

115

7.2.

Notice of Borrowing; Letter of Credit Request

115

7.3.

Certain Funds Period

115

7.4.

Clean-Up Period

117

7.5.

UK Borrower

118

7.6.

Revolving Credit Loans and Extended Revolving Credit Loans

118

7.7.

Conditions Precedent to Restatement Date

118

 

 

 

SECTION 8.

Representations, Warranties and Agreements

118

8.1.

Corporate Status

118

8.2.

Corporate Power and Authority

119

8.3.

No Violation

119

8.4.

Litigation

119

8.5.

Margin Regulations

119

8.6.

Governmental Approvals

119

8.7.

Investment Company Act

120

8.8.

True and Complete Disclosure

120

8.9.

Financial Condition; Financial Statements

120

8.10.

Tax Returns and Payments

120

8.11.

Compliance with ERISA

121

8.12.

Subsidiaries

122

8.13.

Patents, etc.

122

8.14.

Environmental Laws

122

8.15.

Properties

122

 

 

 

SECTION 9.

Affirmative Covenants

123

9.1.

Information Covenants

123

9.2.

Books, Records and Inspections

126

9.3.

Maintenance of Insurance

126

9.4.

Payment of Taxes

127

9.5.

Consolidated Corporate Franchises

127

9.6.

Compliance with Statutes, Obligations, etc.

127

9.7.

ERISA

127

 

ii

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

 

9.8.

Good Repair

128

9.9.

Transactions with Affiliates

128

9.10.

End of Fiscal Years; Fiscal Quarters

128

9.11.

Additional Guarantors and Grantors

129

9.12.

Pledges of Additional Stock and Evidence of Indebtedness

130

9.13.

Use of Proceeds

132

9.14.

Changes in Business

133

9.15.

Further Assurances

133

9.16.

UK Borrower

134

9.17.

Sale and Purchase Agreement

134

9.18.

Post-Closing Obligations

134

 

 

 

SECTION 10.

Negative Covenants

136

10.1.

Limitation on Indebtedness

136

10.2.

Limitation on Liens

139

10.3.

Limitation on Fundamental Changes

141

10.4.

Limitation on Sale of Assets

144

10.5.

Limitation on Investments

145

10.6.

Limitation on Dividends

148

10.7.

Limitations on Debt Payments and Amendments

150

10.8.

Limitations on Sale Leasebacks

151

10.9.

Senior Secured Debt to Consolidated EBITDA Ratio

151

10.10.

Consolidated EBITDA to Consolidated Interest Expense Ratio

151

10.11.

Capital Expenditures

151

 

 

 

SECTION 11.

Events of Default

152

11.1.

Payments

152

11.2.

Representations, etc.

152

11.3.

Covenants

152

11.4.

Default Under Other Agreements

153

11.5.

Bankruptcy, etc.

153

11.6.

ERISA

154

11.7.

Guarantee

154

11.8.

Pledge Agreement

154

11.9.

Security Agreement

154

11.10.

Mortgages

154

11.11.

Foreign Guarantees

155

11.12.

Foreign Security Documents

155

11.13.

Subordination

155

11.14.

Judgments

155

11.15.

Change of Control

155

 

 

 

SECTION 12.

The Administrative Agent

156

12.1.

Appointment

156

12.2.

Delegation of Duties

156

12.3.

Exculpatory Provisions

156

12.4.

Reliance by Administrative Agent

157

 

iii

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

 

12.5.

Notice of Default

157

12.6.

Non-Reliance on Administrative Agent and Other Lenders

158

12.7.

Indemnification

158

12.8.

Administrative Agent in its Individual Capacity

159

12.9.

Successor Agent

159

12.10.

Withholding Tax

159

 

 

 

SECTION 13.

Collateral Allocation Mechanism

160

13.1.

Implementation of CAM

160

13.2.

Letters of Credit

161

13.3.

Net Payments Upon Implementation of CAM Exchange

162

 

 

 

SECTION 14.

Miscellaneous

163

14.1.

Amendments and Waivers

163

14.2.

Notices

165

14.3.

No Waiver; Cumulative Remedies

166

14.4.

Survival of Representations and Warranties

167

14.5.

Payment of Expenses and Taxes

167

14.6.

Successors and Assigns; Participations and Assignments

167

14.7.

Replacements of Lenders under Certain Circumstances

172

14.8.

Adjustments; Set-off

172

14.9.

Counterparts

173

14.10.

Severability

173

14.11.

Integration

173

14.12.

GOVERNING LAW

173

14.13.

Submission to Jurisdiction; Waivers

173

14.14.

Acknowledgments

174

14.15.

WAIVERS OF JURY TRIAL

174

14.16.

Confidentiality

174

14.17.

Judgment Currency

175

14.18.

Permitted Amendments

176

14.19.

Effect of the Amendment and Restatement

176

 

SCHEDULES

 

Schedule 1.1 (a)

Additional Cost

Schedule 1.1 (b)

Mortgaged Properties

Schedule 1.1 (c)

Commitments and Addresses of Lenders

Schedule 8.12

Subsidiaries

Schedule 10.1

Closing Date Indebtedness

Schedule 10.2

Closing Date Liens

Schedule 10.5

Closing Date Investments

 

EXHIBITS

 

Exhibit A-1

Form of Canadian Guarantee

 

iv

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

 

Exhibit A-2

Forms of Canadian Pledge Agreements

Exhibit A-3

Form of Canadian Security Agreement

Exhibit B

Forms of French Pledge Agreements

Exhibit C-1

Forms of German Abstract Acknowledgements of Indebtedness

Exhibit C-2

Form of German Assignment of Claims

Exhibit C-3

Form of German Guarantee

Exhibit C-4

Form of German Negative Pledge Agreement

Exhibit C-5

Form of German Pledge Agreement

Exhibit C-6

Forms of German Conditional Security Agreements

Exhibit C-7

German Pledge Agreement (Brockhues)

Exhibit D

Form of Guarantee

Exhibit E-1

Form of Italian Guarantee

Exhibit E-2

Forms of Italian Share Pledge Agreements

Exhibit E-3

Form of Italian Trademark Pledge Agreement

Exhibit F

Form of Mortgage (Real Property)

Exhibit G

Form of Perfection Certificate

Exhibit H

Form of Pledge Agreement

Exhibit I

Form of Security Agreement

Exhibit J-1

Form of Singapore Guarantee

Exhibit J-2

Forms of Singapore Pledge Agreements

Exhibit J-3

Form of Singapore Security Agreement

Exhibit K

Forms of Taiwan Pledge Agreements

Exhibit L-1

Form of UK Debenture

Exhibit L-2

Form of UK Guarantee

Exhibit L-3

Forms of UK Pledge Agreements

Exhibit M

Form of Luxembourg Pledge Agreements

Exhibit N

Form of Letter of Credit Request

Exhibit O-1

Form of Opinion of Simpson Thacher & Bartlett LLP

Exhibit O-2

Form of Opinion of Tom Riordan

Exhibit O-3

Form of Opinion of Latham & Watkins LLP

Exhibit O-4

Form of Opinion of Latham & Watkins LLP

Exhibit O-5

Form of Opinion of Borden Ladner Gervais

Exhibit O-6

Form of Opinion of Latham & Watkins LLP

Exhibit O-7

Form of Opinion of Lee and Li

Exhibit O-8

Form of Opinion of Norton Rose Milan

Exhibit O-9

Form of Opinion of Burness

Exhibit O-10

Form of Opinion of Arendt & Medernach

Exhibit O-11

Form of Opinion of Local Counsel

Exhibit P

Form of Closing Certificate

Exhibit Q

Form of Assignment and Acceptance

Exhibit R-1

Form of Promissory Note (Tranche A-1 Term Loans)

Exhibit R-2

Form of Promissory Note (Tranche A-2 Term Loans)

Exhibit R-3

Form of Promissory Note (Tranche E Term Loans)

Exhibit R-4

Form of Promissory Note (Tranche G Term Loans)

Exhibit R-5

Form of Promissory Note (Revolving Credit Loans)

Exhibit R-6

Form of Promissory Note (Tranche H Term Loans

 

v

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

 

Exhibit R-7

Form of Promissory Note (Tranche I Term Loans)

Exhibit R-8

Form of Promissory Note (Extended Revolving Credit Loans and Swingline Loans)

Exhibit S

Form of Confidentiality Agreement

Exhibit T

Form of Post-Closing Schedule

Exhibit U

Form of Joinder Agreement

 

vi

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

 

AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 15, 2009, among ROCKWOOD
SPECIALTIES GROUP, INC., a Delaware corporation (the “US Borrower”), ROCKWOOD
SPECIALTIES LIMITED, a company incorporated under the laws of England and Wales
(the “UK Borrower”), ROCKWOOD SPECIALTIES INTERNATIONAL, INC., a Delaware
corporation (“Holdings”), the lending institutions from time to time parties
hereto, CREDIT SUISSE, as Administrative Agent and as Collateral Agent (such
terms and each other capitalized term used but not defined in this introductory
statement having the meaning provided in Section 1), and UBS SECURITIES LLC and
GOLDMAN SACHS CREDIT PARTNERS L.P., as Co-Syndication Agents.

 

WHEREAS, on the Closing Date, the US Borrower, the UK Borrower, Holdings, the
Administrative Agent and certain of the Lenders entered into the Existing Credit
Agreement pursuant to which certain of the Lenders agreed to extend credit to
the Borrowers on a revolving credit basis and/or to make term loans to the US
Borrower and the UK Borrower as specified therein;

 

WHEREAS, the Borrowers desire that certain of the Lenders and the other parties
hereto agree to amend and restate the Existing Credit Agreement in its entirety
and to continue to extend credit under the Existing Credit Agreement as amended
and restated by this Agreement;

 

WHEREAS, the Required Lenders have, on or prior to the Restatement Date,
authorized and directed the Administrative Agent to execute this Agreement
pursuant to the Amendment Agreement;

 

WHEREAS, it is the intent of the parties hereto that this Agreement not
constitute a novation of the obligations and liabilities of the parties under
the Existing Credit Agreement and that this Agreement amend and restate in its
entirety the Existing Credit Agreement;

 

NOW, THEREFORE, the parties hereto agree to amend and restate the Existing
Credit Agreement as follows:

 

SECTION 1.           Definitions

 

1.1.          Defined Terms.  (a)   As used herein, the following terms shall
have the meanings specified in this Section 1.1 unless the context otherwise
requires (it being understood that defined terms in this Agreement shall include
in the singular number the plural and in the plural the singular):

 

“ABR” shall mean, for any day, a rate per annum (rounded upwards, if necessary,
to the next 1/16 of 1%) equal to the greater of (a) the Prime Rate in effect on
such day, (b) the Federal Funds Effective Rate in effect on such day plus ½ of
1% and (c) the Eurodollar Rate for a one-month Interest Period on such day (or
if such day is not a Business Day, the immediately preceding Business Day) plus
1%.  Any change in the ABR due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be

 

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

 

effective as of the opening of business on the effective day of such change in
the Prime Rate or the Federal Funds Effective Rate, respectively.

 

“ABR Loan” shall mean each Loan bearing interest at the rate provided in
Section 2.8(a) and, in any event, shall include all Swingline Loans.

 

“Accepting Lenders” shall have the meaning provided in Section 14.18.

 

“Acquired EBITDA” shall mean, with respect to any Acquired Entity or Business,
any Converted Restricted Subsidiary, any Sold Entity or Business or any
Converted Unrestricted Subsidiary (any of the foregoing, a “Pro Forma Entity”)
for any period, the sum of the amounts for such period of, without duplication,
(a) income from continuing operations before income taxes and extraordinary
items, (b) interest expense, (c) depreciation expense, (d) amortization expense,
including amortization of deferred financing fees, (e) non-recurring charges,
(f) non-cash charges, (g) losses on asset sales and (h) restructuring charges or
reserves less the sum of the amounts for such period of (i) non-recurring gains,
(j) non-cash gains, (k) gains on asset sales and (l) interest income, all as
determined on a consolidated basis for such Pro Forma Entity in accordance with
GAAP.

 

“Acquired Entity or Business” shall have the meaning provided in the definition
of the term “Consolidated EBITDA”.

 

“Acquisition” shall mean the acquisition by the US Borrower and/or certain of
its Affiliates pursuant to the Sale and Purchase Agreement of the outstanding
capital stock (and the economic ownership of certain assets and businesses
subject to a fiduciary trust agreement) of certain members of the Dynamit Nobel
group (collectively, the “Target”) from the New Sellers.

 

“Acquisition Agreements” shall mean the Purchase Agreement and the Sale and
Purchase Agreement.

 

“Acquisition Equity Contribution” shall mean, in connection with the
Acquisition, (a) the contribution by investment entities controlled by KKR and
DLJ Merchant Banking of approximately $488,000,000 (assuming an exchange rate of
$1.20 to €1.00 and subject to adjustment based on the Sale and Purchase
Agreement such that the amount of such contribution, together with the amount
described in Section 6.4, the aggregate amount of the Term Loans funded on the
Funding Date and the amount of any Revolving Credit Loans funded on the Funding
Date to finance the Acquisition (which shall be accompanied by a proportionate
increase in the amount of such equity contribution), shall be sufficient to pay
the purchase price under the Sale and Purchase Agreement) in cash made on the
Funding Date to Parent in the form of common equity, (b) the use by Parent of
the full amount of such cash consideration described in clause (a) to purchase
common equity of PIK Holdco and/or to make a cash equity contribution to the
common equity of PIK Holdco, (c) the use by PIK Holdco of the full amount of
such cash consideration described in clause (b) (less up to $21,000,000 used to
refinance a portion of the PIK Notes and pay related fees and prepayment
premiums) to purchase

 

2

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

 

common equity of Holdings and/or to make a cash equity contribution to the
common equity of Holdings and (d) the use by Holdings of the full amount of such
cash consideration described in clause (c) to purchase common equity of the US
Borrower and/or to make a cash equity contribution to the common equity of the
US Borrower.

 

“Acquisition Escrow Agreement” shall mean the Acquisition Escrow Agreement dated
as of the Funding Date among the New Sellers, the US Borrower, Knight Erste
Beteiligungs GmbH and The Bank of New York, as Financing Escrow Agent.

 

“Additional Cost” shall mean, in relation to any Foreign Currency Borrowing, the
cost as calculated by the Administrative Agent in accordance with
Schedule 1.1(a) imputed to each Lender participating in such Borrowing of
compliance with the mandatory liquid assets requirements of the Financial
Services Authority (or other applicable regulatory authority) during the
applicable Interest Period, expressed as a percentage.

 

“Adjusted Total Extended Revolving Credit Commitment” shall mean at any time the
Total Extended Revolving Credit Commitment less the aggregate Extended Revolving
Credit Commitments of all Defaulting Lenders.

 

“Adjusted Total Revolving Credit Commitment” shall mean at any time the Total
Revolving Credit Commitment less the aggregate Revolving Credit Commitments of
all Defaulting Lenders.

 

“Adjusted Total Term Loan Commitment” shall mean at any time the Total Term Loan
Commitment less the Term Loan Commitments of all Defaulting Lenders.

 

“Administrative Agent” shall mean CS, together with its Affiliates, as the
administrative agent for the Lenders under this Agreement and the other Credit
Documents.  With respect to Foreign Currency Borrowings, the Administrative
Agent may be an Affiliate of CS for purposes of administering such Borrowings,
and all references herein to the term “Administrative Agent” shall be deemed to
refer to the Administrative Agent in respect of the applicable Borrowing or to
all Administrative Agents, as the context requires.

 

“Administrative Agent’s Office” shall mean the office of the Administrative
Agent located at Eleven Madison Avenue, New York, NY 10010, or such other office
as the Administrative Agent may hereafter designate in writing as such to the
other parties hereto.

 

“Affiliate” shall mean, with respect to any Person, any other Person directly or
indirectly controlling, controlled by, or under direct or indirect common
control with such Person.  A Person shall be deemed to control (i) a corporation
if such Person possesses, directly or indirectly, the power (a) to vote 10% or
more of the securities having ordinary voting power for the election of
directors of such corporation or (b) to direct or cause the direction of the
management and policies of such corporation,

 

3

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

 

whether through the ownership of voting securities, by contract or otherwise and
(ii) any other Person if such first Person possesses, directly or indirectly,
the power to direct or cause the direction of the management and policies of
such specified Person, whether through the ownership of voting securities, by
contract or otherwise.

 

“Agents” shall mean the Administrative Agent, the Collateral Agent and the
Co-Syndication Agents.

 

“Aggregate Extended Revolving Credit Outstanding” shall have the meaning
provided in Section 5.2(b).

 

“Aggregate Revolving Credit Outstanding” shall have the meaning provided in
Section 5.2(b).

 

“Agreement” shall mean this Credit Agreement, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Amendment Agreement” shall mean the Amendment Agreement dated as of June 15,
2009 among Holdings, the Borrowers, the Administrative Agent and the Lenders
party thereto to which this Agreement shall be attached.

 

“Amortization Amount” shall have the meaning provided in Section 5.2(c).

 

“Applicable ABR Margin” shall mean at any date, with respect to each ABR Loan
that is (a) a Revolving Credit Loan, 1.75% per annum, (b) an Extended Revolving
Credit Loan or a Swingline Loan, 3.25% per annum, (c) a Tranche E Term Loan,
1.50% per annum and (d) a Tranche H Term Loan, 3.00% per annum.  Notwithstanding
the foregoing, in the event that the Tranche E Term Loans and/or the Tranche H
Term Loans shall at any time be rated at least Ba3 by Moody’s and at least BB-
by S&P, as applicable, the term “Applicable ABR Margin” shall mean, from and
after such date and until such time as such rating shall no longer be
applicable, with respect to each ABR Loan that is a Tranche E Term Loan and/or a
Tranche H Term Loan, as applicable, the applicable percentage per annum set
forth above minus 0.25%.

 

“Applicable Eurodollar Margin” shall mean at any date with respect to each
Eurodollar Loan that is (a) a Revolving Credit Loan, 3.00% per annum, (b) an
Extended Revolving Credit Loan, 4.50% per annum, (c) a Tranche A-1 Term Loan or
a Tranche A-2 Term Loan, 3.00% per annum, (d) a Tranche E Term Loan, 2.75%,
(e) a Tranche G Term Loan, 3.00% per annum, (f) a Tranche H Term Loan, 4.25% per
annum and (g) a Tranche I Term Loan, 4.50%.  Notwithstanding the foregoing, (a)
in the event that the Tranche E Term Loans and/or the Tranche H Term Loans shall
at any time be rated at least Ba3 by Moody’s and at least BB- by S&P, as
applicable, the term “Applicable Eurodollar Margin” shall mean, from and after
such date and until such time as such ratings shall no longer be applicable,
with respect to each Eurodollar Loan that is a Tranche E Term Loan and/or a
Tranche H Term Loan, as applicable, the applicable percentage per annum set
forth above minus 0.25% and (b) in the event that the Tranche G Term Loans
and/or the Tranche I Term Loans shall at any time be rated at least Ba3 by

 

4

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

 

Moody’s and at least BB- by S&P, as applicable, the term “Applicable Eurodollar
Margin” shall mean, from and after such date and until such time as such ratings
shall no longer be applicable, with respect to each Eurodollar Loan that is a
Tranche G Term Loan and/or a Tranche I Term Loan, as applicable, the applicable
percentage per annum set forth above minus 0.25%.

 

“Approved Fund” shall have the meaning provided in Section 14.6.

 

“Asset Sale Prepayment Event” shall mean any sale, transfer or other disposition
of any business units, assets or other properties of the US Borrower or any of
the Restricted Subsidiaries not in the ordinary course of business (including
any sale, transfer or other disposition of any capital stock of any Subsidiary
of the US Borrower owned by the US Borrower or a Restricted Subsidiary). 
Notwithstanding the foregoing, the term “Asset Sale Prepayment Event” shall not
include any transaction permitted by Section 10.4, other than transactions
permitted by Section 10.4(b) and the transactions permitted by Section 10.4(e)
to the extent any Net Cash Proceeds in respect of accounts receivable subject to
receivables financing facilities or factoring arrangements thereunder shall
exceed $200,000,000 at any one time.

 

“Assignment and Acceptance” shall mean an assignment and acceptance
substantially in the form of Exhibit Q.

 

“Authorized Officer” shall mean the Chairman of the Board, the President, the
Chief Financial Officer, the Treasurer or any other senior officer of the US
Borrower designated as such in writing to the Administrative Agent by the US
Borrower.

 

“Available Amount” shall mean, on any date (the “Reference Date”), an amount
equal at such time to (a) the sum of, without duplication, (i) for the purposes
of Section 10.5(j), Section 10.5(m), Section 10.11(b) and the first proviso to
Section 10.7 (to the extent, in the case of the first proviso to Section 10.7,
that the Consolidated Total Debt to Consolidated EBITDA Ratio at such time and
after giving effect to the prepayment, repurchase, redemption or defeasance to
be completed on the Reference Date is less than 2.25 to 1.00), $600,000,000;
provided, however, that any portion of such $600,000,000 in excess of
$90,000,000 can only be used to make investments permitted pursuant to Section
10.5(j) and Section 10.5(m) and in no case shall such portion in excess of
$90,000,000 be used, directly or indirectly, to declare or pay any Dividends or
make any payments pursuant to Section 10.7, (ii) the aggregate amount of Net
Cash Proceeds from Prepayment Events refused by Term Loan Lenders and retained
by the US Borrower or the UK Borrower, as the case may be, in accordance with
Section 5.2(c)(iv) after the Closing Date and on or prior to the Reference Date,
(iii) an amount equal to (x) the cumulative amount of Excess Cash Flow for all
fiscal years completed after the Closing Date and prior to the Reference Date
minus (y) the portion of such Excess Cash Flow that has been after the Closing
Date and on or prior to the Reference Date (or will be) applied to (A) the
prepayment of Loans in accordance with Section 5.2(a)(ii), (B) the payment and
or distribution of dividends by the US Borrower to Holdings to pay cash interest
of the 2011 Senior Notes in accordance with Section 10.6(f) or (C) the
redemption, repurchase or retirement of the 2011 Senior Notes, the PIK Notes or
the PIK

 

5

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

 

Refinancing Preferred Stock in accordance with Section 10.6(g), (iv) the amount
of any capital contributions made in cash to the US Borrower from and including
the Business Day immediately following the Closing Date through and including
the Reference Date, including contributions with the proceeds from any issuance
of equity securities by any of the Borrower, the Parent Companies or Holdings,
(v) the aggregate amount of all cash dividends and other cash distributions
received by the US Borrower or any Restricted Subsidiary so long as such
dividends or distributions are then immediately distributed to the US Borrower
or a Guarantor from any Minority Investments or Unrestricted Subsidiaries after
the Closing Date and on or prior to the Reference Date (other than the portion
of any such dividends and other distributions that is used by the US Borrower or
any Guarantor to pay taxes), (vi) the aggregate amount of all cash repayments of
principal received by the US Borrower or any Guarantor from any Minority
Investments or Unrestricted Subsidiaries after the Closing Date and on or prior
to the Reference Date in respect of loans made by the US Borrower or any
Guarantor to such Minority Investments or Unrestricted Subsidiaries and
(vii) the aggregate amount of all net cash proceeds received by the US Borrower
or any Restricted Subsidiary so long as such proceeds are then immediately
distributed to the US Borrower or a Guarantor in connection with the sale,
transfer or other disposition of its ownership interest in any Minority
Investment or Unrestricted Subsidiary after the Closing Date and on or prior to
the Reference Date minus (b) the sum at such time of (i) the aggregate amount of
any investments (including loans) made by the US Borrower or any Restricted
Subsidiary pursuant to the proviso to Section 10.5(j) or pursuant to
Section 10.5(m) after the Restatement Date and on or prior to the Reference
Date, (ii) the aggregate amount of Capital Expenditures made by the US Borrower
or any of the Restricted Subsidiaries after the Restatement Date and on or prior
to the Reference Date pursuant to Section 10.11(b) and (iii) the aggregate price
paid by the US Borrower in connection with any prepayment, repurchase or
redemption of the Subordinated Notes (other than any such prepayment made
pursuant to sub-clause (z) of the proviso of Section 10.7(a)) or the Senior
Subordinated Notes pursuant to Section 10.7(a) after the Restatement Date and on
or prior to the Reference Date.

 

“Available Commitment” shall mean an amount equal to the excess, if any, of
(a) the Dollar Equivalent of the amount of the Total Revolving Credit Commitment
over (b) the sum of (i) the aggregate principal amount of all Revolving Credit
Loans then outstanding and (ii) the aggregate applicable Letter of Credit
Outstanding at such time.

 

“Available Excess Cash Flow” shall mean at any time (the “Reference Date”)
(x) the cumulative amount of Excess Cash Flow for all fiscal years completed
after the Closing Date and prior to the Reference Date minus (y) the portion at
such time of such Excess Cash Flow that has been after the Closing Date and on
or prior to the Reference Date (A) applied to (i) the prepayment of Loans in
accordance with Section 5.2(a)(ii), (ii) the payment and or distribution of
dividends by the US Borrower to Holdings to pay cash interest of the 2011 Senior
Notes in accordance with Section 10.6(f) or (iii) the redemption, repurchase or
retirement of the 2011 Senior Notes, the PIK Notes or the PIK Refinancing
Preferred Stock in accordance with Section 10.6(g) or (B) utilized by the US
Borrower or any Restricted Subsidiary (i) to make any investments (including

 

6

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

 

loans) pursuant to Section 10.5(j) or Section 10.5(m) after the Closing Date and
on or prior to the Reference Date, (ii) to make Capital Expenditures after the
Closing Date and on or prior to the Reference Date pursuant to Section 10.11(b)
or (iii) in connection with any prepayment, repurchase or redemption of the
Subordinated Notes (other than any such prepayment made pursuant to sub-clause
(z) of the proviso of Section 10.7(a))or the Senior Subordinated Notes pursuant
to Section 10.7(a) after the Closing Date and on or prior to the Reference Date.

 

“Available Extended Commitment” shall mean an amount equal to the excess, if
any, of (a) the Dollar Equivalent of the amount of the Total Extended Revolving
Credit Commitment over (b) the sum of (i) the aggregate principal amount of all
Extended Revolving Credit Loans (but not Swingline Loans) then outstanding and
(ii) the aggregate applicable Letter of Credit Outstanding at such time.

 

“Available Tranche A Commitment” shall mean an amount equal to the excess, if
any, of the Tranche A Term Loan Commitment over the aggregate principal amount
of all Tranche A-1 Term Loans and Tranche A-2 Term Loans then outstanding.

 

“Bankruptcy Code” shall have the meaning provided in Section 11.5.

 

“Board” shall mean the Board of Governors of the Federal Reserve System of the
United States (or any successor).

 

“Borrowers” shall mean the US Borrower and the UK Borrower.

 

“Borrowing” shall mean and include (a) the incurrence of Swingline Loans from
the Swingline Lender on a given date, (b) the incurrence of one Type of Term
Loan on the Funding Date (or resulting from conversions on a given date after
the Funding Date) having, in the case of Eurodollar Term Loans, the same
Interest Period (provided, that ABR Loans incurred pursuant to Section 2.10(b)
shall be considered part of any related Borrowing of Eurodollar Term Loans),
(c) the incurrence of one Type of Revolving Credit Loan on a given date (or
resulting from conversions on a given date) having, in the case of Eurodollar
Revolving Credit Loans, the same Interest Period (provided, that ABR Loans
incurred pursuant to Section 2.10(b) shall be considered part of any related
Borrowing of Eurodollar Revolving Credit Loans) and (d) the incurrence of one
Type of Extended Revolving Credit Loan on a given date (or resulting from
conversions on a given date) having, in the case of Eurodollar Extended
Revolving Credit Loans, the same Interest Period (provided, that ABR Loans
incurred pursuant to Section 2.10(b) shall be considered part of any related
Borrowing of Eurodollar Extended Revolving Credit Loans).

 

“Brockhues” shall mean Brockhues GmbH & Co. KG.

 

“Business Day” shall mean (a) for all purposes other than as covered by clause
(b) below, any day excluding Saturday, Sunday and any day that shall be in The
City of New York or London a legal holiday or a day on which banking
institutions are authorized by law or other governmental actions to close and
(b) with respect to all notices and determinations in connection with, and
payments of principal and interest on,

 

7

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

 

Eurodollar Loans denominated in Euro, any day that is a Business Day described
in clause (a) and which is also a day on which the TARGET payment system is open
for the settlement of payment in Euro; provided, that when used in connection
with any Eurodollar Loan (including with respect to all notices and
determinations in connection therewith and any payments of principal, interest
or other amounts thereon), the term “Business Day” shall also exclude any day on
which banks are not open for dealing in the London interbank market.

 

“Calculation Date” means (a) each date on which a Borrowing of Foreign Currency
Revolving Credit Loans or a Borrowing of Foreign Currency Extended Revolving
Credit Loans is requested, (b) each date on which a Foreign Currency Letter of
Credit is issued, (c) if requested by the Administrative Agent, the last
Business Day of a calendar month, (d) if at any time the Aggregate Revolving
Credit Outstandings exceed 75% of the Total Revolving Credit Commitment or the
Aggregate Extended Revolving Credit Outstandings exceed 75% of the Total
Extended Revolving Credit Commitment, the last Business Day of each week and
(e) if a Default or an Event of Default shall have occurred and be continuing,
such additional dates as the Administrative Agent or the Required Lenders shall
specify.

 

“CAM” shall mean the mechanism for the allocation and exchange of interests in
the Credit Facilities and collections thereunder established under Section 13.

 

“CAM Dollar Lender” shall mean any Lender that has made or holds no Tranche A-1
Term Loans, Tranche A-2 Term Loans, Tranche G Term Loans or Tranche I Term Loans
and has no Revolving Credit Commitment or Extended Revolving Credit Commitment.

 

“CAM Exchange” shall mean the exchange of the Lender’s interests provided for in
Section 13.1.

 

“CAM Exchange Date” shall mean the date on which (a) any event referred to in
Section 11.5 shall occur in respect of Holdings, the US Borrower, the UK
Borrower or any Specified Subsidiary or (b) an acceleration of the maturity of
the Loans pursuant to Section 11 shall occur.

 

“CAM Percentage” shall mean, as to each Lender, a fraction, expressed as a
decimal, of which (a) the numerator shall be the aggregate Dollar Equivalent
(determined on the basis of Exchange Rates prevailing on the CAM Exchange Date)
of the Specified Obligations owed to such Lender and such Lender’s participation
in the aggregate Letter of Credit Outstanding immediately prior to the CAM
Exchange Date and (b) the denominator shall be the aggregate Dollar Equivalent
(as so determined) of the Specified Obligations owed to all the Lenders and the
aggregate Letter of Credit Outstanding immediately prior to such CAM Exchange
Date.  For purposes of computing each Lender’s CAM Percentage, all Specified
Obligations and Letter of Credit Exposures which are denominated in Foreign
Currencies shall be translated into Dollars at the Exchange Rate in effect on
the CAM Exchange Date.

 

8

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

 

“Canadian Guarantee” shall mean the Canadian Guarantee Agreement, made by each
of the Canadian Guarantors in favor of the Administrative Agent for the benefit
of the Lenders to the UK Borrower and the other Secured Parties named therein,
substantially in the form of Exhibit A-1, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Canadian Guarantors” shall mean (a) each Subsidiary of the US Borrower (other
than an Unrestricted Subsidiary) on the Funding Date that is a member of the
Rockwood Group and that is incorporated under the laws of Canada or any province
or territory thereof and is a party to the Canadian Guarantee and (b) each
Subsidiary of the US Borrower that is incorporated under the laws of Canada or
any province or territory thereof and that becomes a party to the Canadian
Guarantee after the Funding Date pursuant to Section 9.11.

 

“Canadian Pledge Agreements” shall mean (a) the Canadian Pledge Agreement,
entered into by the US Borrower and the Administrative Agent for the benefit of
the Lenders to the UK Borrower and the other Secured Parties named therein and
(b) the Canadian Pledge Agreement entered into by the US Borrower and the
Administrative Agent for the benefit of the Lenders to the US Borrower and the
other Secured Parties named therein in each case, substantially in the form of
Exhibit A-2(a) or (b), as applicable, as the same may be amended, supplemented
or otherwise modified from time to time.

 

“Canadian Security Agreement” shall mean the Canadian Security Agreement entered
into by the Canadian Guarantors, certain other Restricted Subsidiaries and the
Administrative Agent for the benefit of the Lenders to the UK Borrower and the
other Secured Parties named therein, substantially in the form of Exhibit A-3,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“Capital Expenditures” shall mean, for any period, the aggregate of all
expenditures (whether paid in cash or accrued as liabilities and including in
all events all amounts expended or capitalized under Capital Leases, but
excluding any amount representing capitalized interest) by the US Borrower and
the Restricted Subsidiaries during such period that, in conformity with GAAP,
are or are required to be included as additions during such period to property,
plant or equipment reflected in the consolidated balance sheet of the US
Borrower and its Subsidiaries; provided, that the term “Capital Expenditures”
shall not include (a) expenditures made in connection with the replacement,
substitution or restoration of assets (i) to the extent financed from insurance
proceeds paid on account of the loss of or damage to the assets being replaced
or restored or (ii) with awards of compensation arising from the taking by
eminent domain or condemnation of the assets being replaced, (b) the purchase
price of equipment that is purchased simultaneously with the trade-in of
existing equipment to the extent that the gross amount of such purchase price is
reduced by the credit granted by the seller of such equipment for the equipment
being traded in at such time, (c) the purchase of plant, property or equipment
made within one year of the sale of any asset to the extent purchased with the
proceeds of such sale or (d) expenditures that constitute any part of
Consolidated Lease Expense.

 

9

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

 

“Capital Lease” shall mean, as applied to any Person, any lease of any property
(whether real, personal or mixed) by that Person as lessee that, in conformity
with GAAP, is, or is required to be, accounted for as a capital lease on the
balance sheet of that Person.

 

“Capitalized Lease Obligations” shall mean, as applied to any Person, all
obligations under Capital Leases of such Person or any of its Subsidiaries, in
each case taken at the amount thereof accounted for as liabilities in accordance
with GAAP.

 

“Change of Control” shall mean and be deemed to have occurred if (a)(i) KKR, DLJ
Merchant Banking, their respective Affiliates and the Management Group shall at
any time not own, in the aggregate, directly or indirectly, beneficially and of
record, at least 35% of the outstanding Voting Stock of Parent (other than as
the result of one or more widely distributed offerings of Parent Common Stock,
in each case whether by Parent or by KKR, DLJ Merchant Banking, their respective
Affiliates or the Management Group) and/or (ii) any person, entity or “group”
(within the meaning of Section 13(d) or 14(d) of the Securities Exchange Act of
1934, as amended) shall at any time have acquired direct or indirect beneficial
ownership of a percentage of the outstanding Voting Stock of Parent that exceeds
the percentage of such Voting Stock then beneficially owned, in the aggregate,
by KKR, DLJ Merchant Banking, their respective Affiliates and the Management
Group, unless, in the case of either clause (i) or (ii) above, KKR, DLJ Merchant
Banking, their respective Affiliates and the Management Group have, at such
time, the right or the ability by voting power, contract or otherwise to elect
or designate for election a majority of the Board of Directors of Parent; and/or
(b) at any time Continuing Directors shall not constitute a majority of the
Board of Directors of Parent; and/or (c) any Person, other than any of the
Parent Companies and any Person who receives capital stock in PIK Holdco in
connection with an investment made pursuant to Section 10.5(g), acquires
ownership, directly or indirectly, beneficially or of record, of any equity
interest (other than Qualified Preferred Stock or PIK Refinancing Preferred
Stock) of any nature in PIK Holdco; and/or (d) any Person, other than any of the
Parent Companies, acquires ownership, directly or indirectly, beneficially or of
record, of any equity interest (other than PIK Refinancing Preferred Stock) of
any nature in Holdings; and/or (e) any Person, other than Holdings (directly) or
any of the Parent Companies (indirectly), acquires ownership, directly or
indirectly, beneficially or of record, of any equity interest of any nature in
the US Borrower; and/or (f) a Change of Control (as defined in any of the
Subordinated Note Indenture, the 2011 Senior Notes Indenture, the Senior
Subordinated Notes Indenture, the Senior Subordinated Loan Agreement or any PIK
Notes Documents) shall have occurred.

 

“Class”, when used in reference to any Loan or Borrowing, refers to whether such
Loan, or the Loans comprising such Borrowing, are Revolving Credit Loans,
Extended Revolving Credit Loans, New Revolving Loans, New Extended Revolving
Loans, Tranche A-1 Term Loans, Tranche A-2 Term Loans, Tranche E Term Loans, New
Tranche H Term Loans (or each Series), New Tranche I Term Loans (or each
Series), Tranche G Term Loans, Tranche H Term Loans, Tranche I Term Loans,
Incremental Refinancing Term Loans (or each Series) or Swingline Loans and, when
used in reference to any Commitment, refers to whether such Commitment is a
Revolving

 

10

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

 

Credit Commitment, Extended Revolving Credit Commitment, New Revolving Credit
Commitment, New Extended Revolving Credit Commitment, Tranche A Term Loan
Commitment, Tranche E Term Loan Commitment, New Tranche H Term Loan Commitment,
New Tranche I Term Loan Commitment, Tranche G Term Loan Commitment, Tranche H
Term Loan Commitment, Tranche I Term Loan Commitment or Incremental Refinancing
Term Loan Commitment.

 

“Clean-Up Period” shall have the meaning provided in Section 7.4.

 

“Closing Date” shall mean July 31, 2004.

 

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time, and the regulations promulgated and rulings issued thereunder.  Section
references to the Code are to the Code, as in effect at the Funding Date, and
any subsequent provisions of the Code, amendatory thereof, supplemental thereto
or substituted therefor.

 

“Collateral Agent” shall mean CS, together with its Affiliates, as the
collateral agent for the Lenders and the other Secured Parties under this
Agreement and the other Credit Documents.

 

“Collateral” shall have the meaning provided in the Pledge Agreement, the
Security Agreement, any Foreign Security Document or any Mortgage, as
applicable.

 

“Collateral Escrow Agent” shall mean JPMorgan Chase Bank, as the collateral
agent for the Administrative Agent under the Financing Escrow Agreement.

 

“Commitment Fee Rate” shall mean, with respect to the Available Commitment on
any day, the rate per annum set forth below opposite the Status in effect on
such day:

 

Status

 

Commitment
Fee Rate

 

 

 

 

 

Level I Status, Level II Status and Level III Status

 

0.50

%

 

 

 

 

Level IV Status

 

0.375

%

 

Notwithstanding the foregoing, the term “Commitment Fee Rate” shall mean 0.50%,
during the period from and including the Funding Date to but excluding the
Initial Financial Statement Delivery Date.

 

“Commitments” shall mean, with respect to each Lender, such Lender’s Term Loan
Commitment, Revolving Credit Commitment, Extended Revolving Credit Commitments,
New Tranche H Term Loan Commitment (if applicable), New Tranche I Term Loan
Commitment (if applicable), New Revolving Credit Commitment (if

 

11

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

 

applicable), New Extended Revolving Credit Commitment (if applicable) or
Incremental Refinancing Term Loan Commitment (if applicable).

 

 “Confidential Information” shall have the meaning provided in Section 14.16.

 

“Confidential Information Memorandum” shall mean the Confidential Information
Memorandum of the US Borrower dated June 2004, delivered to the Lenders in
connection with this Agreement.

 

“Consolidated Earnings” shall mean, for any period, “income (loss) before the
deduction of income taxes” of the US Borrower and the Restricted Subsidiaries,
excluding extraordinary items, for such period, determined in a manner
consistent with the manner in which such amount was determined in accordance
with the audited financial statements most recently required to be delivered
pursuant to Section 9.1(a).

 

“Consolidated EBITDA” shall mean, for any period, the sum, without duplication,
of the amounts for such period of (a) Consolidated Earnings, (b) Consolidated
Interest Expense, (c) depreciation expense, (d) amortization expense, including
amortization of deferred financing fees, (e) extraordinary losses and
non-recurring charges, (f) non-cash charges, (g) losses on asset sales, (h)
restructuring charges or reserves (including severance, relocation costs and
one-time compensation charges and costs relating to the closures of facilities),
(i) Transaction Expenses to the extent deducted in determining Consolidated
Earnings, (j) any expenses or charges incurred in connection with any issuance
of debt or equity securities, (k) any fees and expenses related to Permitted
Acquisitions, (l) any deduction for minority interest expense and (m) items
arising in connection with litigation related to the timber business of the US
Borrower and its Subsidiaries (not exceeding $4,000,000 in the aggregate for any
such period and $9,000,000 in the aggregate during the term of this Agreement),
less the sum of the amounts for such period of (n) extraordinary gains and
non-recurring gains, (o) non-cash gains and (p) gains on asset sales, all as
determined on a consolidated basis for the US Borrower and the Restricted
Subsidiaries in accordance with GAAP; provided, that (i) except as provided in
clause (iv) below, there shall be excluded from Consolidated Earnings for any
period the income from continuing operations before income taxes and
extraordinary items of all Unrestricted Subsidiaries for such period to the
extent otherwise included in Consolidated Earnings, except to the extent
actually received in cash by the US Borrower or its Restricted Subsidiaries
during such period through dividends or other distributions (it being understood
that, to the extent that such income from continuing operations before income
taxes and extraordinary items of any such Unrestricted Subsidiaries is excluded,
the amounts set forth in clauses (b) through (p) above with respect to any such
Unrestricted Subsidiaries shall not be included for purposes of determining
Consolidated EBITDA for such period), (ii) there shall be excluded from
Consolidated Earnings for any period the income from continuing operations
before income taxes and extraordinary items of each Foreign Joint Venture for
such period corresponding to the percentage of capital stock or other equity
interests in such Foreign Joint Venture not owned by the US Borrower or its
Restricted Subsidiaries (other than Foreign Joint Ventures) (it being understood
that, to the extent that such

 

12

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

 

income from continuing operations before income taxes and extraordinary items of
such Foreign Joint Venture is excluded, the ratable amounts allocable to such
non-owned capital stock or equity interests of the amounts set forth in clauses
(b) through (p) above with respect to such Foreign Joint Venture shall not be
included for purposes of determining Consolidated EBITDA for such period),
(iii) there shall be excluded in determining Consolidated EBITDA non-operating
currency transaction gains and losses and (iv)(x) there shall be included in
determining Consolidated EBITDA for any period (A) the Acquired EBITDA of any
Person, property, business or asset (other than an Unrestricted Subsidiary)
acquired to the extent not subsequently sold, transferred or otherwise disposed
of (but not including the Acquired EBITDA of any related Person, property,
business or assets to the extent not so acquired) by the US Borrower or any
Restricted Subsidiary during such period (each such Person, property, business
or asset acquired and not subsequently so disposed of, an “Acquired Entity or
Business”), and the Acquired EBITDA of any Unrestricted Subsidiary that is
converted into a Restricted Subsidiary during such period (each, a “Converted
Restricted Subsidiary”), in each case based on the actual Acquired EBITDA of
such Acquired Entity or Business or Converted Restricted Subsidiary for such
period (including the portion thereof occurring prior to such acquisition or
conversion) and (B) for the purposes of the definition of the term “Permitted
Acquisition” and Sections 10.3, 10.9 and 10.10, an adjustment in respect of each
Acquired Entity or Business equal to the amount of the Pro Forma Adjustment with
respect to such Acquired Entity or Business for such period (including the
portion thereof occurring prior to such acquisition or conversion) as specified
in the Pro Forma Adjustment Certificate delivered to the Lenders and the
Administrative Agent and (y) for purposes of determining the Consolidated Total
Debt to Consolidated EBITDA Ratio only, there shall be excluded in determining
Consolidated EBITDA for any period the Acquired EBITDA of any Person, property,
business or asset (other than an Unrestricted Subsidiary) sold, transferred or
otherwise disposed of by the US Borrower or any Restricted Subsidiary during
such period (each such Person, property, business or asset so sold or disposed
of, a “Sold Entity or Business”), and the Acquired EBITDA of any Restricted
Subsidiary that is converted into an Unrestricted Subsidiary during such period
(each, a “Converted Unrestricted Subsidiary”), in each case based on the actual
Acquired EBITDA of such Sold Entity or Business or Converted Unrestricted
Subsidiary for such period (including the portion thereof occurring prior to
such sale, transfer, disposition or conversion).

 

“Consolidated EBITDA to Consolidated Interest Expense Ratio” shall mean, as of
any date of determination, the ratio of (a) Consolidated EBITDA for the relevant
Test Period to (b) Consolidated Interest Expense for such Test Period.

 

“Consolidated Interest Expense” shall mean, for any period, the sum of (x) cash
interest expense (including that attributable to Capital Leases in accordance
with GAAP), net of cash interest income, of the US Borrower and the Restricted
Subsidiaries on a consolidated basis with respect to all outstanding
Indebtedness of the US Borrower and the Restricted Subsidiaries, including all
commissions, discounts and other fees and charges owed with respect to letters
of credit and bankers’ acceptance financing and net costs under Hedge Agreements
(other than currency swap agreements, currency future or option contracts and
other similar agreements), but excluding, however, amortization of

 

13

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

 

deferred financing costs and any other amounts of non-cash interest, all as
calculated on a consolidated basis in accordance with GAAP plus (y) the
aggregate amount of all cash Dividends paid by the US Borrower to Holdings for
such period pursuant to Section 10.6 to the extent such Dividends were used,
either directly or indirectly, to make cash interest payments on any outstanding
2011 Senior Notes; provided, that (a) except as provided in clause (b) below,
there shall be excluded from Consolidated Interest Expense for any period the
cash interest expense (or income) of all Unrestricted Subsidiaries for such
period to the extent otherwise included in Consolidated Interest Expense and
(b) for purposes of the definition of the term “Permitted Acquisition” and
Sections 10.3, 10.9 and 10.10, there shall be included in determining
Consolidated Interest Expense for any period the cash interest expense (or
income) of any Acquired Entity or Business acquired during such period and of
any Converted Restricted Subsidiary converted during such period, in each case
based on the cash interest expense (or income) of such Acquired Entity or
Business or Converted Restricted Subsidiary for such period (including the
portion thereof occurring prior to such acquisition or conversion) assuming any
Indebtedness incurred or repaid in connection with any such acquisition or
conversion had been incurred or prepaid on the first day of such period.

 

“Consolidated Lease Expense” shall mean, for any period, all rental expenses of
the US Borrower and the Restricted Subsidiaries during such period under
operating leases for real or personal property (including in connection with
Permitted Sale Leasebacks), excluding real estate taxes, insurance costs and
common area maintenance charges and net of sublease income, other than
(a) obligations under vehicle leases entered into in the ordinary course of
business, (b) all such rental expenses associated with assets acquired pursuant
to a Permitted Acquisition to the extent that such rental expenses relate to
operating leases in effect at the time of (and immediately prior to) such
acquisition and (c) Capitalized Lease Obligations, all as determined on a
consolidated basis in accordance with GAAP, provided that there shall be
excluded from Consolidated Lease Expense for any period the rental expenses of
all Unrestricted Subsidiaries for such period to the extent otherwise included
in Consolidated Lease Expense.

 

“Consolidated Net Income” shall mean, for any period, the consolidated net
income (or loss) after the deduction of income taxes of the US Borrower and the
Restricted Subsidiaries, determined on a consolidated basis in accordance with
GAAP.

 

“Consolidated Net Sales” shall mean, for any fiscal year or any Test Period, as
the case may be, “net sales” of the US Borrower and the Restricted Subsidiaries
as set forth in the Section 9.1 Financials with respect to such Test Period or
fiscal year, as applicable.

 

“Consolidated Total Assets” shall mean, as of any date of determination, the
total assets as set forth on the most recent consolidated balance sheet of the
US Borrower delivered pursuant to Section 9.1(a) or (b), as applicable, and the
Restricted Subsidiaries prepared in accordance with GAAP.

 

14

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

 

“Consolidated Total Debt” shall mean, as of any date of determination, (a) the
sum of (i) all Indebtedness of the US Borrower and the Restricted Subsidiaries
for borrowed money outstanding on such date and (ii) all Capitalized Lease
Obligations of the US Borrower and the Restricted Subsidiaries outstanding on
such date, all calculated on a consolidated basis in accordance with GAAP minus
(b) the aggregate amount of cash included in the cash accounts listed on the
consolidated balance sheet of the US Borrower and the Restricted Subsidiaries as
at such date (other than any such cash attributable to transactions consummated
pursuant to Section 10.4(e) in respect of accounts receivable (or any portion
thereof) that have not been collected during the Test Period that includes such
date of determination) up to a maximum amount of $100,000,000 to the extent the
use thereof for application to payment of Indebtedness is not prohibited by law
or any contract to which the US Borrower or any of the Restricted Subsidiaries
is a party.

 

“Consolidated Total Debt to Consolidated EBITDA Ratio” shall mean, as of any
date of determination, the ratio of (a) Consolidated Total Debt as of the last
day of the relevant Test Period to (b) Consolidated EBITDA for such Test Period.

 

“Consolidated Working Capital” shall mean, at any date, the excess of (a) the
sum of all amounts (other than cash, cash equivalents and bank overdrafts) that
would, in conformity with GAAP, be set forth opposite the caption “total current
assets” (or any like caption) on a consolidated balance sheet of Holdings, the
US Borrower and the Restricted Subsidiaries at such date over (b) the sum of all
amounts that would, in conformity with GAAP, be set forth opposite the caption
“total current liabilities” (or any like caption) on a consolidated balance
sheet of Holdings, the US Borrower and the Restricted Subsidiaries on such date,
but excluding (i) the current portion of any Funded Debt, (ii) without
duplication of clause (i) above, all Indebtedness consisting of Loans and Letter
of Credit Exposure to the extent otherwise included therein and (iii) the
current portion of deferred income taxes.

 

“Continuing Director” shall mean, at any date, an individual (a) who is a member
of the Board of Directors of Parent on the Funding Date, (b) who, as at such
date, has been a member of such Board of Directors for at least the 12 preceding
months, (c) who has been nominated to be a member of such Board of Directors,
directly or indirectly, by KKR, DLJ Merchant Banking or one of their respective
Affiliates or Persons nominated by KKR, DLJ Merchant Banking or one of their
respective Affiliates or (d) who has been nominated to be a member of such Board
of Directors by a majority of the other Continuing Directors then in office.

 

“Continuing Lenders” shall mean those Lenders under the Credit Agreement
immediately prior to the Second Amendment Effective Date that execute and
deliver a signature page to the Second Amendment specifically in the capacity of
a “Continuing Lender”.

 

“Continuing Tranche C Term Loan Lenders” shall mean those Lenders under the
Credit Agreement immediately prior to the Third Amendment Effective Date

 

15

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

 

that execute and deliver a signature page to the Third Amendment specifically in
the capacity of a “Continuing Tranche C Term Loan Lender”.

 

“Continuing Tranche D Term Loan Lenders” shall mean those Lenders under the
Credit Agreement immediately prior to the Third Amendment Effective Date that
execute and deliver a signature page to the Third Amendment specifically in the
capacity of a “Continuing Tranche D Term Loan Lender”.

 

“Continuing Tranche F Term Loan Lenders” shall mean those Lenders under the
Credit Agreement immediately prior to the Fourth Amendment Effective Date that
execute and deliver a signature page to the Fourth Amendment specifically in the
capacity of a “Continuing Tranche F Term Loan Lender.

 

“Converting Letters of Credit” shall mean each Letter of Credit issued under the
Existing Credit Agreement and outstanding immediately prior to the Restatement
Date.

 

“Converted Restricted Subsidiary” shall have the meaning provided in the
definition of the term “Consolidated EBITDA”.

 

“Converted Unrestricted Subsidiary” shall have the meaning provided in the
definition of the term “Consolidated EBITDA”.

 

“Co-Syndication Agents” shall mean UBS Securities LLC and Goldman Sachs Credit
Partners L.P.

 

“Credit Documents” shall mean this Agreement, the Security Documents, the
Financing Escrow Agreement, the Amendment Agreement, each Letter of Credit and
any promissory notes issued by the US Borrower or the UK Borrower hereunder.

 

“Credit Event” shall mean and include the making (but not the conversion or
continuation) of a Loan and the issuance of a Letter of Credit.

 

“Credit Facility” shall mean a category of Commitments and extensions of credit
thereunder.

 

“Credit Party” shall mean each of the US Borrower, the UK Borrower, the
Guarantors, the Foreign Subsidiary Guarantors and each other Subsidiary of the
US Borrower that is a party to a Credit Document.

 

“CS” shall mean Credit Suisse and any successor thereto.

 

“Cumulative Consolidated Net Income Available to Stockholders” shall mean, as of
any date of determination, Consolidated Net Income less cash dividends paid by
Holdings with respect to its capital stock for the period (taken as one
accounting period) commencing on the Funding Date and ending on the last day of
the most recent fiscal quarter for which Section 9.1 Financials have been
delivered to the Lenders under Section 9.1.

 

16

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

 

“Debt Incurrence Prepayment Event” shall mean any issuance or incurrence by the
US Borrower or any of the Restricted Subsidiaries of any Indebtedness (including
any issuance by the US Borrower of Permitted Additional Subordinated Notes, any
incurrence of Incremental Refinancing Term Loans pursuant to Section 2.15, any
incurrence of Indebtedness pursuant to clause (ii) of Section 10.1(n) and any
incurrence of Indebtedness pursuant to Section 10.1(q) but excluding any other
Indebtedness permitted to be issued or incurred under Section 10.1 that is not
expressly included herein).

 

“Default” shall mean any event, act or condition that with notice or lapse of
time, or both, would constitute an Event of Default.

 

“Defaulting Lender” shall mean any Lender with respect to which a Lender Default
is in effect.

 

“Dividends” shall have the meaning provided in Section 10.6.

 

“DLJ Merchant Banking” shall mean DLJ Merchant Banking Partners III, L.P. and
its Affiliates.

 

“Dollar Borrowing” shall mean a Borrowing denominated in Dollars.

 

“Dollar Equivalent” shall mean, on any date of determination, (a) with respect
to any amount denominated in Dollars, such amount, and (b) with respect to any
amount denominated in any Foreign Currency, the equivalent in Dollars of such
amount, determined by the Administrative Agent pursuant to Section 1.2(b) using
the applicable Exchange Rate with respect to such Foreign Currency at the time
in effect under the provisions of such Section 1.2.

 

“Dollar Extended Revolving Credit Loan” shall mean an Extended Revolving Credit
Loan denominated in Dollars and made pursuant to Section 2.1(b).

 

“Dollar Letter of Credit” shall mean a Letter of Credit denominated in Dollars
and issued pursuant to Section 3.1.

 

“Dollar Revolving Credit Loan” shall mean a Revolving Credit Loan denominated in
Dollars and made pursuant to Section 2.1(b).

 

“Dollars” and “$” shall mean dollars in lawful currency of the United States of
America.

 

“Domestic Subsidiary” shall mean each Subsidiary of the US Borrower that is
organized under the laws of the United States, any state or territory thereof or
the District of Columbia.

 

“Drawing” shall have the meaning provided in Section 3.4(b).

 

17

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

 

“Eligible Lender” shall mean, at any time, a Person who, on any date on which
interest is payable under this Agreement, is a Person which is (a) beneficially
entitled to the interest payable to it under this Agreement and (b)(i) a UK
Lender or (ii) a Treaty Lender.

 

“EMU” shall mean Economic and Monetary Union as contemplated in the Treaty on
European Union.

 

“EMU Legislation” shall mean the legislative measures of the European Union for
the introduction of, changeover to or operation of the Euro in one or more
member states, being in part legislative measures to implement EMU.

 

“Environmental Claims” shall mean any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, claims, liens, notices of
noncompliance or violation, investigations (other than internal reports prepared
by the US Borrower or any of the Subsidiaries (a) in the ordinary course of such
Person’s business or (b) as required in connection with a financing transaction
or an acquisition or disposition of real estate) or proceedings relating in any
way to any Environmental Law or any permit issued, or any approval given, under
any such Environmental Law (hereinafter, “Claims”), including (i) any and all
Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (ii) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.

 

“Environmental Law” shall mean any applicable Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code and rule of common law now or
hereafter in effect and in each case as amended, and any binding judicial or
administrative interpretation thereof, including any binding judicial or
administrative order, consent decree or judgment, relating to the environment,
human health or safety or Hazardous Materials.

 

“ERISA” shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.  Section references to ERISA are to ERISA as in
effect at the Funding Date and any subsequent provisions of ERISA amendatory
thereof, supplemental thereto or substituted therefor.

 

“ERISA Affiliate” shall mean each person (as defined in Section 3(9) of ERISA)
that together with the US Borrower or a Subsidiary would be deemed to be a
“single employer” within the meaning of Section 414(b) or (c) of the Code or,
solely for purposes of Section 302 of ERISA and Section 412 of the Code, is
treated as a single employer under Section 414 of the Code.

 

“Euro” or “€” shall mean the single currency of the European Union as
constituted by the Treaty on European Union and as referred to in the EMU
Legislation.

 

18

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

 

“Eurodollar Extended Revolving Credit Loan” shall mean any Extended Revolving
Credit Loan bearing interest at a rate determined by reference to the Eurodollar
Rate.

 

“Eurodollar Loan” shall mean any Eurodollar Term Loan, Eurodollar Revolving
Credit Loan or Eurodollar Extended Revolving Credit Loan.

 

“Eurodollar Rate” shall mean, in the case of any Eurodollar Term Loan,
Eurodollar Revolving Credit Loan, Eurodollar Extended Revolving Credit Loan
(other than the Tranche A-1 Term Loans, the Tranche A-2 Term Loans, the Tranche
G Term Loans, the Tranche I Term Loans, any Foreign Currency Revolving Credit
Loan or any Foreign Currency Extended Revolving Credit Loan), with respect to
each day during each Interest Period pertaining to such Eurodollar Loan, a rate
equal to the higher of (a) 2.0% per annum and (b) (i) the rate of interest per
annum determined by the Administrative Agent at approximately 11:00 a.m., London
time, on the date that is two Business Days prior to the commencement of such
Interest Period by reference to the British Bankers’ Association Interest
Settlement Rates for deposits in Dollars (as set forth by the Bloomberg
Information Service or any successor thereto or any other service selected by
the Administrative Agent which has been nominated by the British Bankers’
Association as an authorized information vendor for the purpose of displaying
such rates) for a period equal to such Interest Period; provided, that, to the
extent that an interest rate is not ascertainable pursuant to the foregoing
provisions of this definition, the “Eurodollar Rate” shall be the interest rate
per annum determined by the Administrative Agent to be the average of the rates
per annum at which deposits in Dollars in an amount comparable to such Borrowing
are offered for such relevant Interest Period to major banks in the London
interbank market in London, England by the Administrative Agent at approximately
11:00 a.m. (London time) on the date that is two Business Days prior to the
beginning of such Interest Period multiplied by (ii) the Statutory Reserve
Rate.  With respect to Eurodollar Borrowings denominated in a Foreign Currency,
the Eurodollar Rate for any Interest Period shall be a rate equal to the higher
of (a) 2.0% per annum and (b) (i) the rate of interest per annum determined by
the Administrative Agent at approximately 11:00 a.m. (London time) on the
Quotation Day for such Interest Period by reference to the British Bankers’
Association Interest Settlement Rates for deposits in the currency of such
Borrowing (as set forth by the Bloomberg Information Service or any successor
thereto or any other service selected by the Administrative Agent which has been
nominated by the British Bankers’ Association as an authorized information
vendor for the purpose of displaying such rates) for a period equal to such
Interest Period; provided, that, to the extent that an interest rate is not
ascertainable pursuant to the foregoing provisions of this sentence, the
“Eurodollar Rate” shall be the interest rate per annum determined by the
Administrative Agent to be the average of the rates per annum at which deposits
in the currency of such Borrowing in an amount comparable to such Borrowing are
offered for such relevant Interest Period to major banks in the London interbank
market in London, England by the Administrative Agent at approximately 11:00
a.m. (London time) on the date that is two Business Days prior to the beginning
of such Interest Period multiplied by (ii) the Statutory Reserve Rate.

 

19

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

 

“Eurodollar Revolving Credit Loan” shall mean any Revolving Credit Loan bearing
interest at a rate determined by reference to the Eurodollar Rate.

 

“Eurodollar Term Loan” shall mean any Term Loan bearing interest at a rate
determined by reference to the Eurodollar Rate.

 

“Event of Default” shall have the meaning provided in Section 11.

 

“Excess Cash Flow” shall mean, for any period, an amount equal to the excess of
(a) the sum, without duplication, of (i) Consolidated Net Income for such
period, (ii) an amount equal to the amount of all non-cash charges to the extent
deducted in arriving at such Consolidated Net Income, (iii) decreases in
Consolidated Working Capital for such period and (iv) an amount equal to the
aggregate net non-cash loss on the sale, lease, transfer or other disposition of
assets by the US Borrower and the Restricted Subsidiaries during such period
(other than sales in the ordinary course of business) to the extent deducted in
arriving at such Consolidated Net Income over (b) the sum, without duplication,
of (i) an amount equal to the amount of all non-cash credits included in
arriving at such Consolidated Net Income, (ii) the aggregate amount actually
paid by the US Borrower and the Restricted Subsidiaries in cash during such
period on account of Capital Expenditures (excluding the principal amount of
Indebtedness incurred in connection with such Capital Expenditures, whether
incurred in such period or in a subsequent period), (iii) the aggregate amount
of all prepayments of Revolving Credit Loans, Extended Revolving Credit Loans
and Swingline Loans made during such period to the extent accompanying
reductions of the Total Revolving Credit Commitments or the Total Extended
Revolving Credit Commitments, (iv) the aggregate amount of all principal
payments of Indebtedness of the US Borrower or the Restricted Subsidiaries
(including any Term Loans and the principal component of payments in respect of
Capitalized Lease Obligations but excluding Revolving Credit Loans, Extended
Revolving Credit Loans, Swingline Loans and voluntary prepayments of Term Loans
pursuant to Section 5.1) made during such period (other than in respect of any
revolving credit facility to the extent there is not an equivalent permanent
reduction in commitments thereunder), (v) an amount equal to the aggregate net
non-cash gain on the sale, lease, transfer or other disposition of assets by the
US Borrower and the Restricted Subsidiaries during such period (other than sales
in the ordinary course of business) to the extent included in arriving at such
Consolidated Net Income, (vi) increases in Consolidated Working Capital for such
period, (vii) payments by the US Borrower and the Restricted Subsidiaries during
such period in respect of long-term liabilities of the US Borrower and the
Restricted Subsidiaries other than Indebtedness, (viii) the amount of
investments made during such period pursuant to Section 10.5 to the extent that
such investments were financed with internally generated cash flow of the US
Borrower and the Restricted Subsidiaries, (ix) the amount of dividends paid
during such period pursuant to clause (b), (c), (d) or (e) of the proviso to
Section 10.6 to the extent such dividends were paid with the proceeds of any
amount referred to in paragraph (a) of this definition, (x) the aggregate amount
of expenditures actually made by the US Borrower and the Restricted Subsidiaries
in cash during such period (including expenditures for the payment of financing
fees) to the extent that such expenditures are not expensed during such period
and (xi) the aggregate amount of any premium, make-whole or penalty

 

20

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

 

payments actually paid in cash by the US Borrower and the Restricted
Subsidiaries during such period that are required to be made in connection with
any prepayment of Indebtedness.

 

“Exchange Rate” shall mean on any day, with respect to any Foreign Currency, the
rate at which such Foreign Currency may be exchanged into Dollars, as set forth
at approximately 11:00 a.m. (London time) on such day on the Bloomberg Key
Cross-Currency Rates Page for such Foreign Currency.  In the event that such
rate does not appear on any Bloomberg Key Cross-Currency Rates Page, the
Exchange Rate shall be determined by reference to such other publicly available
service for displaying exchange rates as may be agreed upon by the
Administrative Agent and the US Borrower, or, in the absence of such agreement,
such Exchange Rate shall instead be the arithmetic average of the spot rates of
exchange of the Administrative Agent in the market where its foreign currency
exchange operations in respect of such Foreign Currency are then being
conducted, at or about 10:00 a.m. (Local Time) on such date for the purchase of
Dollars for delivery two Business Days later, provided that if at the time of
any such determination, for any reason, no such spot rate is being quoted, the
Administrative Agent, after consultation with the US Borrower, may use any
reasonable method it deems appropriate to determine such rate, and such
determination shall be conclusive absent manifest error.

 

“Existing Credit Agreement” shall mean the Credit Agreement, dated as of the
Closing Date, among the US Borrower, the UK Borrower, Holdings, Credit Suisse,
as the Administrative Agent and Collateral Agent and UBS Securities LLC and
Goldman Sachs Credit Partners L.P., as Co-Syndication Agents, as amended or
modified and in effect immediately prior to the Restatement Date.

 

“Extended Commitment Fee Rate” shall mean, with respect to the Available
Extended Commitment on any day, 0.75% per annum.

 

“Extended Revolving Credit Commitment” shall mean, (a) with respect to each
Lender that is an Extending Revolving Credit Lender on the Restatement Date, the
amount set forth on Schedule A to the Amendment Agreement (as appended to the
Amendment Agreement on the Restatement Date) as such Lender’s Extended Revolving
Credit Commitment and (b) in the case of any Lender that becomes a Lender after
the Restatement Date, the amount specified as such Lender’s Extended Revolving
Credit Commitment in the Assignment and Acceptance pursuant to which such Lender
assumed a portion of the Total Extended Revolving Credit Commitment, in each
case as the same may be changed from time to time pursuant to the terms hereof.

 

“Extended Revolving Credit Commitment Percentage” shall mean at any time, for
each Lender, the percentage obtained by dividing (a) such Lender’s Extended
Revolving Credit Commitment by (b) the aggregate amount of the Extended
Revolving Credit Commitments; provided, that at any time when the Total Extended
Revolving Credit Commitment shall have been terminated, each Lender’s Extended
Revolving Credit Commitment Percentage shall be its Extended Revolving Credit
Commitment Percentage as in effect immediately prior to such termination.

 

21

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

 

“Extended Revolving Credit Exposure” shall mean, with respect to any Lender at
any time, the sum of (a) the aggregate principal amount of the Dollar Equivalent
of the Extended Revolving Credit Loans of such Lender then outstanding, (b) such
Lender’s Letter of Credit Exposure at such time and (c) such Lender’s Swingline
Exposure at such time.

 

“Extended Revolving Credit Loans” shall have the meaning provided in
Section 2.1(b).

 

“Extended Revolving Credit Maturity Date” shall mean July 30, 2012, or, if such
date is not a Business Day, the next preceding Business Day.

 

“Extending Revolving Credit Lenders” shall mean those Lenders under the Credit
Agreement immediately prior to the Restatement Date that execute and deliver a
signature page to the Amendment Agreement specifically in the capacity of an
Extending Revolving Credit Lender.

 

“Extending Tranche E Term Loan Lenders” shall mean those Lenders under the
Credit Agreement immediately prior to the Restatement Date that execute and
deliver a signature page to the Amendment Agreement specifically in the capacity
of an Extending Tranche E Term Loan Lender.

 

“Extending Tranche G Term Loan Lenders” shall mean those Lenders under the
Credit Agreement immediately prior to the Restatement Date that execute and
deliver a signature page to the Amendment Agreement specifically in the capacity
of an Extending Tranche G Term Loan Lender.

 

“Federal Funds Effective Rate” shall mean, for any day, the weighted average of
the per annum rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day that is a Business Day, the average of
the quotations for the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.

 

“Fee Letter” shall mean the Senior Secured Facilities Fee Letter dated April 19,
2004 among the US Borrower, CS, UBS Loan Finance LLC, UBS Securities LLC and
Goldman Sachs Credit Partners L.P.

 

“Fees” shall mean all amounts payable pursuant to, or referred to in,
Section 4.1.

 

“Final Date” shall mean the date on which the Revolving Credit Commitments shall
have terminated, no Revolving Credit Loans shall be outstanding and the
applicable Letter of Credit Outstandings shall have been reduced to zero.

 

“Final Extended Date” shall mean the date on which the Extended Revolving Credit
Commitments shall have terminated, no Extended Revolving Credit

 

22

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

 

Loans shall be outstanding and the applicable Letter of Credit Outstandings
shall have been reduced to zero.

 

“Financing Escrow Agent” shall mean The Bank of New York.

 

“Financing Escrow Agreement” shall mean the Financing Escrow Agreement dated as
of the Funding Date among the US Borrower, the UK Borrower, PIK Holdco, Knight
Erste Beteiligungs GmbH, the Administrative Agent, the administrative agent
under the Senior Subordinated Loan Agreement, Allianz Lebensversicherungs-AG,
Stuttgart, Allianz Capital Partners GmbH, The Bank of New York, as Financing
Escrow Agent, and JPMorgan Chase Bank, as Collateral Escrow Agent.

 

“First Amendment” shall mean the First Amendment to this Agreement, dated as of
October 8, 2004.

 

“First Amendment Effective Date” shall mean the date on which the First
Amendment becomes effective.

 

“Foreign Currencies” shall mean Euro and Sterling.

 

“Foreign Currency Borrowing” shall mean a Borrowing comprised of Tranche A-1
Term Loans, Tranche A-2 Term Loans, Tranche G Term Loans, Tranche I Term Loans,
Foreign Currency Revolving Credit Loans or Foreign Currency Extended Revolving
Credit Loans.

 

“Foreign Currency Extended Revolving Credit Loan” shall mean an Extended
Revolving Loan denominated in a Foreign Currency and made pursuant to
Section 2.1(b).

 

“Foreign Currency Letter of Credit” shall mean a Letter of Credit denominated in
a Foreign Currency and issued pursuant to Section 3.1.

 

“Foreign Currency Loan” shall mean a Tranche A-1 Term Loan, Tranche A-2 Term
Loan, Tranche G Term Loan, Tranche I Term Loan, Foreign Currency Revolving Loan
or Foreign Currency Extended Revolving Loan.

 

“Foreign Currency Revolving Credit Loan” shall mean a Revolving Loan denominated
in a Foreign Currency and made pursuant to Section 2.1(b).

 

“Foreign Joint Venture” shall mean any Restricted Foreign Subsidiary in which
the US Borrower and its Restricted Subsidiaries own, collectively, less than
100% of the equity interests and designated as such in a written notice to the
Administrative Agent by the US Borrower; provided, that in the event a
Restricted Subsidiary not previously designated by the US Borrower as a Foreign
Joint Venture is subsequently re-designated as a Foreign Joint Venture, (x) such
re-designation shall be deemed to be an investment on the date of such
re-designation in a Foreign Joint Venture in an amount equal to the product of
(i) the net worth of such re-designated Restricted Subsidiary immediately prior
to such re-designation (such net worth to be calculated without regard

 

23

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

 

to any guarantee provided by such re-designated Restricted Subsidiary) and
(ii) the percentage of capital stock or other equity interests in such Foreign
Joint Venture owned by the US Borrower or its Restricted Subsidiaries (other
than Foreign Joint Ventures) and (y) no Default or Event of Default would result
from such re-designation.

 

“Foreign Security Documents” shall mean, collectively, (a) the UK Guarantee,
(b) the UK Pledge Agreements, (c) the UK Debenture, (d) the German Guarantee,
(e) the German Pledge Agreement, (f) the German Pledge Agreement (Brockhues),
(g) the German Assignment of Claims, (h) the German Conditional Security
Agreements, (i) the German Negative Pledge Agreement, (j) the German Abstract
Acknowledgments of Indebtedness, (k) the Italian Guarantee, (l) the Italian
Share Pledge Agreements, (m) the Italian Trademark Pledge Agreement, (n) the
Canadian Guarantee, (o) the Canadian Pledge Agreements, (p) the Canadian
Security Agreement, (q) the French Pledge Agreements, (r) the Singapore
Guarantee, (s) the Singapore Pledge Agreements, (t) the Singapore Security
Agreement, (u) the Taiwan Pledge Agreements, (v) the Luxembourg Pledge
Agreements, (w) any Mortgage over Mortgaged Property of a Foreign Subsidiary,
(x) any security document entered into by a Restricted Foreign Subsidiary
pursuant to Section 9.11 or 9.12 and (y) any other security document entered
into by a Restricted Foreign Subsidiary, including, without limitation, any
other security document entered into by a Restricted Foreign Subsidiary as
required by the Amendment Agreement to secure any of the Obligations.

 

“Foreign Subsidiary” shall mean each Subsidiary of the US Borrower that is not a
Domestic Subsidiary, including the UK Borrower.

 

“Foreign Subsidiary Guarantees” shall mean (a) the UK Guarantee, (b) the German
Guarantee, (c) the Italian Guarantee, (d) the Canadian Guarantee, (e) the
Singapore Guarantee, (f) any guarantee agreement entered into by a Restricted
Foreign Subsidiary pursuant to Section 9.11 or 9.12 and (g) any other guarantee
agreement entered into by a Restricted Foreign Subsidiary to guarantee any of
the Obligations.

 

“Foreign Subsidiary Guarantors” shall mean the UK Guarantors, the German
Guarantors, the Italian Guarantors, the Canadian Guarantors, the Singapore
Guarantors and any other Foreign Subsidiary that becomes a Foreign Subsidiary
Guarantor pursuant to Section 9.11.

 

“Fourth Amendment” shall mean the Fourth Amendment to this Agreement, dated as
of March 23, 2007.

 

“Fourth Amendment Effective Date” shall mean March 23, 2007, the date on which
the conditions set forth in Section 3(c) of the Fourth Amendment are satisfied.

 

“French Pledge Agreements” shall mean (a) the French Pledge Agreement, entered
into by the US Borrower and the Administrative Agent for the benefit of the
Lenders to the UK Borrower and the other Secured Parties named therein and
(b) the French Pledge Agreement entered into by the US Borrower and the
Administrative Agent for the benefit of the Lenders to the US Borrower and the
other

 

24

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

 

Secured Parties named therein, substantially in the form of Exhibit B(a) or (b),
as applicable, as the same may be amended, supplemented or otherwise modified
from time to time.

 

“Fronting Fee” shall have the meaning provided in Section 4.1(d).

 

“Funded Debt” shall mean all Indebtedness of the US Borrower and the Restricted
Subsidiaries for borrowed money that matures more than one year from the date of
its creation or matures within one year from such date that is renewable or
extendable, at the option of the US Borrower or one of the Restricted
Subsidiaries, to a date more than one year from such date or arises under a
revolving credit or similar agreement that obligates the lender or lenders to
extend credit during a period of more than one year from such date, including
all amounts of Funded Debt required to be paid or prepaid within one year from
the date of its creation and, in the case of the US Borrower, Indebtedness in
respect of the Loans.

 

“Funding Date” shall mean July 30, 2004.

 

“GAAP” shall mean generally accepted accounting principles in the United States
of America as in effect from time to time; provided, however, that if there
occurs after the Funding Date any change in GAAP that affects in any respect the
calculation of any covenant contained in Section 10, the Lenders and the US
Borrower shall negotiate in good faith amendments to the provisions of this
Agreement that relate to the calculation of such covenant with the intent of
having the respective positions of the Lenders and the US Borrower after such
change in GAAP conform as nearly as possible to their respective positions as of
the Funding Date and, until any such amendments have been agreed upon, the
covenants in Section 10 shall be calculated as if no such change in GAAP has
occurred.

 

“German Abstract Acknowledgments of Indebtedness” shall mean (x) the agreement
between the UK Borrower and the Administrative Agent and (y) the agreement
between the US Borrower and the Administrative Agent, in each case substantially
in the form of Exhibit C-1(a) or (b), as applicable, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“German Assignment of Claims” shall mean the agreement entered into by the
German Guarantors, certain other Restricted Subsidiaries and the Administrative
Agent for the benefit of the Lenders to the UK Borrower and the other Secured
Parties named therein, substantially in the form of Exhibit C-2, as the same may
be amended, supplemented or otherwise modified from time to time.

 

“German Conditional Security Agreements” shall mean the Agreements and all
attachments and exhibits thereto, substantially in the form of Exhibit C-6, as
the same may be amended, supplemented or otherwise modified from time to time.

 

“German Guarantee” shall mean the German Guarantee Agreement, made by each of
the German Guarantors in favor of the Administrative Agent for the benefit of
the Lenders to the UK Borrower and the other Secured Parties named therein,

 

25

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

 

substantially in the form of Exhibit C-3, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“German Guarantors” shall mean (a) each Subsidiary of the US Borrower (other
than an Unrestricted Subsidiary) on the Funding Date that is a member of the
Rockwood Group and that is incorporated under the laws of Germany and is a party
to the German Guarantee and (b) each Subsidiary of the US Borrower that is
incorporated under the laws of Germany and that becomes a party to the German
Guarantee after the Funding Date pursuant to Section 9.11.

 

“German Negative Pledge Agreement” shall mean the letter and all attachments and
exhibits thereto from Rockwood Pigmente Holding GmbH and Silo Pigmente GmbH to
the Administrative Agent, substantially in the form of Exhibit C-4, as the same
may be amended, supplemented or otherwise modified from time to time.

 

“German Pledge Agreement” shall mean the German Pledge Agreement entered into
among the US Borrower, Rockwood Specialties GmbH and the Administrative Agent
for the benefit of the Lenders, substantially in the form of Exhibit C-5, as the
same may be amended, supplemented or otherwise modified from time to time.

 

“German Pledge Agreement (Brockhues)” shall mean the German Pledge Agreement
entered into among Silo Pigmente GmbH, Rockwood Pigmente Holding GmbH and the
Administrative Agent for the benefit of the Lenders to the UK Borrower and the
other Secured Parties named therein, substantially in the form of Exhibit C-7,
as the same may be amended, supplemented or otherwise modified from time to
time.

 

“Governmental Authority” shall mean any nation or government, any state or other
political subdivision thereof, and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.

 

“Guarantee” shall mean the Guarantee, made by each Guarantor in favor of the
Administrative Agent for the benefit of the Secured Parties, substantially in
the form of Exhibit D, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“Guarantee and Collateral Exception Amount” shall mean, at any time:
(a)(i) $100,000,000 so long as the Senior Secured Debt to Consolidated EBITDA
Ratio as of the last day of the most recent period for which Section 9.1
Financials are delivered by the US Borrower to the Lenders under Section 9.1 is
less than 2.00 to 1.00, (ii) $75,000,000 if the Senior Secured Debt to
Consolidated EBITDA Ratio as of the last day of the most recent period for which
Section 9.1 Financials are delivered by the US Borrower to the Lenders under
Section 9.1 is equal to or greater than 2.00 to 1.00 but less than 3.00 to 1.00
or (iii) $50,000,000 if the Senior Secured Debt to Consolidated EBITDA Ratio as
of the last day of the most recent period for which Section 9.1 Financials are
delivered by the US Borrower to the Lenders under Section 9.1 is greater than or
equal to 3.00 to 1.00 minus (b) the sum of (i) the aggregate amount of

 

26

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

 

Indebtedness incurred or assumed following the Restatement Date prior to such
time pursuant to Section 10.1(j) or (k) that is outstanding at such time and
that was used to acquire, or was assumed in connection with the acquisition of,
capital stock and/or assets in respect of which guarantees, pledges and security
have not been given pursuant to Sections 9.11 and 9.12, (ii) the lesser of
(x) the aggregate Increased Commitment Amount at such time and (y) $50,000,000,
(iii) any Indebtedness incurred following the Restatement Date by any Foreign
Joint Venture and (iv) the aggregate fair market value at the time each such
investment was made of all outstanding investments made following the
Restatement Date pursuant to Section 10.5(j) in respect of which guarantees,
pledges and security have not been given pursuant to Sections 9.11 and 9.12;
provided, that the Guarantee and Collateral Exception Amount shall be increased
to the extent that the Indebtedness and Investments deducted from the Guarantee
and Collateral Exception Amount prior to the Restatement Date are no longer
outstanding; provided further, that if such amount is a negative number, the
Guarantee and Collateral Exception Amount shall be zero.

 

“Guarantee Obligations” shall mean, as to any Person, any obligation of such
Person guaranteeing or intended to guarantee any Indebtedness of any other
Person (the “primary obligor”) in any manner, whether directly or indirectly,
including any obligation of such Person, whether or not contingent, (a) to
purchase any such Indebtedness or any property constituting direct or indirect
security therefor, (b) to advance or supply funds (i) for the purchase or
payment of any such Indebtedness or (ii) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such
Indebtedness of the ability of the primary obligor to make payment of such
Indebtedness or (d) otherwise to assure or hold harmless the owner of such
Indebtedness against loss in respect thereof; provided, however, that the term
“Guarantee Obligations” shall not include endorsements of instruments for
deposit or collection in the ordinary course of business.  The amount of any
Guarantee Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the Indebtedness in respect of which such Guarantee
Obligation is made or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof (assuming such Person is required to
perform thereunder) as determined by such Person in good faith.

 

“Guarantors” shall mean Holdings and the US Subsidiary Guarantors.

 

“Hazardous Materials” shall mean (a) any petroleum or petroleum products,
radioactive materials, friable asbestos, urea formaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid containing
regulated levels of polychlorinated biphenyls, and radon gas; (b) any chemicals,
materials or substances defined as or included in the definition of “hazardous
substances”, “hazardous waste”, “hazardous materials”, “extremely hazardous
waste”, “restricted hazardous waste”, “toxic substances”, “toxic pollutants”,
“contaminants”, or “pollutants”, or words of similar import, under any
applicable Environmental Law; and (c) any other chemical, material or substance,
which is prohibited, limited or regulated by any Environmental Law.

 

27

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

 

“Hedge Agreements” shall mean interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts, commodity price protection agreements or other
commodity price hedging agreements, and other similar agreements entered into by
the US Borrower or any of the Restricted Subsidiaries in the ordinary course of
business (and not for speculative purposes) in order to protect the US Borrower,
the UK Borrower or any of the Restricted Subsidiaries against fluctuations in
interest rates, currency exchange rates or commodity prices.

 

“Holdings” shall have the meaning provided in the preamble to this Agreement.

 

“Increased Amount Date” shall have the meaning provided in Section 2.14.

 

“Increased Commitment Amount” shall have the meaning given to such term in
Section 14.1.

 

“Incremental Refinancing Amount Date” shall have the meaning given to such term
in Section 2.15.

 

“Incremental Refinancing Revolving Credit Commitments” shall have the meaning
given to such term in Section 2.15.

 

“Incremental Refinancing Revolving Credit Lender” shall have the meaning given
to such term in Section 2.15.

 

“Incremental Refinancing Revolving Credit Loan” shall have the meaning given to
such term in Section 2.15.

 

“Incremental Refinancing Term Loan Commitments” shall have the meaning given to
such term in Section 2.15.

 

“Incremental Refinancing Term Loan Lender” shall have the meaning given to such
term in Section 2.15.

 

“Incremental Refinancing Term Loan” shall have the meaning given to such term in
Section 2.15.

 

“Incremental Revolving OID” shall have the meaning given to that term in
Section 2.15.

 

“Incremental Revolving Yield Differential” shall have the meaning given to that
term in Section 2.15.

 

“Indebtedness” of any Person shall mean (a) all indebtedness of such Person for
borrowed money, (b) the deferred purchase price of assets or services that in
accordance with GAAP would be included as liabilities in the balance sheet of
such

 

28

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

 

Person, (c) the face amount of all letters of credit issued for the account of
such Person and, without duplication, all drafts drawn thereunder, (d) all
indebtedness of a second Person secured by any Lien on any property owned by
such first Person, whether or not such indebtedness has been assumed, (e) all
Capitalized Lease Obligations of such Person, (f) all net obligations of such
Person under interest rate swap, cap or collar agreements, interest rate future
or option contracts, currency swap agreements, currency future or option
contracts, commodity price protection agreements or other commodity price
hedging agreements and other similar agreements and (g) without duplication, all
Guarantee Obligations of such Person; provided, that Indebtedness shall not
include trade payables and accrued expenses, in each case payable directly or
through a bank clearing arrangement and arising in the ordinary course of
business.

 

“Initial Financial Statement Delivery Date” shall mean the date on which
Section 9.1 Financials are delivered to the Lenders under Section 9.1 for the
first full fiscal quarter following the Closing Date.

 

“Interest Period” shall mean, with respect to any Term Loan, Revolving Credit
Loan or Extended Revolving Credit Loan, the interest period applicable thereto,
as determined pursuant to Section 2.9.

 

“Italian Guarantee” shall mean the Italian Guarantee Agreement, made by each of
the Italian Guarantors in favor of the Administrative Agent for the benefit of
the Lenders to the UK Borrower and the other Secured Parties named therein,
substantially in the form of Exhibit E-1, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Italian Guarantors” shall mean (a) each Subsidiary of the US Borrower (other
than an Unrestricted Subsidiary) on the Funding Date that is a member of the
Rockwood Group and that is incorporated under the laws of Italy and is a party
to the Italian Guarantee and (b) each Subsidiary of the US Borrower that is
incorporated under the laws of Italy and that becomes a party to the Italian
Guarantee after the Funding Date pursuant to Section 9.11.

 

“Italian Share Pledge Agreements” shall mean (a) the Italian Pledge Agreement,
entered into by the US Borrower and the Administrative Agent for the benefit of
the Lenders to the UK Borrower and the other Secured Parties named therein and
(b) the Italian Pledge Agreement entered into by the US Borrower and the
Administrative Agent for the benefit of the Lenders to the US Borrower and the
other Secured Parties named therein, in each case, substantially in the form of
Exhibit E-2(a) or (b), as applicable, as the same may be amended, supplemented
or otherwise modified from time to time.

 

“Italian Trademark Pledge Agreement” shall mean the unilateral pledge letter
entered into by Rockwood Italia S.p.A. in favor of the Administrative Agent for
the benefit of the Lenders to the UK Borrower and the other Secured Parties
named therein, substantially in the form of Exhibit E-3, as the same may be
amended, supplemented or otherwise modified from time to time.

 

29

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

 

“Joinder Agreement” means an agreement substantially in the form of Exhibit U.

 

“Judgment Currency” shall have the meaning set forth in Section 14.17.

 

“Judgment Currency Conversion Date” shall have the meaning set forth in
Section 14.17.

 

“KKR” shall mean each of Kohlberg Kravis Roberts & Co., L.P. and KKR
Associates, L.P.

 

“L/C Maturity Date” shall mean the date that is (a) with respect to any Letters
of Credit issued under the Revolving Credit Commitment, five Business Days prior
to the Revolving Credit Maturity Date and (b) with respect to any Letters of
Credit under the Extended Revolving Credit Commitment, five Business Days prior
to the Extended Revolving Credit Maturity Date.

 

“L/C Participant” shall have the meaning provided in Section 3.3(a).

 

“L/C Participation” shall have the meaning provided in Section 3.3(a).

 

“L/C Reserve Account” shall have the meaning provided in Section 13.2(a)

 

“Lender Default” shall mean (a) with respect to the determination as to whether
a Lender is a Defaulting Lender for purposes of Section 5.1, Section 5.2 and
Section 14.1 (and any definitions used in such sections), (i) the failure (which
has not been cured) of a Lender to make available its portion of any Borrowing
or to fund its portion of any unreimbursed payment under Section 3.3 or (ii) a
Lender having notified the Administrative Agent and/or the US Borrower that it
does not intend to comply with the obligations under Section 2.1(b), 2.1(d) or
3.3, in the case of either clause (i) or clause (ii) above, as a result of the
appointment of a receiver or conservator with respect to such Lender at the
direction or request of any regulatory agency or authority and (b) with respect
to the determination as to whether a Lender is a Defaulting Lender for purposes
of Section 3.7, Section 4.1 and Section 14.7, (i) the failure (which has not
been cured) of a Lender to make available its portion of any Borrowing or to
fund its portion of any unreimbursed payment under Section 3.3, (ii) the
notification by a Lender to any Borrower, the Administrative Agent, the Letter
of Credit Issuer, the Swingline Lender or any Lender in writing that it does not
intend to comply with any of its funding obligations under this Agreement or a
Lender making a public statement to the effect that it does not intend to comply
with its funding obligations under this Agreement or under other agreements in
which it commits to extend credit, (iii) the failure, within three Business Days
after request by the Administrative Agent, of a Lender to confirm that it will
comply with the terms of this Agreement relating to its obligations to fund
prospective Loans and participations in then outstanding Letters of Credit and
Swingline Loans, (iv) the failure of a Lender to otherwise pay over to the
Administrative Agent or any other Lender any other amount required to be paid by
it hereunder within three Business Days of the date when due, unless the subject
of a good faith dispute, or (v) a Lender (A)

 

30

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

 

becoming or being insolvent or having a parent company that has become or is
insolvent or (B) becoming the subject of a bankruptcy or insolvency proceeding,
or having a receiver, conservator, trustee or custodian appointed for it, or
taking any action in furtherance of, or indicating its consent to, approval of
or acquiescence in any such proceeding or appointment or having a parent company
that has become the subject of a bankruptcy or insolvency proceeding, or has had
a receiver, conservator, trustee or custodian appointed for it, or has taken any
action in furtherance of, or indicating its consent to, approval of or
acquiescence in any such proceeding or appointment.

 

“Lenders” shall mean (a) the Persons listed on Schedule 1.1(c), (b) effective as
of the Third Amendment Effective Date, the Persons listed on Schedule A to the
Third Amendment (as appended to the Third Amendment on the Third Amendment
Effective Date), (c) effective as of the Fourth Amendment Effective Date, the
Persons listed on Schedule A to the Fourth Amendment (as appended to the Fourth
Amendment on the Fourth Amendment Effective Date), (d) effective as of the
Restatement Date, the Persons listed on Schedules A and B to the Amendment
Agreement (as appended to the Amendment Agreement on the Restatement Date) and
(e) any other Person that becomes a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance or otherwise ceases to have any Loans or
Commitments hereunder.

 

“Letter of Credit” shall mean each standby letter of credit issued pursuant to
Section 3.1.

 

“Letter of Credit Commitment” shall mean $100,000,000, as the same may be
reduced from time to time pursuant to Section 3.1.

 

“Letter of Credit Exposure” shall mean, with respect to any Lender, at any time,
the sum of (a) the Dollar Equivalent of the amount of any Unpaid Drawings in
respect of which such Lender has made (or is required to have made) payments to
the Letter of Credit Issuer pursuant to Section 3.4(a) at such time and (b) such
Lender’s Revolving Credit Commitment Percentage or Extended Revolving Credit
Commitment Percentage, as applicable, of the Letter of Credit Outstanding at
such time (excluding the portion thereof consisting of Unpaid Drawings in
respect of which the Lenders have made (or are required to have made) payments
to the Letter of Credit Issuer pursuant to Section 3.4(a)).

 

“Letter of Credit Fee” shall have the meaning provided in Section 4.1(c).

 

“Letter of Credit Issuer” shall mean CS, any of its Affiliates or any successor
pursuant to Section 3.6.  The Letter of Credit Issuer may, in its discretion,
arrange for one or more Letters of Credit to be issued by Affiliates of the
Letter of Credit Issuer, including with respect to Foreign Currency Letters of
Credit, and in each such case the term “Letter of Credit Issuer” shall include
any such Affiliate with respect to Letters of Credit issued by such Affiliate. 
In the event that there is more than one Letter of Credit Issuer at any time,
references herein and in the other Credit Documents to the

 

31

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

 

Letter of Credit Issuer shall be deemed to refer to the Letter of Credit Issuer
in respect of the applicable Letter of Credit or to all Letter of Credit
Issuers, as the context requires.

 

“Letter of Credit Outstanding” shall mean, at any time, the sum of, without
duplication, (a) the sum of (i) the aggregate Stated Amount of all outstanding
Letters of Credit issued under the Revolving Credit Commitment and (ii) the
aggregate amount of all Unpaid Drawings in respect of all Letters of Credit
issued under the Revolving Credit Commitment and (b) the sum of (i) the
aggregate Stated Amount of all outstanding Letters of Credit issued under the
Extended Revolving Credit Commitment and (ii) the aggregate amount of all Unpaid
Drawings in respect of all Letters of Credit issued under the Extended Revolving
Credit Commitment.

 

“Letter of Credit Request” shall have the meaning provided in Section 3.2.

 

“Level I Status” shall mean, on any date, the circumstance that the Consolidated
Total Debt to Consolidated EBITDA Ratio is greater than or equal to 5.00 to 1.00
as of such date.

 

“Level II Status” shall mean, on any date, the circumstance that Level I Status
does not exist and the Consolidated Total Debt to Consolidated EBITDA Ratio is
greater than or equal to 4.50 to 1.00 as of such date.

 

“Level III Status” shall mean, on any date, the circumstance that neither Level
I Status nor Level II Status exists and the Consolidated Total Debt to
Consolidated EBITDA Ratio is greater than or equal to 4.00 to 1.00 as of such
date.

 

“Level IV Status” shall mean, on any date, the circumstance that the
Consolidated Total Debt to Consolidated EBITDA Ratio is less than 4.00 to 1.00
as of such date.

 

“Lien” shall mean any mortgage, pledge, security interest, hypothecation,
assignment, lien (statutory or other) or similar encumbrance (including any
agreement to give any of the foregoing, any conditional sale or other title
retention agreement or any lease in the nature thereof).

 

“Loan” shall mean any Revolving Credit Loan, Extended Revolving Credit Loan,
Swingline Loan, Term Loan, New Revolving Loan, New Extended Revolving Loan, New
Tranche H Term Loan, New Tranche I Term Loans, Incremental Refinancing Revolving
Credit Loan, or Incremental Refinancing Term Loan made by any Lender hereunder.

 

“Local Time” shall mean (a) with respect to a Loan, Borrowing or Letter of
Credit denominated in Dollars, New York time, and (b) with respect to a
Eurodollar Loan or Eurodollar Borrowing denominated in any Foreign Currency,
London time.

 

“Luxembourg Pledge Agreements” shall mean the Luxembourg Pledge Agreements
entered into by the US Borrower and the Administrative Agent for the benefit of
the Lenders to the US Borrower and the other Secured Parties named therein,

 

32

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

 

substantially in the form of Exhibit M, as the same may be amended, supplemented
or otherwise modified from time to time.

 

“Management Group” shall mean, at any time, the Chairman of the Board, any
President, any Executive Vice President or Vice President, any Managing
Director, any Treasurer and any Secretary of any of the Parent Companies,
Holdings, the US Borrower or any Subsidiaries at such time.

 

“Mandatory Borrowing” shall have the meaning provided in Section 2.1(d).

 

“Material Adverse Change” shall mean any change in the business, assets,
operations, properties or financial condition of Holdings, the US Borrower and
its Subsidiaries, taken as a whole, that would materially adversely affect the
ability of Holdings, the US Borrower and the other Credit Parties, taken as a
whole, to perform their obligations under this Agreement or any of the other
Credit Documents.

 

“Material Adverse Effect” shall mean a circumstance or condition affecting the
business, assets, operations, properties or financial condition of Holdings, the
US Borrower and the Subsidiaries, taken as a whole, that would materially
adversely affect (a) the ability of Holdings, the US Borrower and the other
Credit Parties, taken as a whole, to perform their obligations under this
Agreement or any of the other Credit Documents or (b) the rights and remedies of
the Administrative Agent and the Lenders under this Agreement or any of the
other Credit Documents.

 

“Material Subsidiary” shall mean, at any date of determination, (a) the UK
Borrower and (b) each other Restricted Subsidiary of the US Borrower (i) whose
total assets at the last day of the Test Period ending on the last day of the
most recent fiscal period for which Section 9.1 Financials have been delivered
were equal to or greater than 5% of the Consolidated Total Assets of the US
Borrower and the Restricted Subsidiaries at such date or (ii) whose gross
revenues for such Test Period were equal to or greater than 5% of the
consolidated gross revenues of the US Borrower and the Restricted Subsidiaries
for such period, in each case determined in accordance with GAAP.

 

“Maturity Date” shall mean the Tranche A-1 Term Loan Maturity Date, the Tranche
A-2 Term Loan Maturity Date, Tranche E Term Loan Maturity Date, the Tranche G
Term Loan Maturity Date, Tranche H Term Loan Maturity Date, Tranche I Term Loan
Maturity Date, Extended Revolving Credit Maturity Date or the Revolving Credit
Maturity Date.

 

“Minimum Borrowing Amount” shall mean (a) with respect to a Dollar Borrowing of
Term Loans, Revolving Credit Loans or Extended Revolving Credit Loans,
$1,000,000, (b) with respect to a Foreign Currency Borrowing of Term Loans,
Revolving Credit Loans or Extended Revolving Credit Loans, the smallest amount
of the applicable Foreign Currency that has a Dollar Equivalent in excess of
$1,000,000 and (c) with respect to a Borrowing of Swingline Loans, $100,000.

 

33

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

 

“Minority Investment” shall mean any Person (other than a Subsidiary) in which
the US Borrower or any Restricted Subsidiary owns capital stock or other equity
interests.

 

“Moody’s” shall mean Moody’s Investors Service, Inc. or any successor by merger
or consolidation to its business.

 

“Mortgage” shall mean a Mortgage, Assignment of Leases and Rents, Security
Agreement and Financing Statement or other Security Document entered into by the
owner of a Mortgaged Property and the Administrative Agent for the benefit of
the Lenders and the other Secured Parties named therein in respect of that
Mortgaged Property, substantially in the form of Exhibit F or, in the case of
Mortgaged Properties located outside the United States of America, in such form
as agreed between the US Borrower and the Administrative Agent, as the same may
be amended, supplemented or otherwise modified from time to time.

 

“Mortgaged Property” shall mean, initially, each parcel of real estate and the
improvements thereto owned by a Credit Party and identified on Schedule 1.1(b),
and includes each other parcel of real property and improvements thereto with
respect to which a Mortgage is granted pursuant to Section 9.15.

 

“Net Cash Proceeds” shall mean, with respect to any Prepayment Event or the
issuance after the Funding Date by the US Borrower of any Senior Subordinated
Notes or capital stock, (a) the gross cash proceeds (including payments from
time to time in respect of installment obligations, if applicable, but only as
and when received) received by or on behalf of Holdings, the US Borrower or any
of the Restricted Subsidiaries in respect of such Prepayment Event or issuance,
as the case may be, less (b) the sum of:

 

(i)  in the case of any Prepayment Event, the amount, if any, of all taxes paid
or estimated to be payable by Holdings, the US Borrower or any of the Restricted
Subsidiaries in connection with such Prepayment Event,

 

(ii)  in the case of any Prepayment Event (other than a Debt Incurrence
Prepayment Event), the amount of any reasonable reserve established in
accordance with GAAP against any liabilities (other than any taxes deducted
pursuant to clause (i) above) (x) associated with the assets that are the
subject of such Prepayment Event and (y) retained by Holdings, the US Borrower
or any of the Restricted Subsidiaries; provided, that the amount of any
subsequent reduction of such reserve (other than in connection with a payment in
respect of any such liability) shall be deemed to be Net Cash Proceeds of such a
Prepayment Event occurring on the date of such reduction,

 

(iii)  in the case of any Prepayment Event (other than a Debt Incurrence
Prepayment Event), the amount of any Indebtedness (other than any Indebtedness
hereunder) secured by a Lien on the assets that are the subject of such
Prepayment Event to the extent that the instrument creating or evidencing such

 

34

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

 

Indebtedness requires that such Indebtedness be repaid upon consummation of such
Prepayment Event,

 

(iv)  in the case of any Asset Sale Prepayment Event (other than an Asset Sale
Prepayment Event consummated pursuant to Section 10.4(e)), the amount of any
proceeds of such Asset Sale Prepayment Event that the US Borrower has reinvested
(or intends to reinvest within one year of the date of such Asset Sale
Prepayment Event) in the business of the US Borrower or any of the Restricted
Subsidiaries (subject to Section 9.14), provided that any portion of such
proceeds that has not been so reinvested within such one-year period shall
(x) be deemed to be Net Cash Proceeds of an Asset Sale Prepayment Event
occurring on the last day of such one-year period and (y) be applied to the
repayment of Term Loans in accordance with Section 5.2(a)(i); provided further
that, for purposes of the preceding proviso, such one-year period shall be
extended by up to twelve months (or, if less, extended by up to the shortest
period of time in excess of one year that such a reinvestment period exists
pursuant to, or may be extended under the terms of, any instrument governing any
publicly offered or privately placed Indebtedness of Holdings or the US
Borrower) from the last day of such one-year period so long as (A) such proceeds
are to be reinvested within such additional twelve-month period under the US
Borrower’s business plan as most recently adopted in good faith by its Board of
Directors and (B) the US Borrower believes in good faith that such proceeds will
be so reinvested within such additional twelve-month period, and

 

(v)  in the case of any Prepayment Event or the issuance by the US Borrower of
any Senior Subordinated Notes or capital stock, reasonable and customary fees,
commissions, expenses, issuance costs, discounts and other costs paid by either
of the Parent Companies, Holdings, the US Borrower or any of the Restricted
Subsidiaries, as applicable, in connection with such Prepayment Event or
issuance, as the case may be (other than those payable to either of the Parent
Companies, Holdings, the US Borrower or any Subsidiary of the US Borrower), in
each case only to the extent not already deducted in arriving at the amount
referred to in clause (a) above.

 

“New Extended Revolving Loan” shall have the meaning provided in Section 2.14.

 

“New Extended Revolving Loan Commitments” shall have the meaning provided in
Section 2.14.

 

“New Extended Revolving Loan Lender” shall have the meaning provided in
Section 2.14.

 

“New Loan Commitments” shall have the meaning provided in Section 2.14.

 

“New Revolving Loan” shall have the meaning provided in Section 2.14.

 

“New Revolving Loan Commitments” shall have the meaning provided in
Section 2.14.

 

35

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

 

“New Revolving Loan Lender” shall have the meaning provided in Section 2.14.

 

“New Sellers” shall mean mg technologies ag and certain of its subsidiaries that
are parties to the Sale and Purchase Agreement.

 

“New Tranche H Term Loan” shall have the meaning provided in Section 2.14.

 

“New Tranche H Term Loan Commitments” shall have the meaning provided in
Section 2.14.

 

“New Tranche H Term Loan Lender” shall have the meaning provided in
Section 2.14.

 

“New Tranche I Term Loan” shall have the meaning provided in Section 2.14.

 

“New Tranche I Term Loan Commitments” shall have the meaning provided in
Section 2.14.

 

“New Tranche I Term Loan Lender” shall have the meaning provided in
Section 2.14.

 

“Non-Defaulting Lender” shall mean and include each Lender other than a
Defaulting Lender.

 

“Non-Excluded Taxes” shall have the meaning provided in Section 5.4(a).

 

“Notice of Borrowing” shall have the meaning provided in Section 2.3.

 

“Notice of Conversion or Continuation” shall have the meaning provided in
Section 2.6.

 

“Obligations” shall have the meaning assigned to such term in the applicable
Security Documents.

 

“OID” shall have the meaning given to that term in Section 2.15.

 

“Original Seller” shall mean Laporte Plc.

 

“Parent” shall mean Rockwood Holdings, Inc., a Delaware corporation.

 

“Parent Common Stock” shall mean any class of common stock of Parent outstanding
after the Funding Date.

 

“Parent Companies” shall mean the Parent, PIK Holdco and any direct or indirect
wholly owned Subsidiary of Parent or PIK Holdco that is a direct or indirect
parent company of Holdings.

 

36

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

 

“Participant” shall have the meaning provided in Section 14.6(c)(i).

 

“PBGC” shall mean the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.

 

“Perfection Certificate” shall mean a certificate in the form of Exhibit G or
any other form approved by the Administrative Agent.

 

“Permitted Acquisition” shall mean the acquisition, by merger or otherwise, by
the US Borrower or any of the Restricted Subsidiaries of assets or capital stock
or other equity interests, so long as (a) such acquisition and all transactions
related thereto shall be consummated in accordance with applicable law; (b) such
acquisition shall result in the issuer of such capital stock or other equity
interests becoming (i) a Restricted Subsidiary and (ii)(x) in the case of a
Restricted Domestic Subsidiary, a US Subsidiary Guarantor or (y) in the case of
a Restricted Foreign Subsidiary, a Foreign Subsidiary Guarantor, in each case to
the extent required by Section 9.11; (c) such acquisition shall result in the
Administrative Agent, for the benefit of the applicable Lenders, being granted a
security interest in any capital stock or any assets so acquired to the extent
required by Sections 9.11, 9.12 and/or 9.15; (d) after giving effect to such
acquisition, no Default or Event of Default shall have occurred and be
continuing; and (e) the US Borrower shall be in compliance, on a pro forma basis
after giving effect to such acquisition (including any Indebtedness assumed or
permitted to exist or incurred pursuant to Sections 10.1(j) and 10.1(k),
respectively, and any related Pro Forma Adjustment), with the covenants set
forth in Sections 10.9 and 10.10, as such covenants are recomputed as at the
last day of the most recently ended Test Period under such Sections as if such
acquisition had occurred on the first day of such Test Period.

 

“Permitted Additional Notes” shall mean senior or senior subordinated notes,
issued by the US Borrower, (i) the terms of which (1) do not provide for any
scheduled repayment or redemption, mandatory repayment or redemption or sinking
fund obligation prior to the date that is 182 days following the date that is
eight years after the Funding Date (other than customary offers to purchase upon
a change of control, asset sale or event of loss and customary acceleration
rights after an event of default) and (2) to the extent senior subordinated
notes, provide for customary subordination to the Obligations under the Credit
Documents, (ii) the covenants, events of default, Subsidiary guarantees and
other terms of which (other than interest rate and redemption premiums), taken
as a whole, are not more restrictive to the US Borrower and the Subsidiaries
than those in the Subordinated Notes, (iii) which shall bear a rate of interest
determined by the Board of Directors of the US Borrower to be a market rate of
interest at the date of their issuance, (iv) of which no Subsidiary of the US
Borrower (other than a Guarantor) is an obligor under such notes that is not an
obligor under the Subordinated Notes and (v) the principal amount of which, when
taken together with the amount of any New Loan Commitments hereunder (or New
Revolving Loans, New Extended Revolving Loans, New Tranche H Term Loans or New
Tranche I Term Loans made pursuant thereto), shall not exceed $250,000,000 in
the aggregate.

 

37

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

 

“Permitted Additional PIK Notes” shall mean (a) PIK Notes other than PIK Notes
issued as Permitted PIK Debt and (b) PIK Refinancing Indebtedness or PIK
Refinancing Preferred Stock issued in connection with any refinancing or
replacement of PIK Notes issued under clause (a) of this definition; provided,
that the aggregate principal amount of Permitted Additional PIK Notes and
Permitted Additional Subordinated Notes outstanding at any time shall not exceed
$250,000,000, plus accrued interest thereon as provided in the PIK Notes
Documents or the Subordinated Note Indenture, as the case may be.

 

“Permitted Additional Subordinated Notes” shall mean (i) Subordinated Notes
other than Subordinated Notes issued as Permitted Subordinated Debt and/or
(ii) Senior Subordinated Notes other than Senior Subordinated Notes issued as
Permitted Senior Subordinated Debt; provided, that the aggregate principal
amount of Permitted Additional PIK Notes and Permitted Additional Subordinated
Notes outstanding at any time shall not exceed $250,000,000, plus accrued
interest thereon as provided in the PIK Notes Documents, the Subordinated Note
Indenture or the Senior Subordinated Notes Indenture, as the case may be.

 

“Permitted Amendments” shall mean an extension of the final maturity date of the
Extended Revolving Credit Loans and the Extended Revolving Credit Commitments of
the Accepting Lenders (provided, that such extensions may not result in having
more than two additional final maturity date under this Agreement in any year
without the consent of the Administrative Agent) and in, connection therewith,
any increase in the Applicable ABR Margin and Applicable Eurodollar Margin with
respect to the applicable Loans and/or Commitments of the Accepting Lenders and
the payment of additional fees to the Accepting Lenders (such increase and/or
payments to be in the form of cash, equity interest or other property to the
extent not prohibited by this Agreement).

 

“Permitted Capital Expenditure Amount” shall have the meaning provided in
Section 10.11(a).

 

“Permitted Investments” shall mean (a) securities issued or unconditionally
guaranteed by the United States government or any agency or instrumentality
thereof, in each case having maturities of not more than 24 months from the date
of acquisition thereof; (b) securities issued by any state of the United States
of America or any political subdivision of any such state or any public
instrumentality thereof or any political subdivision of any such state or any
public instrumentality thereof having maturities of not more than 24 months from
the date of acquisition thereof and, at the time of acquisition, having an
investment grade rating generally obtainable from either S&P or Moody’s (or, if
at any time neither S&P nor Moody’s shall be rating such obligations, then from
another nationally recognized rating service); (c) commercial paper issued by
any Lender or any bank holding company owning any Lender; (d) commercial paper
maturing no more than 12 months after the date of creation thereof and, at the
time of acquisition, having a rating of at least A-2 or P-2 from either S&P or
Moody’s (or, if at any time neither S&P nor Moody’s shall be rating such
obligations, an equivalent rating from another nationally recognized rating
service); (e) domestic and

 

38

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

 

eurodollar certificates of deposit or bankers’ acceptances maturing no more than
two years after the date of acquisition thereof issued by any Lender or any
other bank having combined capital and surplus of not less than $250,000,000 in
the case of domestic banks and $100,000,000 (or the dollar equivalent thereof)
in the case of foreign banks; (f) repurchase agreements with a term of not more
than 30 days for underlying securities of the type described in clauses (a),
(b) and (e) above entered into with any bank meeting the qualifications
specified in clause (e) above or securities dealers of recognized national
standing; (g) marketable short-term money market and similar securities, having
a rating of at least A-2 or P-2 from either S&P or Moody’s (or, if at any time
neither S&P nor Moody’s shall be rating such obligations, an equivalent rating
from another nationally recognized rating service); (h) shares of investment
companies that are registered under the Investment Company Act of 1940 and
invest solely in one or more of the types of securities described in clauses
(a) through (g) above; and (i) in the case of investments by any Restricted
Foreign Subsidiary or investments made in a country outside the United States of
America, other customarily utilized high-quality investments in the country
where such Restricted Foreign Subsidiary is located or in which such investment
is made.

 

“Permitted Liens” shall mean (a) Liens for taxes, assessments or governmental
charges or claims not yet due or which are being contested in good faith and by
appropriate proceedings for which appropriate reserves have been established in
accordance with GAAP; (b) Liens in respect of property or assets of the US
Borrower or any of the Subsidiaries imposed by law, such as carriers’,
warehousemen’s and mechanics’ Liens and other similar Liens arising in the
ordinary course of business, in each case so long as such Liens arise in the
ordinary course of business and do not individually or in the aggregate have a
Material Adverse Effect; (c) Liens arising from judgments or decrees in
circumstances not constituting an Event of Default under Section 11.14;
(d) Liens incurred or deposits made in connection with workers’ compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, performance and return-of-money bonds and other
similar obligations incurred in the ordinary course of business; (e) ground
leases in respect of real property on which facilities owned or leased by the US
Borrower or any of its Subsidiaries are located; (f) easements, rights-of-way,
restrictions, minor defects or irregularities in title and other similar charges
or encumbrances not interfering in any material respect with the business of
Holdings, the US Borrower and its Subsidiaries, taken as a whole; (g) any
interest or title of a lessor or secured by a lessor’s interest under any lease
permitted by this Agreement; (h) Liens in favor of customs and revenue
authorities arising as a matter of law to secure payment of customs duties in
connection with the importation of goods; (i) Liens on goods the purchase price
of which is financed by a documentary letter of credit issued for the account of
the US Borrower or any of its Subsidiaries; provided, that such Lien secures
only the obligations of the US Borrower or such Subsidiaries in respect of such
letter of credit to the extent permitted under Section 10.1; (j) leases or
subleases and licenses or sub-licenses granted to others not interfering in any
material respect with the business of Holdings, the US Borrower and its
Subsidiaries, taken as a whole; (k) Liens created in the ordinary course of
business in favor of banks and other financial institutions over credit balances
of any bank accounts of any of the Parent Companies, Holdings, the US Borrower
and the Restricted Subsidiaries held at such banks or

 

39

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

 

financial institutions, as the case may be, to facilitate the operation of cash
pooling and/or interest set-off arrangements in respect of such bank accounts in
the ordinary course of business; and (l) Liens on accounts receivables, the
account into which such accounts receivable are paid and other related rights in
respect of which security interests are customarily granted in connection with
asset securitization transactions involving accounts receivable, in each case,
in favor of the factoring or financing party in respect of such accounts
receivable; provided, that the applicable accounts receivable financing
facilities or factoring arrangements are permitted by Section 10.4(e).

 

“Permitted PIK Debt” shall mean (a) the PIK Notes and (b) the 2011 Senior Notes;
provided, that the aggregate principal amount of such PIK Notes and 2011 Senior
Notes (together with the aggregate principal amount of the PIK Refinancing
Indebtedness and the aggregate liquidation preference of PIK Refinancing
Preferred Stock, in each case to the extent replacing the foregoing) outstanding
at any time shall not exceed $170,000,000, plus accrued interest and dividends
in accordance with the PIK Notes Documents or the 2011 Senior Notes Indenture,
as applicable.

 

“Permitted Sale Leaseback” shall mean any Sale Leaseback consummated by the US
Borrower or any of the Restricted Subsidiaries after the Funding Date; provided,
that such Sale Leaseback is consummated for fair value as determined at the time
of consummation in good faith by the US Borrower and, in the case of any Sale
Leaseback (or series of related Sales Leasebacks) the aggregate proceeds of
which exceed $20,000,000, the Board of Directors of the US Borrower (which such
determination may take into account any retained interest or other investment of
the US Borrower or such Restricted Subsidiary in connection with, and any other
material economic terms of, such Sale Leaseback).

 

“Permitted Senior Subordinated Debt” shall mean (a) the Senior Subordinated
Loans and (b) the Senior Subordinated Notes to the extent that the Net Cash
Proceeds therefrom are applied to prepay the principal of, and accrued interest
on, the Senior Subordinated Loans or refinance or replace other Senior
Subordinated Notes; provided that the aggregate principal amount of such Senior
Subordinated Loans and Senior Subordinated Notes outstanding at any time shall
not exceed the sum of $350,000,000 and €419,076,355.71 plus any redemption or
prepayment premiums payable in respect of the Senior Subordinated Loans.

 

“Permitted Subordinated Debt” shall mean the Subordinated Notes, provided that
the aggregate principal amount of such Subordinated Notes outstanding at any
time shall not exceed $375,000,000.

 

“Person” shall mean any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other enterprise
or any Governmental Authority.

 

“PIK Holdco” shall mean Rockwood Specialties Consolidated, Inc., a Delaware
corporation.

 

40

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

 

 

“PIK Notes” shall mean pay-in-kind loans and notes of PIK Holdco issued pursuant
to the documents listed in clauses (a) and (b) of the definition of the PIK
Notes Documents.

 

“PIK Notes Documents” shall mean (a) the PIK Bridge Loan Agreement dated as of
November 20, 2000, as amended, supplemented or otherwise modified from time to
time, among PIK Holdco, as Borrower, the lenders from time to time parties
thereto, Merrill Lynch Capital Corporation, as agent, and Merrill Lynch
International, as arranger, pursuant to which the PIK Notes were issued, (b) the
PIK Note Purchase Agreement between PIK Holdco and Allianz
Lebensversicherungs-AG, Stuttgart, dated as of February 7, 2001, as the same may
be amended, supplemented or otherwise modified from time to time and (c) all
agreements and instruments governing the issuance or terms of any PIK
Refinancing Indebtedness or PIK Refinancing Preferred Stock.

 

“PIK Proceeds Equity Contribution” shall mean the contribution by Holdings to
the US Borrower as common equity of an amount in cash equal to the amount of the
Net Cash Proceeds of Permitted Additional PIK Notes (other than Permitted
Additional PIK Notes described in clause (b) of the definition thereof) issued
by PIK Holdco, with such contribution made using the Net Cash Proceeds of a
prior contribution in cash by PIK Holdco to Holdings from the Net Cash Proceeds
of the issuance by PIK Holdco of such Permitted Additional PIK Notes.

 

“PIK Refinancing Indebtedness” shall mean any Indebtedness of PIK Holdco or
Holdings issued or given in exchange for, or the proceeds of which are used
substantially simultaneously with the issuance thereof to refinance or replace,
PIK Notes or Permitted Additional PIK Notes incurred pursuant to the terms of
this Agreement, so long as (i) the aggregate principal amount of such
Indebtedness does not exceed the aggregate principal amount of the PIK Notes or
Permitted Additional PIK Notes for which such Indebtedness is being exchanged,
or to be refinanced or replaced with such Indebtedness, plus accrued interest,
redemption premiums or dividends in accordance with the PIK Notes Documents,
(ii) such Indebtedness has a maturity no earlier than the maturity of the PIK
Notes or Permitted Additional PIK Notes being refinanced or replaced, (iii) such
Indebtedness does not provide for the payment of interest in cash on any date
that is earlier than the date upon which interest or dividends may be paid in
cash under the terms of the PIK Notes or Permitted Additional PIK Notes being
refinanced or replaced, (iv) all other terms of such refinancing or replacement
Indebtedness are, taken as a whole, no more adverse to the interests of the
Lenders than those previously existing with respect to the PIK Notes or
Permitted Additional PIK Notes being refinanced or replaced and (v) such
refinancing or replacement Indebtedness shall bear a rate of interest determined
by the Board of Directors of PIK Holdco or Holdings, as applicable, to be a
market rate of interest at the date of such refinancing or replacement and have
other terms customary for similar issuances under similar market conditions or
otherwise be on terms reasonably acceptable to the Administrative Agent.

 

“PIK Refinancing Preferred Stock” shall mean any preferred capital stock or
preferred equity interest of PIK Holdco or Holdings issued or given in exchange
for, or

 

41

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

 

the proceeds of which are used substantially simultaneously with the issuance
thereof to refinance or replace, PIK Notes or Permitted Additional PIK Notes
incurred pursuant to the terms of this Agreement, so long as (i) the aggregate
liquidation preference of such preferred capital stock or preferred equity
interest does not exceed the aggregate principal amount of the PIK Notes or
Permitted Additional PIK Notes for which such preferred capital stock or
preferred equity interest is being exchanged, or to be refinanced or replaced
with such preferred capital stock or preferred equity interest, plus accrued
interest or dividends in accordance with the PIK Notes Documents, (ii) such
capital stock or equity interest has a maturity no earlier than the maturity of
the PIK Notes or Permitted Additional PIK Notes being refinanced or replaced,
(iii) such capital stock or equity interest does not provide for the payment of
dividends in cash on any date that is earlier than the date upon which interest
or dividends may be paid in cash under the terms of the PIK Notes or Permitted
Additional PIK Notes being refinanced or replaced, (iv) all other terms of such
refinancing or replacement capital stock or equity interest are, taken as a
whole, no more adverse to the interests of the Lenders than those previously
existing with respect to the PIK Notes or Permitted Additional PIK Notes being
refinanced or replaced and (v) such refinancing or replacement capital stock or
equity interest shall bear a dividend rate determined by the Board of Directors
of PIK Holdco or Holdings, as applicable, to be a market dividend rate at the
date of such refinancing or replacement and have other terms customary for
similar issuances under similar market conditions or otherwise be on terms
reasonably acceptable to the Administrative Agent.

 

“Plan” shall mean any multiemployer or single-employer plan, as defined in
Section 4001 of ERISA and subject to Title IV of ERISA, that is or was within
any of the preceding five plan years maintained or contributed to by (or to
which there is or was an obligation to contribute or to make payments to) the US
Borrower, a Subsidiary or an ERISA Affiliate.

 

“Pledge Agreement” shall mean the Pledge Agreement, entered into by Holdings,
the US Borrower, the other pledgors party thereto and the Administrative Agent
for the benefit of the Lenders, substantially in the form of Exhibit H, as the
same may be amended, supplemented or otherwise modified from time to time.

 

“Post-Closing Schedule” shall have the meaning provided in Section 9.18.

 

“Prepayment Event” shall mean any Asset Sale Prepayment Event, Debt Incurrence
Prepayment Event or any Permitted Sale Leaseback.

 

“Prime Rate” shall mean the rate of interest per annum announced from time to
time by CS as its reference rate in effect at its principal office in New York
City (the Prime Rate not being intended to be the lowest rate of interest
charged by CS in connection with extensions of credit to debtors); each change
in the Prime Rate shall be effective as of the opening of business on the date
such change is announced as being effective.

 

“Pro Forma Adjustment” shall mean, for any Test Period that includes any of the
six fiscal quarters first ending following any Permitted Acquisition, with
respect to

 

42

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

 

the Acquired EBITDA of the applicable Acquired Entity or Business or the
Consolidated EBITDA of the Borrower affected by such acquisition, the pro forma
increase or decrease in such Acquired EBITDA or such Consolidated EBITDA, as the
case may be, projected by the US Borrower in good faith as a result of
reasonably identifiable and supportable net cost savings or additional net
costs, as the case may be, realizable during such period by combining the
operations of such Acquired Entity or Business with the operations of the US
Borrower and its Subsidiaries; provided, that so long as such net cost savings
or additional net costs will be realizable at any time during such six-quarter
period, it may be assumed, for purposes of projecting such pro forma increase or
decrease to such Acquired EBITDA or such Consolidated EBITDA, as the case may
be, that such net cost savings or additional net costs will be realizable during
the entire such period; provided further, that any such pro forma increase or
decrease to such Acquired EBITDA or such Consolidated EBITDA, as the case may
be, shall be without duplication for net cost savings or additional net costs
actually realized during such period and already included in such Acquired
EBITDA or such Consolidated EBITDA, as the case may be.

 

“Pro Forma Adjustment Certificate” shall mean any certificate of an Authorized
Officer of the US Borrower delivered pursuant to Section 9.1(h) or setting forth
the information described in clause (iv) to Section 9.1(d).

 

“Purchase Agreement” shall mean the Business and Share Sale and Purchase
Agreement dated September 25, 2000, between the Original Seller and Parent
pursuant to which Parent, the US Borrower and the Subsidiaries (i) acquired from
the Original Seller (x) all the Original Seller’s assets (including capital
stock) primarily used in the conduct of the Original Seller’s Plastics &
Compounding, Water Technologies, Timber Treatments, Water Treatments, GD Holmes,
Electronics, Pigments and Additives business divisions and (y) all the
outstanding capital stock of Laporte Electronics France, S.A. and (ii) assumed
certain liabilities of the Original Seller, all as provided in such purchase
agreement, for consideration payable to the Original Seller in the aggregate
amount of $1,175,000,000 in cash (subject to certain purchase price adjustments
in accordance with such purchase agreement).

 

“Qualified Preferred Stock” shall mean any preferred capital stock or preferred
equity interest of any of the Parent Companies (a) that does not provide for any
cash dividend payments or other cash distributions in respect thereof on or
prior to the Tranche G Term Loan Maturity Date and (b) that by its terms (or by
the terms of any security into which it is convertible or for which it is
exchangeable or exercisable) or upon the happening of any event does not
(i)(x) mature or become mandatorily redeemable pursuant to a sinking fund
obligation or otherwise, (y) become convertible or exchangeable at the option of
the holder thereof for Indebtedness or preferred stock that is not Qualified
Preferred Stock or (z) become redeemable at the option of the holder thereof
(other than as a result of a change of control event), in whole or in part, in
each case on or prior to the first anniversary of the Tranche G Term Loan
Maturity Date and (ii) provide holders thereunder with any rights upon the
occurrence of a “change of control” event prior to the repayment of the
Obligations under the Credit Documents.

 

43

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

 

“Quotation Day” shall mean, with respect to any Eurodollar Borrowing denominated
in a Foreign Currency and any Interest Period, the day on which it is market
practice in the relevant interbank market for prime banks to give quotations for
deposits in the currency of such Borrowing for delivery on the first day of such
Interest Period.  If such quotations would normally be given by prime banks on
more than one day, the Quotation Day will be the last of such days.

 

“Real Estate” shall have the meaning given to that term in Section 9.1(f).

 

“Recalculation Date” shall have the meaning provided in Section 1.2.

 

“Reference Lender” shall mean CS.

 

“Refinancing Date” shall mean the date that is 182 days prior to the maturity of
the Subordinated Notes.

 

“Refinancing Series” shall have the meaning given to that term in Section 2.15.

 

“Register” shall have the meaning provided in Section 14.6(b)(iv).

 

“Regulation D” shall mean Regulation D of the Board as from time to time in
effect and any successor to all or a portion thereof establishing reserve
requirements.

 

“Regulation T” shall mean Regulation T of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.

 

“Regulation U” shall mean Regulation U of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.

 

“Regulation X” shall mean Regulation X of the Board as from time to time in
effect and any successor to all or a portion thereof establishing margin
requirements.

 

“Related Parties” means, with respect to any specified Person, such Person’s
Affiliates and the directors, officers, employees, agents, trustees and advisors
of such Person and any Person that possesses, directly or indirectly, the power
to direct or cause the direction of the management or policies of such Person,
whether through the ability to exercise voting power, by contract or otherwise.

 

“Repayment Amount” shall mean any Tranche A-1 Repayment Amount, any Tranche A-2
Repayment Amount, any Tranche E Repayment Amount, any Tranche G Repayment
Amount, any Tranche H Repayment Amount or any Tranche I Repayment Amount.

 

44

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

 

“Repayment Date” shall mean a Tranche A-1 Repayment Date, a Tranche A-2
Repayment Date, a Tranche E Repayment Date, a Tranche G Repayment Date, any
Tranche H Repayment Date or any Tranche I Repayment Date.

 

“Reportable Event” shall mean an event described in Section 4043 of ERISA and
the regulations thereunder.

 

“Required Extended Revolving Credit Lenders” shall mean, at any date,
(a) Non-Defaulting Lenders having or holding a majority of the Dollar Equivalent
of the Adjusted Total Extended Revolving Credit Commitment at such date or
(b) if the Total Extended Revolving Credit Commitment has been terminated, the
holders (excluding Defaulting Lenders) of a majority of the outstanding
principal amount of the Dollar Equivalent of the Extended Revolving Credit Loans
and Letter of Credit Exposures relating to Letters of Credit issued under the
Extended Revolving Credit Commitment (excluding the Loans and Letter of Credit
Exposures of Defaulting Lenders) in the aggregate at such date.

 

“Required Lenders” shall mean, at any date, (a) Non-Defaulting Lenders having or
holding a majority of the sum of the Dollar Equivalent of (i) the Adjusted Total
Revolving Credit Commitment at such date, (ii) the Adjusted Total Extended
Revolving Credit Commitment at such date, (iii) the Adjusted Total Term Loan
Commitment at such date and (iv) the outstanding principal amount of the Term
Loans (excluding the Term Loans held by Defaulting Lenders) at such date or
(b) if the Total Revolving Credit Commitment, the Total Extended Revolving
Credit Commitment and the Total Term Loan Commitment have been terminated or for
the purposes of acceleration pursuant to Section 11, the holders (excluding
Defaulting Lenders) of a majority of the Dollar Equivalent of the outstanding
principal amount of the Loans and Letter of Credit Exposures (excluding the
Loans and Letter of Credit Exposures of Defaulting Lenders) in the aggregate at
such date.

 

“Required Revolving Credit Lenders” shall mean, at any date, (a) Non-Defaulting
Lenders having or holding a majority of the Dollar Equivalent of the Adjusted
Total Revolving Credit Commitment at such date or (b) if the Total Revolving
Credit Commitment has been terminated, the holders (excluding Defaulting
Lenders) of a majority of the outstanding principal amount of the Dollar
Equivalent of the Revolving Credit Loans and Letter of Credit Exposures relating
to Letters of Credit issued under the Revolving Credit Commitment (excluding the
Loans and Letter of Credit Exposure of Defaulting Lenders) in the aggregate at
such date.

 

“Required Tranche A Lenders” shall mean, at any date, Non-Defaulting Lenders
having or holding a majority of the sum of (a) the portion of the Adjusted Total
Term Loan Commitment that relates to Tranche A Term Loan Commitments at such
date and (b) the outstanding principal amount of the Tranche A-1 Term Loans and
the Tranche A-2 Term Loans (excluding the Tranche A-1 Term Loans and Tranche A-2
Term Loans held by Defaulting Lenders) in the aggregate at such date.

 

45

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

 

“Required Tranche E Term Loan Lenders” shall mean, at any date, Non-Defaulting
Lenders having or holding a majority of the sum of (a) the portion of the
Adjusted Total Term Loan Commitment that relates to Tranche E Term Loan
Commitments at such date and (b) the outstanding principal amount of the Tranche
E Term Loans (excluding the Tranche E Term Loans held by Defaulting Lenders) in
the aggregate at such date.

 

“Required Tranche G Term Loan Lenders” shall mean, at any date, Non-Defaulting
Lenders having or holding a majority of the sum of (a) the portion of the
Adjusted Total Term Loan Commitment that relates to Tranche G Term Loan
Commitments at such date and (b) the outstanding principal amount of the Tranche
G Term Loans (excluding the Tranche G Term Loans held by Defaulting Lenders) in
the aggregate at such date.

 

“Required Tranche H Term Loan Lenders” shall mean, at any date, Non-Defaulting
Lenders having or holding a majority of the sum of (a) the portion of the
Adjusted Total Term Loan Commitment that relates to Tranche H Term Loan
Commitments at such date and (b) the outstanding principal amount of the Tranche
H Term Loans (excluding the Tranche H Term Loans held by Defaulting Lenders) in
the aggregate at such date.

 

“Required Tranche I Term Loan Lenders” shall mean, at any date, Non-Defaulting
Lenders having or holding a majority of the sum of (a) the portion of the
Adjusted Total Term Loan Commitment that relates to Tranche I Term Loan
Commitments at such date and (b) the outstanding principal amount of the Tranche
I Term Loans (excluding the Tranche I Term Loans held by Defaulting Lenders) in
the aggregate at such date.

 

“Requirement of Law” shall mean, as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or assets or to which such
Person or any of its property or assets is subject.

 

“Restatement Date” shall mean the date on which the conditions to the
effectiveness of the amendment and restatement of the Existing Credit Agreement
as set forth herein that are specified in the Amendment Agreement shall be
satisfied.

 

“Restricted Domestic Subsidiary” shall mean a Domestic Subsidiary that is a
Restricted Subsidiary.

 

“Restricted Foreign Subsidiary” shall mean a Foreign Subsidiary that is a
Restricted Subsidiary.

 

“Restricted Subsidiary” shall mean any Subsidiary of the US Borrower other than
an Unrestricted Subsidiary.

 

46

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

 

“Revolver Refinancing Indebtedness” shall mean Indebtedness issued or incurred
under a new revolving credit facility (a “Additional Refinancing Revolver”) that
permanently refinances, refunds, extends, renews or replaces all or a portion of
the Revolving Credit Commitments or the Extended Revolving Credit Commitments
hereunder; provided that (a) the available commitments under such Additional
Refinancing Revolver when added to any Revolving Credit Commitments and Extended
Revolving Credit Commitments not permanently refinanced with such Additional
Refinancing Revolver shall not exceed the sum of the Total Revolving Credit
Commitments and the Total Extended Revolving Credit Commitments outstanding
immediately prior to the Restatement Date, (b) the US Borrower and the UK
Borrower shall be the only borrowers under such Additional Refinancing Revolver
and the Subsidiary Guarantors shall be the only guarantors, if any, with respect
thereto, (c) such Additional Refinancing Revolver contains covenants and events
of default which, taken as a whole, are determined in good faith by the Chief
Financial Officer of the US Borrower to be the same in all material respects as
(or less restrictive than) the covenants and events of default contained herein,
(d) the maturity date of the Additional Refinancing Revolver shall be no shorter
than the final maturity of the Revolving Credit Commitments or the Extended
Revolving Credit Commitments that it is refinancing, (e) the Indebtedness under
such Additional Refinancing Revolver, if secured, is secured only by Liens on
the Collateral (and not by any other assets) granted in favor of the Collateral
Agent or another agent appointed in connection with such Additional Refinancing
Revolver that are subject to the terms of an intercreditor agreement that is
reasonably satisfactory to the Collateral Agent and (f) the interest rate
applicable to the Additional Refinancing Revolver shall be determined by the US
Borrower and the applicable new lenders.

 

“Revolving Credit Commitment” shall mean, (a) with respect to each Lender that
is a Lender on the Funding Date, the amount set forth opposite such Lender’s
name on Schedule 1.1(c) as such Lender’s “Revolving Credit Commitment” and
(b) in the case of any Lender that becomes a Lender after the Funding Date, the
amount specified as such Lender’s “Revolving Credit Commitment” in the
Assignment and Acceptance pursuant to which such Lender assumed a portion of the
Total Revolving Credit Commitment, in each case as the same may be changed from
time to time pursuant to the terms hereof.

 

“Revolving Credit Commitment Percentage” shall mean at any time, for each
Lender, the percentage obtained by dividing (a) such Lender’s Revolving Credit
Commitment by (b) the aggregate amount of the Revolving Credit Commitments;
provided, that at any time when the Total Revolving Credit Commitment shall have
been terminated, each Lender’s Revolving Credit Commitment Percentage shall be
its Revolving Credit Commitment Percentage as in effect immediately prior to
such termination.

 

“Revolving Credit Exposure” shall mean, with respect to any Lender at any time,
the sum of (a) the aggregate principal amount of the Dollar Equivalent of the
Revolving Credit Loans of such Lender then outstanding and (b) such Lender’s
Letter of Credit Exposure at such time.

 

47

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

 

“Revolving Credit Loans” shall have the meaning provided in Section 2.1(b).

 

“Revolving Credit Maturity Date” shall mean the date that is six years after the
Funding Date, or, if such date is not a Business Day, the next preceding
Business Day.

 

“Rockwood Group” shall mean the US Borrower and its Restricted Subsidiaries
immediately prior to the Acquisition.

 

“RSGI Dollar Debt Escrow Account” shall mean Dollar Account Number 313122
established with the Financing Escrow Agent, to be administered pursuant to the
terms of the Financing Escrow Agreement.

 

“RSGI Euro Debt Escrow Account” shall mean Euro Account Number 7357879780
established with the Financing Escrow Agent, to be administered pursuant to the
terms of the Financing Escrow Agreement.

 

“Sale and Purchase Agreement” shall mean the Sale and Purchase Agreement,
notarized on April 19, 2004, between mg technologies ag, MG North America
Holdings Inc., Knight Erste Beteiligungs-GmbH, Knight Zweite Beteiligungs-GmbH,
Knight Dritte Beteiligungs-GmbH, Knight Vierte Beteiligungs-GmbH, Knight Fünfte
Beteiligungs-GmbH and RW Holding Corp. as the same may be amended, supplemented
or otherwise modified from time to time in accordance with the terms of this
Agreement.

 

“Sale Leaseback” shall mean any transaction or series of related transactions
pursuant to which the US Borrower or any of the Restricted Subsidiaries
(a) sells, transfers or otherwise disposes of any property, real or personal,
whether now owned or hereafter acquired, and (b) as part of such transaction,
thereafter rents or leases such property or other property that it intends to
use for substantially the same purpose or purposes as the property being sold,
transferred or disposed.

 

“S&P” shall mean Standard & Poor’s Ratings Services or any successor by merger
or consolidation to its business.

 

“SEC” shall mean the Securities and Exchange Commission or any successor
thereto.

 

“Second Amendment” shall mean the Second Amendment to this Agreement, dated as
of December 10, 2004.

 

“Second Amendment Effective Date” shall mean the date on which the Second
Amendment becomes effective.

 

“Section 9.1 Financials” shall mean the financial statements delivered, or
required to be delivered, pursuant to Section 9.1(a) or (b) together with the
accompanying officer’s certificate delivered, or required to be delivered,
pursuant to Section 9.1(d).

 

48

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

 

“Secured Parties” shall have the meaning assigned to such term in the applicable
Security Documents.

 

“Security Agreement” shall mean the Security Agreement entered into by the US
Borrower, the other grantors party thereto and the Administrative Agent for the
benefit of the Lenders and the other Secured Parties named therein,
substantially in the form of Exhibit I, as the same may be amended, supplemented
or otherwise modified from time to time.

 

“Security Documents” shall mean, collectively, (a) the Guarantee, (b) the Pledge
Agreement, (c) the Security Agreement, (d) the Foreign Security Documents,
(e) the Mortgages and (f) each other security agreement or other instrument or
document executed and delivered pursuant to Section 9.11 or 9.12 or pursuant to
any of the Security Documents to secure any of the Obligations.

 

“Seller” shall mean any Original Seller or New Seller.

 

“Senior Secured Debt” shall mean, at any time, Consolidated Total Debt at such
time minus any unsecured Indebtedness included therein.

 

“Senior Secured Debt to Consolidated EBITDA Ratio” shall mean, as of any date of
determination, the ratio of (a) Senior Secured Debt as of the last day of the
relevant Test Period to (b) Consolidated EBITDA for such Test Period.

 

“Senior Subordinated Loan Agreement” shall mean the Senior Subordinated Loan
Agreement dated as of the Funding Date among the US Borrower, as borrower, the
several lenders from time to time party thereto, CS, as administrative agent,
Goldman Sachs Credit Partners L.P., as syndication agent, UBS AG, Stamford
Branch, as documentation agent, CS, UBS Loan Finance LLC and Goldman Sachs
Credit Partners L.P., as initial lenders, and CS, UBS Securities LLC and Goldman
Sachs Credit Partners L.P., as lead arrangers, as the same may be amended,
supplemented or otherwise modified from time to time to the extent permitted by
Section 10.7(b).

 

“Senior Subordinated Loans” shall mean (a) subordinated loans made pursuant to
the Senior Subordinated Loan Agreement and having a final maturity not earlier
than the date that is ten years after the Closing Date and (b) any replacement
or refinancing thereof having terms no more materially adverse to the interests
of the Lenders than the terms thereof; provided, that any such amendment,
replacement or refinancing shall bear a rate of interest determined by the Board
of Directors of the US Borrower to be a market rate of interest at the date of
such amendment, replacement or refinancing and have other terms customary for
similar issuances under similar market conditions or otherwise be on terms
reasonably acceptable to the Administrative Agent.

 

“Senior Subordinated Notes” shall mean (a) any Senior Subordinated Notes of the
US Borrower issued after the Funding Date pursuant to the Senior Subordinated
Notes Indenture to refinance any amounts outstanding under the Senior
Subordinated Loan Agreement plus any redemption or prepayment premiums payable
in respect thereof and (b) any replacement or refinancing thereof having terms
no more

 

49

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

 

materially adverse to the interests of the Lenders than the terms thereof;
provided, that any such amendment, replacement or refinancing shall bear a rate
of interest determined by the Board of Directors of the US Borrower to be a
market rate of interest at the date of such amendment, replacement or
refinancing and have other terms customary for similar issuances under similar
market conditions or otherwise be on terms reasonably acceptable to the
Administrative Agent.

 

“Senior Subordinated Notes Indenture” shall mean any Indenture entered into
after the Funding Date pursuant to which the Senior Subordinated Notes are
issued, as the same may be amended, supplemented or otherwise modified from time
to time to the extent permitted by Section 10.7(b).

 

“Series” shall have the meaning provided in Section 2.14.

 

“Singapore Guarantee” shall mean the Singapore Guarantee Agreement, made by each
of the Singapore Guarantors in favor of the Administrative Agent for the benefit
of the Lenders to the UK Borrower and the other Secured Parties named therein,
substantially in the form of Exhibit J-1, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“Singapore Guarantors” shall mean (a) each Subsidiary of the US Borrower (other
than an Unrestricted Subsidiary) on the Funding Date that is a member of the
Rockwood Group and that is incorporated under the laws of Singapore P.O.C. and
is a party to the Singapore Guarantee and (b) each Subsidiary of the US Borrower
that is incorporated under the laws of Singapore P.O.C. and that becomes a party
to the Singapore Guarantee after the Funding Date pursuant to Section 9.11.

 

“Singapore Pledge Agreements” shall mean (a) the Singapore Pledge Agreement,
entered into by the US Borrower and the Administrative Agent for the benefit of
the Lenders to the UK Borrower and the other Secured Parties named therein and
(b) the Singapore Pledge Agreement entered into by the US Borrower and the
Administrative Agent for the benefit of the Lenders to the US Borrower and the
other Secured Parties named therein, in each case, substantially in the form of
Exhibit J-2(a) or (b), as applicable, as the same may be amended, supplemented
or otherwise modified from time to time.

 

“Singapore Security Agreement” shall mean the Singapore Fixed and Floating
Charge entered into by the Singapore Guarantors, certain other Restricted
Subsidiaries and the Administrative Agent for the benefit of the Lenders to the
UK Borrower and the other Secured Parties named therein, substantially in the
form of Exhibit J-3, as the same may be amended, supplemented or otherwise
modified from time to time.

 

“Sold Entity or Business” shall have the meaning provided in the definition of
the term “Consolidated EBITDA”.

 

50

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

 

“Specified Obligations” shall mean Obligations consisting of (a) the principal
and interest on Loans and (b) reimbursement obligations in respect of Letters of
Credit.

 

“Specified Subsidiary” shall mean, at any date of determination, (a) any
Material Subsidiary or (b) any Unrestricted Subsidiary (i) whose total assets at
the last day of the Test Period ending on the last day of the most recent fiscal
period for which Section 9.1 Financials have been delivered were equal to or
greater than 15% of the Consolidated Total Assets of the US Borrower and the
Subsidiaries at such date or (ii) whose gross revenues for such Test Period were
equal to or greater than 15% of the consolidated gross revenues of the US
Borrower and the Subsidiaries for such period, in each case determined in
accordance with GAAP.

 

“Stated Amount” of any Letter of Credit shall mean, as of any date of
determination, the maximum amount then available to be drawn thereunder,
determined without regard to whether any conditions to drawing could then be
met.

 

“Status” shall mean, as to the US Borrower as of any date, the existence of
Level I Status, Level II Status, Level III Status or Level IV Status on such
date.  Changes in Status resulting from changes in the Consolidated Total Debt
to Consolidated EBITDA Ratio shall become effective (the date of such
effectiveness, the “Effective Date”) as of the first day following the last day
of the most recent fiscal year or period for which (a) Section 9.1 Financials
are delivered to the Lenders under Section 9.1 and (b) an officer’s certificate
is delivered by the US Borrower to the Lenders setting forth, with respect to
such Section 9.1 Financials, the then-applicable Status, and shall remain in
effect until the next change to be effected pursuant to this definition;
provided, that (i) if the US Borrower shall have made any payments in respect of
interest or commitment fees during the period (the “Interim Period”) from and
including the Effective Date to but excluding the day any change in Status is
determined as provided above, then the amount of the next such payment due on or
after such day shall be increased or decreased by an amount equal to any
underpayment or overpayment so made by the US Borrower during such Interim
Period and (ii) each determination of the Consolidated Total Debt to
Consolidated EBITDA Ratio or the Senior Secured Debt to Consolidated EBITDA
Ratio, as applicable, pursuant to this definition shall be made with respect to
the Test Period ending at the end of the fiscal period covered by the relevant
financial statements.

 

“Statutory Reserve Rate” shall mean for any day as applied to any Eurodollar
Loan, a fraction (expressed as a decimal), the numerator of which is the number
one and the denominator of which is the number one minus the aggregate of the
maximum reserve percentages that are in effect on that day (including any
marginal, special, emergency or supplemental reserves), expressed as a decimal,
as prescribed by the Board and to which the Administrative Agent is subject, for
eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in
Regulation D of the Board).  Such reserve percentages shall include those
imposed pursuant to such Regulation D.  Eurodollar Loans shall be deemed to
constitute eurocurrency funding and to be subject to such reserve requirements
without benefit of or credit for proration, exemptions or offsets that may be
available from time to time to any Lender under such Regulation D or any

 

51

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

 

comparable regulation.  The Statutory Reserve Rate shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.

 

“Sterling” or “£” shall mean the lawful money of the United Kingdom.

 

“Subordinated Note Indenture” shall mean any Indenture (including the Indenture
dated as of July 23, 2003, among the US Borrower, the guarantors party thereto
and The Bank of New York, as trustee), pursuant to which the Subordinated Notes
are issued, as the same may be amended, supplemented or otherwise modified from
time to time to the extent permitted by Section 10.7(b).

 

“Subordinated Notes” shall mean (a) the 10 5/8% Senior Subordinated Notes due
2011 of the US Borrower issued pursuant to the Subordinated Note Indenture and
(b) any replacement or refinancing thereof having terms no more materially
adverse to the interests of the Lenders than the terms thereof; provided, that
any such amendment, replacement or refinancing shall bear a rate of interest
determined by the Board of Directors of the US Borrower to be a market rate of
interest at the date of such amendment, replacement or refinancing and have
other terms customary for similar issuances under similar market conditions or
otherwise be on terms reasonably acceptable to the Administrative Agent.

 

“Subsidiary” of any Person shall mean and include (a) any corporation more than
50% of whose stock of any class or classes having by the terms thereof ordinary
voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (b) any partnership, association, joint
venture or other entity in which such Person directly or indirectly through
Subsidiaries has more than a 50% equity interest at the time.  Unless otherwise
expressly provided, all references herein to a “Subsidiary” shall mean a
Subsidiary of the US Borrower.

 

“Successor Borrower” shall have the meaning provided in Section 10.3(a).

 

“Successor UK Borrower” shall have the meaning provided in Section 10.3(b).

 

“Swingline Commitment” shall mean $75,000,000.

 

“Swingline Exposure” shall mean, at any time, the aggregate principal amount of
all Swingline Loans then outstanding.  The Swingline Exposure of any Lender at
any time shall mean the sum of (a) the aggregate principal amount of Swingline
Loans then outstanding in respect of which such Lender has made (or is required
to have made) payments to the Swingline Lender pursuant to Section 2.1(d) and
(b) such Lender’s Extended Revolving Credit Commitment Percentage of the
aggregate Swingline Exposure at such time (excluding the portion thereof
consisting of Swingline Loans in respect of which the Lenders have made (or are
required to have made) payments to the Swingline Lender pursuant to
Section 2.1(d)).

 

52

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

 

“Swingline Lender” shall mean CS in its capacity as lender of Swingline Loans
hereunder.

 

“Swingline Loans” shall have the meaning provided in Section 2.1(c).

 

“Swingline Maturity Date” shall mean, with respect to any Swingline Loan, the
date that is five Business Days prior to the Extended Revolving Credit Maturity
Date.

 

“Taiwan Pledge Agreements” shall mean (a) the Taiwan Pledge Agreement, entered
into by the US Borrower and the Administrative Agent for the benefit of the
Lenders to the UK Borrower and the other Secured Parties named therein and
(b) the Taiwan Pledge Agreement entered into by the US Borrower and the
Administrative Agent for the benefit of the Lenders to the US Borrower and the
other Secured Parties named therein, in each case, substantially in the form of
Exhibit K(a) or (b), as applicable, as the same may be amended, supplemented or
otherwise modified from time to time.

 

“Target” shall have the meaning provided in the definition of the term
“Acquisition.”

 

“Term Loan” shall mean any Tranche A-1 Term Loan, Tranche A-2 Term Loan, Tranche
E Term Loan, Tranche G Term Loan, Tranche H Term Loan or Tranche I Term Loan
(or, as the context may require, any other term loan made hereunder prior to the
Restatement Date).

 

“Term Loan Commitment” shall mean, with respect to each Lender, such Lender’s
Tranche A Term Loan Commitment, Tranche E Term Loan Commitment, Tranche G Term
Loan Commitment , Tranche H Term Loan Commitment and Tranche I Term Loan
Commitment”.

 

“Test Period” shall mean, for any determination under this Agreement, the four
consecutive fiscal quarters of the US Borrower then last ended.

 

“Third Amendment” shall mean the Third Amendment to this Agreement, dated as of
December 13, 2005.

 

“Third Amendment Effective Date” shall mean the date on which the Third
Amendment becomes effective.

 

“Total Commitment” shall mean the sum of the Total Term Loan Commitment, the
Total Revolving Credit Commitment and the Total Extended Revolving Credit
Commitment.

 

“Total Credit Exposure” shall mean, at any date, the sum of (a) the Total
Revolving Credit Commitment at such date, (b) the Total Extended Revolving
Credit Commitment at such date, (c) the Total Term Loan Commitment at such date
and (d) the outstanding principal amount of all Term Loans at such date.

 

53

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

 

“Total Extended Revolving Credit Commitment” shall mean the sum of the Extended
Revolving Credit Commitments of all the Lenders.  The Total Extended Revolving
Credit Commitment on the Restatement Date is $180,000,000.

 

“Total Revolving Credit Commitment” shall mean the sum of the Revolving Credit
Commitments of all the Lenders.  The Total Revolving Credit Commitment on the
Funding Date was $250,000,000.  The Total Revolving Credit Commitment on the
Restatement Date is $70,000,000.

 

“Total Term Loan Commitment” shall mean the sum of the Term Loan Commitments,
New Tranche H Term Loan Commitments (if applicable), New Tranche I Term Loan
Commitments (if applicable) and the Incremental Refinancing Term Loan Commitment
(if applicable) of all the Lenders.

 

“Tranche A Loans” shall have the meaning provided in Section 14.6(b)(ii)(B).

 

“Tranche A-1 Repayment Amount” shall have the meaning provided in
Section 2.5(b)(i).

 

“Tranche A-2 Repayment Amount” shall have the meaning provided in
Section 2.5(b)(ii).

 

“Tranche A-1 Repayment Date” shall have the meaning provided in
Section 2.5(b)(i).

 

“Tranche A-2 Repayment Date” shall have the meaning provided in
Section 2.5(b)(ii).

 

“Tranche A-1 Term Loan” shall have the meaning provided in Section 2.1(a).

 

“Tranche A-2 Term Loan” shall have the meaning provided in Section 2.1(a).

 

“Tranche A Term Loan Commitment” shall mean, (a) in the case of each Lender that
is a Lender on the Funding Date, the amount set forth opposite such Lender’s
name on Schedule 1.1(c) as such Lender’s “Tranche A Term Loan Commitment” and
(b) in the case of any Lender that becomes a Lender after the Funding Date, the
amount specified as such Lender’s “Tranche A Term Loan Commitment” in the
Assignment and Acceptance pursuant to which such Lender assumed a portion of the
Total Term Loan Commitment, in each case as the same may be changed from time to
time pursuant to the terms hereof.  The aggregate Tranche A Term Loan Commitment
on the Funding Date is €209,538,177.86.  It is understood and agreed that any
Lender having a Tranche A Term Loan Commitment or holding Tranche A-1 Term Loans
or Tranche A-2 Term Loans shall have (or hold) a pro rata share of the Tranche A
Term Loan Commitment, Tranche A-1 Term Loans and Tranche A-2 Term Loans, as the
case may be.

 

54

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

 

“Tranche A-1 Term Loan Maturity Date” shall mean the date that is seven years
after the Funding Date, or, if such date is not a Business Day, the next
preceding Business Day; provided, however, that the Tranche A-1 Term Loan
Maturity Date will automatically become the Refinancing Date in the event that
on or prior to the Refinancing Date either (a) the Subordinated Notes shall not
have been extended, renewed, replaced or otherwise refinanced in full in
accordance with the terms hereof by Indebtedness which shall have a final
maturity no earlier than (and which shall not require any mandatory payments of
principal in excess of $75,000,000 (except pursuant to asset sale or change of
control provisions that are no more materially adverse to the interests of the
Lenders than those relating to the Subordinated Notes as in effect on the date
hereof) any earlier than) the date that is 182 days following the date that is
seven years after the Funding Date or (b) legal defeasance or similar
arrangements reasonably satisfactory to the Administrative Agent shall not have
been made for the repayment or redemption of the Subordinated Notes in full.

 

“Tranche A-2 Term Loan Maturity Date” shall mean the date that is seven years
after the Funding Date, or, if such date is not a Business Day, the next
preceding Business Day; provided, however, that the Tranche A-2 Term Loan
Maturity Date will automatically become the Refinancing Date in the event that
on or prior to the Refinancing Date either (a) the Subordinated Notes shall not
have been extended, renewed, replaced or otherwise refinanced in full in
accordance with the terms hereof by Indebtedness which shall have a final
maturity no earlier than (and which shall not require any mandatory payments of
principal in excess of $75,000,000 (except pursuant to asset sale or change of
control provisions that are no more materially adverse to the interests of the
Lenders than those relating to the Subordinated Notes as in effect on the date
hereof) any earlier than) the date that is 182 days following the date that is
seven years after the Funding Date or (b) legal defeasance or similar
arrangements reasonably satisfactory to the Administrative Agent shall not have
been made for the repayment or redemption of the Subordinated Notes in full.

 

“Tranche C Term Loan Lender” shall mean each Lender with a Tranche C Term Loan
Commitment or with outstanding Tranche C Term Loans.

 

“Tranche D Term Loan Lender” shall mean each Lender with a Tranche D Term Loan
Commitment or with outstanding Tranche D Term Loans.

 

“Tranche E Repayment Amount” shall have the meaning provided in
Section 2.5(b)(iii).

 

“Tranche E Repayment Date” shall have the meaning provided in
Section 2.5(b)(iii).

 

“Tranche E Term Loan” shall mean a Loan made to the US Borrower in Dollars on
the Third Amendment Effective Date pursuant to Section 3 of the Third
Amendment.  On the Third Amendment Effective Date, the aggregate principal
amount of the Tranche E Term Loans shall be $1,139,275,000.00.  On the
Restatement Date, the aggregate principal amount of the Tranche E Term Loans
shall be $140,068,441.63.

 

55

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

 

“Tranche E Term Loan Commitment” shall mean, with respect to each Lender, the
commitment of such Lender to make Tranche E Term Loans hereunder pursuant to
Section 3 of the Third Amendment on the Third Amendment Effective Date.  The
amount of each Lender’s Tranche E Term Loan Commitment is set forth on Schedule
A to the Third Amendment (as appended to the Third Amendment on the Third
Amendment Effective Date) or in the Assignment and Acceptance pursuant to which
such Lender assumed its Tranche E Term Loan Commitment, in each case as the same
may be changed from time to time pursuant to the terms hereof.

 

“Tranche E Term Loan Lender” shall mean each Lender with a Tranche E Term Loan
Commitment or with outstanding Tranche E Term Loans.

 

“Tranche E Term Loan Maturity Date” shall mean the date that is eight years
after the Funding Date, or, if such date is not a Business Day, the next
preceding Business Day; provided, however, that the Tranche E Term Loan Maturity
Date will automatically become the Refinancing Date in the event that on or
prior to the Refinancing Date either (a) the Subordinated Notes shall not have
been extended, renewed, replaced or otherwise refinanced in full in accordance
with the terms hereof by Indebtedness which shall have a final maturity no
earlier than (and which shall not require any mandatory payments of principal in
excess of $75,000,000 (except pursuant to asset sale or change of control
provisions that are no more materially adverse to the interests of the Lenders
than those relating to the Subordinated Notes as in effect on the date hereof)
any earlier than) the date that is 182 days following the date that is eight
years after the Funding Date or (b) legal defeasance or similar arrangements
reasonably satisfactory to the Administrative Agent shall not have been made for
the repayment or redemption of the Subordinated Notes in full.

 

“Tranche F Term Loan Lender” shall mean each Lender with a Tranche F Term Loan
Commitment or with outstanding Tranche F Term Loans.

 

“Tranche G Repayment Amount” shall have the meaning provided in
Section 2.5(b)(iv).

 

“Tranche G Repayment Date” shall have the meaning provided in
Section 2.5(b)(iv).

 

“Tranche G Term Loan” shall mean a Loan made to the US Borrower in Euro on the
Fourth Amendment Effective Date pursuant to Section 3 of the Fourth Amendment. 
On the Fourth Amendment Effective Date, the aggregate principal amount of the
Tranche G Term Loans shall be €269,314,259.17. On the Restatement Date, the
aggregate principal amount of the Tranche G Term Loans shall be €65,435,999.09.

 

“Tranche G Term Loan Commitment” shall mean, with respect to each Lender, the
commitment of such Lender to make Tranche G Term Loans hereunder pursuant to
Section 3 of the Fourth Amendment on the Fourth Amendment Effective Date.  The
amount of each Lender’s Tranche G Term Loan Commitment is set forth on Schedule
A to the Fourth Amendment (as appended to the Fourth Amendment on the

 

56

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

 

Fourth Amendment Effective Date) or in the Assignment and Acceptance pursuant to
which such Lender assumed its Tranche G Term Loan Commitment, in each case as
the same may be changed from time to time pursuant to the terms hereof.

 

“Tranche G Term Loan Lender” shall mean each Lender with a Tranche G Term Loan
Commitment or with outstanding Tranche G Term Loans.

 

“Tranche G Term Loan Maturity Date” shall mean the date that is eight years
after the Funding Date, or, if such date is not a Business Day, the next
preceding Business Day; provided, however, that the Tranche G Term Loan Maturity
Date will automatically become the Refinancing Date in the event that on or
prior to the Refinancing Date either (a) the Subordinated Notes shall not have
been extended, renewed, replaced or otherwise refinanced in full in accordance
with the terms hereof by Indebtedness which shall have a final maturity no
earlier than (and which shall not require any mandatory payments of principal in
excess of $75,000,000 (except pursuant to asset sale or change of control
provisions that are no more materially adverse to the interests of the Lenders
than those relating to the Subordinated Notes as in effect on the date hereof)
any earlier than) the date that is 182 days following the date that is eight
years after the Funding Date or (b) legal defeasance or similar arrangements
reasonably satisfactory to the Administrative Agent shall not have been made for
the repayment or redemption of the Subordinated Notes in full.

 

“Tranche H Repayment Amount” shall have the meaning provided in
Section 2.5(b)(v).

 

“Tranche H Repayment Date” shall have the meaning provided in Section 2.5(b)(v).

 

“Tranche H Term Loan” shall mean a Loan made to the US Borrower in Dollars on
the Restatement Date pursuant to Section 3 of the Amendment Agreement.  On the
Restatement Date, the aggregate principal amount of the Tranche H Term Loans
shall be $941,956,558.37.

 

“Tranche H Term Loan Commitment” shall mean, with respect to each Lender, the
commitment of such Lender to make Tranche H Term Loans hereunder pursuant to
Section 3 of the Amendment Agreement on the Restatement Date.  The amount of
each Lender’s Tranche H Term Loan Commitment is set forth on Schedule A to the
Amendment Agreement (as appended to the Amendment Agreement on the Restatement
Date) or in the Assignment and Acceptance pursuant to which such Lender assumed
its Tranche H Term Loan Commitment, in each case as the same may be changed from
time to time pursuant to the terms hereof.

 

“Tranche H Term Loan Lender” shall mean each Lender with a Tranche H Term Loan
Commitment or with outstanding Tranche H Term Loans.

 

“Tranche H Term Loan Maturity Date” shall mean May 15, 2014, or, if such date is
not a Business Day, the next preceding Business Day.

 

57

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

 

“Tranche I Repayment Amount” shall have the meaning provided in
Section 2.5(b)(vi).

 

“Tranche I Repayment Date” shall have the meaning provided in
Section 2.5(b)(vi).

 

“Tranche I Term Loan” shall mean a Loan made to the US Borrower in Euro on the
Restatement Date pursuant to Section 4 of the Amendment Agreement.  On the
Restatement Date, the aggregate principal amount of the Tranche I Term Loans
shall be €195,633,946.04.

 

“Tranche I Term Loan Commitment” shall mean, with respect to each Lender, the
commitment of such Lender to make Tranche I Term Loans hereunder pursuant to
Section 4 of the Amendment Agreement on the Restatement Date.  The amount of
each Lender’s Tranche I Term Loan Commitment is set forth on Schedule B to the
Amendment Agreement (as appended to the Amendment Agreement on the Restatement
Date) or in the Assignment and Acceptance pursuant to which such Lender assumed
its Tranche I Term Loan Commitment, in each case as the same may be changed from
time to time pursuant to the terms hereof.

 

“Tranche I Term Loan Lender” shall mean each Lender with a Tranche I Term Loan
Commitment or with outstanding Tranche I Term Loans.

 

“Tranche I Term Loan Maturity Date” shall mean May 15, 2014, or, if such date is
not a Business Day, the next preceding Business Day.

 

“Transactions” shall mean, collectively, (a) the execution, delivery and
performance by the Credit Parties of the Credit Documents, the Senior
Subordinated Loan Agreement and the Senior Subordinated Notes Indenture, in each
case, to the extent they are a party thereto, (b) the Borrowings hereunder, the
borrowings under the Senior Subordinated Loan Agreement, the issuance of the
Senior Subordinated Notes, the issuance of Letters of Credit and the use of
proceeds of each of the foregoing, (c) the granting of Liens pursuant to the
Security Documents, (d) the Acquisition, (e) the refinancing of the 2003 Credit
Agreement and of certain existing Indebtedness of the Target and (f) any other
transaction related to or entered into in connection with any of the foregoing.

 

“Transaction Expenses” shall mean any fees or expenses incurred or paid by
Parent or any of its Subsidiaries in connection with the Transactions.

 

“Transferee” shall have the meaning provided in Section 14.6(e).

 

“Treaty on European Union” shall mean the Treaty of Rome of March 25, 1957, as
amended by the Single European Act 1986 and the Maastricht Treaty (which was
signed in Maastricht on February 7, 1992 and came into force on November 1,
1993).

 

58

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

 

“Treaty Lender” shall mean a Person who, by virtue of a double taxation
agreement between the United Kingdom and the country of residence of that
Person, is (subject only to a prior direction given to the UK Borrower by the
United Kingdom Inland Revenue following an application by that Person) eligible
to receive payments from the UK Borrower under this Agreement, (a) in the case
of an original Lender under this Agreement, without any deduction in respect of
taxes or (b) in the case of a Transferee, subject to a deduction in respect of
taxes to an extent no greater than that which applied to the original Lender
from which the Transferee acquired its Commitments.

 

“2003 Credit Agreement” shall mean the Amended and Restated Credit Agreement
dated as of December 8, 2003 among the US Borrower, the UK Borrower, Holdings,
PIK Holdco, Parent, the Lenders party thereto and JPMorgan Chase Bank, as
administrative agent.

 

“2011 Senior Notes” shall mean (a) the $70,000,000 initial aggregate principal
amount ($112,341,229 aggregate principal amount at maturity) of 12% Senior
Discount Notes due 2011 of Holdings issued pursuant to the 2011 Senior Notes
Indenture and (b) any replacement or refinancing thereof having terms no more
materially adverse to the interests of the Lenders than the terms thereof.

 

“2011 Senior Notes Indenture” shall mean any Indenture (including the Indenture
dated as of July 23, 2003) issued by Holdings, pursuant to which the 2011 Senior
Notes are issued, as the same may be amended, supplemented or otherwise modified
from time to time to the extent permitted by Section 10.7(b).

 

“Type” shall mean (a) as to any Tranche A-1 Term Loan, Tranche A-2 Term Loan,
Tranche G Term Loan or Tranche I Term Loan, its nature as a Eurodollar Term
Loan, (b) as to any Tranche E Term Loan or Tranche H Term Loans, its nature as
an ABR Loan or a Eurodollar Term Loan, (c) as to any Dollar Revolving Credit
Loan or Dollar Extended Revolving Credit Loan, its nature as an ABR Loan, a
Eurodollar Revolving Credit Loan or a Eurodollar Extended Revolving Credit Loan
and (d) as to any Foreign Currency Revolving Credit Loan or Foreign Currency
Extended Revolving Credit Loan, its nature as a Eurodollar Revolving Credit Loan
or a Eurodollar Extended Revolving Credit Loan.

 

“Unfunded Current Liability” of any Plan shall mean the amount, if any, by which
the present value of the accrued benefits under the Plan as of the close of its
most recent plan year, determined in accordance with Statement of Financial
Accounting Standards No. 87 as in effect on the Funding Date, based upon the
actuarial assumptions that would be used by the Plan’s actuary in a termination
of the Plan, exceeds the fair market value of the assets allocable thereto.

 

“UK Borrower” shall have the meaning provided in the preamble to this Agreement.

 

59

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

 

“UK Borrower Debt Escrow Account” shall mean Euro Account Number 8371059780
established by the Financing Escrow Agent, to be administered pursuant to the
terms of the Financing Escrow Agreement.

 

“UK Debenture” shall mean the Debenture entered into by the UK Borrower, the UK
Guarantors and the Administrative Agent for the benefit of the Lenders to the UK
Borrower and the other Secured Parties named therein, substantially in the form
of Exhibit L-1, as the same may be amended, supplemented or otherwise modified
from time to time.

 

“UK Guarantee” shall mean the UK Guarantee Agreement, made by the US Borrower
and each of the UK Guarantors in favor of the Administrative Agent for the
benefit of the Lenders to the UK Borrower and the other Secured Parties named
therein, substantially in the form of Exhibit L-2, as the same may be amended,
supplemented or otherwise modified from time to time.

 

“UK Guarantors” shall mean (a) each Subsidiary of the US Borrower (other than
the UK Borrower and any Unrestricted Subsidiary) on the Funding Date that is a
member of the Rockwood Group and that is incorporated under the laws of England
and Wales and (b) each Subsidiary of the US Borrower that is incorporated under
the laws of England and Wales and that becomes a party to the UK Guarantee after
the Funding Date pursuant to Section 9.11.

 

“UK Lender” shall mean a Person who is (a) a company resident in the United
Kingdom for tax purposes, (b) a partnership each of whose members is a company
so resident or (c) a company not so resident in the United Kingdom for tax
purposes, but which carries on a trade in the United Kingdom through a branch or
agency and is subject to corporation tax on interest paid to it under this
Agreement.

 

“UK Pledge Agreements” shall mean (a) the Charge Over Shares, entered into by
the US Borrower and the Administrative Agent for the benefit of the Lenders to
the UK Borrower and the other Secured Parties named therein and (b) the Charge
Over Shares, entered into by the US Borrower and the Administrative Agent for
the benefit of the Lenders to the US Borrower and the other Secured Parties
named therein, in each case substantially in the form of Exhibit L-3(a) or (b),
as applicable, as the same may be amended, supplemented or otherwise modified
from time to time.

 

“Unpaid Drawing” shall have the meaning provided in Section 3.4(a).

 

“Unrestricted Subsidiary” shall mean (a) any Subsidiary of the US Borrower that
is formed or acquired after the Closing Date (other than a Subsidiary that
becomes or is required to become a Credit Party hereunder); provided, that at
such time (or promptly thereafter) the US Borrower designates such Subsidiary an
Unrestricted Subsidiary in a written notice to the Administrative Agent, (b) any
Restricted Subsidiary (other than a Restricted Subsidiary that is or becomes a
Credit Party) subsequently re-designated as an Unrestricted Subsidiary by the US
Borrower in a written notice to the Administrative Agent; provided, that
(x) such re-designation shall be deemed to be an

 

60

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

 

investment on the date of such re-designation in an Unrestricted Subsidiary in
an amount equal to the sum of (i) the net worth of such re-designated Restricted
Subsidiary immediately prior to such re-designation (such net worth to be
calculated without regard to any guarantee provided by such re-designated
Restricted Subsidiary) and (ii) the aggregate principal amount of any
Indebtedness owed by such re-designated Restricted Subsidiary to the US Borrower
or any other Restricted Subsidiary immediately prior to such re-designation, all
calculated, except as set forth in the parenthetical to clause (i), on a
consolidated basis in accordance with GAAP and (y) no Default or Event of
Default would result from such re-designation and (c) each Subsidiary of an
Unrestricted Subsidiary; provided, however, that at the time of any written
re-designation by the US Borrower to the Administrative Agent that any
Unrestricted Subsidiary shall no longer constitute an Unrestricted Subsidiary,
such Unrestricted Subsidiary shall cease to be an Unrestricted Subsidiary to the
extent no Default or Event of Default would result from such re-designation.  On
or promptly after the date of its formation, acquisition or re-designation, as
applicable, each Unrestricted Subsidiary (other than an Unrestricted Subsidiary
that is a Foreign Subsidiary) shall have entered into a tax sharing agreement
containing terms that, in the reasonable judgment of the Administrative Agent,
provide for an appropriate allocation of tax liabilities and benefits.

 

“US Borrower” shall have the meaning provided in the preamble to this Agreement.

 

“US Subsidiary Guarantors” shall mean (a) each Domestic Subsidiary (other than
an Unrestricted Subsidiary) on the Funding Date and (b) each Domestic Subsidiary
that becomes a party to the Guarantee after the Funding Date pursuant to
Section 9.11.

 

“Voting Stock” shall mean, with respect to any Person, shares of such Person’s
capital stock having the right to vote for the election of directors of such
Person under ordinary circumstances.

 

“Yield Differential” shall have the meaning given to that term in Section 2.15.

 

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

 

1.2.                              Exchange Rates.  (a)    Not later than
1:00 p.m. (New York time) on each Calculation Date, the Administrative Agent
shall (i) determine the Exchange Rate as of such Calculation Date with respect
to each Foreign Currency to be used for calculating the Dollar Equivalent and
(ii) give notice thereof to the Lenders and the US Borrower (on behalf of itself
and the UK Borrower).  The Exchange Rates so determined shall become effective
on the relevant Calculation Date (a “Recalculation Date”), shall remain
effective until the next succeeding Recalculation Date, and shall for all
purposes

 

61

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

 

of this Agreement (other than any provision expressly requiring the use of a
current Exchange Rate) be the Exchange Rates employed in converting any amounts
between Dollars and Foreign Currencies.

 

(b)  Not later than 5:00 p.m. (New York time) on each Recalculation Date and
each date on which Foreign Currency Revolving Credit Loans or Foreign Currency
Extended Revolving Credit Loans are made, the Administrative Agent shall
(i) determine the aggregate amount of the Dollar Equivalents of (A) the
principal amounts of the Foreign Currency Revolving Credit Loans then
outstanding (after giving effect to any Foreign Currency Revolving Credit Loans
or Foreign Currency Extended Revolving Credit Loans, as applicable, made or
repaid on such date), (B) the face value of outstanding Foreign Currency Letters
of Credit and (C) Unpaid Drawings in respect of Foreign Currency Letters of
Credit and (ii) notify the Lenders and the US Borrower (on behalf of itself and
the UK Borrower) of the results of such determination.

 

(c)  For purposes of determining compliance under Sections 10.4, 10.5, 10.6,
10.9, 10.10 and 10.11 with respect to any amount in a Foreign Currency, such
amount shall be deemed to equal the Dollar Equivalent thereof based on the
average daily Exchange Rate for such Foreign Currency for the most recent
twelve-month period immediately prior to the date of determination determined in
a manner consistent with that used in calculating Consolidated EBITDA for the
related period.  For purposes of determining compliance with Sections 10.1 and
10.2, with respect to any amount of Indebtedness in a Foreign Currency,
compliance will be determined at the time of incurrence thereof using the Dollar
Equivalent thereof at the Exchange Rate in effect at the time of such
incurrence.

 

1.3.                              Redenomination of Certain Foreign Currencies. 
(a)    Each obligation of any party to this Agreement to make a payment
denominated in Sterling on or after the date the United Kingdom adopts the Euro
as its lawful currency after the Funding Date shall be redenominated into Euro
at the time of such adoption (in accordance with the EMU Legislation).  If, in
relation to Sterling, the basis of accrual of interest expressed in this
Agreement in respect of that currency shall be inconsistent with any convention
or practice in the London Interbank Market for the basis of accrual of interest
in respect of the Euro, such expressed basis shall be replaced by such
convention or practice with effect from the date on which the United Kingdom
adopts the Euro as its lawful currency; provided, that if any Foreign Currency
Borrowing in Sterling is outstanding immediately prior to such date, such
replacement shall take effect, with respect to such Foreign Currency Borrowing,
at the end of the then current Interest Period.

 

(b)  Each provision of this Agreement shall be subject to such reasonable
changes of construction as the Administrative Agent, in consultation with the US
Borrower and the UK Borrower, may from time to time specify to be appropriate to
reflect the adoption of the Euro by the United Kingdom and any relevant market
conventions or practices relating to the Euro.

 

62

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

 

SECTION 2.                                Amount and Terms of Credit

 

2.1.                              Commitments.  (a)    Subject to and upon the
terms and conditions herein set forth,

 

(i)  each Lender having a Tranche A Term Loan Commitment severally agrees to
make a loan or loans (each a “Tranche A-1 Term Loan” and, collectively, the
“Tranche A-1 Term Loans”) to the US Borrower on the Funding Date in Euro, which
Tranche A-1 Term Loans shall not exceed for any such Lender such Lender’s pro
rata share of all Tranche A-1 Term Loans to be made on the Funding Date (based
on the percentage which such Lender’s Tranche A Term Loan Commitment represents
of the aggregate Tranche A Term Loan Commitments of all Lenders); provided, that
the aggregate principal amount of all Tranche A-1 Term Loans made on the Funding
Date shall not exceed €39,129,762.71;

 

(ii)  each Lender having a Tranche A Term Loan Commitment severally agrees to
make a loan or loans (each a “Tranche A-2 Term Loan” and, collectively, the
“Tranche A-2 Term Loans”) to the UK Borrower on the Funding Date in Euro, which
Tranche A-2 Term Loans shall not exceed for any such Lender such Lender’s pro
rata share of all Tranche A-2 Term Loans to be made on the Funding Date (based
on the percentage which such Lender’s Tranche A Term Loan Commitment represents
of the aggregate Tranche A Term Loan Commitments of all Lenders); provided, that
the aggregate principal amount of all Tranche A-2 Term Loans made on the Funding
Date shall not exceed €128,500,779.57;

 

(iii)  each Lender having a Tranche A Term Loan Commitment severally agrees to
make a loan or loans on a single date on or prior to September 30, 2004 to the
US Borrower and/or the UK Borrower, as directed by the US Borrower in a Notice
of Borrowing delivered in accordance with Section 2.3, the amount of which loans
shall not exceed for any such Lender such Lender’s pro rata share of all such
loans to be made on the applicable date of borrowing (based on the percentage
which such Lender’s Tranche A Term Loan Commitment represents of the aggregate
Tranche A Term Loan Commitments of all Lenders); provided, that the aggregate
principal amount of all such loans made on the date of such borrowing shall not
exceed €41,907,635.58.  The portion of such loans, if any, made on the date of
such borrowing to the US Borrower shall be “Tranche A-1 Term Loans” and the
portion of such loans, if any, made on the date of such borrowing to the UK
Borrower shall be “Tranche A-2 Term Loans” for all purposes under this
Agreement.  In the event that the US Borrower shall not deliver a Notice of
Borrowing with respect to such loans on or prior to September 30, 2004 in
accordance with Section 2.3, the US Borrower shall be deemed to have requested
on behalf of itself a Tranche A-1 Term Loan in the amount of €41,907,635.58 (and
such Tranche A-1 Term Loan shall be funded on September 30, 2004 as stated
above), unless the US Borrower shall give the Administrative Agent at the
Administrative Agent’s Office written notice (or telephonic notice promptly
confirmed in writing) prior to 12:00 Noon (Local Time) at least three Business
Days prior to September 30, 2004 that no such loans are to be made to the US
Borrower or the UK Borrower;

 

(iv)  each Lender having a Tranche E Term Loan Commitment severally agrees,
pursuant to the Third Amendment, to make a Tranche E Term Loan or

 

63

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

 

Tranche E Term Loans on the Third Amendment Effective Date to the US Borrower in
Dollars, which Tranche E Term Loans shall not exceed for any such Lender the
Tranche E Term Loan Commitment of such Lender as of the Third Amendment
Effective Date; provided, that each Continuing Tranche D Term Loan Lender having
a Tranche E Term Loan Commitment shall make Tranche E Term Loans on the Third
Amendment Effective Date by exchanging its existing term loans designated as
“Tranche D Term Loans” under the Credit Agreement immediately prior to the Third
Amendment Effective Date for Tranche E Term Loans in the manner contemplated by
Section 3 of the Third Amendment;

 

(v)  each Lender having a Tranche G Term Loan Commitment severally agrees,
pursuant to, and in accordance with, the Fourth Amendment, to make a Tranche G
Term Loan or Tranche G Term Loans on the Fourth Amendment Effective Date to the
US Borrower in Euro, which Tranche G Term Loans shall not exceed for any such
Lender the Tranche G Term Loan Commitment of such Lender as of the Fourth
Amendment Effective Date, provided that each Continuing Tranche F Term Loan
Lender having a Tranche G Term Loan Commitment shall make Tranche G Term Loans
on the Fourth Amendment Effective Date by exchanging its existing term loans
designated as “Tranche F Term Loans” under the Credit Agreement immediately
prior to the Fourth Amendment Effective Date for Tranche G Term Loans in the
manner contemplated by Section 3 of the Fourth Amendment;

 

(vi)  each Lender having a Tranche H Term Loan Commitment severally agrees,
pursuant to the Amendment Agreement, to be deemed to have made a Tranche H Term
Loan or Tranche H Term Loans on the Restatement Date to the US Borrower in
Dollars, which Tranche H Term Loans shall not exceed for any such Lender the
Tranche H Term Loan Commitment of such Lender as of the Restatement Date, by
converting its existing term loans designated as “Tranche E Term Loans” under
the Existing Credit Agreement immediately prior to the Restatement Date for
Tranche H Term Loans in the manner contemplated by Section 3 of the Amendment
Agreement; and

 

(vii)  each Lender having a Tranche I Term Loan Commitment severally agrees,
pursuant to the Amendment Agreement, to be deemed to have made a Tranche I Term
Loan or Tranche I Term Loans on the Restatement Date to the US Borrower in Euro,
which Tranche I Term Loans shall not exceed for any such Lender the Tranche I
Term Loan Commitment of such Lender as of the Restatement Date, by converting
its existing term loans designated as “Tranche G Term Loans” under the Existing
Credit Agreement immediately prior to the Restatement Date for Tranche I Term
Loans in the manner contemplated by Section 4 of the Amendment Agreement.

 

Such Term Loans shall be made on the Funding Date (except as provided in clause
(iii), clause (iv), clause (v), clause (vi) or clause (vii) above).  On the
Restatement Date, the US Borrower shall pay all amounts owing under Section 2.11
as a result of the repayment or conversion of Tranche E Term Loans and Tranche G
Term Loans as required above in this Section 2.1(a).  Such Term Loans (i) may,
in respect of Tranche E Term Loans or Tranche H Term Loans and at the option of
the US Borrower, be incurred and maintained as, and/or converted into, ABR Loans
or Eurodollar Term

 

64

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

 

Loans, provided that all such Term Loans made by each of the Lenders pursuant to
the same Borrowing shall, unless otherwise specifically provided herein, consist
entirely of Term Loans of the same Type, (ii) shall, in respect of Tranche A-1
Term Loans, Tranche A-2 Term Loans, Tranche G Term Loans and Tranche I Term
Loans, be incurred and maintained as Eurodollar Term Loans, (iii) may be repaid
or prepaid in accordance with the provisions hereof, but once repaid or prepaid,
may not be reborrowed and (iv) shall not exceed in the aggregate the total of
all Tranche A Term Loan Commitments, Tranche E Term Loan Commitments, Tranche G
Term Loan Commitments, Tranche H Term Loan Commitments or Tranche I Term Loan
Commitments, as applicable.  On the Tranche A-1 Term Loan Maturity Date, all
Tranche A-1 Term Loans shall be repaid in full.  On the Tranche A-2 Term Loan
Maturity Date, all Tranche A-2 Term Loans shall be repaid in full.  On the
Tranche E Term Loan Maturity Date, all Tranche E Term Loans shall be repaid in
full.  On the Tranche G Term Loan Maturity Date, all Tranche G Term Loans shall
be repaid in full.  On the Tranche H Term Loan Maturity Date, all Tranche H Term
Loans shall be repaid in full.  On the Tranche I Term Loan Maturity Date, all
Tranche I Term Loans shall be repaid in full.

 

(b)  (i)  Subject to and upon the terms and conditions herein set forth, each
Lender having a Revolving Credit Commitment severally agrees to make a loan or
loans denominated in Dollars (each a “Dollar Revolving Credit Loan” and,
collectively, the “Dollar Revolving Credit Loans” and, together with the Foreign
Currency Revolving Credit Loans, the “Revolving Credit Loans”) and each Lender
having an Extended Revolving Credit Commitment severally agrees to make a loan
or loans denominated in Dollars (each a “Dollar Extended Revolving Credit Loan”
and, collectively, the “Dollar Extended Revolving Credit Loans” and, together
with the Foreign Currency Extended Revolving Credit Loans, the “Extended
Revolving Credit Loans”) to the US Borrower or the UK Borrower, as the case may
be, which Dollar Revolving Credit Loans or Dollar Extended Revolving Credit
Loans (A) shall be made at any time and from time to time on and after the
Funding Date and prior to the Revolving Credit Maturity Date or the Extended
Revolving Credit Maturity Date, as applicable, (B) may, at the option of the US
Borrower or the UK Borrower, as the case may be, be incurred and maintained as,
and/or converted into, ABR Loans, Eurodollar Revolving Credit Loans or
Eurodollar Extended Revolving Credit Loans; provided, that all Dollar Revolving
Credit Loans and all Dollar Extended Revolving Credit Loans made by each of the
Lenders pursuant to the same Borrowing shall, unless otherwise specifically
provided herein, consist entirely of Dollar Revolving Credit Loans or Dollar
Extended Revolving Credit Loans of the same Type, (C) may be repaid and
reborrowed in accordance with the provisions hereof, (D) shall not, for any such
Lender at any time, after giving effect thereto and to the application of the
proceeds thereof, result in such Lender’s Revolving Credit Exposure or Extended
Revolving Credit Exposure, as applicable, at such time exceeding such Lender’s
Revolving Credit Commitment or Extended Revolving Credit Commitment, as
applicable, at such time and (E) shall not, after giving effect thereto and to
the application of the proceeds thereof, result at any time in the aggregate
amount of the Lenders’ Revolving Credit Exposures or Extended Revolving Credit
Exposures, as applicable, at such time exceeding the Total Revolving Credit
Commitment or the Total Extended Revolving Credit Commitment, as applicable,
then in effect; provided further, that (x) as of the Restatement Date there
shall be no Dollar Revolving Credit Loans outstanding and

 

65

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

 

(y) from and after the Restatement Date, no Dollar Revolving Credit Loans may be
requested of or made by any Lender having a Revolving Credit Commitment until
the Extended Revolving Credit Exposures shall be equal to no less than the Total
Extended Revolving Credit Commitment; provided, however, that if, at such time
that the Extended Revolving Credit Exposure equals or exceeds the Total Extended
Revolving Credit Commitment, the US Borrower or the UK Borrower requests a
Dollar Letter of Credit otherwise permitted in accordance with Section 3, a
portion of the outstanding Dollar Extended Revolving Credit Loans shall be
automatically deemed to be refinanced and replaced by Revolving Credit Loans
under the Revolving Credit Commitment in an amount sufficient to allow such
Letter of Credit to be issued at such time under the Extended Revolving Credit
Commitments so long as such refinancing shall not result in any Lender’s
Revolving Credit Exposure exceeding such Lender’s Revolving Credit Commitment.

 

(ii)  Subject to and upon the terms and conditions herein set forth, each Lender
having a Revolving Credit Commitment severally agrees to make a loan or loans
denominated in a Foreign Currency (each a “Foreign Currency Revolving Credit
Loan” and, collectively, the “Foreign Currency Revolving Credit Loans”) or an
Extended Revolving Credit Commitment severally agrees to make a loan or loans
denominated in a Foreign Currency (each a “Foreign Currency Extended Revolving
Credit Loan” and, collectively, the “Foreign Currency Extended Revolving Credit
Loans”) to the US Borrower or the UK Borrower, as the case may be, which Foreign
Currency Revolving Credit Loans or Foreign Currency Extended Revolving Credit
Loans (A) shall be made at any time and from time to time on and after the
Funding Date and prior to the Revolving Credit Maturity Date or the Extended
Revolving Credit Maturity Date, as applicable, (B) shall be incurred and
maintained entirely as Eurodollar Foreign Currency Revolving Credit Loans or
Eurodollar Foreign Currency Extended Revolving Credit Loans, (C) may be repaid
and reborrowed in accordance with the provisions hereof, (D) shall not, for any
such Lender at any time, after giving effect thereto and to the application of
the proceeds thereof, result in such Lender’s Revolving Credit Exposure or
Extended Revolving Credit Exposure, as applicable, at such time exceeding such
Lender’s Revolving Credit Commitment or Extended Revolving Credit Commitment, as
applicable, at such time and (E) shall not, after giving effect thereto and to
the application of the proceeds thereof, result at any time in the aggregate
amount of the Lenders’ Revolving Credit Exposures or Extended Revolving Credit
Exposures, as applicable, at such time exceeding the Total Revolving Credit
Commitment or the Total Extended Revolving Credit Commitment, as applicable,
then in effect; provided further, that (x) as of the Restatement Date there
shall be no Foreign Currency Revolving Credit Loans outstanding and (y) from and
after the Restatement Date, no Foreign Currency Revolving Credit Loans may be
requested of or made by any Lender having a Revolving Credit Commitment until
the Extended Revolving Credit Exposures shall be equal to no less then than the
Total Extended Revolving Credit Commitment; provided, however, that if, at such
time that the Extended Revolving Credit Exposure equals or exceeds the Total
Extended Revolving Credit Commitment, the US Borrower or the UK Borrower
requests a Foreign Currency Letter of Credit otherwise permitted in accordance
with Section 3, a portion of the outstanding Foreign Currency Extended Revolving
Credit Loans shall be automatically deemed to be refinanced and replaced by
Revolving Credit Loans under the Revolving Credit

 

66

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

 

Commitment in an amount sufficient to allow such Letter of Credit to be issued
at such time under the Extended Revolving Credit Commitments so long as such
refinancing shall not result in any Lender’s Revolving Credit Exposure exceeding
such Lender’s Revolving Credit Commitment.

 

(iii)  Each Lender may at its option make any Eurodollar Loan by causing any
domestic or foreign branch or Affiliate of such Lender to make such Loan;
provided, that (A) any exercise of such option shall not affect the obligation
of the US Borrower or the UK Borrower as the case may be, to repay such Loan and
(B) in exercising such option, such Lender shall use its reasonable efforts to
minimize any increased costs to the US Borrower or the UK Borrower as the case
may be, resulting therefrom (which obligation of the Lender shall not require it
to take, or refrain from taking, actions that it determines would result in
increased costs for which it will not be compensated hereunder or that it
determines would be otherwise disadvantageous to it and in the event of such
request for costs for which compensation is provided under this Agreement, the
provisions of Section 3.5 shall apply).  On the Revolving Credit Maturity Date,
all Revolving Credit Loans shall be repaid in full.  On the Extended Revolving
Credit Maturity Date, all Extended Revolving Credit Loans shall be repaid in
full.

 

(c)  Subject to and upon the terms and conditions herein set forth, the
Swingline Lender in its individual capacity agrees, at any time and from time to
time on and after the Funding Date and prior to the Swingline Maturity Date, to
make a loan or loans (each a “Swingline Loan” and, collectively, the “Swingline
Loans”) to the US Borrower in Dollars, which Swingline Loans (i) shall be ABR
Loans, (ii) shall have the benefit of the provisions of Section 2.1(d),
(iii) shall not exceed at any time outstanding the Swingline Commitment,
(iv) shall not, after giving effect thereto and to the application of the
proceeds thereof, result at any time in the aggregate amount of the Extended
Revolving Credit Exposures at such time exceeding the Total Extended Revolving
Credit Commitment then in effect and (v) may be repaid and reborrowed in
accordance with the provisions hereof.  On the Swingline Maturity Date, each
outstanding Swingline Loan shall be repaid in full.  The Swingline Lender shall
not make any Swingline Loan after receiving a written notice from the US
Borrower, the UK Borrower or any Lender stating that a Default or Event of
Default exists and is continuing until such time as the Swingline Lender shall
have received written notice of (i) rescission of all such notices from the
party or parties originally delivering such notice or (ii) the waiver of such
Default or Event of Default in accordance with the provisions of Section 14.1.

 

(d)  On any Business Day, the Swingline Lender may, in its sole discretion, give
notice to the Lenders that all then-outstanding Swingline Loans shall be funded
with a Borrowing of Extended Revolving Credit Loans, in which case Extended
Revolving Credit Loans constituting ABR Loans (each such Borrowing, a “Mandatory
Borrowing”) shall be made on the immediately succeeding Business Day by all
Lenders pro rata based on each Lender’s Extended Revolving Credit Commitment
Percentage, as applicable, and the proceeds thereof shall be applied directly to
the Swingline Lender to repay the Swingline Lender for such outstanding
Swingline Loans.  Each Lender hereby irrevocably agrees to make such Extended
Revolving Credit Loans upon one Business

 

67

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

 

Day’s notice pursuant to each Mandatory Borrowing in the amount and in the
manner specified in the preceding sentence and on the date specified to it in
writing by the Swingline Lender notwithstanding (i) that the amount of the
Mandatory Borrowing may not comply with the minimum amount for each Borrowing
specified in Section 2.2, (ii) whether any conditions specified in Section 7 are
then satisfied, (iii) whether a Default or an Event of Default has occurred and
is continuing, (iv) the date of such Mandatory Borrowing or (v) any reduction in
the Total Commitment after any such Swingline Loans were made.  In the event
that, in the sole judgment of the Swingline Lender, any Mandatory Borrowing
cannot for any reason be made on the date otherwise required above (including as
a result of the commencement of a proceeding under the Bankruptcy Code in
respect of the Borrower), each Lender hereby agrees that it shall forthwith
purchase from the Swingline Lender (without recourse or warranty) such
participation of the outstanding Swingline Loans as shall be necessary to cause
the Lenders to share in such Swingline Loans ratably based upon their respective
Extended Revolving Credit Commitment Percentages, as applicable; provided, that
all principal and interest payable on such Swingline Loans shall be for the
account of the Swingline Lender until the date the respective participation is
purchased and, to the extent attributable to the purchased participation, shall
be payable to the Lender purchasing the same from and after such date of
purchase.

 

2.2.                              Minimum Amount of Each Borrowing; Maximum
Number of Borrowings.  The aggregate principal amount of each Borrowing of Term
Loans, Revolving Credit Loans, Extended Revolving Credit Loans or Swingline
Loans shall be in a multiple of the Dollar Equivalent of $100,000 and shall not
be less than the Minimum Borrowing Amount with respect thereto (except that
Mandatory Borrowings shall be made in the amounts required by Section 2.1(d)). 
More than one Borrowing may be incurred on any date; provided, that at no time
shall there be outstanding more than 20 Borrowings of Eurodollar Loans under
this Agreement.

 

2.3.                              Notice of Borrowing.  (a)    The US Borrower
(on its own behalf and on behalf of the UK Borrower) shall give the
Administrative Agent at the Administrative Agent’s Office written notice (or
telephonic notice promptly confirmed in writing) of the Borrowing of Term Loans
(i) prior to 12:00 Noon (Local Time) at least three Business Days prior to the
date of Borrowing of Term Loans if all or any of such Term Loans are to be
initially Eurodollar Loans and (ii) prior to 10:00 a.m.(New York time) on the
date of the Borrowing of Term Loans if all such Term Loans are to be ABR Loans. 
Such notice (together with each notice of a Borrowing of Revolving Credit Loans
or Extended Revolving Credit Loans pursuant to Section 2.3(b) and each notice of
a Borrowing of Swingline Loans pursuant to Section 2.3(c), a “Notice of
Borrowing”) shall be irrevocable and shall specify (i) the borrower of the Term
Loans, which shall be either the US Borrower or the UK Borrower, (ii) the
currency in which the Borrowing is to be made, which shall be either Dollars or
Euro, (iii) the aggregate principal amount of the Term Loans to be made,
(iv) the date of the borrowing (which shall be a Business Day and (other than in
the case of the Term Loans made available pursuant to Section 2.1(a)(iii), (iv),
(v) and (vi)) shall be the Funding Date) and (v) whether the Term Loans shall
consist of ABR Loans and/or Eurodollar Term Loans and, if the Term Loans are to
include Eurodollar Term Loans, the Interest Period to be initially applicable
thereto.  The

 

68

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

 

Administrative Agent shall promptly give each Lender written notice (or
telephonic notice promptly confirmed in writing) of each proposed Borrowing of
Term Loans, of such Lender’s proportionate share thereof and of the other
matters covered by the related Notice of Borrowing.

 

(b)  Whenever the US Borrower or the UK Borrower desires to incur Revolving
Credit Loans or Extended Revolving Credit Loans hereunder (other than Mandatory
Borrowings or borrowings to repay Unpaid Drawings), it shall give the
Administrative Agent at the Administrative Agent’s Office as specified in
Section 14.2, (i) prior to 12:00 Noon (Local Time) at least three Business Days’
prior written notice (or telephonic notice promptly confirmed in writing) of
each Borrowing of Eurodollar Revolving Credit Loans or Eurodollar Extended
Revolving Credit Loans and (ii) prior to 12:00 Noon (New York time) at least one
Business Day’s prior written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing of ABR Loans; provided that for any deemed borrowing
of Revolving Credit Loans pursuant to Section 2.1(b)(i) and (ii) such notice
will not be required.  Each such Notice of Borrowing, except as otherwise
expressly provided in Section 2.10, shall be irrevocable and shall specify
(i) the borrower of the Revolving Credit Loans or Extended Revolving Credit
Loans, as applicable, which shall be either the US Borrower or the UK Borrower,
(ii) the currency in which the Revolving Credit Loans or Extended Revolving
Credit Loans, as applicable, are to be made, which shall be Dollars or a Foreign
Currency, (iii) the aggregate principal amount of the Revolving Credit Loans or
Extended Revolving Credit Loans, as applicable, to be made pursuant to such
Borrowing (which, in the case of a Foreign Currency Borrowing, shall be stated
in both the applicable Foreign Currency and the Dollar Equivalent thereof),
(iii) the date of Borrowing (which shall be a Business Day), (iv) whether the
respective Borrowing shall consist of ABR Loans, Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans and, if Eurodollar Revolving
Credit Loans or Eurodollar Extended Revolving Credit Loans, the Interest Period
to be initially applicable thereto and (v) the number and location of the
account to which funds are to be disbursed.  The Administrative Agent shall
promptly give each Lender written notice (or telephonic notice promptly
confirmed in writing) of each proposed Borrowing of Revolving Credit Loans or
Extended Revolving Credit Loans, as applicable, of such Lender’s proportionate
share thereof and of the other matters covered by the related Notice of
Borrowing.

 

(c)  Whenever the US Borrower desires to incur Swingline Loans hereunder, it
shall give the Swingline Lender written notice (or telephonic notice promptly
confirmed in writing) of each Borrowing of Swingline Loans prior to 2:30 p.m.
(New York time) on the date of such Borrowing.  Each such notice shall be
irrevocable and shall specify (i) the aggregate principal amount of the
Swingline Loans to be made pursuant to such Borrowing, (ii) the date of
Borrowing (which shall be a Business Day) and (iii) the number and location of
the account to which funds are to be disbursed.

 

(d)  Mandatory Borrowings shall be made upon the notice specified in
Section 2.1(d), with the US Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of Mandatory Borrowings as set forth in such
Section.

 

69

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

 

(e)  Borrowings to reimburse Unpaid Drawings shall be made upon the notice
specified in Section 3.4(a).

 

(f)  Without in any way limiting the obligation of the US Borrower or the UK
Borrower, as the case may be, to confirm in writing any notice it may give
hereunder by telephone, the Administrative Agent may act prior to receipt of
written confirmation without liability upon the basis of such telephonic notice
believed by the Administrative Agent in good faith to be from an Authorized
Officer of the US Borrower or the UK Borrower, as the case may be.  In each such
case, the US Borrower and the UK Borrower each hereby waive the right to dispute
the Administrative Agent’s record of the terms of any such telephonic notice.

 

2.4.                              Disbursement of Funds.  (a)    No later than
12:00 Noon (Local Time) on the date specified in each Notice of Borrowing
(including Mandatory Borrowings), each Lender will make available its pro rata
portion, if any, of each Borrowing requested to be made on such date in the
manner provided below; provided, that all Swingline Loans shall be made
available in the full amount thereof by the Swingline Lender no later than
3:00 p.m. (New York time) on the date requested.

 

(b)  Each Lender shall make available all amounts it is to fund under any
Borrowing in Dollars or in the applicable Foreign Currency, as the case may be,
and in immediately available funds to the Administrative Agent at the
Administrative Agent’s Office and the Administrative Agent will (except in the
case of Mandatory Borrowings and Borrowings to repay Unpaid Drawings) make
available to (i) the US Borrower by depositing to the US Borrower’s account that
is designated to the Administrative Agent the aggregate of the amounts so made
available in Dollars or in the applicable Foreign Currency, as the case may be,
and the type of funds received and (ii) the UK Borrower, by depositing to the UK
Borrower’s account that is designated to the Administrative Agent the aggregate
of the amounts so made available in Dollars or in the applicable Foreign
Currency, as the case may be, and the type of funds received.  Unless the
Administrative Agent shall have been notified by any Lender prior to the date of
any such Borrowing that such Lender does not intend to make available to the
Administrative Agent its portion of the Borrowing or Borrowings to be made on
such date, the Administrative Agent may assume that such Lender has made such
amount available to the Administrative Agent on such date of Borrowing, and the
Administrative Agent, in reliance upon such assumption, may (in its sole
discretion and without any obligation to do so) make available to the US
Borrower or the UK Borrower, as the case may be, a corresponding amount.  If
such corresponding amount is not in fact made available to the Administrative
Agent by such Lender and the Administrative Agent has made available same to the
US Borrower or the UK Borrower, as the case may be, the Administrative Agent
shall be entitled to recover such corresponding amount from such Lender.  If
such Lender does not pay such corresponding amount forthwith upon the
Administrative Agent’s demand therefor the Administrative Agent shall promptly
notify the US Borrower or the UK Borrower, as the case may be, and the US
Borrower or the UK Borrower, as the case may be, shall immediately pay such
corresponding amount to the Administrative Agent.  The Administrative Agent
shall also be entitled to recover from such Lender or the US Borrower or the UK
Borrower, as the case may be, interest on

 

70

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

 

such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Administrative Agent to the US
Borrower or the UK Borrower, as the case may be, to the date such corresponding
amount is recovered by the Administrative Agent, at a rate per annum equal to
(i) if paid by such Lender, the Federal Funds Effective Rate or (ii) if paid by
the US Borrower or the UK Borrower, as the case may be, the then-applicable rate
of interest, calculated in accordance with Section 2.8, for the respective
Loans.

 

(c)  Nothing in this Section 2.4 shall be deemed to relieve any Lender from its
obligation to fulfill its commitments hereunder or to prejudice any rights that
the US Borrower or the UK Borrower, as the case may be, may have against any
Lender as a result of any default by such Lender hereunder (it being understood,
however, that no Lender shall be responsible for the failure of any other Lender
to fulfill its commitments hereunder).

 

2.5.                            Repayment of Loans; Evidence of Debt.  (a)   
The US Borrower shall repay to the Administrative Agent, for the benefit of the
Lenders, on the Tranche A-1 Term Loan Maturity Date, the then-unpaid Tranche A-1
Term Loans, in Euro.  The UK Borrower shall repay to the Administrative Agent,
for the benefit of the Lenders, on the Tranche A-2 Term Loan Maturity Date, the
then-unpaid Tranche A-2 Term Loans, in Euro.  The US Borrower shall repay to the
Administrative Agent, for the benefit of the Lenders, on the Tranche E Term Loan
Maturity Date, the then-unpaid Tranche E Term Loans, in Dollars.  The US
Borrower shall repay to the Administrative Agent, for the benefit of the
Lenders, on the Tranche G Term Loan Maturity Date, the then-unpaid Tranche G
Term Loans, in Euro.  The US Borrower shall repay to the Administrative Agent,
for the benefit of the Lenders, on the Tranche H Term Loan Maturity Date, the
then-unpaid Tranche H Term Loans, in Dollars.  The US Borrower shall repay to
the Administrative Agent, for the benefit of the Lenders, on the Tranche I Term
Loan Maturity Date, the then-unpaid Tranche I Term Loans, in Euro.  The US
Borrower and the UK Borrower, as the case may be, shall repay to the
Administrative Agent in Dollars or the applicable Foreign Currency, as the case
may be, for the benefit of the Lenders, on the Revolving Credit Maturity Date,
the then-unpaid Revolving Credit Loans.  The US Borrower and the UK Borrower, as
the case may be, shall repay to the Administrative Agent in Dollars or the
applicable Foreign Currency, as the case may be, for the benefit of the Lenders,
on the Extended Revolving Credit Maturity Date, the then-unpaid Extended
Revolving Credit Loans.  The US Borrower shall repay to the Administrative Agent
in Dollars, for the account of the Swingline Lender, on the Swingline Maturity
Date, the then-unpaid Swingline Loans.

 

(b)  (i)  The US Borrower shall repay to the Administrative Agent, in Euro, for
the benefit of the Lenders of Tranche A-1 Term Loans, on each date set forth
below (each a “Tranche A-1 Repayment Date”), the principal amount of the
Tranche A-1 Term Loans equal to (x) the sum of the outstanding principal amount
of Tranche A-1 Term Loans immediately after funding on the Funding Date and, if
applicable, the outstanding principal amount of additional Tranche A-1 Term
Loans funded after the Funding Date pursuant to Section 2.1(a)(iii) multiplied
by (y) the percentage set forth

 

71

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

 

below opposite such Tranche A-1 Repayment Date (each a “Tranche A-1 Repayment
Amount”):

 

Number of Months
From Funding Date

 

Tranche A-1
Repayment Amount

 

 

 

18

 

 

5.00%

24

 

 

5.00%

30

 

 

7.50%

36

 

 

7.50%

42

 

 

8.33%

48

 

 

8.33%

54

 

 

8.33%

60

 

 

8.33%

66

 

 

9.16%

72

 

 

9.16%

78

 

 

11.66%

Tranche A-1 Term Loan Maturity Date

 

 

11.70% or remainder

 

(ii)  The UK Borrower shall repay to the Administrative Agent, in Euro, for the
benefit of the Lenders of Tranche A-2 Term Loans, on each date set forth below
(each a “Tranche A-2 Repayment Date”), the principal amount of the Tranche A-2
Term Loans equal to (x) the sum of the outstanding principal amount of Tranche
A-2 Term Loans immediately after funding on the Funding Date and, if applicable,
the outstanding principal amount of additional Tranche A-2 Term Loans funded
after the Funding Date pursuant to Section 2.1(a)(iii) multiplied by (y) the
percentage set forth below opposite such Tranche A-2 Repayment Date (each a
“Tranche A-2 Repayment Amount”):

 

72

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

 

Number of Months
From Funding Date

 

Tranche A-2
Repayment Amount

 

 

 

18

 

 

5.00%

24

 

 

5.00%

30

 

 

7.50%

36

 

 

7.50%

42

 

 

8.33%

48

 

 

8.33%

54

 

 

8.33%

60

 

 

8.33%

66

 

 

9.16%

72

 

 

9.16%

78

 

 

11.66%

Tranche A-2 Term Loan Maturity Date

 

 

11.70% or remainder

 

(iii)  The US Borrower shall repay to the Administrative Agent, in Dollars, for
the benefit of the Lenders of Tranche E Term Loans, on each date set forth below
(each a “Tranche E Repayment Date”), the principal amount of the Tranche E Term
Loans equal to (x) the outstanding principal amount of Tranche E Term Loans
immediately after funding on the Restatement Date multiplied by (y) the
percentage set forth below opposite such Tranche E Repayment Date (each a
“Tranche E Repayment Amount”):

 

Number of Months
From Funding Date

 

Tranche E
Repayment Amount

 

 

 

60

 

 

0.5%

66

 

 

0.5%

72

 

 

0.5%

78

 

 

0.5%

84

 

 

0.5%

90

 

 

0.5%

Tranche E Term Loan Maturity Date

 

 

93.0% or remainder

 

(iv)  The US Borrower shall repay to the Administrative Agent, in Euro, for the
benefit of the Lenders of Tranche G Term Loans, on each date set forth below
(each a “Tranche G Repayment Date”), the principal amount of the Tranche G Term
Loans equal to (x) the outstanding principal amount of Tranche G Term Loans
immediately after funding on the Restatement Date multiplied by (y) the
percentage set forth below opposite such Tranche G Repayment Date (each a
“Tranche G Repayment Amount”):

 

Number of Months
From Funding Date

 

Tranche G
Repayment Amount

 

 

 

60

 

 

0.5%

 

73

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

 

Number of Months
From Funding Date

 

Tranche G
Repayment Amount

66

 

 

0.5%

72

 

 

0.5%

78

 

 

0.5%

84

 

 

0.5%

90

 

 

0.5%

Tranche G Term Loan Maturity Date

 

 

93.0% or remainder

 

(v)  The US Borrower shall repay to the Administrative Agent, in Dollars, for
the benefit of the Lenders of Tranche H Term Loans, on each date set forth below
(each a “Tranche H Repayment Date”), the principal amount of the Tranche H Term
Loans equal to (x) the outstanding principal amount of Tranche H Term Loans
immediately after funding on the Restatement Date multiplied by (y) the
percentage set forth below opposite such Tranche H Repayment Date (each a
“Tranche H Repayment Amount”):

 

Number of Months
From Funding Date

 

Tranche H
Repayment
Amount

 

 

 

60

 

 

0.5%

66

 

 

0.5%

72

 

 

0.5%

78

 

 

0.5%

84

 

 

0.5%

90

 

 

0.5%

96

 

 

0.5%

102

 

 

0.5%

108

 

 

0.5%

114

 

 

0.5%

Tranche H Term Loan Maturity Date

 

 

95.0% or remainder

 

(vi)  The US Borrower shall repay to the Administrative Agent, in Euro, for the
benefit of the Lenders of Tranche I Term Loans, on each date set forth below
(each a “Tranche I Repayment Date”), the principal amount of the Tranche I Term
Loans equal to (x) the outstanding principal amount of Tranche I Term Loans
immediately after funding on the Restatement Date multiplied by (y) the
percentage set forth below opposite such Tranche I Repayment Date (each a
“Tranche I Repayment Amount”):

 

74

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

 

Number of Months
From Funding Date

 

Tranche I
Repayment
Amount

 

 

 

60

 

 

0.5%

66

 

 

0.5%

72

 

 

0.5%

78

 

 

0.5%

84

 

 

0.5%

90

 

 

0.5%

96

 

 

0.5%

102

 

 

0.5%

108

 

 

0.5%

114

 

 

0.5%

Tranche I Term Loan Maturity Date

 

 

95.0% or remainder

 

(c)  Each Lender shall maintain in accordance with its usual practice an account
or accounts evidencing the Indebtedness of the US Borrower and the UK Borrower,
as the case may be, to the appropriate lending office of such Lender resulting
from each Loan made by such lending office of such Lender from time to time,
including the amounts of principal and interest payable and paid to such lending
office of such Lender from time to time under this Agreement.

 

(d)  The Administrative Agent shall maintain the Register pursuant to
Section 14.6(b)(iv), and a subaccount for each Lender, in which Register and
subaccounts (taken together) shall be recorded (i) the amount and currency of
each Loan made hereunder, whether such Loan is a Term Loan, a Revolving Credit
Loan or Extended Revolving Credit Loan or a Swingline Loan, the Type of each
Loan made and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the US
Borrower and the UK Borrower, as the case may be, to each Lender or the
Swingline Lender hereunder and (iii) the amount of any sum received by the
Administrative Agent hereunder from the US Borrower and the UK Borrower, as the
case may be, and each Lender’s share thereof.

 

(e)  The entries made in the Register and accounts and subaccounts maintained
pursuant to paragraphs (c) and (d) of this Section 2.5 shall, to the extent
permitted by applicable law, be prima facie evidence of the existence and
amounts of the obligations of the US Borrower and the UK Borrower therein
recorded; provided, however, that the failure of any Lender or the
Administrative Agent to maintain such account, such Register or such subaccount,
as applicable, or any error therein, shall not in any manner affect the
obligation of the US Borrower or the UK Borrower to repay (with applicable
interest) the Loans made to the US Borrower or the UK Borrower by such Lender in
accordance with the terms of this Agreement.

 

2.6.                            Conversions and Continuations.  (a)    The US
Borrower shall have the option on any Business Day to convert all or a portion
equal to at least the Minimum

 

75

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

 

Borrowing Amount of the outstanding principal amount of Tranche E Term Loans,
Tranche H Term Loans, Dollar Revolving Credit Loans or Dollar Extended Revolving
Credit Loans of one Type into a Borrowing or Borrowings of another Type and the
US Borrower or the UK Borrower, as the case may be, shall have the option on any
Business Day to continue the outstanding principal amount of any Eurodollar Term
Loans, Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit
Loans as Eurodollar Term Loans, Eurodollar Revolving Credit Loans or Eurodollar
Extended Revolving Credit Loans, as the case may be, for an additional Interest
Period; provided, that (i) no partial conversion of Eurodollar Term Loans,
Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans
shall reduce the outstanding principal amount of Eurodollar Term Loans,
Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans
made pursuant to a single Borrowing to less than the Minimum Borrowing Amount,
(ii) ABR Loans may not be converted into Eurodollar Term Loans, Eurodollar
Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans if a
Default or Event of Default is in existence on the date of the conversion and
the Administrative Agent has or the Required Lenders have determined in its or
their sole discretion not to permit such conversion, (iii) Eurodollar Loans may
not be continued as Eurodollar Term Loans, Eurodollar Revolving Credit Loans or
Eurodollar Extended Revolving Credit Loans for an additional Interest Period if
a Default or Event of Default is in existence on the date of the proposed
continuation and the Administrative Agent has or the Required Lenders have
determined in its or their sole discretion not to permit such continuation and
(iv) Borrowings resulting from conversions pursuant to this Section 2.6 shall be
limited in number as provided in Section 2.2.  Each such conversion or
continuation shall be effected by the US Borrower or the UK Borrower, as the
case may be, by giving the Administrative Agent at the Administrative Agent’s
Office prior to 12:00 Noon (Local Time) at least three Business Days’ (or one
Business Day’s notice in the case of a conversion into ABR Loans) prior written
notice (or telephonic notice promptly confirmed in writing) (each a “Notice of
Conversion or Continuation”) specifying the Term Loans, Revolving Credit Loans
or Extended Revolving Credit Loans to be so converted or continued, the Type of
Term Loans, Revolving Credit Loans or Extended Revolving Credit Loans to be
converted or continued into and, if such Term Loans, Revolving Credit Loans or
Extended Revolving Credit Loans are to be converted into or continued as
Eurodollar Term Loans, Eurodollar Revolving Credit Loans or Eurodollar Extended
Revolving Credit Loans, the Interest Period to be initially applicable thereto. 
The Administrative Agent shall give each Lender notice as promptly as
practicable of any such proposed conversion or continuation affecting any of its
Term Loans, Revolving Credit Loans or Extended Revolving Credit Loans.

 

(b)  If any Default or Event of Default is in existence at the time of any
proposed continuation of any Eurodollar Term Loans, Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans and the Administrative Agent
has or the Required Lenders have determined in its or their sole discretion not
to permit such continuation, such Eurodollar Term Loans, Eurodollar Revolving
Credit Loans or Eurodollar Extended Revolving Credit Loans shall be
automatically converted on the last day of the then-current Interest Period
(i) in respect of Tranche E Term Loans, Tranche H Term Loans, Dollar Revolving
Credit Loans and Dollar Extended Revolving Credit

 

76

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

 

Loans, into ABR Loans, and (ii) in respect of Tranche A-1 Term Loans, Tranche
A-2 Term Loans, Tranche G Term Loans, Tranche I Term Loans, Foreign Currency
Revolving Credit Loans and Foreign Currency Extended Revolving Credit Loans,
into Eurodollar Loans with an Interest Period of one month.  If upon the
expiration of any Interest Period in respect of Eurodollar Term Loans,
Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans,
the US Borrower or the UK Borrower, as the case may be, has failed to elect a
new Interest Period to be applicable thereto as provided in paragraph (a) above,
(i) the US Borrower or the UK Borrower, as the case may be, shall be deemed to
have elected to convert such Dollar Borrowing of Eurodollar Term Loans,
Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans,
as the case may be, into a Borrowing of ABR Loans effective as of the expiration
date of such current Interest Period and (ii) the US Borrower or the UK
Borrower, as the case may be, shall be deemed to have elected to convert such
Foreign Currency Borrowing of Eurodollar Term Loans, Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans, as the case may be, into a
Borrowing of Eurodollar Loans with an Interest Period of one month effective as
of the expiration date of such then-current Interest Period.

 

2.7.                            Pro Rata Borrowings.  Each Borrowing of Term
Loans under this Agreement shall be granted by the Lenders pro rata on the basis
of their then-applicable Term Loan Commitments.  Each Borrowing of Revolving
Credit Loans or Extended Revolving Credit Loans, as applicable, under this
Agreement shall be granted by the Lenders pro rata on the basis of their
then-applicable Revolving Credit Commitments or Extended Revolving Credit
Commitments, as applicable.  It is understood that no Lender shall be
responsible for any default by any other Lender in its obligation to make Loans
hereunder and that each Lender shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Lender to
fulfill its commitments hereunder.

 

2.8.                            Interest.  (a)    The unpaid principal amount of
each ABR Loan shall bear interest from the date of the Borrowing thereof until
maturity (whether by acceleration or otherwise) at a rate per annum that shall
at all times be the Applicable ABR Margin plus the ABR in effect from time to
time.

 

(b)  The unpaid principal amount of each Eurodollar Term Loan, Eurodollar
Revolving Credit Loan or Eurodollar Extended Revolving Credit Loan shall bear
interest from the date of the Borrowing thereof until maturity thereof (whether
by acceleration or otherwise) at a rate per annum that shall at all times be the
Applicable Eurodollar Margin in effect from time to time plus the relevant
Eurodollar Rate plus, in the case of Foreign Currency Loans, any Additional Cost
incurred by such Lender in respect of such Foreign Currency Loans from time to
time.

 

(c)  If all or a portion of (i) the principal amount of any Loan or (ii) any
interest payable thereon shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear interest
at a rate per annum that is (x) in the case of overdue principal, the rate that
would otherwise be applicable thereto plus 2% or (y) in the case of any overdue
interest, to the extent permitted by

 

77

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

 

applicable law, the rate described in Section 2.8(a) plus 2% from and including
the date of such non-payment to but excluding the date on which such amount is
paid in full (after as well as before judgment).

 

(d)  Interest on each Loan shall accrue from and including the date of any
Borrowing to but excluding the date of any repayment thereof and shall be
payable (i) in respect of each ABR Loan, quarterly in arrears on the last day of
each March, June, September and December, (ii) in respect of each Eurodollar
Term Loan, Eurodollar Revolving Credit Loan or Eurodollar Extended Revolving
Credit Loan, on the last day of each Interest Period applicable thereto and, in
the case of an Interest Period in excess of three months, on each date occurring
at three-month intervals after the first Business Day of such Interest Period,
(iii) in respect of each Loan (except, other than in the case of prepayments,
any ABR Loan), on any prepayment (on the amount prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.  It is
understood and agreed that, in the event that the Acquisition is not consummated
on July 31, 2004 and the Loans are prepaid, interest on each Loan made on the
Funding Date shall accrue from and including the Funding Date to but excluding
the date of the repayment thereof in accordance with this Agreement and such
interest shall be payable on the date of such prepayment.

 

(e)  All computations of interest hereunder shall be made in accordance with
Section 5.5.

 

(f)  The Administrative Agent, upon determining the interest rate for any
Borrowing of Eurodollar Loans, shall promptly notify the US Borrower (on its own
behalf and on behalf of the UK Borrower) and the relevant Lenders thereof.  Each
such determination shall, absent clearly demonstrable error, be final and
conclusive and binding on all parties hereto.

 

2.9.                            Interest Periods.  At the time the US Borrower
or the UK Borrower, as the case may be, gives a Notice of Borrowing or Notice of
Conversion or Continuation in respect of the making of, or conversion into or
continuation as, a Borrowing of Eurodollar Term Loans, Eurodollar Revolving
Credit Loans or Eurodollar Extended Revolving Credit Loans (in the case of the
initial Interest Period applicable thereto) or prior to 10:00 a.m. (Local Time)
on the third Business Day prior to the expiration of an Interest Period
applicable to a Borrowing of Eurodollar Term Loans, Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans, the US Borrower or the UK
Borrower, as the case may be, shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) the Interest Period applicable to such Borrowing, which Interest Period
shall, at the option of the US Borrower or the UK Borrower, as the case may be,
be a one, two, three, six or (in the case of Revolving Credit Loans or Extended
Revolving Credit Loans, if available to all the Lenders making such loans as
determined by such Lenders in good faith based on prevailing market conditions)
a nine or twelve month period; provided, that the initial Interest Period may be
for a period less than one month if agreed upon by the US Borrower and the
Administrative Agent.  Notwithstanding anything to the contrary contained above:

 

78

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

 

(a)  the initial Interest Period for any Borrowing of Eurodollar Term Loans,
Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans
shall commence on the date of such Borrowing (including the date of any
conversion from a Borrowing of ABR Loans) and each Interest Period occurring
thereafter in respect of such Borrowing shall commence on the day on which the
next preceding Interest Period expires;

 

(b)  if any Interest Period relating to a Borrowing of Eurodollar Term Loans,
Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans
begins on the last Business Day of a calendar month or begins on a day for which
there is no numerically corresponding day in the calendar month at the end of
such Interest Period, such Interest Period shall end on the last Business Day of
the calendar month at the end of such Interest Period;

 

(c)  if any Interest Period would otherwise expire on a day that is not a
Business Day, such Interest Period shall expire on the next succeeding Business
Day; provided, that if any Interest Period in respect of a Eurodollar Term Loan,
Eurodollar Revolving Credit Loan or Eurodollar Extended Revolving Credit Loan
would otherwise expire on a day that is not a Business Day but is a day of the
month after which no further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day; and

 

(d)  the US Borrower or the UK Borrower, as the case may be, shall not be
entitled to elect any Interest Period in respect of any Eurodollar Term Loan,
any Eurodollar Revolving Credit Loan or any Eurodollar Extended Revolving Credit
Loan if such Interest Period would extend beyond the applicable Maturity Date of
such Loan.

 

2.10.                        Increased Costs, Illegality, etc.  (a)    In the
event that (x) in the case of clause (i) below, the Administrative Agent or
(y) in the case of clauses (ii) and (iii) below, any Lender shall have
reasonably determined (which determination shall, absent clearly demonstrable
error, be final and conclusive and binding upon all parties hereto):

 

(i)  on any date for determining the Eurodollar Rate for any Interest Period
that (x) deposits in the principal amounts of the Loans comprising such
Eurodollar Borrowing and in the currency in which such Loan is to be denominated
are not generally available in the relevant market or (y) by reason of any
changes arising on or after the Funding Date affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the applicable
interest rate on the basis provided for in the definition of Eurodollar Rate; or

 

(ii)  at any time, that such Lender shall incur increased costs or reductions in
the amounts received or receivable hereunder with respect to any Eurodollar
Loans (other than any such increase or reduction attributable to taxes) because
of (x) any change since the Funding Date in any applicable law, governmental
rule, regulation, guideline or order (or in the interpretation or administration
thereof and including the introduction of any new law or governmental rule,
regulation, guideline or order), such

 

79

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

 

as, for example, without limitation, a change in official reserve requirements,
and/or (y) other circumstances affecting the interbank Eurodollar market or the
position of such Lender in such market; or

 

(iii)  at any time, that the making or continuance of any Eurodollar Loan has
become unlawful by compliance by such Lender in good faith with any law,
governmental rule, regulation, guideline or order (or would conflict with any
such governmental rule, regulation, guideline or order not having the force of
law even though the failure to comply therewith would not be unlawful), or has
become impracticable as a result of a contingency occurring after the Funding
Date that materially and adversely affects the interbank Eurodollar market;

 

then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall within a reasonable time thereafter give notice
(if by telephone, confirmed in writing) to the US Borrower (on its own behalf
and on behalf of the UK Borrower) and to the Administrative Agent of such
determination (which notice the Administrative Agent shall promptly transmit to
each of the other Lenders).  Thereafter (x) in the case of clause (i) above,
Eurodollar Term Loans, Eurodollar Revolving Credit Loans and Eurodollar Extended
Revolving Credit Loans shall no longer be available until such time as the
Administrative Agent notifies the US Borrower (on its own behalf and on behalf
of the UK Borrower) and the Lenders that the circumstances giving rise to such
notice by the Administrative Agent no longer exist (which notice the
Administrative Agent agrees to give at such time when such circumstances no
longer exist), and any Notice of Borrowing or Notice of Conversion given by the
US Borrower or the UK Borrower with respect to Eurodollar Term Loans, Eurodollar
Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans that have
not yet been incurred shall be deemed rescinded by the US Borrower or the UK
Borrower, (y) in the case of clause (ii) above, the US Borrower or the UK
Borrower, as the case may be, shall pay to such Lender, promptly after receipt
of written demand therefor such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Lender in its reasonable discretion shall determine) as shall be required to
compensate such Lender for such increased costs or reductions in amounts
receivable hereunder (it being agreed that a written notice as to the additional
amounts owed to such Lender, showing in reasonable detail the basis for the
calculation thereof, submitted to the US Borrower or the UK Borrower, as the
case may be, by such Lender shall, absent clearly demonstrable error, be final
and conclusive and binding upon all parties hereto) and (z) in the case of
clause (iii) above, the US Borrower or the UK Borrower, as the case may be,
shall take one of the actions specified in Section 2.10(b) as promptly as
possible and, in any event, within the time period required by law.

 

(b)  At any time that any Eurodollar Loan is affected by the circumstances
described in Section 2.10(a)(ii) or (iii), the US Borrower or the UK Borrower,
as the case may be, may (and in the case of a Eurodollar Loan affected pursuant
to Section 2.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is
then being made pursuant to a Borrowing, cancel said Borrowing by giving the
Administrative Agent telephonic notice (confirmed promptly in writing) thereof
on the same date that the US Borrower or the UK Borrower, as the case may be,
was notified by a Lender pursuant to Section

 

80

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

 

2.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan is a Tranche E Term
Loan, a Tranche H Term Loan, a Dollar Revolving Credit Loan or a Dollar Extended
Revolving Credit Loan and is then outstanding, upon at least three Business
Days’ notice to the Administrative Agent, require the affected Lender to convert
each such Eurodollar Revolving Credit Loan, Eurodollar Extended Revolving Credit
Loan and Eurodollar Term Loan into an ABR Loan; provided, that if more than one
Lender is affected at any time, then all affected Lenders must be treated in the
same manner pursuant to this Section 2.10(b).

 

(c)  If, after the Funding Date, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any governmental authority, the
National Association of Insurance Commissioners, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by a Lender or its parent with any request or directive made or adopted after
the Funding Date regarding capital adequacy (whether or not having the force of
law) of any such authority, association, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Lender’s or its
parent’s capital or assets as a consequence of such Lender’s commitments or
obligations hereunder to a level below that which such Lender or its parent
could have achieved but for such adoption, effectiveness, change or compliance
(taking into consideration such Lender’s or its parent’s policies with respect
to capital adequacy), then from time to time, promptly after demand by such
Lender (with a copy to the Administrative Agent), the US Borrower or the UK
Borrower, as the case may be, shall pay to such Lender such additional amount or
amounts as will compensate such Lender or its parent for such reduction, it
being understood and agreed, however, that a Lender shall not be entitled to
such compensation as a result of such Lender’s compliance with, or pursuant to
any request or directive to comply with, any such law, rule or regulation as in
effect on the Funding Date.  Each Lender, upon determining in good faith that
any additional amounts will be payable pursuant to this Section 2.10(c), will
give prompt written notice thereof to the US Borrower (on its own behalf and on
behalf of the UK Borrower), which notice shall set forth in reasonable detail
the basis of the calculation of such additional amounts, although the failure to
give any such notice shall not, subject to Section 2.13, release or diminish any
of the US Borrower’s or the UK Borrower’s, as the case may be, obligations to
pay additional amounts pursuant to this Section 2.10(c) upon receipt of such
notice.

 

(d)  Notwithstanding the foregoing, in the case of Foreign Currency Revolving
Credit Loans or Foreign Currency Extended Revolving Credit Loans affected by the
circumstances described in Section 2.10(a)(i), as promptly as practicable but in
no event later than three Business Days after the giving of the required notice
by the Administrative Agent with respect to such circumstances, the
Administrative Agent (in consultation with the Lenders) shall negotiate with the
US Borrower in good faith in order to ascertain whether a substitute interest
rate (a “Substitute Rate”) may be agreed upon for the maintaining of existing
Foreign Currency Revolving Credit Loans or Foreign Currency Extended Revolving
Credit Loans.  If a Substitute Rate is agreed upon by the US Borrower and all
the Lenders, such Substitute Rate shall apply.  If a Substitute Rate is not so
agreed upon by the US Borrower and all the Lenders within such time,

 

81

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

 

each Lender’s Foreign Currency Revolving Credit Loans or Foreign Currency
Extended Revolving Credit Loans, as applicable, shall thereafter bear interest
at a rate equal to the sum of (i) the rate certified by such Lender to be its
costs of funds (from such sources as it may reasonably select out of those
sources then available to it) for such Foreign Currency Revolving Credit Loans
or Foreign Currency Extended Revolving Credit Loans, as applicable, plus
(ii) the Applicable Eurodollar Margin plus (iii), in the case of Foreign
Currency Loans denominated in Sterling only, any Additional Cost incurred by
such Lender in respect of such Sterling Foreign Currency Loans from time to
time.

 

2.11.                        Compensation.  If (a) any payment of principal of
any Eurodollar Term Loan, Eurodollar Revolving Credit Loan or Eurodollar
Extended Revolving Credit Loan is made by the US Borrower or the UK Borrower, as
the case may be, to or for the account of a Lender other than on the last day of
the Interest Period for such Eurodollar Loan as a result of a payment or
conversion pursuant to Section 2.5, 2.6, 2.10, 5.1, 5.2 or 14.7, as a result of
acceleration of the maturity of the Loans pursuant to Section 11 or for any
other reason, (b) any Borrowing of Eurodollar Term Loans, Eurodollar Revolving
Credit Loans or Eurodollar Extended Revolving Credit Loans is not made as a
result of a withdrawn Notice of Borrowing, (c) any ABR Loan is not converted
into a Eurodollar Term Loan, Eurodollar Revolving Credit Loan or Eurodollar
Extended Revolving Credit Loan as a result of a withdrawn Notice of Conversion
or Continuation, (d) any Eurodollar Loan is not continued as a Eurodollar Term
Loan, Eurodollar Revolving Credit Loan or Eurodollar Extended Revolving Credit
Loan as a result of a withdrawn Notice of Conversion or Continuation or (e) any
prepayment of principal of any Eurodollar Term Loan, Eurodollar Revolving Credit
Loan or Eurodollar Extended Revolving Credit Loan is not made as a result of a
withdrawn notice of prepayment pursuant to Section 5.1 or 5.2, the US Borrower
or the UK Borrower, as the case may be, shall, after receipt of a written
request by such Lender (which request shall set forth in reasonable detail the
basis for requesting such amount), pay to the Administrative Agent for the
account of such Lender any amounts required to compensate such Lender for any
additional losses, costs or expenses that such Lender may reasonably incur as a
result of such payment, failure to convert, failure to continue or failure to
prepay, including any loss, cost or expense (excluding loss of anticipated
profits) actually incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by any Lender to fund or maintain such
Eurodollar Loan.

 

2.12.                        Change of Lending Office.  Each Lender agrees that,
upon the occurrence of any event giving rise to the operation of
Section 2.10(a)(ii), 2.10(a)(iii), 2.10(b), 3.5 or 5.4 with respect to such
Lender, it will, if requested by the US Borrower or the UK Borrower, as the case
may be, use reasonable efforts (subject to overall policy considerations of such
Lender) to designate another lending office for any Loans affected by such
event; provided, that such designation is made on such terms that such Lender
and its lending office suffer no economic, legal or regulatory disadvantage,
with the object of avoiding the consequence of the event giving rise to the
operation of any such Section.  Nothing in this Section 2.12 shall affect or
postpone any of the obligations of the US Borrower or the UK Borrower, as the
case may be, or the right of any Lender provided in Section 2.10, 3.5 or 5.4.

 

82

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

 

2.13.                        Notice of Certain Costs.  Notwithstanding anything
in this Agreement to the contrary, to the extent any notice required by
Section 2.10, 2.11, 3.5 or 5.4 is given by any Lender more than 180 days after
such Lender has knowledge (or should have had knowledge) of the occurrence of
the event giving rise to the additional cost, reduction in amounts, loss, tax or
other additional amounts described in such Sections, such Lender shall not be
entitled to compensation under Section 2.10, 2.11, 3.5 or 5.4, as the case may
be, for any such amounts incurred or accruing prior to the giving of such notice
to the US Borrower or the UK Borrower, as the case may be.

 

2.14.                        Incremental Facilities.  The US Borrower may by
written notice to the Administrative Agent elect to request the establishment of
one or more (x) new Tranche H Term Loan Commitments (the “New Tranche H Term
Loan Commitments”) and/or new Tranche I Term Loans Commitments (the “New Tranche
I Term Loan Commitments”) and/or (y) new Revolving Credit Commitments (the “New
Revolving Credit Commitment”) and/or new Extended Revolving Credit Commitments
(the “New Extended Revolving Loan Commitments” and, together with the New
Tranche H Term Loan Commitments, the New Tranche I Term Loan Commitment and the
New Revolving Credit Commitments, the “New Loan Commitments”), by an aggregate
amount not less than $25,000,000 individually (or such lesser amount which shall
be approved by the Administrative Agent or such lesser amount that shall
constitute the difference between $250,000,000 and all such New Loan Commitments
obtained prior to such date), and integral multiples of $5,000,000 in excess of
that amount, and in any event, by an aggregate amount which, when taken together
with the principal amount of any Permitted Additional Notes, shall not exceed
$250,000,000 in the aggregate.  Each such notice shall specify the date (each,
an “Increased Amount Date”) on which the US Borrower proposes that the New Loan
Commitments shall be effective, which shall be a date not less than 10 Business
Days after the date on which such notice is delivered to the Administrative
Agent; provided, that the US Borrower shall first offer the Lenders to provide
all of the New Loan Commitments prior to offering any other Person that is an
eligible assignee pursuant to Section 14.6(b); provided further, that any Lender
offered or approached to provide all or a portion of the New Loan Commitments
may elect or decline, in its sole discretion, to provide a New Loan Commitment. 
Such New Loan Commitments shall become effective, as of such Increased Amount
Date; provided, that (1) no Default or Event of Default shall exist on such
Increased Amount Date before or after giving effect to such New Loan
Commitments, as applicable; (2) both before and after giving effect to the
making of any Series of New Tranche H Term Loans, New Tranche I Term Loans, New
Revolving Loans, or New Extended Revolving Loans, each of the conditions set
forth in Section 7.1 and 7.2 shall be satisfied; (3) the US Borrower and its
Subsidiaries shall be in pro forma compliance with each of the covenants set
forth in Sections 10.9 and 10.10 as of the last day of the most recently ended
fiscal quarter after giving effect to such New Loan Commitments and any
investment to be consummated in connection therewith; (4) the New Loan
Commitments shall be effected pursuant to one or more Joinder Agreements
executed and delivered by the US Borrower and Administrative Agent, and each of
which shall be recorded in the Register by the US Borrower and Administrative
Agent, and shall be subject to the requirements set forth in Section 5.4(b);
(5) the US Borrower shall make any payments required pursuant to Section 2.11 in
connection with the New Loan Commitments, as applicable; and (6) the US Borrower

 

83

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

 

shall deliver or cause to be delivered (i) a certificate of the US Borrower and
Holdings dated the Increased Amount Date, substantially in the form of
Exhibit P, with appropriate insertions, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of such Credit Party, and
attaching the documents referred to in Section 6.7 and 6.8 and, where
applicable, certifying as to the incumbency and specimen signature of each
officer executing any Credit Document or any other document delivered in
connection therewith on behalf of such Credit Party, (ii) the executed legal
opinions of Simpson Thacher and Bartlett LLP and Tom Riordan, general counsel of
the Credit Parties, in each case, substantially in the forms previously
delivered in connection with this Agreement and (iii) any other applicable
documents reasonably required by the Administrative Agent in connection with any
such transaction.  Any New Tranche H Term Loans or New Tranche I Term Loans made
on an Increased Amount Date shall be designated a separate series (a “Series”)
of New Tranche H Term Loans or New Tranche H Term Loans, as applicable, for all
purpose of this Agreement.

 

On any Increased Amount Date on which New Revolving Loan Commitments or New
Extended Revolving Loan Commitments are effected, subject to the satisfaction of
the foregoing terms and conditions, (a) each of the Lenders with New Revolving
Loan Commitments or Extended Revolving Credit Commitments, as applicable, shall
assign to each Lender with a New Revolving Credit Commitment (each, a “New
Revolving Loan Lender”) or a New Extended Revolving Loan Commitments (each, a
“New Extended Revolving Loan Lender”), as applicable, and each of the New
Revolving Loan Lenders or New Extended Revolving Loan Lenders shall purchase
from each of the Lenders with Revolving Credit Commitments or Extended Revolving
Credit Commitments, as applicable, at the principal amount thereof (together
with accrued interest), such interests in the Revolving Credit Loans or Extended
Revolving Credit Loans, as applicable, outstanding on such Increased Amount Date
as shall be necessary in order that, after giving effect to all such assignments
and purchases, such Revolving Credit Loans or Extended Revolving Credit Loans,
as applicable, will be held by existing Lenders with Revolving Credit Loans or
Extended Revolving Credit Loans, as applicable, and New Revolving Loan Lenders
or New Extended Revolving Loan Lenders, as applicable, ratably in accordance
with their Revolving Credit Commitments or Extended Revolving Credit Commitments
after giving effect to the addition of such New Revolving Credit Commitments or
New Extended Revolving Credit Commitments to the New Revolving Credit
Commitments or Extended Revolving Credit Commitments, (b) each New Revolving
Credit Commitment or New Extended Revolving Credit Commitment shall be deemed
for all purposes a Revolving Credit Commitment or an Extended Revolving Credit
Commitment, as applicable, and each Loan made thereunder (a “New Revolving Loan”
or a “New Extended Revolving Loan”, as applicable) shall be deemed, for all
purposes, a Revolving Credit Loan or an Extended Revolving Credit Loan and
(c) each New Revolving Loan Lender and New Extended Revolving Loan Lender shall
become a Lender with respect to the New Revolving Loan Commitment or New
Extended Revolving Loan Commitment, as applicable, and all matters relating
thereto.

 

On any Increased Amount Date on which any New Tranche H Term Loan Commitments or
New Tranche I Term Loan Commitments of any Series are effective,

 

84

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

 

subject to the satisfaction of the foregoing terms and conditions, (i) each
Lender with a New Tranche H Term Loan Commitment (each, a “New Tranche H Term
Loan Lender”) or New Tranche I Term Loan Commitment (each, a “New Tranche I Term
Loan Lender”) of any Series shall make a Loan to the US Borrower (a “New Tranche
H Term Loan” or a “New Tranche I Term Loan”, as applicable) in an amount equal
to its New Tranche H Term Loan Commitment or New Tranche I Term Loan Commitment,
as applicable, of such Series, and (ii) each New Tranche H Term Loan Lender and
New Tranche I Term Loan Lender of any Series shall become a Lender hereunder
with respect to the New Tranche H Term Loan Commitment or New Tranche I Term
Loan Commitment, as applicable, of such Series and the New Tranche H Term Loans
or New Tranche I Term Loans, as applicable, of such Series made pursuant
thereto.

 

The terms and provisions of the New Tranche H Term Loans, New Tranche I Term
Loans, New Tranche H Term Loan Commitments and New Tranche I Term Loan
Commitments of any Series shall be, except as otherwise set forth herein or in
the Joinder Agreement, identical to the Tranche H Term Loans or the Tranche I
Term Loans, as applicable; provided, however, that (i) the applicable maturity
date of each Series shall be no shorter than the final maturity of the Extended
Revolving Credit Loans and the Tranche H Term Loans and (ii) the rate of
interest applicable to the New Tranche H Term Loans and the New Tranche H Term
Loans of each Series shall be determined by the US Borrower and the applicable
new Lenders and shall be set forth in each applicable Joinder Agreement. The
terms and provisions of the New Revolving Loans, New Extended Revolving Loans,
New Revolving Credit Commitments and New Extended Revolving Credit Commitments
shall be identical to the Revolving Credit Loans, the Extended Revolving Credit
Loans, the Revolving Credit Commitments and the Extended Revolving Credit
Commitments.

 

Each Joinder Agreement may, without the consent of any other Lenders, effect
such amendments to this Agreement and the other Credit Documents as may be
necessary or appropriate, in the opinion of the Administrative Agent, to effect
the provision of this Section 2.14.

 

2.15.                        Incremental Refinancing Facilities.  The US
Borrower may by written notice to the Administrative Agent elect to request the
establishment of one or more new tranches of (x) Term Loan Commitments (the
“Incremental Refinancing Term Loan Commitments”), by an aggregate amount not
less than $25,000,000 individually (or such lesser amount which shall be
approved by the Administrative Agent), and integral multiples of $5,000,000 in
excess of that amount, the proceeds of which shall be used solely to repay the
Tranche A-1 Term Loans, the Tranche A-2 Term Loans, the Tranche E Term Loans or
the Tranche G Term Loans as required by Section 5.2 and (y) Revolving Credit
Commitments or Extended Revolving Credit Commitments (the “Incremental
Refinancing Revolving Credit Commitments”), by an aggregate amount not less than
$25,000,000 individually (or such lesser amount which shall be approved by the
Administrative Agent), and integral multiples of $5,000,000 in excess of that
amount, the proceeds of which shall be used solely to permanently replace
Revolving Credit Commitments or Extended Revolving Credit Commitments.  Each
such notice shall specify the date (each, an “Incremental Refinancing Amount
Date”) on which the US

 

85

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

 

Borrower proposes that the Incremental Refinancing Term Loan Commitments or
Incremental Refinancing Revolving Credit Commitments shall be effective, which
shall be a date not less than 10 Business Days after the date on which such
notice is delivered to the Administrative Agent; provided, that the US Borrower
shall first offer the Lenders to provide all of the Incremental Refinancing Term
Loan Commitments or all Incremental Refinancing Revolving Credit Commitments, as
applicable, prior to offering any other Person that is an eligible assignee
pursuant to Section 14.6(b); provided further, that any Lender offered or
approached to provide all or a portion of the Incremental Refinancing Term Loan
Commitments or the Incremental Refinancing Revolving Credit Commitments may
elect or decline, in its sole discretion, to provide an Incremental Refinancing
Term Loan Commitment or Incremental Refinancing Revolving Credit Commitment, as
applicable.  Such Incremental Refinancing Term Loan Commitments and such
Incremental Refinancing Revolving Credit Commitments, as applicable, shall
become effective, as of such Incremental Refinancing Amount Date; provided, that
(1) no Default or Event of Default shall exist on such Incremental Refinancing
Amount Date before or after giving effect to such Incremental Refinancing Term
Loan Commitments or such Incremental Refinancing Revolving Credit Commitments,
as applicable; (2) both before and after giving effect to the making of any
Series of Incremental Refinancing Term Loans or any Incremental Refinancing
Revolving Credit Commitments, each of the conditions set forth in Section 7.1
and 7.2 shall be satisfied; (3) the US Borrower and its Subsidiaries shall be in
pro forma compliance with each of the covenants set forth in Sections 10.9 and
10.10 as of the last day of the most recently ended fiscal quarter after giving
effect to such Incremental Refinancing Term Loan Commitments or such Incremental
Refinancing Revolving Credit Commitments; (4) the Incremental Refinancing Term
Loan Commitments and the Incremental Refinancing Revolving Credit Commitments,
as applicable, shall be effected pursuant to one or more Joinder Agreements
executed and delivered by the US Borrower and Administrative Agent, and each of
which shall be recorded in the Register by the US Borrower and Administrative
Agent, and shall be subject to the requirements set forth in Section 5.4(b);
(5) the US Borrower shall make any payments required pursuant to Section 2.11 in
connection with the Incremental Refinancing Term Loan Commitments or Incremental
Refinancing Revolving Credit Commitments, as applicable; and (6) the US Borrower
shall deliver or cause to be delivered (i) a certificate of the US Borrower and
Holdings dated the Incremental Refinancing Amount Date, substantially in the
form of Exhibit P, with appropriate insertions, executed by the President or any
Vice President and the Secretary or any Assistant Secretary of such Credit
Party, and attaching the documents referred to in Section 6.7 and 6.8 and, where
applicable, certifying as to the incumbency and specimen signature of each
officer executing any Credit Document or any other document delivered in
connection therewith on behalf of such Credit Party, (ii) the executed legal
opinions of Simpson Thacher and Bartlett LLP and Tom Riordan, general counsel of
the Credit Parties, in each case, substantially in the forms previously
delivered in connection with this Agreement and (iii) any other applicable
documents reasonably required by the Administrative Agent in connection with any
such transaction.  Any Incremental Refinancing Term Loans or Incremental
Refinancing Revolving Credit Commitments made on an Incremental Refinancing
Amount Date shall be designated a separate series (a “Refinancing Series”) of
Incremental Refinancing Term Loans or

 

86

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

 

Incremental Refinancing Revolving Credit Commitments, as applicable, for all
purpose of this Agreement.

 

The terms and provisions of any Term Loans made under the Incremental
Refinancing Term Loan Commitments shall be, except as otherwise set forth herein
or in the Joinder Agreement, identical to those of the Tranche H Term Loans;
provided, however, that (i) the applicable maturity date of each Refinancing
Series shall be no shorter than the final maturity of the Tranche H Term Loans
and (ii) the rate of interest applicable to the Incremental Refinancing Term
Loans of each Refinancing Series shall be determined by the US Borrower and the
applicable new Lenders and shall be set forth in each applicable Joinder
Agreement; provided further, that if the initial yield on any Incremental
Refinancing Term Loans (as determined by the Administrative Agent to be equal to
the sum of (x) the Eurodollar Rate (including any applicable Eurodollar Rate
floor) plus the Applicable Eurodollar Margin applicable to the Incremental
Refinancing Term Loans and (y) if the Incremental Refinancing Term Loans are
initially made at a discount or the Lenders making the same receive a fee
directly or indirectly from Holdings, either Borrower or any Subsidiary for
doing so (the amount of such fee, expressed as a percentage of the Incremental
Refinancing Term Loans, being referred to herein as “OID”), the amount of such
OID divided by the lesser of (A) the average life to maturity of such
Incremental Refinancing Term Loans and (B) four) exceeds by more than 50 basis
points (the amount of such excess above 50 basis points being referred to herein
as the “Yield Differential”) the Eurodolloar Rate plus the Applicable Eurodollar
Margin then in effect for any Eurodollar Rate Tranche H Term Loan or Tranche I
Term Loan, then the Applicable Margin then in effect for Term Loans shall
automatically be increased by the Yield Differential, effective upon the making
of the Incremental Refinancing Term Loans (and if the Eurodollar Rate margins on
the Incremental Refinancing Term Loans are subject to a leveraged-based pricing
grid, appropriate increases to the other Applicable Margins for the Term Loans,
consistent with the foregoing, shall be made).

 

On any Incremental Refinancing Amount Date on which any Incremental Refinancing
Term Loan Commitments of any Refinancing Series are effective, subject to the
satisfaction of the foregoing terms and conditions, (i) each Lender with a
Incremental Refinancing Term Loan Commitment (each, a “Incremental Refinancing
Term Loan Lender”) of any Refinancing Series shall make a Loan to the US
Borrower (a “Incremental Refinancing Term Loan”) in an amount equal to its
Incremental Refinancing Term Loan Commitment of such Refinancing Series, and
(ii) each Incremental Refinancing Term Loan Lender of any Refinancing
Series shall become a Lender hereunder with respect to the Incremental
Refinancing Term Loan Commitment of such Refinancing Series and the Incremental
Refinancing Term Loans of such Refinancing Series made pursuant thereto.

 

The terms and provisions of any Incremental Refinancing Revolving Credit Loans
made under the Incremental Refinancing Revolving Credit Commitments shall be,
except as otherwise set forth herein or in the Joinder Agreement, identical to
those of the Revolving Credit Loans or Extended Revolving Credit Loans, as
applicable; provided, however, that (i) the applicable maturity date of such
Refinancing Series shall

 

87

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

 

be no shorter than the final maturity of the Revolving Credit Commitments or
Extended Revolving Credit Commitments, as applicable and (ii) the rate of
interest applicable to the Incremental Refinancing Revolving Credit Loans of
each Refinancing Series shall be determined by the US Borrower and the
applicable new Lenders and shall be set forth in each applicable Joinder
Agreement.

 

On any Incremental Refinancing Amount Date on which any Incremental Refinancing
Revolving Credit Commitments of any Refinancing Series are effective, subject to
the satisfaction of the foregoing terms and conditions, (i) each Lender with a
Incremental Refinancing Revolving Credit Commitment (each, a “Incremental
Refinancing Revolving Credit Lender”) of any Refinancing Series shall commit to
make Extended Revolving Credit Loans to the US Borrower (“Incremental
Refinancing Revolving Credit Loans”) in an amount equal to its Incremental
Refinancing Revolving Credit Commitment of such Refinancing Series, and
(ii) each Incremental Refinancing Revolving Credit Lender of any Refinancing
Series shall become a Lender hereunder with respect to the Incremental
Refinancing Revolving Credit Commitment of such Refinancing Series.

 

Each Joinder Agreement may, without the consent of any other Lenders, effect
such amendments to this Agreement and the other Credit Documents as may be
necessary or appropriate, in the opinion of the Administrative Agent, to effect
the provision of this Section 2.15.

 

SECTION 3.                                Letters of Credit

 

3.1.                              Letters of Credit.  (a)    Subject to and upon
the terms and conditions herein set forth, (i) the US Borrower or the UK
Borrower, at any time and from time to time on or after the Funding Date and
prior to the L/C Maturity Date, may request that the Letter of Credit Issuer
issue for the account of the US Borrower or the UK Borrower, as the case may be,
a standby letter of credit or letters of credit in Dollars (each a “Dollar
Letter of Credit” and, collectively, the “Dollar Letters of Credit”) in such
form as may be approved by the Letter of Credit Issuer in its reasonable
discretion and (ii) the US Borrower or the UK Borrower, at any time and from
time to time on or after the Funding Date and prior to the L/C Maturity Date,
may request that the Letter of Credit Issuer issue for the account of the US
Borrower or the UK Borrower, as the case may be, a standby letter of credit or
letters of credit in a Foreign Currency (each a “Foreign Currency Letter of
Credit” and, collectively, the “Foreign Currency Letters of Credit” and,
together with the Dollar Letters of Credit, the “Letters of Credit”) in such
form as may be approved by the Letter of Credit Issuer in its reasonable
discretion.  Notwithstanding anything contained herein to the contrary, it is
acknowledged and agreed that, from and after the Restatement Date, (a) all
Letter of Credit Exposure with respect to Converting Letters of Credit and any
related Unpaid Drawings shall be deemed for all purposes hereunder to be issued
under the Extended Revolving Credit Commitment, (b) there shall be an automatic
adjustment to the participations held by each Lender thereunder pursuant to
Section 3.3 so that the undivided participation and interest of the Lenders in
each such Converting Letter of Credit and any related Unpaid Drawing is deemed
to be made in respect of the Extended Revolving Credit Commitment as if such

 

88

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

 

Converting Letter of Credit were made on or after the Restatement Date and
(c) all Letters of Credit issued after the Restatement Date shall be issued
under the Extended Revolving Credit Commitment; provided, however, that if, the
Extended Revolving Credit Exposure equals or exceeds the Total Extended
Revolving Credit Commitment and all possible automatic refinancings of Extended
Revolving Loans have occurred pursuant to Section 2.1(b)(i) or (ii), as
applicable, then Letters of Credit may be issued under the Revolving Credit
Commitment.

 

(b)  Notwithstanding the foregoing, (i) no Letter of Credit shall be issued the
Dollar Equivalent of the Stated Amount of which, when added to the Letter of
Credit Outstanding at such time, would exceed the Letter of Credit Commitment
then in effect; (ii) no Letter of Credit shall be issued the Dollar Equivalent
of the Stated Amount of which would cause (A) the aggregate amount of the
Lenders’ Revolving Credit Exposures at such time to exceed the Total Revolving
Credit Commitment then in effect or (B) the aggregate amount of the Lenders’
Extended Revolving Credit Exposures at such time to exceed the Total Extended
Revolving Credit Commitment then in effect; (iii) each Letter of Credit shall
have an expiration date occurring no later than one year after the date of
issuance thereof, unless otherwise agreed upon by the Administrative Agent and
the Letter of Credit Issuer; provided, that any Letter of Credit may, upon
request of the US Borrower or the UK Borrower, as the case may be, provide for
the automatic renewal thereof for additional consecutive periods of one year or
less (which in no event shall extend beyond the L/C Maturity Date), subject to
any conditions specified in such Letter of Credit; and provided further, that in
no event shall such expiration date occur later than the L/C Maturity Date;
(iv) each Letter of Credit shall be denominated in Dollars or in a Foreign
Currency; (v) no Letter of Credit shall be issued if it would be illegal under
any applicable law for the beneficiary of the Letter of Credit to have a Letter
of Credit issued in its favor; and (vi) no Letter of Credit shall be issued by
the Letter of Credit Issuer after it has received a written notice from the US
Borrower, the UK Borrower or any Lender stating that a Default or Event of
Default has occurred and is continuing until such time as the Letter of Credit
Issuer shall have received a written notice of (x) rescission of such notice
from the party or parties originally delivering such notice or (y) the waiver of
such Default or Event of Default in accordance with the provisions of
Section 14.1.

 

(c)  Upon at least one Business Day’s prior written notice (or telephonic notice
promptly confirmed in writing) to the Administrative Agent and the Letter of
Credit Issuer (which notice the Administrative Agent shall promptly transmit to
each of the Lenders), the US Borrower (on its own behalf and on behalf of the UK
Borrower) shall have the right, on any day, permanently to terminate or reduce
the Letter of Credit Commitment in whole or in part; provided, that, after
giving effect to such termination or reduction, the Letter of Credit Outstanding
shall not exceed the Letter of Credit Commitment.

 

3.2.                              Letter of Credit Requests.  (a)    Whenever
the US Borrower or the UK Borrower desires that a Letter of Credit be issued for
its account, it shall give the Administrative Agent and the Letter of Credit
Issuer at least five (or such lesser number as may be agreed upon by the
Administrative Agent and the Letter of Credit Issuer)

 

89

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

 

Business Days’ written notice thereof.  Each notice shall be executed by the US
Borrower or the UK Borrower, as the case may be, and shall be in the form of
Exhibit N (each a “Letter of Credit Request”). The Administrative Agent shall
promptly notify each Lender of such issuance.

 

(b)  The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the US Borrower or the UK Borrower, as the case
may be, that the Letter of Credit may be issued in accordance with, and will not
violate the requirements of, Section 3.1(b).

 

3.3.                              Letter of Credit Participations.  (a)   
Immediately upon the issuance by the Letter of Credit Issuer of any Letter of
Credit, the Letter of Credit Issuer shall be deemed to have sold and transferred
to each other Lender that has a Revolving Credit Commitment or an Extended
Revolving Credit Commitment, as applicable (each such other Lender, in its
capacity under this Section 3.3, an “L/C Participant”), and each such L/C
Participant shall be deemed irrevocably and unconditionally to have purchased
and received from the Letter of Credit Issuer, without recourse or warranty, an
undivided interest and participation (each an “L/C Participation”), to the
extent of such L/C Participant’s Revolving Credit Commitment Percentage or
Revolving Credit Commitment Percentage, as applicable, in such Letter of Credit,
each substitute letter of credit, each drawing made thereunder and the
obligations of the US Borrower or the UK Borrower, as the case may be, under
this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto (although Letter of Credit Fees will be paid directly to the
Administrative Agent for the ratable account of the L/C Participants as provided
in Section 4.1(c) and the L/C Participants shall have no right to receive any
portion of any Fronting Fees).

 

(b)  In determining whether to pay under any Letter of Credit, the Letter of
Credit Issuer shall have no obligation other than to confirm that any documents
required to be delivered under such Letter of Credit have been delivered and
that they appear to comply on their face with the requirements of such Letter of
Credit.  Any action taken or omitted to be taken by the Letter of Credit Issuer
under or in connection with any Letter of Credit issued by it, if taken or
omitted in the absence of gross negligence or willful misconduct, shall not
create for the Letter of Credit Issuer any resulting liability.

 

(c)  In the event that the Letter of Credit Issuer makes any payment under any
Letter of Credit issued by it and the US Borrower or the UK Borrower, as the
case may be, shall not have repaid such amount in full to the Letter of Credit
Issuer pursuant to Section 3.4(a), the Letter of Credit Issuer shall promptly
notify the Administrative Agent who will notify each applicable L/C Participant
of such failure, and each such L/C Participant shall promptly and
unconditionally pay to the Administrative Agent, for the account of the Letter
of Credit Issuer, the amount of such L/C Participant’s Revolving Credit
Commitment Percentage or Extended Revolving Credit Commitment Percentage, as
applicable, of such unreimbursed payment in Dollars or in the applicable Foreign
Currency, as the case may be, and in immediately available funds; provided,
however, that no L/C Participant shall be obligated to pay to the Administrative
Agent for the account of the Letter of Credit Issuer its Revolving Credit
Commitment Percentage or

 

90

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

 

Extended Revolving Credit Commitment Percentage, as applicable, of such
unreimbursed amount arising from any wrongful payment made by the Letter of
Credit Issuer under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Letter of
Credit Issuer.  If the Letter of Credit Issuer so notifies, prior to 11:00 a.m.
(Local Time) on any Business Day, any L/C Participant required to fund a payment
under a Letter of Credit, such L/C Participant shall make available to the
Administrative Agent for the account of the Letter of Credit Issuer such L/C
Participant’s Revolving Credit Commitment Percentage or Extended Revolving
Credit Commitment Percentage, as applicable, of the amount of such payment on
such Business Day in immediately available funds (or, if such notification is
given after 11:00 a.m. (Local Time) on any Business Day, such amount shall be
made available on the immediately following Business Day).  If and to the extent
such L/C Participant shall not have so made its Revolving Credit Commitment
Percentage or Extended Revolving Credit Commitment Percentage, as applicable, of
the amount of such payment available to the Administrative Agent for the account
of the Letter of Credit Issuer, such L/C Participant agrees to pay to the
Administrative Agent for the account of the Letter of Credit Issuer, forthwith
on demand, such amount, together with interest thereon for each day from such
date until the date such amount is paid to the Administrative Agent for the
account of the Letter of Credit Issuer at the Federal Funds Effective Rate.  The
failure of any L/C Participant to make available to the Administrative Agent for
the account of the Letter of Credit Issuer its Revolving Credit Commitment
Percentage or Extended Revolving Credit Commitment Percentage, as applicable, of
any payment under any Letter of Credit shall not relieve any other L/C
Participant of its obligation hereunder to make available to the Administrative
Agent for the account of the Letter of Credit Issuer its Revolving Credit
Commitment Percentage or Extended Revolving Credit Commitment Percentage, as
applicable, of any payment under such Letter of Credit on the date required, as
specified above, but no L/C Participant shall be responsible for the failure of
any other L/C Participant to make available to the Administrative Agent such
other L/C Participant’s Revolving Credit Commitment Percentage or Extended
Revolving Credit Commitment Percentage, as applicable, of any such payment.

 

(d)  Whenever the Letter of Credit Issuer receives a payment in respect of an
unpaid reimbursement obligation as to which the Administrative Agent has
received for the account of the Letter of Credit Issuer any payments from the
L/C Participants pursuant to paragraph (c) above, the Letter of Credit Issuer
shall pay to the Administrative Agent and the Administrative Agent shall
promptly pay to each L/C Participant that has paid its Revolving Credit
Commitment Percentage or Extended Revolving Credit Commitment Percentage, as
applicable, of such reimbursement obligation, in Dollars or the applicable
Foreign Currency, as the case may be, and in immediately available funds, an
amount equal to such L/C Participant’s share (based upon the proportionate
aggregate amount originally funded by such L/C Participant to the aggregate
amount funded by all L/C Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of the
respective L/C Participations.

 

(e)  The obligations of the L/C Participants to make payments to the
Administrative Agent for the account of the Letter of Credit Issuer with respect
to Letters

 

91

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

 

of Credit shall be irrevocable and not subject to counterclaim, set-off or other
defense or any other qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including under any of the following circumstances:

 

(i)  any lack of validity or enforceability of this Agreement or any of the
other Credit Documents;

 

(ii)  the existence of any claim, set-off, defense or other right that the US
Borrower or the UK Borrower, as the case may be, may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of Credit
(or any Person for whom any such transferee may be acting), the Administrative
Agent, the Letter of Credit Issuer, any Lender or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the US Borrower or the UK Borrower and the beneficiary named
in any such Letter of Credit);

 

(iii)  any draft, certificate or any other document presented under any Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;

 

(iv)  the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Credit Documents; or

 

(v)  the occurrence of any Default or Event of Default;

 

provided, however, that no L/C Participant shall be obligated to pay to the
Administrative Agent for the account of the Letter of Credit Issuer its
Revolving Credit Commitment Percentage or Extended Revolving Credit Commitment
Percentage, as applicable, of any unreimbursed amount arising from any wrongful
payment made by the Letter of Credit Issuer under a Letter of Credit as a result
of acts or omissions constituting willful misconduct or gross negligence on the
part of the Letter of Credit Issuer.

 

3.4.                              Agreement to Repay Letter of Credit Drawings. 
(a)    The US Borrower or the UK Borrower, as the case may be, hereby agrees to
reimburse the Letter of Credit Issuer, by making payment to the Administrative
Agent in Dollars or in the applicable Foreign Currency, as the case may be, in
immediately available funds at the Administrative Agent’s Office, for any
payment or disbursement made by the Letter of Credit Issuer under any Letter of
Credit (each such amount (including the Dollar Equivalent thereof) so paid until
reimbursed, an “Unpaid Drawing”) immediately after, and in any event on the date
of, such payment, with interest on the amount so paid or disbursed by the Letter
of Credit Issuer, to the extent not reimbursed prior to 5:00 p.m. (Local Time)
on the date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date the Letter of Credit Issuer is reimbursed
therefor at a rate per annum that shall at all times be the Applicable ABR
Margin plus the ABR as in effect from time to time; provided, that,
notwithstanding anything contained in this Agreement to the contrary, (i) unless
the US Borrower or the UK Borrower, as the

 

92

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

 

case may be, shall have notified the Administrative Agent and the Letter of
Credit Issuer prior to 10:00 a.m. (Local Time) on the date of such drawing that
the US Borrower or the UK Borrower, as the case may be, intends to reimburse the
Letter of Credit Issuer for the amount of such drawing with funds other than the
proceeds of Loans, the US Borrower or the UK Borrower, as the case may be, shall
be deemed to have given a Notice of Borrowing to the Administrative Agent
requesting that the Lenders make Dollar Revolving Credit Loans or Dollar
Extended Revolving Credit Loans, as applicable, (each of which shall initially
be ABR Loans) or Foreign Currency Revolving Credit Loans or Foreign Currency
Extended Revolving Credit Loans (each of which shall be Eurodollar Loans with an
Interest Period of one month denominated in Sterling or Euro), as the case may
be, on the date on which such drawing is honored in an amount equal to the
amount of such drawing and (ii) the Administrative Agent shall promptly notify
each L/C Participant of such drawing and the amount of its Revolving Credit Loan
or Extended Revolving Credit Loan, as applicable, to be made in respect thereof,
and (x) in respect of Dollar Letters of Credit, each L/C Participant shall be
irrevocably obligated to make a Dollar Revolving Credit Loan or a Dollar
Extended Revolving Credit Loan, as applicable, in each case that is an ABR Loan
to the US Borrower or the UK Borrower, as the case may be, in the amount of its
Revolving Credit Commitment Percentage or Extended Revolving Credit Commitment
Percentage, as applicable, of the applicable Unpaid Drawing by 12:00 noon (Local
Time) on such Business Day by making the amount of such Dollar Revolving Credit
Loan or Dollar Extended Revolving Credit Loan, as applicable, available to the
Administrative Agent at the Administrative Agent’s Office and (y) in respect of
Foreign Currency Letters of Credit, each L/C Participant shall be irrevocably
obligated to make a Foreign Currency Revolving Credit Loan or a Foreign Currency
Extended Revolving Credit Loan, as applicable, in each case that is a Eurodollar
Loan with an Interest Period of one month to the US Borrower or the UK Borrower,
as the case may be, denominated in Sterling or Euro, as the case may be, in the
amount of its Revolving Credit Commitment Percentage or Extended Revolving
Credit Commitment Percentage, as applicable, of the applicable Unpaid Drawing by
12:00 noon (London time) on such Business Day by making the amount of such
Foreign Currency Revolving Credit Loan or Foreign Currency Extended Revolving
Credit Loan, as applicable, available to the Administrative Agent at the
Administrative Agent’s Office.  Such Dollar Revolving Credit Loans or Dollar
Extended Revolving Credit Loans, Foreign Currency Revolving Credit Loans or
Foreign Currency Extended Revolving Credit Loans, as the case may be, shall be
made without regard to the Minimum Borrowing Amount.  The Administrative Agent
shall use the proceeds of such Revolving Credit Loans or Extended Revolving
Credit Loans, as applicable, solely for the purpose of reimbursing the Letter of
Credit Issuer for the related Unpaid Drawing.

 

(b)  The US Borrower’s and the UK Borrower’s obligations under this Section 3.4
to reimburse the Letter of Credit Issuer with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances and irrespective of any set-off, counterclaim or
defense to payment that the US Borrower, the UK Borrower or any other Person may
have or have had against the Letter of Credit Issuer, the Administrative Agent
or any Lender (including in its capacity as an L/C Participant), including any
defense based upon the failure of any drawing under a Letter of Credit (each a
“Drawing”) to conform to the terms of the Letter

 

93

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

 

of Credit or any non-application or misapplication by the beneficiary of the
proceeds of such Drawing; provided, that the US Borrower or the UK Borrower, as
the case may be, shall not be obligated to reimburse the Letter of Credit Issuer
for any wrongful payment made by the Letter of Credit Issuer under the Letter of
Credit issued by it as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of the Letter of Credit Issuer.

 

3.5.                              Increased Costs.  If after the Funding Date,
the adoption of any applicable law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or actual compliance by the Letter of
Credit Issuer or any L/C Participant with any request or directive made or
adopted after the Funding Date (whether or not having the force of law), by any
such authority, central bank or comparable agency shall either (a) impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued by the Letter of Credit Issuer, or
any L/C Participant’s L/C Participation therein, or (b) impose on the Letter of
Credit Issuer or any L/C Participant any other conditions affecting its
obligations under this Agreement in respect of Letters of Credit or L/C
Participations therein or any Letter of Credit or such L/C Participant’s L/C
Participation therein, and the result of any of the foregoing is to increase the
cost to the Letter of Credit Issuer or such L/C Participant of issuing,
maintaining or participating in any Letter of Credit, or to reduce the amount of
any sum received or receivable by the Letter of Credit Issuer or such L/C
Participant hereunder (other than any such increase or reduction attributable to
taxes) in respect of Letters of Credit or L/C Participations therein, then,
promptly after receipt of written demand to the US Borrower or the UK Borrower,
as the case may be, by the Letter of Credit Issuer or such L/C Participant, as
the case may be, (a copy of which notice shall be sent by the Letter of Credit
Issuer or such L/C Participant to the Administrative Agent), the US Borrower or
the UK Borrower, as the case may be, shall pay to the Letter of Credit Issuer or
such L/C Participant such additional amount or amounts as will compensate the
Letter of Credit Issuer or such L/C Participant for such increased cost or
reduction, it being understood and agreed, however, that the Letter of Credit
Issuer or an L/C Participant shall not be entitled to such compensation as a
result of such Person’s compliance with, or pursuant to any request or directive
to comply with, any such law, rule or regulation as in effect on the Funding
Date.  A certificate submitted to the US Borrower or the UK Borrower, as the
case may be, by the Letter of Credit Issuer or a L/C Participant, as the case
may be, (a copy of which certificate shall be sent by the Letter of Credit
Issuer or such L/C Participant to the Administrative Agent) setting forth in
reasonable detail the basis for the determination of such additional amount or
amounts necessary to compensate the Letter of Credit Issuer or such L/C
Participant as aforesaid shall be conclusive and binding on the US Borrower and
the UK Borrower absent clearly demonstrable error.

 

3.6.                              Successor Letter of Credit Issuer.  The Letter
of Credit Issuer may resign as Letter of Credit Issuer upon 60 days’ prior
written notice to the Administrative Agent, the Lenders and the US Borrower.  If
the Letter of Credit Issuer shall resign as Letter of Credit Issuer under this
Agreement, then the US Borrower shall appoint from among the Lenders with
Extended Revolving Credit Commitments a successor issuer of

 

94

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

 

Letters of Credit, whereupon such successor issuer shall succeed to the rights,
powers and duties of the Letter of Credit Issuer, and the term “Letter of Credit
Issuer” shall mean such successor issuer effective upon such appointment.  At
the time such resignation shall become effective, the US Borrower and the UK
Borrower shall pay to the resigning Letter of Credit Issuer all accrued and
unpaid fees pursuant to Sections 4.1(d) and (e).  The acceptance of any
appointment as the Letter of Credit Issuer hereunder by a successor Lender shall
be evidenced by an agreement entered into by such successor, in a form
satisfactory to the US Borrower and the Administrative Agent and, from and after
the effective date of such agreement, such successor Lender shall have all the
rights and obligations of the previous Letter of Credit Issuer under this
Agreement and the other Credit Documents.  After the resignation of the Letter
of Credit Issuer hereunder, the resigning Letter of Credit Issuer shall remain a
party hereto and shall continue to have all the rights and obligations of a
Letter of Credit Issuer under this Agreement and the other Loan Documents with
respect to Letters of Credit issued by it prior to such resignation, but shall
not be required to issue additional Letters of Credit.  After any retiring
Letter of Credit Issuer’s resignation as Letter of Credit Issuer, the provisions
of this Agreement relating to the Letter of Credit Issuer shall inure to its
benefit as to any actions taken or omitted to be taken by it (a) while it was
Letter of Credit Issuer under this Agreement or (b) at any time with respect to
Letters of Credit issued by such Letter of Credit Issuer.

 

3.7.                              Defaulting Lenders and Letters of Credit.  If
any Letter of Credit Exposure exists at the time a Lender becomes a Defaulting
Lender, then:

 

(a)  all or any part of such Letter of Credit Exposure shall be reallocated
among the non-Defaulting Lenders in accordance with their respective Extended
Revolving Credit Commitment Percentage but only to the extent (x) the sum of all
non-Defaulting Lenders’ Extended Revolving Credit Exposures plus such Defaulting
Lender’s Letter of Credit Exposure does not exceed the total of all
non-Defaulting Lenders’ Extended Revolving Credit Commitments and (y) no Default
or Event of Default exists and is continuing;

 

(b)  if the reallocation described in clause (a) above cannot, or can only
partially, be effected, the US Borrower shall within one Business Day following
notice by the Administrative Agent cash collateralize such Defaulting Lender’s
Letter of Credit Exposure (after giving effect to any partial reallocation
pursuant to clause (a) above) in accordance with the procedures set forth in
Section 5.2(b) for so long as such Letter of Credit Exposure is outstanding;

 

(c)  if the US Borrower cash collateralizes any portion of such Defaulting
Lender’s Letter of Credit Exposure pursuant to Section 3.7(b), the US Borrower
shall not be required to pay any fees to such Defaulting Lender with respect to
such Defaulting Lender’s Letter of Credit Exposure during the period such
Defaulting Lender’s Letter of Credit Exposure is cash collateralized;

 

(d)  if the Letter of Credit Exposure of the non-Defaulting Lenders is
reallocated pursuant to Section 3.7(a), then the fees payable to the Lenders
pursuant to

 

95

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

 

Sections 4.1(c) or (d) shall be adjusted in accordance with such non-Defaulting
Lenders’ Extended Revolving Credit Commitment Percentages; or

 

(e)  if any Defaulting Lender’s LC Exposure is neither cash collateralized nor
reallocated pursuant to Section 3.7(a), then, without prejudice to any rights or
remedies of the Letter of Credit Issuer or any Lender hereunder, all facility
fees that otherwise would have been payable to such Defaulting Lender (solely
with respect to the portion of such Defaulting Lender’s Commitment that was
utilized by such LC Exposure) and Letter of Credit Fees payable under Sections
4.1(c) or (d) with respect to such Defaulting Lender’s Letter of Credit Exposure
shall be payable to the Letter of Credit Issuer until such Letter of Credit
Exposure is cash collateralized and/or reallocated.

 

So long as any Lender is a Defaulting Lender, the Issuing Bank shall not be
required to issue, amend or increase any Letter of Credit, unless it is
reasonably satisfied that the related exposure will be 100% covered by the
Commitments of the non-Defaulting Lenders and/or cash collateral will be
provided by the Borrower in accordance with Section 3.7(c).

 

SECTION 4.                                Fees; Commitments

 

4.1.                              Fees.  (a)    The US Borrower (on behalf of
itself and the UK Borrower) agrees to pay to the Administrative Agent in
Dollars, for the account of each Lender having a Revolving Credit Commitment (in
each case pro rata according to the respective Revolving Credit Commitments of
all such Lenders), a commitment fee for each day from and including the Funding
Date to but excluding the Final Date.  Such commitment fee shall be payable in
arrears (i) on the last day of each March, June, September and December (for the
three-month period (or portion thereof) ended on such day for which no payment
has been received) and (ii) on the Final Date (for the period ended on such date
for which no payment has been received pursuant to clause (i) above), and shall
be computed for each day during such period at a rate per annum equal to the
Commitment Fee Rate in effect on such day on the Available Commitments in effect
on such day.  In addition, the US Borrower (on behalf of itself and the UK
Borrower) agrees to pay to the Administrative Agent in Euro, for the account of
each Lender having a Tranche A Term Loan Commitment (in each case pro rata
according to the respective Tranche A Term Loan Commitments of all such
Lenders), a commitment fee for each day from and including the Funding Date to
but excluding the earlier of September 30, 2004 and the date of any Borrowing of
Tranche A-1 Term Loans or Tranche A-2 Term Loans pursuant to
Section 2.1(a)(iii).  Such commitment fee shall be payable in arrears on the
earlier of September 30, 2004 and the date of any Borrowing of Tranche A-1 Term
Loans or Tranche A-2 Term Loans pursuant to Section 2.1(a)(iii), and shall be
computed for each day during such period at a rate per annum equal to 0.50% on
the Available Tranche A Commitment in effect on such day.  Notwithstanding the
foregoing, the US Borrower shall not be obligated to pay any amounts to any
Defaulting Lender pursuant to this Section 4.1.

 

(b)  The US Borrower (on behalf of itself and the UK Borrower) agrees to pay to
the Administrative Agent in Dollars, for the account of each Lender having an

 

96

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

 

Extended Revolving Credit Commitment (in each case pro rata according to the
respective Extended Revolving Credit Commitments of all such Lenders), a
commitment fee for each day from and including the Restatement Date to but
excluding the Final Extended Date.  Such commitment fee shall be payable in
arrears (i) on the last day of each March, June, September and December (for the
three-month period (or portion thereof) ended on such day for which no payment
has been received) and (ii) on the Final Extended Date (for the period ended on
such date for which no payment has been received pursuant to clause (i) above),
and shall be computed for each day during such period at a rate per annum equal
to the Extended Commitment Fee Rate on the Available Extended Commitments in
effect on such day.  Notwithstanding the foregoing, the US Borrower shall not be
obligated to pay any amounts to any Defaulting Lender pursuant to this
Section 4.1.

 

(c)  The US Borrower (on behalf of itself and the UK Borrower) agrees to pay to
the Administrative Agent in Dollars for the account of the Lenders pro rata on
the basis of their respective Letter of Credit Exposure, a fee in respect of
each Letter of Credit (the “Letter of Credit Fee”), for the period from and
including the date of issuance of such Letter of Credit to but excluding the
termination date of such Letter of Credit computed at the per annum rate for
each day equal to the Applicable Eurodollar Margin for Extended Revolving Credit
Loans, or with respect to Letters of Credit issued under the Revolving Credit
Commitments, the Applicable Eurodollar Margin for Revolving Credit Loans, in
each case, minus 0.125% per annum on the average daily Stated Amount of such
Letter of Credit.  Such Letter of Credit Fees shall be due and payable quarterly
in arrears on the last day of each March, June, September and December and on
the date upon which the Total Extended Revolving Credit Commitment terminates
and the Letter of Credit Outstandings shall have been reduced to zero.

 

(d)  The US Borrower (on behalf of itself and the UK Borrower) agrees to pay to
the Administrative Agent in Dollars for the account of the Letter of Credit
Issuer a fee in respect of each Letter of Credit issued by it (the “Fronting
Fee”), for the period from and including the date of issuance of such Letter of
Credit to but excluding the termination date of such Letter of Credit, computed
at the rate for each day equal to 0.125% per annum on the average daily Stated
Amount of such Letter of Credit.  Such Fronting Fees shall be due and payable
quarterly in arrears on the last day of each March, June, September and
December and on the date upon which the Total Extended Revolving Credit
Commitment terminates and the Letter of Credit Outstandings shall have been
reduced to zero.

 

(e)  The US Borrower (on behalf of itself and the UK Borrower) agrees to pay
directly to the Letter of Credit Issuer in Dollars upon each issuance of,
drawing under, and/or amendment of, a Letter of Credit issued by it such amount
as the Letter of Credit Issuer and the US Borrower shall have agreed upon for
issuances of, drawings under or amendments of, letters of credit issued by it.

 

4.2.                              Voluntary Reduction of Revolving Credit
Commitments and Extended Revolving Credit Commitments.  Upon at least one
Business Day’s prior written notice (or telephonic notice promptly confirmed in
writing) to the Administrative

 

97

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

 

Agent at the Administrative Agent’s Office (which notice the Administrative
Agent shall promptly transmit to each of the Lenders), the US Borrower (on
behalf of itself and the UK Borrower) shall have the right, without premium or
penalty, on any day, permanently to terminate or reduce (i) the Revolving Credit
Commitments and/or the Foreign Currency Revolving Commitments in whole or in
part; provided, that (a) any such reduction shall apply proportionately and
permanently to reduce the Revolving Credit Commitment or the Foreign Currency
Revolving Commitment, as the case may be, of each of the Lenders, (b) any
partial reduction pursuant to this Section 4.2 shall be in the amount of at
least the Dollar Equivalent of $1,000,000 and in integral multiples of the
Dollar Equivalent of $100,000 and (c) after giving effect to such termination or
reduction and to any prepayments of the Loans made on the date thereof in
accordance with this Agreement, the aggregate amount of the Lenders’ Revolving
Credit Exposures shall not exceed the Total Revolving Credit Commitment or
(ii) the Extended Revolving Credit Commitments and/or the Foreign Currency
Extended Revolving Commitments in whole or in part; provided, that (a) any such
reduction shall apply proportionately and permanently to reduce the Extended
Revolving Credit Commitment or the Foreign Currency Extended Revolving
Commitment, as the case may be, of each of the Lenders, (b) any partial
reduction pursuant to this Section 4.2 shall be in the amount of at least the
Dollar Equivalent of $1,000,000 and in integral multiples of the Dollar
Equivalent of $100,000 and (c) after giving effect to such termination or
reduction and to any prepayments of the Loans made on the date thereof in
accordance with this Agreement, the aggregate amount of the Lenders’ Extended
Revolving Credit Exposures shall not exceed the Total Extended Revolving Credit
Commitment.

 

4.3.                              Mandatory Termination of Commitments.  (a)   
€167,630,542.28 of the Tranche A Term Loan Commitments shall terminate at
5:00 p.m. (New York time) on the Funding Date.  €41,907,635.58 of the Tranche A
Term Loan Commitments shall terminate at 5:00 p.m. (New York time) on
September 30, 2004. All of the Tranche E Term Loan Commitments shall terminate
at 5:00 p.m. (New York time) on the Third Amendment Effective Date.  All of the
Tranche G Term Loan Commitments shall terminate at 5:00 p.m. (New York time) on
the Fourth Amendment Effective Date.  All of the Tranche H Term Loan Commitments
shall terminate at 5:00 p.m. (New York time) on the Restatement Date.  All of
the Tranche I Term Loan Commitments shall terminate at 5:00 p.m. (New York time)
on the Restatement Date.

 

(b)  The Total Revolving Credit Commitment, including the Total Foreign Currency
Revolving Commitment, shall terminate at 5:00 p.m. (New York time) on the
Revolving Credit Maturity Date.

 

(c)  The Total Extended Revolving Credit Commitment, including the Total Foreign
Currency Extended Revolving Commitment, shall terminate at 5:00 p.m. (New York
time) on the Extended Revolving Credit Maturity Date.

 

(d)  The Swingline Commitment shall terminate at 5:00 p.m. (New York time) on
the Swingline Maturity Date.

 

98

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

 

(e)  In the event, that the US Borrower or the UK Borrower incur any Revolver
Refinancing Indebtedness or Incremental Refinancing Revolving Credit
Commitments, the portion of the Revolving Credit Commitments or Extended
Revolving Credit Commitments, as applicable, permanently refinanced with such
Revolver Refinancing Indebtedness or such Incremental Refinancing Revolving
Credit Commitments shall be reduced by the amount of the new Revolver
Refinancing Indebtedness or the new Incremental Refinancing Revolving Credit
Commitments.

 

SECTION 5.                                Payments

 

5.1.                              Voluntary Prepayments.  The US Borrower and
the UK Borrower shall have the right to prepay Term Loans, Revolving Credit
Loans, Extended Revolving Credit Loans and Swingline Loans, without premium or
penalty, in whole or in part from time to time on the following terms and
conditions: (a) the US Borrower (on its own behalf and on behalf of the UK
Borrower) shall give the Administrative Agent at the Administrative Agent’s
Office (or, in the case of a Swingline Loan, the Swingline Lender) written
notice (or telephonic notice promptly confirmed in writing) of its intent to
make such prepayment, the amount of such prepayment and (in the case of
Eurodollar Term Loans, Eurodollar Revolving Credit Loans and Eurodollar Extended
Revolving Credit Loans) the specific Borrowing(s) pursuant to which such
prepayment shall be applied, which notice shall be given by the US Borrower no
later than (i) in the case of Term Loans, Revolving Credit Loans or Extended
Revolving Credit Loans, 10:00 a.m. (Local Time) one Business Day prior to, or
(ii) in the case of Swingline Loans, 10:00 a.m. (Local Time) on, the date of
such prepayment and shall promptly be transmitted by the Administrative Agent to
each of the Lenders or the Swingline Lender, as the case may be; (b) each
partial prepayment of any Borrowing of Term Loans, Revolving Credit Loans or
Extended Revolving Credit Loans shall be in a multiple of the Dollar Equivalent
of $100,000 and in an aggregate principal amount of the Dollar Equivalent of at
least $1,000,000 and each partial prepayment of Swingline Loans shall be in a
multiple of the Dollar Equivalent of $100,000 and in an aggregate principal
amount of at least the Dollar Equivalent of $100,000; provided, that no partial
prepayment of Eurodollar Term Loans, Eurodollar Revolving Credit Loans or
Eurodollar Extended Revolving Credit Loans made pursuant to a single Borrowing
shall reduce the outstanding Eurodollar Term Loans, Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans made pursuant to such
Borrowing to an amount less than the Minimum Borrowing Amount for Eurodollar
Term Loans, Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving
Credit Loans; and (c) any prepayment of Eurodollar Term Loans, Eurodollar
Revolving Credit Loans or Eurodollar Extended Revolving Credit Loans pursuant to
this Section 5.1 on any day other than the last day of an Interest Period
applicable thereto shall be subject to compliance by the US Borrower or the UK
Borrower, as the case may be, with the applicable provisions of Section 2.11. 
Each prepayment in respect of any tranche of Term Loans pursuant to this
Section 5.1 shall be (a) applied to Tranche A-1 Term Loans, Tranche A-2 Term
Loans, Tranche E Term Loans, Tranche G Term Loans, Tranche H Term Loans or
Tranche I Term Loans in such manner as the US Borrower (on its own behalf and on
behalf of the UK Borrower) may determine and (b) applied to reduce Tranche A-1
Repayment Amounts, Tranche A-2 Repayment Amounts, Tranche E Repayment Amounts,
Tranche G Repayment Amounts,

 

99

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

 

Tranche H Repayment Amounts or Tranche I Repayment Amounts in such order as the
US Borrower (on its own behalf and on behalf of the UK Borrower) may determine;
provided, however, that any prepayment pursuant to this Section 5.1 made prior
to July 30, 2011 in respect of (i) Tranche E Term Loans or Tranche H Term Loans
shall be applied on a pro rata basis collectively to both such tranches and
(ii) Tranche G Term Loans or Tranche I Term Loans shall be applied on a pro rata
basis collectively to both such tranches; provided further, that with respect to
any prepayment of Term Loans pursuant to this Section 5.1 made with the Net Cash
Proceeds from any incurrence of Indebtedness pursuant to clause (ii) of
Section 10.1(n) which are not required to be applied in accordance with
Section 5.2, the US Borrower (on its own behalf and on the behalf of the UK
Borrower) may apply such proceeds, at its election, to the Tranche A-1 Term
Loans, the Tranche A-2 Term Loans, the Tranche E Term Loans and/or the Tranche G
Term Loans in such manner as it may determine and, following the repayment of
the Tranche A-1 Term Loans, the Tranche A-2 Term Loans, the Tranche E Term Loans
and the Tranche G Term Loans in full, in such manner as it may determine.  At
the US Borrower’s election (on its own behalf and on behalf of the UK Borrower)
in connection with any prepayment pursuant to this Section 5.1, such prepayment
shall not be applied to any Term Loan, Revolving Credit Loan or Extended
Revolving Credit Loan of a Defaulting Lender.  All voluntary prepayments of all
but not less than all of the Tranche H Term Loans and/or the Tranche I Term
Loans effected on or prior to the first anniversary of the Restatement Date with
the proceeds of a substantially concurrent issuance or incurrence of new bank
loans which (x) are incurred for the primary purpose of refinancing the Tranche
H Term Loans or Tranche I Term Loans, as the case may be, and decreasing the
Applicable ABR Margin or Applicable Eurodollar Margin with respect thereto,
(y) otherwise have terms and conditions (and are in an aggregate principal
amount) substantially the same as those of the Tranche H Term Loans or Tranche I
Term Loans, as the case may be, as in effect prior to the prepayment thereof and
(z) are not otherwise in connection with a transaction and any transactions
related thereto not permitted by this Agreement (as determined prior to giving
effect to any amendment or waiver of this Agreement being adopted in connection
with such transaction and related transactions), shall be accompanied by a
prepayment fee equal to 1.00% of the aggregate principal amount of such
prepayment.

 

5.2.                              Mandatory Prepayments.  (a)    Term Loan
Prepayments.  (i)  On each occasion that a Prepayment Event occurs, the US
Borrower and the UK Borrower shall, within five Business Days after the
occurrence of such Prepayment Event, offer to prepay, in accordance with
paragraph (c) below, the principal amount of Term Loans in an amount equal to
100% of the Net Cash Proceeds from such Prepayment Event; provided that if such
Prepayment Event is a Debt Incurrence Prepayment Event arising pursuant to
clause (ii) of Section 10.1(n), a prepayment pursuant to this
Section 5.2(a)(i) shall only be required from and after such time as there is
$250,000,000 of Indebtedness outstanding under such clause and such prepayment
shall be in an amount equal to 50% of the Net Cash Proceeds from such Prepayment
Event.  For avoidance of doubt, no prepayment shall be required pursuant to this
Section 5.2(a)(i) for any Prepayment Events that have occurred prior to the
Fourth Amendment Effectiveness Date.

 

100

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

 

(ii)  Not later than the date that is six months after the last day of any
fiscal year (commencing with the fiscal year ending December 31, 2004), if the
Consolidated Total Debt to Consolidated EBITDA Ratio as of the end of such
fiscal year is greater than or equal to 3.50 to 1.00, the US Borrower and the UK
Borrower shall offer to prepay, in accordance with paragraph (c) below, the
principal of Term Loans in an amount equal to (w) 50% of Excess Cash Flow for
such fiscal year, minus (x) the amount of any such Excess Cash Flow that the US
Borrower has, after the end of such fiscal year and prior to such date,
reinvested in the business of the US Borrower or any of its Subsidiaries
(subject to Section 9.14), minus (y) the principal amount of Term Loans
voluntarily prepaid pursuant to Section 5.1 during such fiscal year and minus
(z) an amount equal to $10,000,000 for such fiscal year.

 

(b)  Aggregate Revolving Credit Outstandings and Aggregate Extended Revolving
Credit Outstandings.  If on any date the aggregate amount of the Lenders’
Revolving Credit Exposures (all the foregoing, collectively, the “Aggregate
Revolving Credit Outstandings”) exceeds 103% of the Total Revolving Credit
Commitment as then in effect or the aggregate amount of the Lenders’ Extended
Revolving Credit Exposures (all the foregoing, collectively, the “Aggregate
Extended Revolving Credit Outstandings”) exceeds 103% of the Total Extended
Revolving Credit Commitment as then in effect, the US Borrower and/or the UK
Borrower, as the case may be, shall forthwith repay on such date the principal
amount of Swingline Loans and, after all Swingline Loans have been paid in full,
Revolving Credit Loans or Extended Revolving Credit Loans, as applicable, in an
amount equal to such excess.  If, after giving effect to the prepayment of all
outstanding Swingline Loans and Revolving Credit Loans or Extended Revolving
Credit Loans, as applicable, the Aggregate Revolving Credit Outstandings exceed
the Total Revolving Credit Commitment then in effect or the Aggregate Extended
Revolving Credit Outstandings exceed the Total Extended Revolving Credit
Commitment then in effect, as applicable, the US Borrower and/or the UK
Borrower, as the case may be, shall pay to the Administrative Agent an amount in
cash equal to such excess and the Administrative Agent shall hold such payment
for the benefit of the Lenders as security for the obligations of the US
Borrower and the UK Borrower hereunder (including obligations in respect of
Letter of Credit Outstandings) pursuant to a cash collateral agreement to be
entered into in form and substance satisfactory to the Administrative Agent
(which shall permit certain investments in Permitted Investments satisfactory to
the Administrative Agent, until the proceeds are applied to the secured
obligations).

 

(c)  Application to Repayment Amounts.  Each prepayment of Term Loans required
by Section 5.2(a) shall (unless otherwise indicated below) be initially
allocated pro rata among the Tranche A-1 Term Loans, the Tranche A-2 Term Loans,
the Tranche E Term Loans, the Tranche G Term Loans, the Tranche H Term Loans and
the Tranche I Term Loans and each such prepayment of Term Loans (including those
prepayments described below) shall be applied to reduce the applicable Repayment
Amounts in such order as the US Borrower (on its own behalf and on behalf of the
UK Borrower) may determine up to an amount equal to the aggregate amount of the
applicable Repayment Amounts required to be made by the US Borrower or the UK
Borrower pursuant to Section 2.5(b)(i), (ii), (iii), (iv), (v) or (vi), as the
case may be, during the two year period

 

101

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

 

immediately following the date of the prepayment (such amount being, the
“Amortization Amount”); provided, that to the extent that the amount of the
prepayment exceeds the Amortization Amount, such excess shall be applied ratably
to reduce the then remaining Repayment Amounts under such Term Facility;
provided further, that, notwithstanding anything to the contrary contained
herein, with respect to any prepayment of Term Loans required by
Section 5.2(a) that results from a Debt Incurrence Prepayment Event in respect
of any incurrence of Incremental Refinancing Term Loans pursuant to
Section 2.15, any incurrence of Indebtedness pursuant to clause (ii) of
Section 10.1(n) and any incurrence of Indebtedness pursuant to Section 10.1(q),
such prepayment shall be initially allocated pro rata among the Tranche A-1 Term
Loans, the Tranche A-2 Term Loans, the Tranche E Term Loans and the Tranche G
Term Loans until such time as all such Term Loans have been repaid in full and,
other than with respect to a Debt Incurrence Prepayment Event in respect of any
incurrence of Indebtedness pursuant to Section 10.1(q), thereafter, pro rata
among the remaining Term Loans.  With respect to each such prepayment, (i) the
US Borrower (on its own behalf and on behalf of the UK Borrower) will, not later
than the date specified in Section 5.2(a) for offering to make such prepayment,
give the Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the Administrative Agent provide notice of such prepayment to
each Term Loan Lender, (ii) each Tranche E Term Loan Lender, each Tranche G Term
Loan Lender, each Tranche H Term Loan Lender and each Tranche I Term Loan Lender
will have the right to refuse any such prepayment by giving written notice of
such refusal to the Administrative Agent within fifteen Business Days after such
Lender’s receipt of notice from the Administrative Agent of such prepayment (and
the US Borrower and the UK Borrower shall not prepay any such Tranche E Term
Loans, Tranche G Term Loan, Tranche H Term Loans and Tranche I Term Loans until
the date that is specified in the immediately following clause), (iii) the US
Borrower and the UK Borrower will make all such prepayments not so refused upon
the earlier of (x) such fifteenth Business Day and (y) such time as the
Administrative Agent has received notice from each Lender that it consents to or
refuses such prepayment and (iv) any prepayment so refused may be retained by
the US Borrower or the UK Borrower, as the case may be; provided, that any
prepayment so refused that relates to Net Cash Proceeds from a Debt Incurrence
Prepayment Event in respect of the issuance of Permitted Additional Subordinated
Notes shall be allocated pro rata to the then outstanding Tranche A-1 Term Loans
and Tranche A-2 Term Loans and shall be applied as set forth above in this
paragraph (c).

 

(d)  Application to Term Loans.  With respect to each prepayment of Term Loans
required by Section 5.2(a), the US Borrower (on its own behalf and on behalf of
the UK Borrower) may, subject to Section 5.2(c), designate the Types of Loans
that are to be prepaid and the specific Borrowing(s) pursuant to which made;
provided, that (i) Eurodollar Term Loans may be designated for prepayment
pursuant to this Section 5.2 only on the last day of an Interest Period
applicable thereto unless all Eurodollar Term Loans with Interest Periods ending
on such date of required prepayment and all Term Loans that are ABR Loans have
been paid in full; (ii) if any prepayment of Eurodollar Term Loans made pursuant
to a single Borrowing shall reduce the outstanding Term Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount for
Eurodollar Term Loans, such Borrowing shall immediately be converted into ABR
Loans; and (iii) in the case of a prepayment of Tranche E Term Loans or Tranche
G

 

102

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

 

Term Loans required by Section 5.2(a), the prepayment amount shall be applied on
a pro rata basis to the then outstanding Loans of the applicable Class,
regardless of Type and, in the case of Eurodollar Term Loans of the applicable
Class, the Interest Period therefor.  In the absence of a designation by the US
Borrower as described in the preceding sentence, the Administrative Agent shall,
subject to the above, make such designation in its reasonable discretion with a
view, but no obligation, to minimize breakage costs owing under Section 2.11.

 

(e)  Application to Revolving Credit Loans and Extended Revolving Credit Loans. 
With respect to each prepayment of Revolving Credit Loans or Extended Revolving
Credit Loans elected by the US Borrower pursuant to Section 5.1 or required by
Section 5.2(b), the US Borrower (on its own behalf and on behalf of the UK
Borrower) may designate (i) the Types of Loans that are to be prepaid and the
specific Borrowing(s) pursuant to which made and (ii) the Dollar Revolving
Credit Loans, Foreign Currency Revolving Credit Loans, Dollar Extended Revolving
Credit Loans or Foreign Currency Extended Revolving Credit Loans to be prepaid;
provided, that (w) Eurodollar Revolving Credit Loans or Eurodollar Extended
Revolving Credit Loans may be designated for prepayment pursuant to this
Section 5.2 only on the last day of an Interest Period applicable thereto unless
all Eurodollar Revolving Credit Loans or all Eurodollar Extended Revolving
Credit Loans, as applicable, with Interest Periods ending on such date of
required prepayment and all ABR Loans have been paid in full; (x) if any
prepayment by the US Borrower of Eurodollar Revolving Credit Loans or Eurodollar
Extended Revolving Credit Loans made pursuant to a single Borrowing shall reduce
the outstanding Dollar Equivalent of the Revolving Credit Loans or Extended
Revolving Credit Loans, as applicable, made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount for Eurodollar Revolving Credit
Loans or Eurodollar Extended Revolving Credit Loans, as applicable, such
Borrowing shall immediately be converted into ABR Loans; (y) each prepayment of
any Loans made pursuant to a Borrowing shall be applied pro rata among such
Loans; and (z) notwithstanding the provisions of the preceding clause (y), no
prepayment made pursuant to Section 5.2(a) or Section 5.2(b) of Revolving Credit
Loans or Extended Revolving Credit Loans shall be applied to the Revolving
Credit Loans or Extended Revolving Credit Loans of any Defaulting Lender.  In
the absence of a designation by the US Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such
designation in its reasonable discretion with a view, but no obligation, to
minimize breakage costs owing under Section 2.11.

 

(f)  Eurodollar Interest Periods.  In lieu of making any payment pursuant to
this Section 5.2 in respect of any Eurodollar Loan other than on the last day of
the Interest Period therefor so long as no Default or Event of Default shall
have occurred and be continuing, the US Borrower or the UK Borrower, as the case
may be, at its option may deposit with the Administrative Agent an amount equal
to the amount of the Eurodollar Loan to be prepaid and such Eurodollar Loan
shall be repaid on the last day of the Interest Period therefor in the required
amount.  Such deposit shall be held by the Administrative Agent in a corporate
time deposit account established on terms reasonably satisfactory to the
Administrative Agent, earning interest at the then-customary rate for accounts
of such type.  Such deposit shall constitute cash collateral for the
Obligations;

 

103

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

 

provided, that the US Borrower or the UK Borrower, as the case may be, may at
any time direct that such deposit be applied to make the applicable payment
required pursuant to this Section 5.2.

 

(g)  Minimum Amount.  No prepayment shall be required pursuant to
Section 5.2(a)(i) unless and until the amount at any time of Net Cash Proceeds
from Prepayment Events required to be applied at or prior to such time pursuant
to such Section and not yet applied at or prior to such time to prepay Term
Loans pursuant to such Section exceeds the Dollar Equivalent of $15,000,000 in
the aggregate.

 

(h)  Foreign Asset Sales.  Notwithstanding any other provisions of this
Section 5.2, (i) to the extent that any of or all the Net Cash Proceeds of any
asset sale by a Restricted Foreign Subsidiary giving rise to an Asset Sale
Prepayment Event (a “Foreign Asset Sale”) are prohibited or delayed by
applicable local law from being repatriated to the United States or the United
Kingdom, the portion of such Net Cash Proceeds so affected will not be required
to be applied to repay Term Loans at the times provided in this Section 5.2 but
may be retained by the applicable Restricted Foreign Subsidiary so long, but
only so long, as the applicable local law will not permit repatriation to the
United States or the United Kingdom (the US Borrower and the UK Borrower hereby
agreeing to cause the applicable Restricted Foreign Subsidiary to promptly take
all actions required by the applicable local law to permit such repatriation),
and once such repatriation of any of such affected Net Cash Proceeds is
permitted under the applicable local law, such repatriation will be immediately
effected and such repatriated Net Cash Proceeds will be promptly (and in any
event not later than two Business Days after such repatriation) applied (net of
additional taxes payable or reserved against as a result thereof) to the
repayment of the Term Loans pursuant to this Section 5.2 and (ii) to the extent
that the US Borrower (on its own behalf and on behalf of the UK Borrower) has
determined in good faith that repatriation of any of or all the Net Cash
Proceeds of any Foreign Asset Sale would have a material adverse tax cost
consequence with respect to such Net Cash Proceeds, the Net Cash Proceeds so
affected may be retained by the applicable Restricted Foreign Subsidiary;
provided, that, in the case of this clause (ii), on or before the date on which
any Net Cash Proceeds so retained would otherwise have been required to be
applied to reinvestments or prepayments pursuant to Section 5.2(a), (x) the US
Borrower or the UK Borrower, as the case may be, applies an amount equal to such
Net Cash Proceeds to such reinvestments or prepayments as if such Net Cash
Proceeds had been received by the US Borrower or the UK Borrower, as the case
may be, rather than such Restricted Foreign Subsidiary, less the amount of
additional taxes that would have been payable or reserved against if such Net
Cash Proceeds had been repatriated (or, if less, the Net Cash Proceeds that
would be calculated if received by such Foreign Subsidiary) or (y) such Net Cash
Proceeds are applied to the repayment of Indebtedness of a Restricted Foreign
Subsidiary.

 

5.3.                              Method and Place of Payment.  (a)    Except as
otherwise specifically provided herein, all payments under this Agreement shall
be made by the US Borrower or the UK Borrower, without set-off, counterclaim or
deduction of any kind, to the Administrative Agent for the ratable account of
the Lenders entitled thereto, the Letter of Credit Issuer or the Swingline
Lender, as the case may be, not later than

 

104

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

 

12:00 Noon (Local Time) on the date when due and shall be made (i) in the case
of amounts payable in Dollars, in immediately available funds at the
Administrative Agent’s Office and (ii) in the case of amounts payable in a
Foreign Currency, in immediately available funds at the Administrative Agent’s
Office or at such other office as the Administrative Agent shall specify for
such purpose by notice to the Borrower, it being understood that written or
facsimile notice by the US Borrower or the UK Borrower, as the case may be, to
the Administrative Agent to make a payment from the funds in the US Borrower’s
or the UK Borrower’s, as the case may be, account at the Administrative Agent’s
Office shall constitute the making of such payment to the extent of such funds
held in such account.  All payments under each Credit Document (whether of
principal, interest or otherwise) shall be made (i) in the case of the principal
of and interest on each Loan, in the currency in which such Loan is denominated,
(ii) in the case of reimbursement obligations in respect of Letters of Credit,
in the currency in which such Letter of Credit is denominated, (iii) in the case
of any indemnification or expense reimbursement payment, in Dollars or Euro, as
requested by the Person entitled to receive such payment, or (iv) in all other
cases, in Dollars, in each case except as otherwise expressly provided herein. 
The Administrative Agent will thereafter cause to be distributed on the same day
(if payment was actually received by the Administrative Agent prior to 2:00 p.m.
(Local Time) on such day) like funds relating to the payment of principal or
interest or Fees ratably to the Lenders entitled thereto.

 

(b)  Any payments under this Agreement that are made later than 2:00 p.m. (Local
Time) shall be deemed to have been made on the next succeeding Business Day at
the Administrative Agent’s discretion.  Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable during such
extension at the applicable rate in effect immediately prior to such extension.

 

5.4.                              Net Payments.  (a)    All payments made by the
US Borrower and the UK Borrower under this Agreement shall be made free and
clear of, and without deduction or withholding for or on account of, any current
or future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding (i) net income
taxes and franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender and (ii) any taxes imposed on the
Administrative Agent or any Lender as a result of a current or former connection
between the Administrative Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Administrative Agent or such Lender having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement).  If
any such non-excluded taxes, levies, imposts, duties, charges, fees, deductions
or withholdings (“Non-Excluded Taxes”) are required to be withheld from any
amounts payable to the Administrative Agent or any Lender hereunder, the amounts
so payable to the Administrative Agent or such Lender shall be increased to the
extent necessary to yield to the Administrative Agent or such Lender (after
payment of all Non-Excluded Taxes)

 

105

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

 

interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement; provided, however, that the US Borrower
shall not be required to increase any such amounts payable to any Lender that is
not organized under the laws of the United States of America or a state thereof
(a “Non-U.S. Lender”) if such Lender fails to comply with the requirements of
paragraph (b) of this Section 5.4.  Whenever any Non-Excluded Taxes are payable
by the US Borrower or the UK Borrower, as the case may be, as promptly as
possible thereafter such US Borrower or UK Borrower shall send to the
Administrative Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt (or other
evidence acceptable to such Lender, acting reasonably) received by such US
Borrower or the UK Borrower showing payment thereof.  In addition, if the US
Borrower or the UK Borrower, as the case may be, fails to pay any Non-Excluded
Taxes when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, the US Borrower or the UK Borrower, as the case may be, shall
indemnify the Administrative Agent and the Lenders for any incremental taxes,
interest, costs or penalties that may become payable by the Administrative Agent
or any Lender as a result of any such failure.  The agreements in this
Section 5.4(a) shall survive the termination of this Agreement and the payment
of the Loans and all other amounts payable hereunder.

 

(b)  Each Non-U.S. Lender shall:

 

(i)  deliver to the US Borrower and the Administrative Agent two copies of
either (x) in the case of Non-U.S. Lender claiming exemption from U.S. Federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of “portfolio interest”, United States Internal Revenue Service
Form W-8BEN (together with a certificate representing that such Non-U.S. Lender
is not a bank for purposes of Section 881(c) of the Code, is not a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Code) of the US
Borrower and is not a controlled foreign corporation related to the US Borrower
(within the meaning of Section 864(d)(4) of the Code)), or (y) Internal Revenue
Service Form W-8BEN or Form W-8ECI, in each case properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or reduced
rate of, U.S. Federal withholding tax on payments by the US Borrower under this
Agreement;

 

(ii)  deliver to the US Borrower and the Administrative Agent two further copies
of any such form or certification (or any applicable successor form) on or
before the date that any such form or certification expires or becomes obsolete
and after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the US Borrower; and

 

(iii)  obtain such extensions of time for filing and complete such forms or
certifications as may reasonably be requested by the US Borrower or the
Administrative Agent;

 

unless in any such case any change in treaty, law or regulation has occurred
prior to the date on which any such delivery would otherwise be required that
renders any such form

 

106

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

 

inapplicable or would prevent such Lender from duly completing and delivering
any such form with respect to it and such Lender so advises the US Borrower and
the Administrative Agent.  Each Person that shall become a Participant pursuant
to Section 14.6 or a Lender pursuant to Section 14.6 shall, upon the
effectiveness of the related transfer, be required to provide all the forms and
statements required pursuant to this Section 5.4(b); provided, that in the case
of a Participant such Participant shall furnish all such required forms and
statements to the Lender from which the related participation shall have been
purchased.  Notwithstanding anything to the contrary, no Lender or Participant
shall be required to deliver any form or certification that it is not legally
able to deliver.

 

(c)  The US Borrower shall not be required to indemnify any Non-U.S. Lender, or
to pay any additional amounts to any Non-U.S. Lender, in respect of U.S. Federal
withholding tax pursuant to paragraph (a) above to the extent that (i) the
obligation to withhold amounts with respect to U.S. Federal withholding tax
existed on the date such Non-U.S. Lender became a party to this Agreement (or,
in the case of a Participant that is not organized under the laws of the United
States of America or a state thereof (a “Non-U.S. Participant”), on the date
such Non-U.S. Participant became a Participant hereunder); provided, however,
that this clause (i) shall not apply to the extent that (x) the indemnity
payments or additional amounts any Lender (or Participant) would be entitled to
receive (without regard to this clause (i)) do not exceed the indemnity payment
or additional amounts that the person making the assignment, participation or
transfer to such Lender (or Participant) would have been entitled to receive in
the absence of such assignment, participation or transfer, or (y) such
assignment, participation or transfer had been requested by the US Borrower or
the UK Borrower, (ii) the obligation to pay such additional amounts would not
have arisen but for a failure by such Non U.S. Lender or Non U.S. Participant to
comply with the provisions of paragraph (b) above or (iii) any of the
representations or certifications made by a Non-U.S. Lender or Non-U.S.
Participant pursuant to paragraph (b) above are incorrect at the time a payment
hereunder is made, other than by reason of any change in treaty, law or
regulation having effect after the date such representations or certifications
were made.

 

(d)  Where a Lender is not, or has ceased to be, an Eligible Lender on the due
date for payment of any sum under this Agreement, the increased amount due under
Section 5.4(a) hereof shall be limited to the amount the UK Borrower would have
had to pay if:

 

(i)  where that Lender had been a UK Lender before ceasing to be an Eligible
Lender, the Lender had remained a UK Lender;

 

(ii)  where that Lender had been a Treaty Lender before ceasing to be an
Eligible Lender, the Lender had remained a Treaty Lender and an appropriate
direction had been given by the United Kingdom Inland Revenue authorizing the UK
Borrower to make payment with deduction of tax at a reduced rate in accordance
with the provisions of the relevant double taxation agreement; or

 

107

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

 

(iii)  where that Lender had not been a Eligible Lender, the Lender had been a
UK Lender;

 

this Section 5.4(d) shall not apply to the extent that the UK Borrower would
have been required to make a deduction or withholding on account of tax
regardless of whether such Lender is an Eligible Lender.

 

This Section 5.4(d) shall not apply in circumstances where a Lender ceases to be
an Eligible Lender due to a change in the Requirement of Law or double taxation
treaty or in its application or interpretation, in each case taking effect after
the Funding Date.

 

(e)  If the US Borrower or the UK Borrower determines in good faith that a
reasonable basis exists for contesting any taxes for which indemnification has
been demanded hereunder, the relevant Lender or the Administrative Agent, as
applicable, shall cooperate with such US Borrower or UK Borrower in challenging
such taxes at such US Borrower’s or UK Borrower’s expense if so requested by
such US Borrower or UK Borrower.  If any Lender or the Administrative Agent, as
applicable, receives a refund of a tax for which a payment has been made by the
US Borrower or the UK Borrower pursuant to this Agreement, which refund in the
good faith judgment of such Lender or Administrative Agent, as the case may be,
is attributable to such payment made by such US Borrower or UK Borrower, then
the Lender or the Administrative Agent, as the case may be, shall reimburse such
US Borrower or UK Borrower for such amount (together with any interest received
thereon) as the Lender or Administrative Agent, as the case may be, determines
to be the proportion of the refund as will leave it, after such reimbursement,
in no better or worse position than it would have been in if the payment had not
been required.  A Lender or Administrative Agent shall claim any refund that it
determines is available to it, unless it concludes in its reasonable discretion
that it would be adversely affected by making such a claim.  Neither any Lender
nor the Administrative Agent shall be obliged to disclose any information
regarding its tax affairs or computations to the US Borrower or the UK Borrower
in connection with this paragraph (e) or any other provision of this
Section 5.4.

 

(f)  Each Lender represents and agrees that, on the Funding Date and at all
times during the term of this Agreement, it is not and will not be a conduit
entity participating in a conduit financing arrangement (as defined in
Section 7701(1) of the Code and the regulations thereunder) with respect to the
Borrowings hereunder unless the US Borrower has consented to such arrangement
prior thereto.

 

5.5.                              Computations of Interest and Fees.  (a)   
Interest on Eurodollar Loans and, except as provided in the next succeeding
sentence, ABR Loans shall be calculated on the basis of a 360-day year for the
actual days elapsed.  Interest on (i) Foreign Currency Revolving Credit Loans
and Foreign Currency Extended Revolving Credit Loans denominated in Sterling and
(ii) ABR Loans in respect of which the rate of interest is calculated on the
basis of the Prime Rate and interest on overdue interest shall be calculated on
the basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed.

 

108

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

 

(b)  Fees and Letter of Credit Outstanding shall be calculated on the basis of a
365- (or 366-, as the case may be) day year for the actual days elapsed.

 

SECTION 6.                                Conditions Precedent to Initial
Borrowing

 

Subject to Section 7.3 and, in the case of Sections 6.1(e) to 6.1(w) inclusive,
Sections 6.2(b) to 6.2(h) inclusive, Sections 6.2(k) and 6.2 (l) and Sections
6.3(c) to 6.3 (k) inclusive (unless, in the case of Section 6.3(c), the UK
Borrower shall be a borrower hereunder on the Funding Date) and Sections 6.6 to
6.8 inclusive (in each case, to the extent they relate to the UK Borrower
(unless the UK Borrower shall be a borrower hereunder on the Funding Date)
and/or any Foreign Subsidiary Guarantor), subject to Section 9.18 (but only to
the extent set forth on Schedule 9.18), the earlier of the initial Borrowing and
the initial issuance of any Letter of Credit under this Agreement is subject to
the satisfaction of the following conditions precedent:

 

6.1.                              Credit Documents.  The Administrative Agent
shall have received each of the following:

 

(a)  this Agreement, executed and delivered by a duly authorized officer of each
of Holdings, the US Borrower, the UK Borrower and each Lender;

 

(b)  the Guarantee, executed and delivered by a duly authorized officer of each
Guarantor;

 

(c)  the Pledge Agreement, executed and delivered by a duly authorized officer
of each pledgor party thereto;

 

(d)  the Security Agreement, executed and delivered by a duly authorized officer
of each grantor party thereto;

 

(e)  a Mortgage in respect of each Mortgaged Property, executed and delivered by
a duly authorized officer of each mortgagor party thereto;

 

(f)  the UK Guarantee, executed and delivered by a duly authorized officer of
the UK Borrower;

 

(g)  the UK Pledge Agreements, executed and delivered by a duly authorized
officer of the US Borrower;

 

(h)  the UK Debenture, executed and delivered by a duly authorized officer of
the UK Borrower;

 

(i)  the German Abstract Acknowledgements of Indebtedness, executed and
delivered by a duly authorized officer of each guarantor party thereto;

 

(j)  the German Assignment of Claims, executed and delivered by a duly
authorized officer of each guarantor party thereto;

 

109

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

 

(k)  the German Guarantee, executed and delivered by a duly authorized officer
of each guarantor party thereto;

 

(l)  the German Pledge Agreement, executed and delivered by a duly authorized
officer of each pledgor party thereto;

 

(m)  the German Negative Pledge Agreement, executed and delivered by a duly
authorized officer of each grantor party thereto;

 

(n)  [Reserved];

 

(o)  the Canadian Guarantee, executed and delivered by a duly authorized officer
of each guarantor party thereto;

 

(p)  the Canadian Pledge Agreements, executed and delivered by a duly authorized
officer of each pledgor party thereto;

 

(q)  the Canadian Security Agreement, executed and delivered by a duly
authorized officer of each grantor party thereto;

 

(r)  the French Pledge Agreements, executed and delivered by a duly authorized
officer of each pledgor party thereto;

 

(s)  the Taiwan Pledge Agreements, executed and delivered by a duly authorized
officer of each pledgor party thereto;

 

(t)  the Italian Guarantee, executed and delivered by a duly authorized officer
of each guarantor party thereto;

 

(u)  the Italian Share Pledge Agreements, executed and delivered by a duly
authorized officer of each pledgor party thereto;

 

(v)  the Italian Trademark Pledge Agreement, executed and delivered by a duly
authorized officer of each pledgor party thereto; and

 

(w)  the Luxembourg Pledge Agreements, executed and delivered by a duly
authorized officer of each pledgor party thereto.

 

6.2.                              Collateral.  (a)    All outstanding equity
interests in whatever form of the US Borrower and each Restricted Subsidiary
owned by or on behalf of any Credit Party (other than a Restricted Foreign
Subsidiary) shall have been pledged pursuant to the Pledge Agreement (except
that the Restricted Subsidiaries shall not be required to pledge more than 65%
of the outstanding equity interests of any Restricted Foreign Subsidiary) and
all certificates representing securities pledged under the Pledge Agreement,
accompanied by instruments of transfer and undated stock powers endorsed in
blank, shall have been delivered to the Collateral Escrow Agent and shall be
held in escrow pursuant to the terms of the Financing Escrow Agreement.

 

110

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

 

(b)  All outstanding equity interests in whatever form of the UK Borrower shall,
except to the extent pledged pursuant to the Pledge Agreement, have been pledged
pursuant to the UK Pledge Agreements and all certificates representing
securities pledged under the UK Pledge Agreements, accompanied by instruments of
transfer and undated stock powers endorsed in blank, shall have been delivered
to the Collateral Escrow Agent and shall be held in escrow pursuant to the terms
of the Financing Escrow Agreement.

 

(c)  All outstanding equity interests in whatever form owned by or on behalf of
each pledgor under the German Pledge Agreement shall have been pledged pursuant
to the German Pledge Agreement and all certificates representing securities
pledged under the German Pledge Agreement, accompanied by instruments of
transfer and undated stock powers endorsed in blank, shall have been delivered
to the Collateral Escrow Agent and shall be held in escrow pursuant to the terms
of the Financing Escrow Agreement.

 

(d)  All outstanding equity interests in whatever form owned by or on behalf of
each pledgor under the Canadian Pledge Agreements shall have been pledged
pursuant to the Canadian Pledge Agreements and all certificates representing
securities pledged under the Canadian Pledge Agreements, accompanied by
instruments of transfer and undated stock powers endorsed in blank, shall have
been delivered to the Collateral Escrow Agent and shall be held in escrow
pursuant to the terms of the Financing Escrow Agreement.

 

(e)  All outstanding equity interests in whatever form owned by or on behalf of
each pledgor under the French Pledge Agreements shall have been pledged pursuant
to the French Pledge Agreements and all certificates representing securities
pledged under the French Pledge Agreements, accompanied by instruments of
transfer and undated stock powers endorsed in blank, shall have been delivered
to the Collateral Escrow Agent and shall be held in escrow pursuant to the terms
of the Financing Escrow Agreement.

 

(f)  All outstanding equity interests in whatever form owned by or on behalf of
each pledgor under the Taiwan Pledge Agreements shall have been pledged pursuant
to the Taiwan Pledge Agreements and all duly endorsed certificates representing
securities pledged under the Taiwan Pledge Agreements, shall have been delivered
to the Collateral Escrow Agent and shall be held in escrow pursuant to the terms
of the Financing Escrow Agreement.

 

(g)  All outstanding equity interests in whatever form owned by or on behalf of
each pledgor under the Italian Share Pledge Agreements shall have been pledged
pursuant to the Italian Share Pledge Agreements and all certificates
representing securities pledged under the Italian Share Pledge Agreements,
accompanied by instruments of transfer and undated stock powers endorsed in
blank, shall have been delivered to the Collateral Escrow Agent and shall be
held in escrow pursuant to the terms of the Financing Escrow Agreement.

 

111

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

 

(h)  All outstanding equity interests in whatever form owned by or on behalf of
each pledgor under the Luxembourg Pledge Agreements shall have been pledged
pursuant to the Luxembourg Pledge Agreements and all certificates representing
securities pledged under the Luxembourg Pledge Agreements, accompanied by
instruments of transfer and undated stock powers endorsed in blank, shall have
been delivered to the Collateral Escrow Agent and shall be held in escrow
pursuant to the terms of the Financing Escrow Agreement.

 

(i)  All Indebtedness of Holdings, the US Borrower and each Subsidiary that is
owing to any Credit Party party to the Pledge Agreement shall be evidenced by
one or more global promissory notes and shall have been pledged pursuant to the
Pledge Agreement, and all such promissory notes, together with instruments of
transfer with respect thereto endorsed in blank, shall have been delivered to
the Collateral Escrow Agent and shall be held in escrow pursuant to the terms of
the Financing Escrow Agreement.

 

(j)  All documents and instruments, including Uniform Commercial Code financing
statements, required by law or reasonably requested by the Administrative Agent
to be filed, registered or recorded to create the Liens intended to be created
by the Security Agreement and to perfect such Liens to the extent required by,
and with the priority required by, the Security Agreement shall have been
delivered to the Administrative Agent for filing, registration or recording
pending the Closing Date.

 

(k)  All documents and instruments required by law or reasonably requested by
the Administrative Agent to be filed, registered or recorded to create the Liens
intended to be created by each of the Foreign Security Documents and to perfect
such Liens to the extent required by, and with the priority required by, each of
the Foreign Security Documents shall have been delivered to the Administrative
Agent for filing, registration or recording pending the Closing Date.

 

(l)  The Administrative Agent shall have received, in respect of each Mortgaged
Property owned by the US Borrower or a US Subsidiary Guarantor a policy or
policies of title insurance issued by a nationally recognized title insurance
company insuring the Lien of each Mortgage as a valid first Lien on the
Mortgaged Property described therein, free of any other Liens except as
expressly permitted by Section 10.2 (and subject to the release on the Closing
Date of the liens thereon in respect of the Existing Credit Agreement), together
with such endorsements, coinsurance and reinsurance as the Administrative Agent
may reasonably request.

 

It is understood and agreed that the pledges described in clauses (a) through
(i) inclusive of this Section 6.2 shall become effective immediately and
automatically upon the occurrence of the Closing Date, but that prior to the
Closing Date, such pledges (and the Liens created thereby) shall not be
effective.

 

6.3.                              Legal Opinions.  The Administrative Agent
shall have received the executed legal opinions of (a) Simpson Thacher &
Bartlett LLP, special New York counsel to the US Borrower, substantially in the
form of Exhibit O-1, (b) Tom Riordan,

 

112

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

 

General Counsel to the US Borrower, substantially in the form of Exhibit O-2,
(c) Latham & Watkins LLP, English legal counsel to the Administrative Agent,
substantially in the form of Exhibit O-3, (d) Latham & Watkins LLP, German legal
counsel to the Administrative Agent, substantially in the form of Exhibit O-4,
(e) Borden Ladner Gervais, Canadian legal counsel to the Borrower, substantially
in the form of Exhibit O-5, (f) Latham & Watkins, LLP French legal counsel to
the Administrative Agent substantially in the form of Exhibit O-6, (g) Lee and
Li, Taiwan legal counsel to the Administrative Agent, substantially in the form
of Exhibit O-7, (h) Norton Rose Milan, Italian legal counsel to the
Administrative Agent, substantially in the form of Exhibit O-8, (i) Burness,
Scotland legal counsel to the Administrative Agent, substantially in the form of
Exhibit O-9, (j) Arendt & Medernach, Luxembourg legal counsel to the
Administrative Agent, substantially in the form of Exhibit O-10 and (k) local
counsel to the US Borrower in each jurisdiction where a Mortgaged Property in
the United States of America is located, substantially in the form of
Exhibit O-11.  The US Borrower, the UK Borrower, the other Credit Parties and
the Administrative Agent hereby instruct such counsel to deliver such legal
opinions.

 

6.4.                              Receipt of Senior Subordinated Notes and
Senior Subordinated Loan Agreement Proceeds.  Gross proceeds of not less than
$350,000,000 and Є419,076,355.71 from the issuance of the Senior Subordinated
Notes under the Senior Subordinated Notes Indenture in a public offering or in a
Rule 144A or other private placement and/or borrowings under the Senior
Subordinated Loan Agreement shall have been deposited on the Funding Date in the
RSGI Dollar Debt Escrow Account and the RSGI Euro Debt Escrow Account,
respectively, to be held by the Financing Escrow Agent pursuant to the terms of
the Financing Escrow Agreement.

 

6.5.                              Equity Contributions.  The Acquisition Equity
Contribution shall have been made and the full amount of the proceeds thereof
shall have been deposited on the Funding Date in escrow accounts held by the
Financing Escrow Agent pursuant to the terms of the Financing Escrow Agreement.

 

6.6.                              Closing Certificates.  The Administrative
Agent shall have received a certificate of each Credit Party (other than the
Singapore Guarantors), dated the Funding Date, substantially in the form of
Exhibit P, with appropriate insertions, executed by the President or any Vice
President and the Secretary or any Assistant Secretary of such Credit Party, and
attaching the documents referred to in Sections 6.7 and 6.8 and, where
applicable, certifying as to the incumbency and specimen signature of each
officer executing any Credit Document or any other document delivered in
connection herewith on behalf of such Credit Party.

 

6.7.                              Corporate Proceedings of Each Credit Party. 
The Administrative Agent shall have received a copy of the resolutions, in form
and substance satisfactory to the Administrative Agent, of the Board of
Directors (or equivalent governing body) of each Credit Party (or a duly
authorized committee thereof) authorizing (a) the execution, delivery and
performance of the Credit Documents (and any agreements relating thereto) to
which it is a party, (b) in the case of the US Borrower and the UK Borrower, the

 

113

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

 

extensions of credit contemplated hereunder and (c) the granting of the Liens
contemplated to be granted under the Security Documents.

 

6.8.                              Corporate Documents.  The Administrative Agent
shall have received true and complete copies of the certificate of incorporation
and by-laws (or equivalent organizational documents) of each Credit Party.

 

6.9.                              Fees.  The fees in the amounts previously
agreed in writing by the Agents and the Lenders to be received by the Lenders on
the Closing Date and all expenses (including the reasonable fees, disbursements
and other charges of counsel to the Administrative Agent) for which invoices
have been presented on or prior to the Funding Date shall, in each case, have
been deposited on the Funding Date in an escrow account held by the Financing
Escrow Agent on behalf and for the account of the Administrative Agent (or its
nominee) pursuant to the terms of the Financing Escrow Agreement.

 

6.10.                        Escrow Agreements; Acquisition.  The full amount of
the proceeds of the Tranche A-1 Term Loans made on the Funding Date funded
pursuant to Section 2.1(a)(v)(x) shall be deposited on the Funding Date in the
RSGI Euro Debt Escrow Account to be held by the Financing Escrow Agent pursuant
to the terms of the Financing Escrow Agreement.  The full amount of the proceeds
of the Tranche A-2 Term Loans made on the Funding Date shall be deposited on the
Funding Date in the UK Borrower Debt Escrow Account to be held by the Financing
Escrow Agent pursuant to the terms of the Financing Escrow Agreement.  The
Administrative Agent shall have received the Financing Escrow Agreement executed
and delivered by a duly authorized officer of each Person party thereto, which
shall provide, among other things, that as a condition precedent to the release
of all funds held in the RSGI Euro Debt Escrow Account, the RSGI Dollar Debt
Account and the UK Borrower Debt Escrow Account the Acquisition shall have been,
or simultaneously with the initial release of funds thereunder shall be,
consummated in accordance in all material respects with applicable law and the
Sale and Purchase Agreement without any amendment or waiver of any provision
relating to conditionality to closing thereunder.  The Administrative Agent
shall have received the Acquisition Escrow Agreement executed and delivered by a
duly authorized officer of each Person party thereto.

 

6.11.                        Patriot Act.  The Administrative Agent shall have
received, at least five Business Days prior to the Funding Date, all documents
and other information required by bank regulatory authorities under applicable
“know your customer” and anti-money laundering rules and regulations, including
the Patriot Act and requested by the Administrative Agent at least ten Business
Days prior to the Funding Date.

 

114

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

 

SECTION 7.                                Conditions Precedent to All Credit
Events; Certain Funds Period; Clean-Up Period; Conditions Precedent to
Restatement Date

 

The agreement of each Lender to make any Loan requested to be made by it on any
date (excluding Mandatory Borrowings) and the obligation of the Letter of Credit
Issuer to issue Letters of Credit on any date is subject to the satisfaction of
the following conditions precedent:

 

7.1.                              No Default; Representations and Warranties. 
Subject to Section 7.3 and Section 7.4, at the time of each Credit Event and
also after giving effect thereto (a) no Default or Event of Default shall have
occurred and be continuing and (b) all representations and warranties made by
any Credit Party contained herein or in the other Credit Documents shall be true
and correct in all material respects with the same effect as though such
representations and warranties had been made on and as of the date of such
Credit Event (except where such representations and warranties expressly relate
to an earlier date, in which case such representations and warranties shall have
been true and correct in all material respects as of such earlier date) (it
being understood that no such representation or warranty made on the Funding
Date shall be deemed to be not true and correct solely as a result of the fact
that the Funding Date shall not occur simultaneously with the Closing Date).

 

7.2.                              Notice of Borrowing; Letter of Credit
Request.  (a)  Prior to the making of each Term Loan, each Revolving Credit Loan
(other than any Revolving Credit Loan made pursuant to Section 3.4(a)), each
Extended Revolving Credit Loan (other than any Extended Revolving Credit Loan
made pursuant to Section 3.4(a))  and each Swingline Loan, the Administrative
Agent shall have received a Notice of Borrowing (whether in writing or by
telephone) meeting the requirements of Section 2.3.

 

(b)  Prior to the issuance of each Letter of Credit, the Administrative Agent
and the Letter of Credit Issuer shall have received a Letter of Credit Request
meeting the requirements of Section 3.2(a).

 

The acceptance of the benefits of each Credit Event shall constitute a
representation and warranty by each Credit Party to each of the Lenders that all
the applicable conditions specified above exist as of that time.

 

7.3.                              Certain Funds Period.  Once each of the
conditions precedent set forth in Section 6.1(a), 6.4, 6.5 and 6.10 shall have
been satisfied and if each of the conditions precedent set forth in Sections
6.2(m) and 6.9 shall be satisfied contemporaneously with the initial Borrowings
hereunder, the Lenders shall only be entitled to (a) decline to make available
any Term Loan to be made on the Funding Date or any Revolving Credit Loan to be
made on the Funding Date or (b) exercise any right to cancel or terminate any
Term Loan Commitment to make a Term Loan on the Funding Date or any Revolving
Credit Commitment to make a Revolving Credit Loan on the Funding Date, in each
case to finance the Acquisition, the refinancing of the 2003 Credit Agreement,
the refinancing of certain existing Indebtedness of the Target, the payment of

 

115

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

 

Transaction Expenses and any other transactions relating to the foregoing, if
any of the following events, circumstances or conditions shall be present:

 

(i)  all outstanding equity interests in whatever form of each Restricted
Subsidiary owned directly by the US Borrower (after giving effect to the
Acquisition) shall not have been pledged pursuant to the Pledge Agreement
pending the Closing Date (except that the US Borrower shall not be required to
pledge more than 65% of the equity interests of any Restricted Foreign
Subsidiary to support the obligations of the US Borrower) or all certificates
representing such pledged securities, accompanied by instruments of transfer and
undated stock powers endorsed in blank, shall not have been delivered to the
Collateral Escrow Agent to be held in escrow pursuant to the terms of the
Financing Escrow Agreement;

 

(ii)  any failure of any condition precedent set forth in Section 6.1 clauses
(b) through (d) inclusive, 6.2(a) (except, in the case of Section 6.2(a), to the
extent any actions are required to be taken by a Foreign Subsidiary), 6.2(i),
6.2(j), 6.3(a), 6.3(b), 6.3(c) (in the case of Section 6.3(c), only if the UK
Borrower shall be a borrower hereunder on the Funding Date), 6.6, 6.7, 6.8
(except, in the case of Sections 6.6, 6.7 and 6.8, to the extent such Sections
relate to a Foreign Subsidiary, other than the UK Borrower if the UK Borrower
shall be a borrower hereunder on the Funding Date) or 6.11 to be satisfied to
the extent that such condition relates directly to (x) the US Borrower or
(y) any Restricted Subsidiary that is a member of the Rockwood Group that is
legally able to satisfy such condition, provided that, in the case of this
clause (y), each Restricted Subsidiary that is a member of the Rockwood Group
shall have used reasonable efforts to avoid any such legal prohibition;

 

(iii)  any default of any covenant in the first sentence of Section 9.17;

 

(iv)  any event described in Section 11.5 shall occur with respect to the US
Borrower or the UK Borrower, provided that, in the case of any such event with
respect to the UK Borrower, the Lenders shall not be required to make any Loan
to the UK Borrower but instead shall be required to make such Loan to the US
Borrower subject to the terms of Section 6 and this Section 7.3;

 

(v)  the US Borrower or the UK Borrower shall fail to pay any amounts due and
payable under this Agreement, any other Credit Document or the Fee Letter;

 

(vi)  any Credit Document or any material provision thereof shall cease to be in
full force and effect with respect to the US Borrower or any Restricted
Subsidiary that is a member of the Rockwood Group (other than (x) pursuant to
the terms hereof or thereof, (y) as a result of acts or omissions of the
Administrative Agent or any Lender or (z) as a result of any legal prohibition
affecting any Restricted Subsidiary that is a member of the Rockwood Group;
provided, that, in the case of this clause (z), each Restricted Subsidiary that
is a member of the Rockwood Group shall have used reasonable efforts to avoid
any such legal prohibition) or any of the US Borrower or any

 

116

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

 

Restricted Subsidiary that is a member of the Rockwood Group shall deny or
disaffirm in writing its obligations under any Credit Document (other than
pursuant to the terms hereof or thereof);

 

(vii)  any breach by the US Borrower (with respect to itself) or by any
Restricted Subsidiary that is a member of the Rockwood Group (other than, in the
case of any Restricted Subsidiary that is a member of the Rockwood Group, as a
result of any legal prohibition affecting such Restricted Subsidiary; provided,
that such Restricted Subsidiary shall have used reasonable efforts to avoid any
such legal prohibition) of any covenant in Section 10.1, 10.2, 10.6 or 10.7; or

 

(viii)  any breach by the US Borrower (with respect to itself) or by any
Restricted Subsidiary that is a member of the Rockwood Group (other than, in the
case of any Restricted Subsidiary that is a member of the Rockwood Group, as a
result of any legal prohibition affecting such Restricted Subsidiary; provided,
that such Restricted Subsidiary shall have used reasonable efforts to avoid any
such legal prohibition) of any representation or warranty in Section 8.1 or 8.2.

 

Further, the Lenders shall not be entitled to exercise any right of set-off
against the proceeds of the Term Loans or any Revolving Credit Loan made on the
Funding Date to finance the Acquisition, the refinancing of the 2003 Credit
Agreement, the refinancing of certain existing Indebtedness of the Target, the
payment of Transaction Expenses and any other transaction related to any of the
foregoing.

 

Notwithstanding the foregoing, if any condition precedent to the initial
Borrowing set forth in Section 6 of this Agreement is not satisfied but as a
result of the foregoing provisions of this Section 7.3 the Lenders are
nonetheless required to make Loans on the Funding Date, there shall be, subject
to Section 7.4, an Event of Default under Section 11 on the day following the
Closing Date and all rights and remedies shall be available to the Lenders to
the extent they would have been available but for this Section 7.3 (even though
they were not available prior to such date).

 

7.4.                              Clean-Up Period.  From the period from the
Funding Date until the date which falls (a) 25 days after the Funding Date, in
the case of circumstances affecting the US Borrower and any Subsidiary that is a
member of the Rockwood Group or (b) 90 days after the Funding Date, in the case
of circumstances affecting any other Subsidiary (such period described in
clauses (a) and (b), the “Clean-Up Period”), a breach of representation or
warranty or a breach of covenant or a Default or an Event of Default hereunder
shall not be deemed to be a breach of representation or warranty or a breach of
covenant or a Default or an Event of Default hereunder, as the case may be, if
and for so long as, during such Clean-Up Period, the circumstances giving rise
to the relevant breach of representation or warranty or breach of covenant or
Default or Event of Default:

 

(i)  are capable of being cured and, if Holdings, the US Borrower or any
Subsidiary that is a member of the Rockwood Group or (after the date that is 30
days after the Funding Date) any other Restricted Subsidiary is aware of the
relevant

 

117

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

 

circumstances at the time and there exists no legal prohibition affecting any
Restricted Subsidiary which would prevent such cure, reasonable efforts are
being made to cure the same;

 

(ii)  have not been procured by or approved by Holdings, the US Borrower or any
Subsidiary that is a member of the Rockwood Group or (if arising after the date
that is 30 days after the Funding Date) any other Restricted Subsidiary that is
not a member of the Rockwood Group unless such other Restricted Subsidiary was
legally bound to take such action; and

 

(iii)  do not have a Material Adverse Effect;

 

provided, that if the relevant circumstances are continuing at the end of the
applicable Clean-Up Period there shall be a breach of representation or
warranty, breach of covenant, Default or Event of Default, as the case may be,
on such date.

 

7.5.                              UK Borrower.  Notwithstanding any of the
foregoing provisions in this Section 7 (but subject to the proviso contained in
Section 7.3(iv)), the agreement of each Lender to make any Loan to the UK
Borrower on any date and the obligation of the Letter of Credit Issuer to issue
Letters of Credit for the account of the UK Borrower on any date is subject to
the satisfaction of the conditions set forth in Section 6.3(c) and Sections 6.6
to 6.8 inclusive (in each case, to the extent they relate to the UK Borrower) on
or prior to such date.

 

7.6.                              Revolving Credit Loans and Extended Revolving
Credit Loans.  In the case of any Revolving Credit Loan, at the time of the
applicable Credit Event the Extended Revolving Credit Exposures shall be equal
to no less than the Total Extended Revolving Credit Commitment.

 

7.7.                              Conditions Precedent to Restatement Date.  The
effectiveness of the amendment and restatement of the Existing Credit Agreement
in the form of this Agreement is subject to the satisfaction of the conditions
set forth in Section 6 of the Amendment Agreement.

 

SECTION 8.                                Representations, Warranties and
Agreements

 

In order to induce the Lenders to enter into this Agreement, to make the Loans
and issue or participate in Letters of Credit as provided for herein, each of
Holdings, the US Borrower and the UK Borrower make the following representations
and warranties to, and agreements with, the Lenders, all of which shall survive
the execution and delivery of this Agreement and the making of the Loans and the
issuance of the Letters of Credit:

 

8.1.                              Corporate Status.  Each of Holdings, the US
Borrower, the UK Borrower and each Material Subsidiary (a) is a duly organized
and validly existing corporation or other entity in good standing under the laws
of the jurisdiction of its organization and has the corporate or other
organizational power and authority to own its property and assets and to
transact the business in which it is engaged and (b) has duly

 

118

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

 

qualified and is authorized to do business and is in good standing in all
jurisdictions where it is required to be so qualified, except where the failure
to be so qualified could not reasonably be expected to result in a Material
Adverse Effect.

 

8.2.                              Corporate Power and Authority.  Each Credit
Party has the corporate or other organizational power and authority to execute,
deliver and carry out the terms and provisions of the Credit Documents to which
it is a party and has taken all necessary corporate or other organizational
action to authorize the execution, delivery and performance of the Credit
Documents to which it is a party.  Each Credit Party has duly executed and
delivered each Credit Document to which it is a party and each such Credit
Document constitutes the legal, valid and binding obligation of such Credit
Party enforceable in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors’ rights generally and subject to general principles of equity.

 

8.3.                              No Violation.  Neither the execution, delivery
or performance by any Credit Party of the Credit Documents to which it is a
party nor compliance with the terms and provisions thereof nor the consummation
of the Transactions and the other transactions contemplated hereby or thereby
will (a) contravene any applicable provision of any material law, statute, rule,
regulation, order, writ, injunction or decree of any court or governmental
instrumentality, (b) result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of any of Holdings, the US Borrower, the UK
Borrower or any of the Restricted Subsidiaries (other than Liens created under
the Credit Documents) pursuant to, the terms of any material indenture
(including the Senior Subordinated Notes Indenture, the Senior Subordinated Loan
Agreement, the Subordinated Note Indenture, and the 2011 Senior Notes
Indenture), loan agreement, lease agreement, mortgage, deed of trust, agreement
or other material instrument to which any of Holdings, the US Borrower, the UK
Borrower or any of the Restricted Subsidiaries is a party or by which it or any
of its property or assets is bound or (c) violate any provision of the
certificate of incorporation, By-Laws or other constitutional documents of
Holdings, the US Borrower, the UK Borrower or any of the Restricted
Subsidiaries.

 

8.4.                              Litigation.  There are no actions, suits or
proceedings (including Environmental Claims) pending or, to the knowledge of any
of Holdings, the US Borrower or the UK Borrower, threatened with respect to any
of Holdings, the US Borrower, the UK Borrower or any of the Subsidiaries that
could reasonably be expected to result in a Material Adverse Effect.

 

8.5.                              Margin Regulations.  Neither the making of any
Loan hereunder nor the use of the proceeds thereof will violate the provisions
of Regulation T, U or X of the Board.

 

8.6.                              Governmental Approvals.  No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any Governmental Authority is required to
authorize or is required in connection with

 

119

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

 

(a) the execution, delivery and performance of any Credit Document or (b) the
legality, validity, binding effect or enforceability of any Credit Document,
except any of the foregoing the failure of which to obtain or make could not
reasonably be expected to have a Material Adverse Effect.

 

8.7.                              Investment Company Act.  Neither Holdings nor
the US Borrower is an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

 

8.8.                              True and Complete Disclosure.  (a)  None of
the factual information and data (taken as a whole) heretofore or
contemporaneously furnished by any of Holdings, the US Borrower, the UK
Borrower, any of the Subsidiaries or any of their respective authorized
representatives in writing to the Administrative Agent and/or any Lender on or
before the Funding Date (including (i) the Confidential Information Memorandum
and (ii) all information contained in the Credit Documents) for purposes of or
in connection with this Agreement or any transaction contemplated herein
contained any untrue statement or omitted to state any material fact necessary
to make such information and data (taken as a whole) not misleading at such time
in light of the circumstances under which such information or data was
furnished, it being understood and agreed that for purposes of this
Section 8.8(a), such factual information and data shall not include projections
and pro forma financial information.

 

(b)  The projections and pro forma financial information contained in the
information and data referred to in paragraph (a) above were based on good faith
estimates and assumptions believed by such Persons to be reasonable at the time
made, it being recognized by the Lenders that such projections as to future
events are not to be viewed as facts and that actual results during the period
or periods covered by any such projections may differ from the projected
results.

 

8.9.                              Financial Condition; Financial Statements. 
The (a) unaudited and audited historical consolidated financial information of
the US Borrower as set forth in the Confidential Information Memorandum,
(b) audited financial statements of the Target for each of the fiscal years
ended September 30, 2001 and September 30, 2002, the three months ended
December 31, 2002 and the twelve months ended December 31, 2003 and (c) audited
balance sheet of the US Borrower and the related audited statements of
operations and cash flows (in each case to be provided pursuant to
Section 9.1(a) and (b)), in each case present or will, when provided, present
fairly in all material respects the combined financial position of each of the
US Borrower and the Target (as applicable) at the respective dates of said
information, statements and results of operations for the respective periods
covered thereby.  The audited financial statements referred to in this
Section 8.9 have been prepared in accordance with GAAP consistently applied
except to the extent provided in the notes to said financial statements.  There
has been no Material Adverse Change since December 31, 2003, other than solely
as a result of changes in general economic conditions.

 

8.10.                        Tax Returns and Payments.  Each of Holdings, the US
Borrower, the UK Borrower and the Subsidiaries has filed all federal income tax
returns and all

 

120

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

 

other material tax returns, domestic and foreign, required to be filed by it and
has paid all material taxes and assessments payable by it that have become due,
other than those not yet delinquent or contested in good faith.  Each of,
Holdings, the US Borrower, the UK Borrower and each of the Subsidiaries have
paid, or have provided adequate reserves (in the good faith judgment of the
management of the US Borrower) in accordance with GAAP for the payment of, all
material federal, state and foreign income taxes applicable for all prior fiscal
years and for the current fiscal year to the Closing Date.  To the extent that
any breach of any of the representations or warranties in this Section 8.10
relates to a period, event or action prior to the Closing Date in respect of
which Holdings, the US Borrower and/or the Restricted Subsidiaries are
indemnified to the extent of the breach by any Seller pursuant to either
Acquisition Agreement, there shall be deemed to be no breach thereof; provided,
that such a breach will exist if the applicable Seller does not satisfy its
indemnification obligations to the extent and in respect of the circumstances
giving rise to such breach within a reasonable time of being notified by
Holdings, the US Borrower and/or the Restricted Subsidiaries of such
circumstances (such Persons hereby agreeing to so notify the applicable Seller
promptly of such circumstances).

 

8.11.                        Compliance with ERISA.  Each Plan is in compliance
with ERISA, the Code and any applicable Requirement of Law; no Reportable Event
has occurred (or is reasonably likely to occur) with respect to any Plan; no
Plan is insolvent or in reorganization (or is reasonably likely to be insolvent
or in reorganization), and no written notice of any such insolvency or
reorganization has been given to any of Holdings, the US Borrower, any
Subsidiary or any ERISA Affiliate; no Plan (other than a multiemployer plan) has
an accumulated or waived funding deficiency (or is reasonably likely to have
such a deficiency); none of Holdings, the US Borrower, any Subsidiary or any
ERISA Affiliate has incurred (or is reasonably likely expected to incur) any
liability to or on account of a Plan pursuant to Section 409, 502(i), 502(l),
515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or Section 4971 or 4975 of
the Code or has been notified in writing that it will incur any liability under
any of the foregoing Sections with respect to any Plan; no proceedings have been
instituted (or are reasonably likely to be instituted) to terminate or to
reorganize any Plan or to appoint a trustee to administer any Plan, and no
written notice of any such proceedings has been given to any of Holdings, the US
Borrower, any Subsidiary or any ERISA Affiliate; and no lien imposed under the
Code or ERISA on the assets of any of Holdings, the US Borrower or any
Subsidiary or any ERISA Affiliate exists (or is reasonably likely to exist) nor
has any of Holdings, the US Borrower, any Subsidiary or any ERISA Affiliate been
notified in writing that such a lien will be imposed on the assets of any of
Holdings, the US Borrower, any Subsidiary or any ERISA Affiliate on account of
any Plan, except to the extent that a breach of any of the representations,
warranties or agreements in this Section 8.11 would not result, individually or
in the aggregate, in an amount of liability that would be reasonably likely to
have a Material Adverse Effect or relates to any matter disclosed in the
financial statements of the US Borrower contained in the Confidential
Information Memorandum.  No Plan (other than a multiemployer plan) has an
Unfunded Current Liability that would, individually or when taken together with
any other liabilities referenced in this Section 8.11, be reasonably likely to
have a Material Adverse Effect.  With respect to Plans that are multiemployer
plans (as defined in Section 3(37) of ERISA), the representations and warranties
in this Section 8.11, other than any made with respect to

 

121

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

 

(a) liability under Section 4201 or 4204 of ERISA or (b) liability for
termination or reorganization of such Plans under ERISA, are made to the best
knowledge of the US Borrower.  To the extent that any breach of any of the
representations or warranties in this Section 8.11 relates to a period, event or
action prior to the Closing Date in respect of which Holdings, the US Borrower
and/or the Restricted Subsidiaries are indemnified to the extent of the breach
by any Seller pursuant to either Acquisition Agreement, there shall be deemed to
be no breach thereof; provided, that such a breach will exist if the applicable
Seller does not satisfy its indemnification obligations to the extent and in
respect of the circumstances giving rise to such breach within a reasonable time
of being notified by Holdings, the US Borrower and/or the Restricted
Subsidiaries of such circumstances (such Persons hereby agreeing to so notify
the applicable Seller promptly of such circumstances).

 

8.12.                        Subsidiaries.  Holdings does not have any
Subsidiaries other than the US Borrower and its Subsidiaries.  Schedule 8.12
lists each Subsidiary of the US Borrower (and the direct and indirect ownership
interest of the US Borrower therein), in each case existing on the Funding Date
(after giving effect to the Acquisition).  To the knowledge of the US Borrower,
after due enquiry, each Material Subsidiary as of the Funding Date (after giving
effect to the Acquisition) has been so designated on Schedule 8.12.

 

8.13.                        Patents, etc.  Holdings, the US Borrower, the UK
Borrower and each of the Restricted Subsidiaries have obtained all patents,
trademarks, servicemarks, trade names, copyrights, licenses and other rights,
free from burdensome restrictions, that are necessary for the operation of their
respective businesses as currently conducted and as proposed to be conducted,
except where the failure to obtain any such rights could not reasonably be
expected to have a Material Adverse Effect.

 

8.14.                        Environmental Laws.  (a)    Except as could not
reasonably be expected to have a Material Adverse Effect: (i) each of Holdings,
the US Borrower, the UK Borrower and each of the Subsidiaries are in compliance
with all Environmental Laws in all jurisdictions in which Holdings, the US
Borrower and each of the Subsidiaries are currently doing business (including
having obtained all material permits required under Environmental Laws);
(ii) each of Holdings, the US Borrower and the UK Borrower will comply and cause
each of the Subsidiaries to comply with all such Environmental Laws (including
all permits required under Environmental Laws); and (iii) none of Holdings, the
US Borrower, the UK Borrower and each of the Subsidiaries has become subject to
any Environmental Claim or any other liability under any Environmental Law.

 

(b)  None of Holdings, the US Borrower, the UK Borrower or any of the
Subsidiaries has treated, stored, transported, released or disposed of Hazardous
Materials at or from any currently or formerly owned Real Estate or facility
relating to its business in a manner that could reasonably be expected to have a
Material Adverse Effect.

 

8.15.                        Properties.  Each of Holdings, the US Borrower, the
UK Borrower and each of the Subsidiaries have good title to or leasehold
interest in all properties that

 

122

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

 

are necessary for the operation of their respective businesses as currently
conducted and as proposed to be conducted, free and clear of all Liens (other
than any Liens permitted by this Agreement) and except where the failure to have
such good title could not reasonably be expected to have a Material Adverse
Effect.

 

SECTION 9.                                Affirmative Covenants

 

Each of the US Borrower and the UK Borrower and, with respect to
Section 9.12(c) and 9.15 only, Holdings, hereby covenants and agrees that on the
Funding Date and thereafter, for so long as this Agreement is in effect and
until the Commitments, the Swingline Commitment and each Letter of Credit have
terminated and the Loans and Unpaid Drawings, together with interest, Fees and
all other Obligations incurred hereunder, are paid in full:

 

9.1.                              Information Covenants.  The US Borrower will
furnish to each Lender and the Administrative Agent:

 

(a)  Annual Financial Statements.  As soon as available and in any event on or
before the date on which such financial statements are required to be filed with
the SEC (or, if such financial statements are not required to be filed with the
SEC, on or before the date that is 90 days after the end of each such fiscal
year), the consolidated balance sheet of (i) the US Borrower and the Restricted
Subsidiaries and (ii) the US Borrower and its Subsidiaries, in each case as at
the end of such fiscal year prepared in accordance with GAAP, and the related
consolidated statement of operations and cash flows for such fiscal year, each
prepared in accordance with GAAP, setting forth comparative consolidated figures
for the preceding fiscal year, and certified by independent certified public
accountants of recognized national standing whose opinion shall not be qualified
as to the scope of audit or as to the status of the US Borrower, the UK Borrower
or any of the Material Subsidiaries as a going concern, together in any event
with a certificate of such accounting firm stating that in the course of its
regular audit of the business of the US Borrower, the UK Borrower and the
Material Subsidiaries, which audit was conducted in accordance with generally
accepted auditing standards, such accounting firm has obtained no knowledge of
any Default or Event of Default relating to Section 10.9 or 10.10 that has
occurred and is continuing or, if in the opinion of such accounting firm such a
Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof.

 

(b)  Quarterly Financial Statements.  As soon as available and in any event on
or before the date on which such financial statements are required to be filed
with the SEC with respect to each of the first three quarterly accounting
periods in each fiscal year of the US Borrower (or, if such financial statements
are not required to be filed with the SEC, on or before the date that is 45 days
after the end of each such quarterly accounting period), the consolidated
balance sheet of (i) the US Borrower and the Restricted Subsidiaries and
(ii) the US Borrower and its Subsidiaries, in each case as at the end of such
quarterly period and the related consolidated statement of operations for such
quarterly accounting period and for the elapsed portion of the fiscal year ended
with the last day of such quarterly period, and the related consolidated
statement of cash flows for

 

123

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

 

the elapsed portion of the fiscal year ended with the last day of such quarterly
period, and setting forth comparative consolidated figures for the related
periods in the prior fiscal year or, in the case of such consolidated balance
sheet, for the last day of such quarterly period in the prior fiscal year, each
prepared in accordance with GAAP, all of which shall be certified by an
Authorized Officer of the US Borrower, subject to changes resulting from audit
and normal year-end audit adjustments.

 

(c)  Budgets.  Within 60 days after the commencement of each fiscal year of the
US Borrower, consolidated budgets of each of the US Borrower, the US Borrower
and its Restricted Subsidiaries, the UK Borrower and the UK Borrower and its
Restricted Subsidiaries in reasonable detail for the fiscal year as customarily
prepared by management of the US Borrower and the UK Borrower for their internal
use, setting forth the principal assumptions upon which such budgets are based.

 

(d)  Officer’s Certificates.  At the time of the delivery of the financial
statements provided for in Sections 9.1(a) and (b), a certificate of an
Authorized Officer of the US Borrower to the effect that no Default or Event of
Default exists or, if any Default or Event of Default does exist, specifying the
nature and extent thereof, which certificate shall set forth (i) the
calculations required to establish whether the US Borrower and the Subsidiaries
were in compliance with the provisions of Sections 10.9 and 10.10 as at the end
of such fiscal year or period, as the case may be, (ii) a specification of any
change in the identity of the Restricted Subsidiaries, Unrestricted Subsidiaries
and Foreign Subsidiaries as at the end of such fiscal year or period, as the
case may be, from the Restricted Subsidiaries, Unrestricted Subsidiaries and
Foreign Subsidiaries, respectively, provided to the Lenders on the Funding Date
or the most recent fiscal year or period, as the case may be, (iii) the then
applicable Status and (iv) the amount of any Pro Forma Adjustment not previously
set forth in a Pro Forma Adjustment Certificate or any change in the amount of a
Pro Forma Adjustment set forth in any Pro Forma Adjustment Certificate
previously provided and, in either case, in reasonable detail, the calculations
and basis therefor.  At the time of the delivery of the financial statements
provided for in Section 9.1(a), (i) a certificate of an Authorized Officer of
the US Borrower setting forth in reasonable detail the Available Amount as at
the end of the fiscal year to which such financial statements relate and (ii) a
certificate of an Authorized Officer and the chief legal officer of the US
Borrower (x) setting forth the information required pursuant to Section 2 of the
Perfection Certificate or confirming that there has been no change in such
information since the Funding Date or the date of the most recent certificate
delivered pursuant to this subsection (d)(ii), as the case may be, and
(y) certifying that all Uniform Commercial Code financing statements (including
fixture filings, as applicable) or other appropriate filings, recordings or
registrations, including all refilings, rerecordings and reregistrations,
containing a description of the Collateral have been filed of record in each
governmental, municipal or other appropriate office in each jurisdiction
identified pursuant to clause (x) above to the extent necessary to protect and
perfect the security interests under the Security Documents.

 

(e)  Notice of Default or Litigation.  Promptly after an Authorized Officer of
any of the US Borrower, the UK Borrower or any of the Subsidiaries obtains
knowledge thereof, notice of (i) the occurrence of any event that constitutes a
Default or

 

124

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

 

Event of Default, which notice shall specify the nature thereof, the period of
existence thereof and what action any of the US Borrower or the UK Borrower
proposes to take with respect thereto, and (ii) any litigation or governmental
proceeding pending against any of the US Borrower, the UK Borrower or any of the
Subsidiaries that could reasonably be expected to result in a Material Adverse
Effect.

 

(f)  Environmental Matters.  The US Borrower and the UK Borrower will promptly
advise the Lenders in writing after obtaining knowledge of any one or more of
the following environmental matters, unless such environmental matters would
not, individually or when aggregated with all other such matters, be reasonably
expected to result in a Material Adverse Effect:

 

(i)  any pending or threatened Environmental Claim against any of the US
Borrower, the UK Borrower or any of the Subsidiaries or any Real Estate;

 

(ii)  any condition or occurrence on any Real Estate that (x) results in
noncompliance by any of the US Borrower, the UK Borrower or any of the
Subsidiaries with any applicable Environmental Law or (y) could reasonably be
anticipated to form the basis of an Environmental Claim against any of Holdings,
the US Borrower, the UK Borrower or any of the Subsidiaries or any Real Estate;

 

(iii)  any condition or occurrence on any Real Estate that could reasonably be
anticipated to cause such Real Estate to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Estate under any
Environmental Law; and

 

(iv)  the taking of any removal or remedial action in response to the actual or
alleged presence of any Hazardous Material on any Real Estate.

 

All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and the
response thereto.  The term “Real Estate” shall mean land, buildings and
improvements owned or leased by any of the US Borrower, the UK Borrower or any
of the Subsidiaries, but excluding all operating fixtures and equipment, whether
or not incorporated into improvements.

 

(g)  Other Information.  Promptly upon filing thereof, copies of any filings
(including on Form 10-K, 10-Q or 8-K) or registration statements with, and
reports to, the SEC or any analogous Government Authority in any relevant
jurisdiction by any of the US Borrower, the UK Borrower or any of the
Subsidiaries (other than amendments to any registration statement (to the extent
such registration statement, in the form it becomes effective, is delivered to
the Lenders), exhibits to any registration statement and, if applicable, any
registration statements on Form S-8) and copies of all financial statements,
proxy statements, notices and reports that any of the US Borrower, the UK
Borrower or any of the Subsidiaries shall send to the holders of any publicly
issued debt of any of Holdings, the US Borrower, the UK Borrower and/or any of
the Subsidiaries (including any Senior Subordinated Notes and Subordinated
Notes, (in each case whether publicly issued or not)) in their capacity as such
holders (in each case to the extent not

 

125

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

 

theretofore delivered to the Lenders pursuant to this Agreement) and, with
reasonable promptness, such other information (financial or otherwise) as the
Administrative Agent on its own behalf or on behalf of any Lender may reasonably
request in writing from time to time.

 

(h)  Pro Forma Adjustment Certificate.  Not later than the consummation of the
acquisition of any Acquired Entity or Business by the US Borrower or any
Restricted Subsidiary for which there shall be a Pro Forma Adjustment and not
later than any date on which financial statements are delivered with respect to
any four-quarter period in which a Pro Forma Adjustment is made as a result of
the consummation of the acquisition of any Acquired Entity or Business by the US
Borrower or any Restricted Subsidiary for which there shall be a Pro Forma
Adjustment, a certificate of an Authorized Officer of the US Borrower setting
forth the amount of such Pro Forma Adjustment and, in reasonable detail, the
calculations and basis therefor.

 

(i)  Collection of Accounts Receivable.  Promptly following written request of
the same from the Administrative Agent, but no more frequently than on one
occasion during each 10-Business Day period following the delivery of each
officer’s certificate referred to in Section 9.1(d), such information regarding
the collection by the US Borrower or any of the Restricted Subsidiaries or, to
the extent that such information is available to the US Borrower or any of the
Restricted Subsidiaries with the use of commercially reasonable efforts, any
other Person of accounts receivable that have been subjected to a transaction
consummated pursuant to Section 10.4(e).

 

9.2.                              Books, Records and Inspections.  Each of the
US Borrower and the UK Borrower will, and will cause each of the Subsidiaries
to, permit officers and designated representatives of the Administrative Agent
or the Required Lenders to visit and inspect any of the properties or assets of
the US Borrower, the UK Borrower and any such Subsidiary in whomsoever’s
possession to the extent that it is within such party’s control to permit such
inspection, and to examine the books of account of the US Borrower, the UK
Borrower and any such Subsidiary and discuss the affairs, finances and accounts
of the US Borrower, the UK Borrower and of any such Subsidiary with, and be
advised as to the same by, its and their officers and independent accountants,
all at such reasonable times and intervals and to such reasonable extent as the
Administrative Agent or the Required Lenders may desire.

 

9.3.                              Maintenance of Insurance.  Each of the US
Borrower and the UK Borrower will, and will cause each of the Material
Subsidiaries to, at all times maintain in full force and effect, with insurance
companies that the US Borrower believes (in the good faith judgment of the
management of the US Borrower) are financially sound and responsible at the time
the relevant coverage is placed or renewed, insurance in at least such amounts
and against at least such risks (and with such risk retentions) as are usually
insured against in the same general area by companies engaged in the same or a
similar business; and will furnish to the Lenders, upon written request from the
Administrative Agent, information presented in reasonable detail as to the
insurance so carried.

 

126

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

 

9.4.                              Payment of Taxes.  Each of the US Borrower and
the UK Borrower will pay and discharge, and will cause each of the Subsidiaries
to pay and discharge, all material taxes, assessments and governmental charges
or levies imposed upon it or upon its income or profits, or upon any properties
belonging to it, prior to the date on which material penalties attach thereto,
and all lawful material claims that, if unpaid, could reasonably be expected to
become a material Lien upon any properties of the US Borrower, the UK Borrower
or any of the Restricted Subsidiaries; provided, that neither the US Borrower,
the UK Borrower nor any of the Subsidiaries shall be required to pay any such
tax, assessment, charge, levy or claim that is being contested in good faith and
by proper proceedings if it has maintained adequate reserves (in the good faith
judgment of the management of the US Borrower) with respect thereto in
accordance with GAAP.

 

9.5.                              Consolidated Corporate Franchises.  Each of
the US Borrower and the UK Borrower will do, and will cause each Material
Subsidiary to do, or cause to be done, all things necessary to preserve and keep
in full force and effect its existence, corporate rights and authority, except
to the extent that the failure to do so could not reasonably be expected to have
a Material Adverse Effect; provided, however, that the US Borrower and its
Subsidiaries may consummate any transaction permitted under Section 10.3, 10.4
or 10.5.

 

9.6.                              Compliance with Statutes, Obligations, etc. 
Each of the US Borrower and the UK Borrower will, and will cause each Subsidiary
to, comply with all applicable laws, rules, regulations and orders, except to
the extent the failure to do so could not reasonably be expected to have a
Material Adverse Effect.

 

9.7.                              ERISA.  Promptly after any of the US Borrower
or any Subsidiary or any ERISA Affiliate knows or has reason to know of the
occurrence of any of the following events that, individually or in the aggregate
(including in the aggregate such events previously disclosed or exempt from
disclosure hereunder, to the extent the liability therefor remains outstanding),
would be reasonably likely to have a Material Adverse Effect, the US Borrower
will deliver to each of the Lenders a certificate of an Authorized Officer or
any other senior officer of the US Borrower setting forth details as to such
occurrence and the action, if any, that the US Borrower, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any notices
(required, proposed or otherwise) given to or filed with or by US Borrower, such
Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant (other than
notices relating to an individual participant’s benefits) or the Plan
administrator with respect thereto: that a Reportable Event has occurred; that
an accumulated funding deficiency has been incurred or an application is to be
made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code with respect
to a Plan; that a Plan having an Unfunded Current Liability has been or is to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA (including the giving of written notice thereof); that a Plan has an
Unfunded Current Liability that has or will result in a lien under ERISA or the
Code; that proceedings will be or have been instituted to terminate a Plan
having an Unfunded Current Liability

 

127

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

 

(including the giving of written notice thereof); that a proceeding has been
instituted against the US Borrower, a Subsidiary or an ERISA Affiliate pursuant
to Section 515 of ERISA to collect a delinquent contribution to a Plan; that the
PBGC has notified the US Borrower, any Subsidiary or any ERISA Affiliate of its
intention to appoint a trustee to administer any Plan; that the US Borrower, any
Subsidiary or any ERISA Affiliate has failed to make a required installment or
other payment pursuant to Section 412 of the Code with respect to a Plan; or
that the US Borrower, any Subsidiary or any ERISA Affiliate has incurred or will
incur (or has been notified in writing that it will incur) any liability
(including any contingent or secondary liability) to or on account of a Plan
pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or
4204 of ERISA or Section 4971 or 4975 of the Code.

 

9.8.                              Good Repair.  Each of the US Borrower and the
UK Borrower will, and will cause each of the Restricted Subsidiaries to, ensure
that its properties and equipment used or useful in its business in whomsoever’s
possession they may be to the extent that it is within the control of such party
to cause same, are kept in good repair, working order and condition, normal wear
and tear excepted, and that from time to time there are made in such properties
and equipment all needful and proper repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto, to the extent and
in the manner customary for companies in similar businesses and consistent with
third party leases, except in each case to the extent the failure to do so could
not be reasonably expected to have a Material Adverse Effect.

 

9.9.                              Transactions with Affiliates.  Each of the US
Borrower and the UK Borrower will conduct, and cause each of the Restricted
Subsidiaries to conduct, all transactions with any of its Affiliates on terms
that are substantially as favorable to the US Borrower, the UK Borrower or such
Restricted Subsidiary as it would obtain in a comparable arm’s-length
transaction with a Person that is not an Affiliate; provided, that the foregoing
restrictions shall not apply to (a) the payment of customary annual fees to KKR,
DLJ Merchant Banking and/or their respective Affiliates for management,
consulting and financial services rendered to the Parent Companies, Holdings,
the US Borrower, the UK Borrower and the Subsidiaries and investment banking
fees paid to KKR, DLJ Merchant Banking and/or their respective Affiliates for
services rendered to the Parent Companies, Holdings, the US Borrower, the UK
Borrower and the Subsidiaries in connection with divestitures, acquisitions,
financings and other transactions, (b) customary fees paid to members of the
Board of Directors (in their capacity as such) of the Parent Companies,
Holdings, the US Borrower, the UK Borrower and the Subsidiaries and
(c) transactions permitted by Section 10.6.

 

9.10.                        End of Fiscal Years; Fiscal Quarters.  The US
Borrower will, for financial reporting purposes, cause (a) its, and each of its
Subsidiaries’, fiscal years to end on December 31 of each year and (b) its, and
each of its Subsidiaries’, fiscal quarters to end on dates consistent with such
fiscal year-end and the US Borrower’s past practice; provided, however, that the
US Borrower may, upon written notice to the Administrative Agent, change the
financial reporting convention specified above to any other financial reporting
convention reasonably acceptable to the Administrative Agent, in which case the
US Borrower and the Administrative Agent will, and are hereby authorized by the

 

128

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

 

Lenders to, make any adjustments to this Agreement that are necessary in order
to reflect such change in financial reporting.

 

9.11.                        Additional Guarantors and Grantors.  (a)    Except
as provided in Section 10.1(j) or (k), the US Borrower will, except to the
extent prohibited by applicable law or to the extent that it would result in
material adverse tax consequences for Parent and its Subsidiaries, taken as a
whole, cause (i) any direct or indirect Domestic Subsidiary (other than any
Unrestricted Subsidiary) formed or otherwise purchased or acquired after the
Funding Date (including pursuant to a Permitted Acquisition) and (ii) any
Subsidiary (other than any Unrestricted Subsidiary) that is not a Domestic
Subsidiary on the Funding Date but subsequently becomes a Domestic Subsidiary
(other than any Unrestricted Subsidiary), in each case to execute a supplement
to each of the Guarantee and the Security Agreement, substantially in the form
of Annex B or Annex 1, as applicable, to the respective agreement in order to
become a Guarantor under the Guarantee and a grantor under the Security
Agreement.  The US Borrower will, and will cause each of the Restricted
Subsidiaries to, use commercially reasonable efforts to structure the ownership
of any such Domestic Subsidiary so as to avoid any such legal prohibition or
material adverse tax consequences described in the immediately preceding
sentence that may result from such ownership structure.

 

(b)  Each of the US Borrower and the UK Borrower will, except to the extent
prohibited by applicable law or to the extent that it would result in material
adverse tax consequences for Parent and its Subsidiaries, taken as a whole,
cause (i) any direct or indirect Subsidiary of the US Borrower (other than any
Unrestricted Subsidiary or Foreign Joint Venture) incorporated under the laws of
any of England and Wales, Scotland, Germany, Italy, Canada or Singapore that is
formed or otherwise purchased or acquired after the Closing Date (including
pursuant to a Permitted Acquisition) and (ii) any member of the Rockwood Group
(other than an Unrestricted Subsidiary or Foreign Joint Venture) that is not
incorporated under the laws of any such country on the Closing Date but
subsequently becomes incorporated under such laws, in each case to execute a
supplement to the applicable Foreign Security Documents in form and substance
reasonably satisfactory to the Administrative Agent (or guarantee and security
arrangements in relation to the Obligations of the UK Borrower, as the case may
be, in a form and to an extent agreed between the US Borrower and the
Administrative Agent, but to be substantially consistent (taking into account
the scope of customary collateral arrangements in the applicable jurisdiction)
with the scope of the guarantee and collateral arrangements entered into
pursuant to the Foreign Subsidiary Guarantees and the Foreign Security
Documents), in order to become a Foreign Subsidiary Guarantor and a grantor
under the applicable Foreign Security Documents; provided, that the US Borrower
and the UK Borrower shall not be required to comply with the requirements of
subclause (i) above with respect to any Permitted Acquisition of such direct or
indirect Subsidiary of the US Borrower to the extent that the aggregate amount
of (x) all Indebtedness incurred pursuant to Section 10.1(j) and (k) and
outstanding at such time pursuant to which the US Borrower or the UK Borrower,
as the case may be, has utilized (and at such time continues to utilize) the
proviso to Section 10.1(j)(i)(y) or 10.1(k)(i)(y), respectively, and (y) the
fair market value at the time such investment was made of all investments made
pursuant to Section 10.5(j) as to which the US Borrower or the UK Borrower, as
the case

 

129

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

 

may be, has utilized (and at such time continues to utilize) the proviso
thereto, does not exceed the Guarantee and Collateral Exception Amount in effect
at such time.

 

(c)  Each of the US Borrower and the UK Borrower will cause each Foreign
Subsidiary that is a Restricted Foreign Subsidiary or that is required to become
a Restricted Foreign Subsidiary for an investment to constitute a Permitted
Acquisition, in each case that makes an investment constituting a Permitted
Acquisition pursuant to Section 10.5(j) to enter into guarantee and security
arrangements in relation to the Obligations of the UK Borrower in respect of the
capital stock and/or assets acquired pursuant to such Permitted Acquisition to
the extent the target of such Permitted Acquisition is incorporated under the
laws of (or has assets located in) any of England and Wales, Scotland,
Germany, Italy, Canada or Singapore, in a form and to an extent agreed between
the US Borrower and the Administrative Agent, but to be substantially consistent
(taking into account the scope of customary collateral arrangements in the
applicable jurisdiction) with the scope of the guarantee and collateral
arrangements entered into pursuant to the Foreign Subsidiary Guarantees and the
Foreign Security Documents, and to comply with Section 9.15 in respect of such
arrangements; provided, that (i) no such Restricted Foreign Subsidiary shall be
required to enter into such arrangements to the extent that such arrangements
would (x) be prohibited by the law of the jurisdiction of incorporation or
formation of such Restricted Subsidiary or of the entity whose capital stock is
acquired or (y) have material adverse tax consequences for any of the Parent
Companies, Holdings, the US Borrower or any of the Restricted Subsidiaries and
(ii) the US Borrower and the UK Borrower shall not be required to comply with
the requirements of this clause (c) with respect to any Permitted Acquisition of
any such Restricted Foreign Subsidiary to the extent that the aggregate amount
of (x) all Indebtedness incurred pursuant to Section 10.1(j) and (k) and
outstanding at such time pursuant to which the US Borrower or the UK Borrower,
as the case may be, has utilized (and at such time continues to utilize) the
proviso to Section 10.1(j)(i)(y) or 10.1(k)(i)(y), respectively, and (y) the
fair market value at the time such investment was made of all investments made
pursuant to Section 10.5(j) as to which the US Borrower or the UK Borrower, as
the case may be, has utilized (and at such time continues to utilize) the
proviso thereto, does not exceed the Guarantee and Collateral Exception Amount
in effect at such time.

 

9.12.                        Pledges of Additional Stock and Evidence of
Indebtedness.  (a)    The US Borrower will, except to the extent prohibited by
applicable law or to the extent that it would result in material adverse tax
consequences for Parent and its Subsidiaries, taken as a whole, pledge, and, if
applicable, will cause each Domestic Subsidiary to pledge, to the Administrative
Agent, for the benefit of the Secured Parties, (i) all the capital stock of each
Domestic Subsidiary (other than any Unrestricted Subsidiary) and each Foreign
Subsidiary (other than an Unrestricted Subsidiary or any capital stock
representing in excess of 65% of the issued and outstanding capital stock in any
Foreign Subsidiary) held by the US Borrower or a Domestic Subsidiary, in each
case, formed or otherwise purchased or acquired after the Funding Date, in each
case pursuant to a supplement to the Pledge Agreement in form and substance
reasonably satisfactory to the Administrative Agent, (ii) all evidences of
Indebtedness in excess of $5,000,000 received by the US Borrower or any of the
Domestic Subsidiaries (other than any Unrestricted

 

130

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

 

Subsidiary) in connection with any disposition of assets pursuant to
Section 10.4(b), in each case pursuant to a supplement to the Pledge Agreement,
substantially in the form of Annex A thereto and (iii) any global promissory
notes executed after the Funding Date evidencing Indebtedness of any of
Holdings, the US Borrower and each Subsidiary that is owing to any of the US
Borrower or any Domestic Subsidiary (other than any Unrestricted Subsidiary), in
each case pursuant to a supplement to the Pledge Agreement, substantially in the
form of Annex A thereto; provided, that the US Borrower and any such Domestic
Subsidiary shall not be required to comply with the requirements of this clause
(a) with respect to any Permitted Acquisition of (1) any such Foreign Subsidiary
or (2) any such Domestic Subsidiary to the extent in the case of this subclause
(2) that Indebtedness is incurred pursuant to Section 10.1(j) or (k) in
connection therewith, in each case, to the extent that the aggregate amount of
(x) all Indebtedness incurred pursuant to Section 10.1(j) and (k) and
outstanding at such time pursuant to which the US Borrower or the UK Borrower,
as the case may be, has utilized (and at such time continues to utilize) the
proviso to Section 10.1(j)(i)(y) or 10.1(k)(i)(y), respectively, and (y) the
fair market value at the time such investment was made of all investments made
pursuant to Section 10.5(j) as to which the US Borrower or the UK Borrower, as
the case may be, has utilized (and at such time continues to utilize) the
proviso thereto, does not exceed the Guarantee and Collateral Exception Amount
in effect at such time.  The US Borrower will, and will cause each of the
Restricted Subsidiaries to, use commercially reasonable efforts to structure the
ownership of any such Domestic Subsidiary so as to avoid any such legal
prohibition or material adverse tax consequences described in the immediately
preceding sentence that may result from such ownership structure.

 

(b)  The US Borrower will pledge, and, if applicable, will cause each Subsidiary
(other than any Foreign Joint Venture or any Subsidiary of such a Foreign Joint
Venture) to pledge, to the Administrative Agent, for the benefit of the Lenders
to the UK Borrower, (i) all the capital stock of each Subsidiary of the UK
Borrower and of any Foreign Subsidiary Guarantor owned or held by the US
Borrower or any Restricted Subsidiary, in each case formed or otherwise
purchased or acquired after the Closing Date to the extent such Subsidiary is
incorporated under the laws of any of England and Wales, Scotland,
Germany, Italy, Canada or Singapore, in each case pursuant to a supplement to
the applicable Foreign Security Documents in form and substance reasonably
satisfactory to the Administrative Agent (or pledge arrangements in relation to
the Obligations of the UK Borrower, in a form and to an extent agreed between
the US Borrower and the Administrative Agent, but to be substantially consistent
(taking into account the scope of customary collateral arrangements in the
applicable jurisdiction) with the scope of the pledge arrangements entered into
pursuant to the Foreign Security Documents) and (ii) all evidences of
Indebtedness with a Dollar Equivalent in excess of $5,000,000 received by any of
the Foreign Subsidiary Guarantors in connection with any disposition of assets
pursuant to Section 10.4(b), in each case pursuant to a supplement to the
applicable Foreign Security Documents in form and substance reasonably
satisfactory to the Administrative Agent (or pledge arrangements in relation to
the Obligations of the UK Borrower, in a form and to an extent agreed between
the US Borrower and the Administrative Agent, but to be substantially consistent
(taking into account the scope of customary collateral arrangements in the
applicable jurisdiction) with the scope of the pledge arrangements entered into
pursuant to the Foreign Security Documents); provided,

 

131

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

 

that the US Borrower and any such Subsidiary shall not be required to comply
with the requirements of subclause (i) above with respect to any Permitted
Acquisition of any such Subsidiary of the UK Borrower or of any such Foreign
Subsidiary Guarantor to the extent that the aggregate amount of (x) all
Indebtedness incurred pursuant to Section 10.1(j) and (k) and outstanding at
such time pursuant to which the US Borrower or the UK Borrower, as the case may
be, has utilized (and at such time continues to utilize) the proviso to
Section 10.1(j)(i)(y) or 10.1(k)(i)(y), respectively, and (y) the fair market
value at the time such investment was made of all investments made pursuant to
Section 10.5(j) as to which the US Borrower or the UK Borrower, as the case may
be, has utilized (and at such time continues to utilize) the proviso thereto,
does not exceed the Guarantee and Collateral Exception Amount in effect at such
time.

 

(c)  Holdings will pledge to the Administrative Agent, for the benefit of the
Lenders, all capital stock of the US Borrower acquired by it after the Funding
Date (including any capital stock issued in connection with (i) PIK Proceeds
Equity Contributions, (ii) loans and advances made pursuant to
Section 10.5(c)(i) and (iii) dividends paid by the Borrower solely in its
capital stock pursuant to Section 10.6) and the US Borrower will pledge to the
Administrative Agent, for the benefit of the Secured Parties, pursuant to the
Pledge Agreement or the UK Pledge Agreements, as the case may be, all capital
stock of the UK Borrower acquired by it after the Funding Date.

 

(d)  The US Borrower and the UK Borrower agree that all Indebtedness in excess
of $5,000,000 of any of the US Borrower and each Subsidiary that is owing to any
Credit Party party to the Pledge Agreement shall be evidenced by one or more
global promissory notes.

 

9.13.                        Use of Proceeds.  The US Borrower and the UK
Borrower will use the Letters of Credit and the proceeds of all Revolving Credit
Loans, all Extended Revolving Credit Loans and Swingline Loans solely for
general corporate purposes.  The US Borrower and the UK Borrower will use the
proceeds of all Term Loans (other than any Term Loans funded under the Tranche A
Term Loan Commitment pursuant to Section 2.1(a)(i) or Section 2.1(a)(ii), as
applicable, after the Funding Date, any Tranche E Term Loans funded pursuant to
Section 2.1(a)(iv) on the Third Amendment Effective Date, any Tranche G Term
Loans funded pursuant to Section 2.1(a)(v) on the Fourth Amendment Effective
Date, any Tranche H Term Loans deemed made pursuant to Section 2.1(a)(vi) on the
Restatement Date and any Tranche I Term Loans deemed made pursuant to
Section 2.1(a)(vii) on the Restatement Date), together with the proceeds of the
Acquisition Equity Contribution and the borrowings under the Senior Subordinated
Loan Agreement, to pay the consideration for the Acquisition, to refinance the
2003 Credit Agreement, PIK Notes (and related fees and prepayment premiums) of
PIK Holdco and certain existing Indebtedness of the Target and to pay
Transaction Expenses.  The US Borrower and the UK Borrower will use the proceeds
of all Tranche A-1 Term Loans and/or Tranche A-2 Term Loans that are funded
after the Funding Date pursuant to Section 2.1(a)(iii) solely for general
corporate purposes.  The US Borrower will (i) use the proceeds of all Tranche E
Term Loans funded on the Third Amendment Effective Date solely to repay in full
the outstanding principal amount of those existing term loans designated as
“Tranche D Term Loans” under the Credit Agreement immediately prior to

 

132

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

 

the Third Amendment Effective Date and to pay fees and expenses in connection
with such prepayments and with the Third Amendment, (ii) use the proceeds of all
Tranche G Term Loans funded on the Fourth Amendment Effective Date solely to
repay in full the outstanding principal amount of those existing term loans
designated as “Tranche F Term Loans” under the Credit Agreement immediately
prior to the Fourth Amendment Effective Date and to pay fees and expenses in
connection with such prepayments and with the Fourth Amendment, (iii) use the
aggregate amount of all Tranche H Term Loans deemed made on the Restatement Date
solely to convert a portion of the outstanding principal amount of those
existing term loans designated as “Tranche E Term Loans” under the Credit
Agreement immediately prior to the Restatement Date, (iv) use the aggregate
amount of all Tranche I Term Loans deemed made on the Restatement Date solely to
convert a portion of the outstanding principal amount of those existing term
loans designated as “Tranche G Term Loans” under the Credit Agreement
immediately prior to the Restatement Date and (v) use the proceeds of all
Incremental Refinancing Term Loans to solely repay Tranche A-1 Term Loans,
Tranche A-2 Term Loans, Tranche E Term Loans and Tranche G Term Loans as
required by Section 5.2.

 

9.14.                        Changes in Business.  The US Borrower, the UK
Borrower and the Subsidiaries, taken as a whole, will not fundamentally and
substantively alter the character of their business, taken as a whole, from the
business conducted by the US Borrower, the UK Borrower and the Subsidiaries,
taken as a whole, on the Funding Date and other business activities incidental
or related to any of the foregoing.

 

9.15.                        Further Assurances.  (a)    Each of Holdings, the
US Borrower and the UK Borrower will, and will cause each other Credit Party to,
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 to effectuate the transactions contemplated by the Credit Documents and in
order to grant, preserve, protect and perfect the validity and priority of the
security interests created or intended to be created by the Security Agreement,
the Pledge Agreement, any Foreign Security Document or any Mortgage, all at the
expense of Holdings, the US Borrower and the Restricted Subsidiaries.

 

(b)  If any assets (including any real estate or improvements thereto or any
interest therein) with a book value or fair market value in excess of $5,000,000
are acquired by the US Borrower, the UK Borrower or any other Credit Party after
the Closing Date (other than assets constituting Collateral under the Security
Agreement or any Foreign Security Document that become subject to the Lien of
the Security Agreement or the applicable Foreign Security Documents, as the case
may be, upon acquisition thereof) that are of the nature secured by the Security
Agreement, any Foreign Security Document or any Mortgage, as the case may be,
the US Borrower will notify the Administrative Agent and the Lenders thereof,
and, if requested by the Administrative Agent or the Required Lenders, the US
Borrower will cause such assets to be subjected to a Lien securing the
applicable Obligations and will take, and cause the other Credit Parties to
take, such actions as shall be necessary or reasonably requested by the

 

133

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

 

Administrative Agent to grant and perfect such Liens, including actions
described in paragraph (a) of this Section, all at the expense of the Credit
Parties.  Any Mortgage delivered to the Administrative Agent in accordance with
the preceding sentence shall be accompanied by (x) a policy or policies of title
insurance issued by a nationally recognized title insurance company insuring the
Lien of each Mortgage as a valid first Lien on the Mortgaged Property described
therein, free of any other Liens except as expressly permitted by Section 10.2,
together with such endorsements, coinsurance and reinsurance as the
Administrative Agent may reasonably request and (y) an opinion of local counsel
to the Borrower (or in the event a Subsidiary of the Borrower is the Mortgagor,
to such Subsidiary) substantially in the form of Exhibit O-12.

 

(c)  The US Borrower further agrees that, as promptly as practicable after the
Funding Date it shall cause Brockhues to enter into the German Conditional
Security Agreements substantially in the form attached hereto as Exhibit C-6
immediately upon satisfaction of either of the following conditions:

 

(i)  Silo Pigmente GmbH and Rockwood Pigmente Holding GmbH hold together 100% of
the partners’ interests (or, following the change of legal status of Brockhues
to a stock corporation, 100% of the shares) in Brockhues; or

 

(ii)  the legal obligation in the Federal Republic of Germany changes to the
effect that in the reasonable judgment of the US Borrower, in consultation with
the Administrative Agent, the execution of the German Conditional Security
Agreements by Brockhues is possible without running material legal risks under
German law.

 

9.16.                        UK Borrower.  The US Borrower shall ensure that the
UK Borrower is on the Funding Date, and shall at all times thereafter be, a
direct wholly owned Subsidiary of the US Borrower, and Holdings and the US
Borrower agree that the UK Borrower is not permitted to be sold, transferred or
otherwise disposed of pursuant to Section 10.4.

 

9.17.                        Sale and Purchase Agreement.  The US Borrower and
any applicable Restricted Subsidiary shall not amend or waive any of the terms
of the Sale and Purchase Agreement in any way that would reasonably be expected
to be materially adverse to the interests of the Lenders.  The US Borrower and
any applicable Restricted Subsidiary shall consult with the Agents in connection
with any litigation or arbitration proceeding to which it is a party involving
the Sale and Purchase Agreement.

 

9.18.                        Post-Closing Obligations.  (a)    To the extent any
of the documents listed in Sections 6.1(e) to 6.1(w) inclusive, Sections
6.2(b) to 6.2(h) inclusive, Sections 6.2(k) and 6.2 (l), Sections 6.3(c) to
6.3(k) inclusive and Sections 6.6 to 6.8 inclusive shall not be delivered on or
prior to the Funding Date or any of the other documents or actions required to
be delivered or taken pursuant to Section 6 shall not be delivered or taken on
or prior to the Funding Date, each of the US Borrower and the UK Borrower (as
applicable) shall, on or prior to the Funding Date, prepare a schedule (the
“Post-Closing Schedule”), substantially in the form of Exhibit T, identifying
such

 

134

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

 

documents that are not delivered and/or actions that are not taken and shall
(i) deliver, or cause the applicable Subsidiaries to deliver, the documents
listed on the Post-Closing Schedule to the Administrative Agent within 30 days
following the Funding Date and (ii) take, or cause the applicable Subsidiaries
to take, each of the actions specified in Section 6.2 within 30 days following
the Funding Date; provided, that, without the consent of any Lender, the
Administrative Agent and/or the Collateral Agent may (in their respective sole
discretion) within 30 days following the Funding Date extend such 30 day period
on a one-time basis for an additional period not to exceed 30 days.  It is
understood and agreed that any period available for the delivery of documents
and the taking of actions provided by this Section 9.18 shall not be in addition
to, and shall run concurrently with, any Clean-Up Period provided in
Section 7.4.

 

(b)  Each of Holdings, the US Borrower and the UK Borrower shall, as promptly as
practicable after the Funding Date (but in any event, no later than October 31,
2004), cause (i) the Singapore Guarantee and the Singapore Security Agreement to
be executed by the Singapore Guarantors and the other Restricted Subsidiaries
party thereto, (ii) the Singapore Pledge Agreements to be executed by the US
Borrower and (iii) Section 9.15(a) to be complied with in respect of such
collateral.  Concurrently with the delivery of the Singapore Guarantee, the
Singapore Security Agreement and the Singapore Pledge Agreements, the
Administrative Agent shall have received an executed legal opinion of Allen &
Gledhill (or such other counsel acceptable to the Administrative Agent, acting
reasonably), in form and substance acceptable to the Administrative Agent,
acting reasonably, delivered to the Administrative Agent and for the benefit of
the Lenders to the US Borrower and the UK Borrower.  Concurrently with the
delivery of the Singapore Pledge Agreements, all outstanding equity interests in
whatever form owned by or on behalf of each pledgor under the Singapore Pledge
Agreements shall have been pledged pursuant to the Singapore Pledge Agreements
and the Administrative Agent shall have received all certificates representing
securities pledged under the Singapore Pledge Agreements, accompanied by
instruments of transfer and undated stock powers endorsed in blank.

 

(c)  The US Borrower agrees that, as promptly as practicable after the Funding
Date (but in any event, no later than October 31, 2004), it shall cause Rockwood
Specialties GmbH to exercise its voting rights in each of Silo Pigmente GmbH and
Rockwood Pigmente Holding GmbH to the effect that:

 

(i)  a partners’ resolution of Brockhues shall be passed to resolve that Silo
Pigmente GmbH and Rockwood Pigmente Holding GmbH may pledge all of the partners’
interests in Brockhues owned by them in favor of the Administrative Agent; and

 

(ii)  Silo Pigmente GmbH and Rockwood Pigmente Holding GmbH shall pledge all of
the partners’ interests in Brockhues owned by them in the form substantially set
forth in Exhibit C-7 hereto following the partners’ resolution described in
clause (i) above.

 

135

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

 

SECTION 10.                          Negative Covenants

 

Each of Holdings (with respect to Section 10.3(B) and Section 10.6 only), the US
Borrower and the UK Borrower hereby covenant and agree that on the Funding Date
and thereafter, for so long as this Agreement is in effect and until the
Commitments, the Swingline Commitment and each Letter of Credit have terminated
and the Loans and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder, are paid in full:

 

10.1.                        Limitation on Indebtedness.  The US Borrower and
the UK Borrower will not, and will not permit any of the Restricted Subsidiaries
to, create, incur, assume or suffer to exist any Indebtedness, except:

 

(a)  Indebtedness arising under the Credit Documents and arising under any
Revolver Refinancing Indebtedness;

 

(b)  Indebtedness of (i) the US Borrower to any Subsidiary of the US Borrower
and (ii) any Subsidiary to the US Borrower or any other Restricted Subsidiary of
the US Borrower;

 

(c)  Indebtedness in respect of any bankers’ acceptance, letter of credit,
warehouse receipt or similar facilities entered into in the ordinary course of
business;

 

(d)  except as provided in clauses (j) and (k) below, Guarantee Obligations
incurred by (i) Restricted Subsidiaries in respect of Indebtedness of the US
Borrower or other Restricted Subsidiaries that is permitted to be incurred under
this Agreement and (ii) the US Borrower in respect of Indebtedness of the
Restricted Subsidiaries that is permitted to be incurred under this Agreement;
provided, that there shall be no Guarantee Obligations (a) by a Restricted
Foreign Subsidiary of any Indebtedness of the US Borrower and (b) in respect of
the Permitted Subordinated Debt, Permitted Senior Subordinated Debt or Permitted
Additional Notes, unless such Guarantee Obligations are made by a Guarantor
(other than Holdings) and such Guarantee is unsecured and subordinated (other
than in the case of Permitted Additional Notes which are senior notes) to the
Obligations to the same extent as the applicable Permitted Subordinated Debt or
Permitted Senior Subordinated Debt, as the case may be;

 

(e)  Guarantee Obligations incurred in the ordinary course of business in
respect of obligations to suppliers, customers, franchisees, lessors and
licensees;

 

(f)  (i) Indebtedness (including Indebtedness arising under Capital Leases)
incurred within 270 days of the acquisition, construction or improvement of
fixed or capital assets to finance the acquisition, construction or improvement
of such fixed or capital assets or otherwise incurred in respect of Capital
Expenditures permitted by Section 10.11, (ii) Indebtedness arising under Capital
Leases entered into in connection with Permitted Sale Leasebacks and
(iii) Indebtedness arising under Capital Leases, other than Capital Leases in
effect on the Fourth Amendment Effective Date and Capital Leases entered into
pursuant to

 

136

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

 

subclauses (i) and (ii) above; provided, that the aggregate amount of
Indebtedness incurred pursuant to this subclause (iii) shall not exceed
$75,000,000 at any time outstanding, and (iv) any refinancing, refunding,
renewal or extension of any Indebtedness specified in subclause (i), (ii) or
(iii) above; provided further, that the principal amount thereof is not
increased above the principal amount thereof outstanding immediately prior to
such refinancing, refunding, renewal or extension;

 

(g)  Indebtedness outstanding on the Closing Date and listed on Schedule 10.1,
and any refinancing, refunding, renewal or extension thereof; provided, that
(i) the principal amount thereof is not increased above the principal amount
thereof outstanding immediately prior to such refinancing, refunding, renewal or
extension, except to the extent otherwise permitted hereunder and (ii) the
direct and contingent obligors with respect to such Indebtedness are not
changed;

 

(h)  Indebtedness in respect of Hedge Agreements;

 

(i)  Indebtedness in respect of (i) Permitted Subordinated Debt, and
(ii) Permitted Senior Subordinated Debt and (iii) Permitted Additional Notes, in
each case, subject, in the case of any Guarantee Obligations in respect thereof,
to clause (d) above;

 

(j)  (i) Indebtedness of a Person or Indebtedness attaching to assets of a
Person that, in either case, becomes a Restricted Subsidiary or Indebtedness
attaching to assets that are acquired by the US Borrower or any Restricted
Subsidiary, in each case after the Closing Date as the result of a Permitted
Acquisition; provided, that (w) such Indebtedness existed at the time such
Person became a Restricted Subsidiary or at the time such assets were acquired
and, in each case, was not created in anticipation thereof, (x) such
Indebtedness is not guaranteed in any respect by the US Borrower or any
Restricted Subsidiary (other than any such Person that so becomes a Restricted
Subsidiary), (y)(A) the capital stock of such Person is pledged to the
Administrative Agent to the extent required under Section 9.11 or Section 9.12
and (B) such Person executes a supplement to each of the Guarantee, the Security
Agreement, the applicable Foreign Guarantee and/or the applicable Foreign
Security Documents and the Pledge Agreement (or alternative guarantee and
security arrangements in relation to the Obligations) to the extent required
under Sections 9.11 or 9.12, as applicable; provided, that the requirements of
this subclause (y) shall not apply to an aggregate amount at any time
outstanding of up to (and including) the Guarantee and Collateral Exception
Amount at such time of the aggregate of (1) such Indebtedness and (2) all
Indebtedness as to which the proviso to clause (k)(i)(y) below then applies, and
(z) in respect of any such Indebtedness incurred on and after the Fourth
Amendment Effective Date, the aggregate amount of such Indebtedness and all
Indebtedness incurred under clause (k) below, when taken together, does not
exceed $450,000,000 in the aggregate at any time outstanding, and (ii) any
refinancing, refunding, renewal or extension of any Indebtedness specified in

 

137

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

 

subclause (i) above; provided, that except to the extent otherwise permitted
hereunder, (x) the principal amount of any such Indebtedness is not increased
above the principal amount thereof outstanding immediately prior to such
refinancing, refunding, renewal or extension and (y) the direct and contingent
obligors with respect to such Indebtedness are not changed;

 

(k)  (i) Indebtedness of the US Borrower or any Restricted Subsidiary incurred
to finance a Permitted Acquisition; provided, that (x) such Indebtedness is not
guaranteed in any respect by any Restricted Subsidiary (other than any Person
acquired (the “acquired Person”) as a result of such Permitted Acquisition or
the Restricted Subsidiary so incurring such Indebtedness) or, in the case of
Indebtedness of any Restricted Subsidiary, by the US Borrower, (y)(A) the US
Borrower or such Restricted Subsidiary pledges the capital stock of such
acquired Person to the Administrative Agent to the extent required under
Section 9.11 or Section 9.12 and (B) such acquired Person executes a supplement
to the Guarantee, the Security Agreement, the applicable Foreign Guarantee
and/or the applicable Foreign Security Documents and the Pledge Agreement (or
alternative guarantee and security arrangements in relation to the Obligations)
to the extent required under Sections 9.11 or 9.12, as applicable; provided,
that the requirements of this subclause (y) shall not apply to an aggregate
amount at any time outstanding of up to (and including) the amount of the
Guarantee and Collateral Exception Amount at such time of the aggregate of
(1) such Indebtedness and (2) all Indebtedness as to which the proviso to
clause (j)(i)(y) above then applies, and (z) in respect of any such Indebtedness
incurred on and after the Fourth Amendment Effective Date, the aggregate amount
of such Indebtedness and all Indebtedness assumed or permitted to exist under
clause (j) above, when taken together, does not exceed $450,000,000 in the
aggregate at any time outstanding, and (ii) any refinancing, refunding, renewal
or extension of any Indebtedness specified in subclause (i) above; provided,
that (x) the principal amount of any such Indebtedness is not increased above
the principal amount thereof outstanding immediately prior to such refinancing,
refunding, renewal or extension and (y) the direct and contingent obligors with
respect to such Indebtedness are not changed, except to the extent otherwise
permitted hereunder;

 

(l)  (i) Indebtedness of Restricted Foreign Subsidiaries existing as of the
Fourth Amendment Effective Date and any refinancing, refunding, renewal or
extension thereof; provided, that the principal amount thereof is not increased
above the principal amount thereof outstanding as of the Fourth Amendment
Effective Date and (ii)(x) Indebtedness of Restricted Foreign Subsidiaries
incurred after the Fourth Amendment Effective Date in an aggregate amount at any
time outstanding not to exceed $150,000,000;

 

(m)  (i) Indebtedness incurred in connection with any Permitted Sale Leaseback
and (ii) any refinancing, refunding, renewal or extension of any Indebtedness
specified in subclause (i) above; provided, that, except to the extent otherwise
permitted hereunder, (x) the principal amount of any such Indebtedness is not
increased above the principal amount thereof outstanding immediately prior

 

138

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

 

to such refinancing, refunding, renewal or extension and (y) the direct and
contingent obligors with respect to such Indebtedness are not changed;

 

(n)  (i) additional Indebtedness incurred and outstanding pursuant to this
clause (n) prior to the Restatement Date, (ii) additional Indebtedness incurred
after the Restatement Date in an aggregate amount not to exceed $1,000,000,000
at any time outstanding; provided, that with respect to any Indebtedness
incurred pursuant to this subclause (ii) of this clause (n) on or after the
Restatement Date the Net Cash Proceeds therefrom are (A) applied, immediately
after the receipt thereof, to the prepayment of Term Loans in accordance with
Section 5.2 to the extent required thereby or (B) to the extent not required to
be so applied, used solely for Permitted Acquisitions or other general corporate
purposes of the Borrowers and the Subsidiaries; provided, further that any Net
Cash Proceeds of such Indebtedness applied, immediately after the receipt
thereof, to the prepayment of Term Loans in accordance with Section 5.2 will not
reduce the portion of such $1,000,000,000 available pursuant to this subclause
(ii) of this clause (n) and (iii) any refinancing, refunding, renewal or
extension of any Indebtedness specified in sub-clauses (i) and (ii) above;
provided, that in the case of any such refinancing, refunding, renewal or
extension relating to Indebtedness under sub-clause (i), the principal amount
thereof is not increased above the principal amount thereof outstanding as of
the Restatement Date;

 

(o)  Indebtedness in respect of Permitted Additional Subordinated Notes to the
extent that the Net Cash Proceeds therefrom are, immediately after the receipt
thereof, applied to the prepayment of Term Loans in accordance with Section 5.2;

 

(p)  the incurrence by the US Borrower or any Restricted Subsidiary of
Indebtedness represented by letters of credit, bank guarantees or other similar
instruments; provided, that such Indebtedness shall not exceed $50,000,000 in
the aggregate at any time outstanding; and

 

(q)  Indebtedness incurred by the US Borrower to the extent that the Net Cash
Proceeds therefrom are, immediately after the receipt thereof, applied solely to
the prepayment of Tranche A-1 Term Loans, Tranche A-2 Term Loans, Tranche E Term
Loans and Tranche G Term Loans in accordance with Section 5.2; provided, that
(A) the terms of such Indebtedness will not provide for any scheduled repayment,
mandatory redemption or sinking fund obligations prior to the Tranche I Term
Loan Maturity Date (other than customary offers to repurchase upon a change of
control, asset sale or event of loss and customary acceleration rights after an
event of default) and (B) no Subsidiary of the US Borrower (other than the UK
Borrower) is a borrower or guarantor with respect to such Indebtedness unless
such Subsidiary is a Credit Party which shall have previously or substantially
concurrently guaranteed the Obligations.

 

10.2.                        Limitation on Liens.  The US Borrower and the UK
Borrower will not, and will not permit any of the Restricted Subsidiaries to,
create, incur, assume or

 

139

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

 

suffer to exist any Lien upon any property or assets of any kind (real or
personal, tangible or intangible) of the US Borrower or any Restricted
Subsidiary, whether now owned or hereafter acquired, except:

 

(a)  Liens arising under the Credit Documents;

 

(b)  Permitted Liens;

 

(c)  Liens securing Indebtedness permitted pursuant to Section 10.1(f);
provided, that such Liens attach at all times only to the assets so financed;

 

(d)  Liens existing on the Closing Date and listed on Schedule 10.2;

 

(e)  the replacement, extension or renewal of any Lien permitted by clauses
(a) through (d) above and clauses (f) and (g) of this Section 10.2 upon or in
the same assets theretofore subject to such Lien or the replacement, extension
or renewal (without increase in the amount or change in any direct or contingent
obligor except to the extent otherwise permitted hereunder) of the Indebtedness
secured thereby;

 

(f)  Liens existing on the assets of any Person that becomes a Restricted
Subsidiary, or existing on assets acquired, pursuant to a Permitted Acquisition
to the extent the Liens on such assets secure Indebtedness permitted by
Section 10.1(j); provided, that such Liens attach at all times only to the same
assets that such Liens attached to, and secure only the same Indebtedness that
such Liens secured, immediately prior to such Permitted Acquisition;

 

(g)  (i) Liens placed upon the capital stock of any Restricted Subsidiary
acquired pursuant to a Permitted Acquisition to secure Indebtedness of the US
Borrower or any other Restricted Subsidiary incurred pursuant to
Section 10.1(k) in connection with such Permitted Acquisition and (ii) Liens
placed upon the assets of such Restricted Subsidiary to secure a guarantee by
such Restricted Subsidiary or any such Indebtedness of the US Borrower or any
other Restricted Subsidiary;

 

(h)  (i) Liens existing as of the Fourth Amendment Effective Date and any
replacement, extension or renewal (without increase in the amount or change in
any direct or contingent obligor except to the extent otherwise permitted
hereunder) of the Indebtedness secured thereby and (ii) additional Liens
incurred after the Fourth Amendment Effective Date so long as the aggregate
principal amount of the obligations so secured does not exceed $75,000,000 at
any time outstanding;

 

(i)  Liens securing Indebtedness permitted pursuant to Section 10.1(p);
provided, that if such Liens shall exist on any Collateral, the beneficiaries
thereof (or an agent on their behalf) shall have entered into an intercreditor
agreement with the Collateral Agent that is reasonably satisfactory to the
Collateral Agent;

 

140

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

 

(j)  Liens securing Revolver Refinancing Indebtedness permitted pursuant to
Section 10.1(a); and

 

(k)  Liens securing Indebtedness permitted pursuant to Section 10.1(q);
provided, that such Liens may be either a first priority Lien on the Collateral
that is pari passu with the Lien securing the Obligations or a Lien ranking
junior to the Lien on the Collateral securing the Obligations (but may not be
secured by any other assets that are not Collateral) and, in any such case, the
beneficiaries thereof (or an agent on their behalf) shall have entered into an
intercreditor agreement with the Collateral Agent that is reasonably
satisfactory to the Collateral Agent.

 

10.3.                        Limitation on Fundamental Changes.  (A) Except as
expressly permitted by Section 10.4 or 10.5, each of the US Borrower and the UK
Borrower will not, and will not permit any of the Restricted Subsidiaries to,
enter into any merger, consolidation or amalgamation, or liquidate, wind up or
dissolve itself (or suffer any liquidation or dissolution), or convey, sell,
lease, assign, transfer or otherwise dispose of, all or substantially all its
business units, assets or other properties, except that:

 

(a)  any Subsidiary of the US Borrower or any other Person may be merged or
consolidated with or into the US Borrower; provided, that (i) the US Borrower
shall be the continuing or surviving corporation or the Person formed by or
surviving any such merger or consolidation (if other than the US Borrower) shall
be an entity organized or existing under the laws of the United States, any
state thereof, the District of Columbia or any territory thereof (the US
Borrower or such Person, as the case may be, being herein referred to as the
“Successor Borrower”), (ii) the Successor Borrower (if other than the US
Borrower) shall expressly assume all the obligations of the US Borrower under
this Agreement and the other Credit Documents pursuant to a supplement hereto or
thereto in form reasonably satisfactory to the Administrative Agent, (iii) no
Default or Event of Default would result from the consummation of such merger or
consolidation, (iv) the Successor Borrower shall be in compliance, on a pro
forma basis after giving effect to such merger or consolidation, with the
covenants set forth in Sections 10.9 and 10.10, as such covenants are recomputed
as at the last day of the most recently ended Test Period under such Section as
if such merger or consolidation had occurred on the first day of such Test
Period, (v) each Guarantor, unless it is the other party to such merger or
consolidation, shall have by a supplement to the Guarantee confirmed that its
Guarantee shall apply to the Successor Borrower’s obligations under this
Agreement, (vi) each Subsidiary grantor and each Subsidiary pledgor, unless it
is the other party to such merger or consolidation, shall have by a supplement
to the Security Agreement or the Pledge Agreement, as applicable, confirmed that
its obligations thereunder shall apply to the Successor Borrower’s obligations
under this Agreement, (vii) each mortgagor of a Mortgaged Property, unless it is
the other party to such merger or consolidation, shall have by an amendment to
or restatement of the applicable Mortgage confirmed that its obligations
thereunder shall apply to the Successor Borrower’s obligations under this
Agreement, and (viii) the US Borrower shall have delivered to the Administrative
Agent an officer’s certificate and an opinion

 

141

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

 

of counsel, each stating that such merger or consolidation and such supplement
to this Agreement or any Security Document comply with this Agreement; provided
further, that if the foregoing are satisfied, the Successor Borrower (if other
than the US Borrower) will succeed to, and be substituted for, the US Borrower
under this Agreement;

 

(b)  any Subsidiary of the UK Borrower or any other Person may be merged or
consolidated with or into the UK Borrower, provided, that (i) the UK Borrower
shall be the continuing or surviving corporation or the Person formed by or
surviving any such merger or consolidation (if other than the UK Borrower) shall
be a corporation organized or existing under the laws of England and Wales (the
UK Borrower or such Person, as the case may be, being herein referred to as the
“Successor UK Borrower”), (ii) the Successor UK Borrower (if other than the UK
Borrower) shall expressly assume all the obligations of the UK Borrower under
this Agreement and the other Credit Documents pursuant to a supplement hereto or
thereto in form reasonably satisfactory to the Administrative Agent, (iii) no
Default or Event of Default would result from the consummation of such merger or
consolidation, (iv) the US Borrower shall be in compliance, on a pro forma basis
after giving effect to such merger or consolidation, with the covenants set
forth in Sections 10.9 and 10.10, as such covenants are recomputed as at the
last day of the most recently ended Test Period under such Section as if such
merger or consolidation had occurred on the first day of such Test Period,
(v) the US Borrower, each Guarantor and each Foreign Subsidiary Guarantor,
unless it is the other party to such merger or consolidation, shall have by a
supplement to the Guarantee or Foreign Subsidiary Guarantee, as the case may be,
confirmed that its Guarantee or Foreign Subsidiary Guarantee, as the case may
be, shall apply to the Successor UK Borrower’s obligations under this Agreement,
(vi) each grantor and each pledgor, unless it is the other party to such merger
or consolidation, shall have by a supplement to the applicable Security Document
confirmed that its obligations thereunder shall apply to the Successor UK
Borrower’s obligations under this Agreement, (vii) each mortgagor of a Mortgaged
Property, unless it is the other party to such merger or consolidation, shall
have by an amendment to or restatement of the applicable Mortgage confirmed that
its obligations thereunder shall apply to the Successor UK Borrower’s
obligations under this Agreement, and (viii) the UK Borrower shall have
delivered to the Administrative Agent an officer’s certificate and an opinion of
counsel, each stating that such merger or consolidation, such supplement to this
Agreement or any Security Document and such amendment or restatement to any
applicable Mortgage, as the case may be, comply with this Agreement; provided
further, that if the foregoing are satisfied, the Successor UK Borrower (if
other than the UK Borrower) will succeed to, and be substituted for, the UK
Borrower under this Agreement;

 

(c)  any Subsidiary of the US Borrower (other than the UK Borrower) or any other
Person may be merged or consolidated with or into any one or more Subsidiaries
of the US Borrower (other than the UK Borrower); provided, that (i) in the case
of any merger or consolidation involving one or more Restricted Subsidiaries,
(A) a Restricted Subsidiary shall be the continuing or surviving

 

142

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

 

corporation or (B) the US Borrower shall take all steps necessary to cause the
Person formed by or surviving any such merger or consolidation (if other than a
Restricted Subsidiary) to become a Restricted Subsidiary, (ii) in the case of
any merger or consolidation involving one or more Guarantors and/or Foreign
Subsidiary Guarantors, as the case may be, a Guarantor or Foreign Subsidiary
Guarantor, as the case may be, shall be the continuing or surviving corporation
or the Person formed by or surviving any such merger or consolidation (if other
than a Guarantor or Foreign Subsidiary Guarantor, as the case may be) shall
execute a supplement to the Guarantee Agreement, the Pledge Agreement and the
Security Agreement and any applicable Mortgage or the analogous Foreign Security
Documents, as the case may be, in form and substance reasonably satisfactory to
the Administrative Agent in order to become a Guarantor or Foreign Subsidiary
Guarantor, as the case may be, and pledgor, mortgagor and grantor of Collateral
for the benefit of the Secured Parties, (iii) no Default or Event of Default
would result from the consummation of such merger or consolidation, (iv) the US
Borrower shall be in compliance, on a pro forma basis after giving effect to
such merger or consolidation, with the covenants set forth in Sections 10.9 and
10.10, as such covenants are recomputed as at the last day of the most recently
ended Test Period under such Section as if such merger or consolidation had
occurred on the first day of such Test Period, and (v) the US Borrower shall
have delivered to the Administrative Agent an Officers’ Certificate stating that
such merger or consolidation and such supplements to any Security Document
comply with this Agreement;

 

(d)  any Restricted Subsidiary that is not a Guarantor or a Foreign Subsidiary
Guarantor may sell, lease, transfer or otherwise dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the US Borrower, the UK
Borrower, a Guarantor, a Foreign Subsidiary Guarantor or any other Restricted
Subsidiary of the US Borrower;

 

(e)  any Guarantor or any Foreign Subsidiary Guarantor may sell, lease, transfer
or otherwise dispose of any or all of its assets (upon voluntary liquidation or
otherwise) to the US Borrower, the UK Borrower or any other Guarantor or Foreign
Subsidiary Guarantor; and

 

(f)  any Restricted Subsidiary (other than the UK Borrower) may liquidate or
dissolve if (x) the US Borrower determines in good faith that such liquidation
or dissolution is in the best interests of the US Borrower and is not materially
disadvantageous to the Lenders and (y) to the extent such Restricted Subsidiary
is a Credit Party, any assets or business not otherwise disposed of or
transferred in accordance with Section 10.4 or 10.5, or, in the case of any such
business, discontinued, shall be transferred to, or otherwise owned or conducted
by, another Credit Party after giving effect to such liquidation or dissolution.

 

(B) Holdings will not engage in any business or activity other than (a) the
ownership of all the outstanding shares of capital stock of the US Borrower,
(b) maintaining its corporate existence, (c) participating in tax, accounting
and other

 

143

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

 

administrative matters as a member of the consolidated group of Parent, (d) the
performance of the Credit Documents to which it is a party, (e) making any
Dividend permitted by Section 10.6 or holding any cash received in connection
with Dividends made by the US Borrower in accordance with Section 10.6 pending
application thereof by Holdings in the manner contemplated by Section 10.6,
(f) the performance of the 2011 Senior Notes Indenture, (g) the issuance of PIK
Refinancing Indebtedness or PIK Refinancing Preferred Stock and the performance
under such PIK Refinancing Indebtedness or PIK Refinancing Preferred Stock,
(h) so long as no Default or Event of Default has occurred and is continuing,
the prepayment, repurchase, retirement or redemption of the 2011 Senior Notes,
PIK Refinancing Indebtedness and/or PIK Refinancing Preferred Stock (x) from the
proceeds of Dividends received in accordance with Section 10.6(g) and (y) from
the amount of any capital contributions made in cash to Holdings from and
including the Business Day immediately following the Closing Date through and
including the date of such redemption, repurchase or retirement, including
contributions with the proceeds from any issuance of equity securities by any of
the Parent Companies or Holdings and (i) activities incidental to the businesses
or activities described in clauses (a) to (h) of this Section 10.3(B).  Holdings
will not own or acquire any assets (other than shares of capital stock of the US
Borrower, cash and Permitted Investments) or incur any liabilities (other than
liabilities under the Credit Documents, liabilities under its guarantee of the
Subordinated Notes and the Senior Subordinated Notes (provided, that Holdings
shall not guarantee the Subordinated Notes or the Senior Subordinated Notes
unless (x) Holdings also has guaranteed the Obligations pursuant to the
Guarantee, (y) such guarantee of the Subordinated Notes or the Senior
Subordinated Notes is unsecured and subordinated to such guarantee of the
Obligations on terms no less favorable to the Lenders than the subordination
provisions of the Subordinated Notes or the Senior Subordinated Notes, as the
case may be, and (z) such guarantee of the Subordinated Notes or the Senior
Subordinated Notes provides for the release and termination thereof, without
action by any party, upon any release and termination of such guarantee of the
Obligations), liabilities under the 2011 Senior Notes Indenture, liabilities in
respect of PIK Refinancing Indebtedness or PIK Refinancing Preferred Stock and
liabilities imposed by law, including tax liabilities, and other liabilities
incidental to its existence and business and activities permitted by this
Agreement).

 

10.4.                        Limitation on Sale of Assets.  Each of the US
Borrower and the UK Borrower will not, and will not permit any of the Restricted
Subsidiaries to, (i) convey, sell, lease, assign, transfer or otherwise dispose
of any of its property, business or assets (including receivables and leasehold
interests), whether now owned or hereafter acquired (other than any such sale,
transfer, assignment or other disposition resulting from any casualty or
condemnation of any assets of the US Borrower or the Restricted Subsidiaries) or
(ii) sell to any Person (other than the US Borrower, a Guarantor or a Restricted
Foreign Subsidiary) any shares owned by it of any Restricted Subsidiary’s
capital stock, except that:

 

(a)  the US Borrower and the Restricted Subsidiaries may sell, transfer or
otherwise dispose of used or surplus equipment, vehicles, inventory and other
assets in the ordinary course of business;

 

144

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

 

(b)  the US Borrower and the Restricted Subsidiaries may sell, transfer or
otherwise dispose of other assets (other than accounts receivable) for fair
value, provided, that in the case of any such sale, transfer or other
disposition on and after the Restatement Date (i) the amount of any such sale,
transfer or disposal, together with the aggregate amount of any previous sales,
transfers and disposals made by the US Borrower and the Restricted Subsidiaries,
taken as a whole, pursuant to this clause (b) on and after the Restatement Date,
shall not exceed in the aggregate an amount equal to 20% of Consolidated Total
Assets as of March 31, 2009, (ii) any consideration in excess of $5,000,000
received by the US Borrower or any Guarantor in connection with such sales,
transfers and other dispositions of assets pursuant to this clause (b) that is
in the form of Indebtedness shall be pledged to the Administrative Agent
pursuant to Section 9.12, (iii) with respect to any such sale, transfer or
disposition (or series of related sales, transfers or dispositions) in an
aggregate amount in excess of $25,000,000 the US Borrower shall be in
compliance, on a pro forma basis after giving effect to such sale, transfer or
disposition, with the covenants set forth in Sections 10.9 and 10.10, as such
covenants are recomputed as at the last day of the most recently ended Test
Period under such Sections as if such sale, transfer or disposition had occurred
on the first day of such Test Period and (iv) after giving effect to any such
sale, transfer or disposition, no Default or Event of Default shall have
occurred and be continuing;

 

(c)  the US Borrower and the Restricted Subsidiaries may make sales of assets to
the US Borrower or to any Restricted Subsidiary; provided, that any such sales
to Restricted Foreign Subsidiaries shall be for fair value;

 

(d)  any Restricted Subsidiary may effect any transaction permitted by
Section 10.3;

 

(e)  in addition to selling or transferring accounts receivable pursuant to the
other provisions hereof, the US Borrower and the Restricted Subsidiaries may
(i) sell or discount without recourse accounts receivable arising in the
ordinary course of business in connection with the compromise or collection
thereof and (ii) sell or transfer accounts receivable and related rights
pursuant to customary receivables financing facilities or factoring
arrangements; provided, that the aggregate amount of accounts receivable subject
to such receivables financing facilities or factoring arrangements at any one
time shall not exceed $200,000,000 or any greater amount so long as any Net Cash
Proceeds in respect of accounts receivable in excess of $200,000,000 subject to
such receivables financing facilities or factoring arrangements at any one time
are promptly applied to prepay the Term Loans in the manner set forth in
Sections 5.2(c) and (d); and

 

(f)  the sale of the Groupe Novasep segment.

 

10.5.                        Limitation on Investments.  The US Borrower will
not, and will not permit any of the Restricted Subsidiaries to, make any
advance, loan, extensions of

 

145

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

 

credit or capital contribution to, or purchase any stock, bonds, notes,
debentures or other securities of or any assets of, or make any other investment
in, any Person, except:

 

(a)  extensions of trade credit and asset purchases in the ordinary course of
business;

 

(b)  Permitted Investments;

 

(c)  loans and advances to officers, directors and employees of Parent or any of
its Subsidiaries (i) to finance the purchase of capital stock of Parent
(provided, that the amount of such loans and advances used to acquire such
capital stock shall be contributed by Holdings to the US Borrower in cash as
common equity using the proceeds of prior contributions of common equity by
Parent to PIK Holdco and by PIK Holdco to Holdings, respectively) and (ii) for
additional purposes not contemplated by subclause (i) above in an aggregate
principal amount at any time outstanding with respect to this clause (ii) not
exceeding $25,000,000;

 

(d)  investments existing on the Closing Date and listed on Schedule 10.5, and
any extensions, renewals or reinvestments thereof, so long as the aggregate
amount of all investments pursuant to this clause (d) is not increased at any
time above the amount of such investments existing on the Closing Date;

 

(e)  investments in Hedge Agreements permitted by Section 10.1(h);

 

(f)  investments received in connection with the bankruptcy or reorganization of
suppliers or customers and in settlement of delinquent obligations of, and other
disputes with, customers arising in the ordinary course of business;

 

(g)  investments to the extent that payment for such investments is made solely
with capital stock of any of the Parent Companies;

 

(h)  investments constituting non-cash proceeds of sales, transfers and other
dispositions of assets to the extent permitted by Section 10.4;

 

(i)  investments in any Guarantor (other than Holdings), the US Borrower, the UK
Borrower or any Foreign Subsidiary Guarantor, and investments (other than
investments representing a Permitted Acquisition or any other acquisition, by
merger or otherwise, of any assets or capital stock or other equity interests of
any Person who is not, immediately prior to such acquisition, a Restricted
Subsidiary) by any Restricted Subsidiary that is not a US Subsidiary Guarantor
or a Foreign Subsidiary Guarantor in another Restricted Subsidiary that is not a
US Subsidiary Guarantor or a Foreign Subsidiary Guarantor;

 

(j)  investments constituting Permitted Acquisitions; provided, that, in the
case of any Permitted Acquisition on or after the Restatement Date the aggregate
amount of any such investment, as valued at the fair market value of such

 

146

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

 

investment at the time each such investment is made, made by the US Borrower or
any Restricted Subsidiary in any Restricted Foreign Subsidiary, to the extent
that such Restricted Foreign Subsidiary does not become a Foreign Subsidiary
Guarantor pursuant to Section 9.11 and does not enter into the guarantee and
collateral arrangements contemplated thereby, shall not exceed the Available
Amount at the time of such investment plus an amount equal to any repayments,
interest, returns, profits, distributions, income and similar amounts actually
received in cash in respect of any such investment (which amount shall not
exceed the amount of such investment valued at the fair market value of such
investment at the time such investment was made);

 

(k)  investments in the equity interests of one or more newly formed persons
that are received in consideration of the contribution by the US Borrower or its
applicable Restricted Subsidiaries of assets (including capital stock) to such
person or persons; provided, that, in the case of any such investment made on or
after the Fourth Amendment Effective Date (i) the fair market value of such
assets, determined on arms-length basis, so contributed pursuant to this
paragraph (k) shall not in the aggregate exceed $150,000,000, (ii) with respect
to investments in Foreign Joint Ventures, the sum of all investments in Foreign
Joint Ventures made pursuant to this Section 10.5(k) prior to the date thereof
and all investment in Foreign Joint Ventures made pursuant to
Section 10.5(m)(ii) below prior to the date thereof, when taken together, as
valued at the fair market value of such investment at the time each such
investment is made, does not exceed $250,000,000 plus an amount equal to any
repayments, interest, returns, profits, distributions, income and similar
amounts actually received in cash in respect of any such investment (which
amount shall not exceed the amount of such investment valued at the fair market
value of such investment at the time such investment was made) in the aggregate
and (iii) in respect of each such contribution, an Authorized Officer of the
US Borrower shall certify, in a form to be agreed upon by the US Borrower and
the Administrative Agent (x) after giving effect to such contribution, no
Default or Event of Default shall have occurred and be continuing, (y) the fair
market value of the assets so contributed and (z) that the requirements of
paragraph (i) of this proviso remain satisfied;

 

(l)  investments made to repurchase or retire common stock of Parent owned by
any employee stock ownership plan or key employee stock ownership plan of the
Parent Companies, Holdings or the US Borrower;

 

(m)  (i) additional investments (including investments in Minority Investments
and Unrestricted Subsidiaries) made under this clause (m) prior to the
Restatement Date or (ii) such additional investments (including investments in
Minority Investments and Unrestricted Subsidiaries) made thereafter, as valued
at the fair market value of such investment at the time each such investment is
made, in an aggregate amount at the time of such investment not in excess of the
Available Amount at such time plus an amount equal to any repayments, interest,
returns, profits, distributions, income and similar amounts actually received in
cash in respect of any such investment (which amount shall not exceed the

 

147

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

 

amount of such investment valued at the fair market value of such investment at
the time such investment was made); provided, that with respect to investments
in Foreign Joint Ventures made on or after the Restatement Date, the sum of all
investments in Foreign Joint Ventures made pursuant to Section 10.5 (k) above
prior to the date thereof and all investment in Foreign Joint Ventures made
pursuant to this Section 10.5(m)(ii) prior to the date thereof, when taken
together, as valued at the fair market value of such investment at the time each
such investment is made, does not exceed $250,000,000 plus an amount equal to
any repayments, interest, returns, profits, distributions, income and similar
amounts actually received in cash in respect of any such investment (which
amount shall not exceed the amount of such investment valued at the fair market
value of such investment at the time such investment was made) in the aggregate;

 

(n)  investments permitted under Section 10.6; and

 

(o)  contributions to a “rabbi” trust within the meaning of Revenue Procedure
92-64 or contributions to a trust which is qualified under Section 401(a) of the
Code or other grantor trust subject to the claims of creditors in the case of a
bankruptcy of the US Borrower.

 

10.6.                        Limitation on Dividends.  Neither Holdings nor the
US Borrower will declare or pay any dividends (other than, (a) in respect of
Holdings, dividends payable solely in its capital stock or rights, warrants or
options to purchase its capital stock and (b) in respect of the US Borrower,
dividends payable solely in its capital stock) or return any capital to its
stockholders or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for consideration, any shares of any class of
its capital stock or the capital stock of any direct or indirect parent now or
hereafter outstanding (or any options or warrants or stock appreciation rights
issued with respect to any of its capital stock), or set aside any funds for any
of the foregoing purposes, or permit any of the Restricted Subsidiaries to
purchase or otherwise acquire for consideration (other than in connection with
an investment permitted by Section 10.5) any shares of any class of the capital
stock of Holdings or the US Borrower, now or hereafter outstanding (or any
options or warrants or stock appreciation rights issued with respect to any of
its capital stock) (all of the foregoing “Dividends”); provided, that, so long
as no Default or Event of Default exists or would exist after giving effect
thereto subject to the last sentence of this Section, (a) each of Holdings and
the US Borrower may redeem in whole or in part any of its capital stock for
another class of capital stock or rights to acquire its capital stock or with
proceeds from substantially concurrent equity contributions or issuances of new
shares of its capital stock; provided, that such other class of capital stock
contains terms and provisions at least as advantageous to the Lenders in all
respects material to their interests as those contained in the capital stock
redeemed thereby, (b) Holdings may repurchase shares of its capital stock (or
any options or warrants or stock appreciation rights issued with respect to any
of its capital stock) held by officers, directors and employees of Parent and
its Subsidiaries, with the proceeds of dividends from the US Borrower which
shall also be permitted, so long as such repurchase is pursuant to, and in
accordance with the terms of, management and/or

 

148

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

 

employee stock plans, stock subscription agreements or shareholder agreements,
(c) the US Borrower and the Restricted Subsidiaries may make investments
permitted by Section 10.5, (d) each of Holdings and the US Borrower may pay
dividends to, seriatim, Holdings and any Parent Company; provided, that (i) the
aggregate amount of such dividends (without duplication) paid pursuant to this
clause (d) shall not at any time exceed 50% of Cumulative Consolidated Net
Income Available to Stockholders at such time less the amount of dividends
previously paid pursuant to this clause (d) following the last day of the most
recent fiscal quarter for which Section 9.1 Financials have been delivered to
the Lenders under Section 9.1 and (ii) at the time of the payment of any such
dividends and after giving effect thereto, the Consolidated Total Debt to
Consolidated EBITDA Ratio on the date of such payment of such dividends shall be
less than 3.50:1.00, (e) each of the US Borrower and Holdings may declare and
pay dividends and/or make distributions on its capital stock, as applicable, the
proceeds of which will be used by Parent solely to pay taxes of Parent, PIK
Holdco, Holdings, the US Borrower and the Subsidiaries as part of a consolidated
tax filing group, along with franchise taxes, administrative and similar
expenses related to its existence and ownership of PIK Holdco, Holdings, the US
Borrower, as applicable; provided, that the amount of such dividends does not
exceed in any fiscal year the amount of such taxes and expenses payable for such
fiscal year (it being understood that such expenses shall in no event exceed
$5,000,000 in the aggregate per fiscal year, except that such expenses may
exceed $5,000,000 in fiscal year 2007; provided, that such expenses for the
period from the Fourth Amendment Effective Date to December 31, 2007 shall in no
event exceed $5,000,000 in the aggregate), (f) the US Borrower may declare and
pay dividends and/or make distributions on its capital stock, the proceeds of
which will be used by Holdings on and after August 15, 2007 solely to pay cash
interest, if any, of the 2011 Senior Notes as and to the extent that payment of
such interest in cash is required by the 2011 Senior Notes Indenture, (g) the US
Borrower and Holdings may declare and pay dividends and/or make distributions on
its capital stock, as applicable, from Available Excess Cash Flow, the proceeds
of which will be used by Holdings and PIK Holdco solely to redeem, repurchase or
retire 2011 Senior Notes, PIK Notes, PIK Refinancing Preferred Stock or PIK
Refinancing Indebtedness if (x) at the time of the payment of such dividends and
after giving effect thereto the Consolidated Total Debt to Consolidated EBITDA
Ratio on the date of such payment of such dividends shall be less than 2.25 to
1.00 and (y) the US Borrower applies an amount equal to the proceeds used for
such redemption, repurchase or retirement of 2011 Senior Notes, PIK Notes, PIK
Refinancing Preferred Stock or PIK Refinancing Indebtedness to prepay Term Loans
outstanding hereunder in accordance with Section 5.1 hereof on the date of any
such redemption, repurchase or retirement of 2011 Senior Notes, PIK Notes, PIK
Refinancing Preferred Stock or PIK Refinancing Indebtedness (except to the
extent that the US Borrower has already applied not less than 50.0% of the
cumulative amount of Excess Cash Flow for all fiscal years completed after the
Closing Date and prior to the date of such redemption, repurchase or retirement
of 2011 Senior Notes, PIK Notes, PIK Refinancing Preferred Stock or PIK
Refinancing Indebtedness pursuant to Section 5.1 or Section 5.2 hereof) and
(h) Holdings may issue PIK Refinancing Indebtedness or PIK Refinancing Preferred
Stock in exchange for, or declare and pay dividends and/or make distributions on
its capital stock from the proceeds of the issuance by Holdings of any PIK
Refinancing Indebtedness or PIK

 

149

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

 

Refinancing Preferred Stock to the extent such proceeds are utilized by PIK
Holdco substantially simultaneously with such issuance to redeem, repurchase or
retire, PIK Notes or Permitted Additional PIK Notes of PIK Holdco that are being
refinanced or replaced by such PIK Refinancing Indebtedness or PIK Refinancing
Preferred Stock.  Notwithstanding anything contained in this Section 10.6 to the
contrary, on and after the Restatement Date until after the first anniversary of
the Restatement Date, neither Holdings nor the US Borrower will be permitted to
declare or pay any Dividends that would otherwise be permitted by subsections
(d) and (g) described above.

 

10.7.                        Limitations on Debt Payments and Amendments. 
(a)    Neither the US Borrower nor any Restricted Subsidiary will prepay,
repurchase or redeem or otherwise defease any Senior Subordinated Notes or any
Subordinated Notes as applicable (it being understood that any payment of
principal prior to May 15, 2011, in the case of Subordinated Notes shall be
deemed a prepayment for purposes of this Section 10.7); provided, however, that
the US Borrower may prepay, repurchase or redeem Senior Subordinated Notes
and/or Subordinated Notes (x) so long as no Default or Event of Default has
occurred and is continuing, for an aggregate price not in excess of the
Available Amount at the time of such prepayment, repurchase or redemption;
provided, that to the extent the Available Amount so utilized is attributable to
Excess Cash Flow in accordance with clause (a)(iii) of the definition of
“Available Amount”, the US Borrower applies an amount equal to the proceeds used
for such prepayment, repurchase or redemption of Senior Subordinated Notes
and/or Subordinated Notes to prepay Term Loans outstanding hereunder in
accordance with Section 5.1 hereof on the date of any such prepayment,
repurchase or redemption of Senior Subordinated Notes and/or Subordinated Notes
(except to the extent that the US Borrower has already applied not less than
50.0% of the cumulative amount of Excess Cash Flow for all fiscal years
completed after the Closing Date and prior to the date of such prepayment,
repurchase or redemption of Senior Subordinated Notes and/or Subordinated Notes
pursuant to Section 5.1 or Section 5.2 hereof), (y) so long as no Event of
Default described in Section 11.1 or 11.5 has occurred and is continuing,  with
the proceeds of subordinated Indebtedness that (1) is permitted by Section 10.1
and (2) has terms material to the interests of the Lenders not materially less
advantageous to the Lenders than those of the Senior Subordinated Notes and/or
Subordinated Notes, as the case may be or (z) so long as no Default or Event of
Default has occurred and is continuing, in the case of the Subordinated Notes
only, at any time on or after May 15, 2007 (it being understood that any such
prepayment, repurchase or redemption pursuant to this sub-clause (z) shall be
made without utilization of the Available Amount).

 

(b)  The US Borrower will not waive, amend, modify, terminate or release the
Senior Subordinated Notes Indenture, the Senior Subordinated Loan Agreement or
the Subordinated Note Indenture, to the extent that any such waiver, amendment,
modification, termination or release would be adverse to the Lenders in any
material respect; provided, that this clause (b) shall not prohibit the
repayment of obligations under the Senior Subordinated Loan Agreement with the
Net Cash Proceeds from the issuance of the Senior Subordinated Notes.

 

150

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

 

10.8.                        Limitations on Sale Leasebacks.  The US Borrower
will not, and will not permit any of the Restricted Subsidiaries to, enter into
or effect any Sale Leasebacks, other than Permitted Sale Leasebacks.

 

10.9.                        Senior Secured Debt to Consolidated EBITDA Ratio. 
The US Borrower will not permit the Senior Secured Debt to Consolidated EBITDA
Ratio for any Test Period ending during any period set forth below to be greater
than the ratio set forth below opposite such period:

 

Period

 

Ratio

Restatement Date to and including March 31, 2010

 

4.40 to 1.00

April 1, 2010 to and including September 30, 2010

 

4.25 to 1.00

October 1, 2010 and thereafter

 

4.00 to 1.00

 

10.10.                  Consolidated EBITDA to Consolidated Interest Expense
Ratio.  The US Borrower will not permit the Consolidated EBITDA to Consolidated
Interest Expense Ratio for any Test Period ending during any period set forth
below to be less than the applicable ratio set forth below opposite such period:

 

Period

 

Ratio

October 1, 2004 to March 31, 2005

 

1.60 to 1.00

April 1, 2005 to September 30, 2005

 

1.70 to 1.00

October 1, 2005 to March 31, 2007

 

1.75 to 1.00

April 1, 2007 to March 31, 2008

 

1.85 to 1.00

April 1, 2008 to December 31, 2008

 

1.95 to 1.00

January 1, 2009 and thereafter

 

2.00 to 1.00

 

10.11.                  Capital Expenditures.  The US Borrower and the UK
Borrower will not, and will not permit any of the Restricted Subsidiaries to,
make any Capital Expenditures (other than Permitted Acquisitions that constitute
Capital Expenditures), that would cause the aggregate amount of such Capital
Expenditures made by the US Borrower and the Restricted Subsidiaries in any
fiscal year of the US Borrower set forth below to exceed the sum of (a) the
greater of (i) the amount set forth in the table below opposite such fiscal year
and (ii) an amount equal to 10% multiplied by Consolidated Net Sales for such
fiscal year (such greater amount, the “Permitted Capital Expenditure Amount”)
and (b) the Available Amount as of the last day of such fiscal year (provided,
that no portion of the Available Amount may be used for Capital Expenditures
until the entire amount of the sum of (i) the Permitted Capital Expenditure
Amount for such year and (ii) the carry-forward amount (as defined below in this
Section 10.11) for such year shall have been used to make Capital Expenditures).

 

Period

 

Amount

 

January 1, 2004 to December 31, 2004

 

$

275,000,000

 

January 1, 2005 to December 31, 2005

 

$

275,000,000

 

January 1, 2006 to December 31, 2006

 

$

240,000,000

 

 

151

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

 

Period

 

Amount

 

January 1, 2007 to December 31, 2007

 

$

225,000,000

 

January 1, 2008 to December 31, 2008

 

$

225,000,000

 

January 1, 2009 to December 31, 2009

 

$

225,000,000

 

January 1, 2010 to December 31, 2010

 

$

225,000,000

 

January 1, 2011 and thereafter

 

$

225,000,000

 

 

To the extent that Capital Expenditures (other than Permitted Acquisitions that
constitute Capital Expenditures) made by the US Borrower and the Restricted
Subsidiaries during any fiscal year are less than the Permitted Capital
Expenditure Amount for such fiscal year, 100% of such unused amount (each such
amount, a “carry-forward amount”) may be carried forward to the immediately
succeeding fiscal year and utilized to make such Capital Expenditures in such
succeeding fiscal year in the event the amount set forth above for such
succeeding fiscal year has been used (it being understood and agreed that (a) no
carry-forward amount may be carried forward beyond the first two fiscal years
immediately succeeding the fiscal year in which it arose, (b) no portion of the
carry-forward amount available for any fiscal year may be used until the entire
amount of the Permitted Capital Expenditure Amount for such fiscal year (without
giving effect to such carry-forward amount) shall have been used to make Capital
Expenditures and (c) if the carry-forward amount available for any fiscal year
is the sum of amounts carried forward from each of the two immediately preceding
fiscal years, no portion of such carry-forward amount from the earlier of the
two immediately preceding fiscal years may be used until the entire portion of
such carry-forward amount from the more recent immediately preceding fiscal year
shall have been used for such Capital Expenditures made in such fiscal year).

 

SECTION 11.                          Events of Default

 

Upon the occurrence of any of the following specified events (each an “Event of
Default”):

 

11.1.                        Payments.  The US Borrower or the UK Borrower shall
(a) default in the payment when due of any principal of the Loans or
(b) default, and such default shall continue for five or more days, in the
payment when due of any interest on the Loans or any Fees or any Unpaid Drawings
or of any other amounts owing hereunder or under any other Credit Document; or

 

11.2.                        Representations, etc.  Any representation, warranty
or statement made or deemed made by any Credit Party herein or in any Security
Document or any certificate delivered or required to be delivered pursuant
hereto or thereto shall prove to be untrue in any material respect on the date
as of which made or deemed made; or

 

11.3.                        Covenants.  Any Credit Party shall (a) default in
the due performance or observance by it of any term, covenant or agreement
contained in Section 9.1(e), Section 9.16, Section 9.18 or Section 10 or
(b) default in the due performance or observance by it of any term, covenant or
agreement (other than those referred to in Section 11.1 or 11.2 or clause (a) of
this Section 11.3) contained in this Agreement, or any Security Document and
such default shall continue unremedied for a period of at

 

152

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

 

least 30 days after receipt of written notice by the US Borrower from the
Administrative Agent or the Required Lenders; or

 

11.4.                        Default Under Other Agreements.  Any of Holdings,
the US Borrower, the UK Borrower or any of the Restricted Subsidiaries shall
(i) default in any payment with respect to any Indebtedness (other than the
Obligations) in excess of $30,000,000 in the aggregate, for Holdings, the US
Borrower, the UK Borrower and such Subsidiaries, beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created or (ii) default in the observance or performance of any agreement or
condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or (except in the case of
Indebtedness consisting of any Hedge Agreement) any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause, any such Indebtedness to
become due prior to its stated maturity; or (b) without limiting the provisions
of clause (a) above, any such Indebtedness (other than Indebtedness consisting
of any Hedge Agreement) shall be declared to be due and payable, or required to
be prepaid other than by a regularly scheduled required prepayment or as a
mandatory prepayment, prior to the stated maturity thereof; or

 

11.5.                        Bankruptcy, etc.  Any of Holdings, the US Borrower,
the UK Borrower or any Specified Subsidiary shall commence a voluntary case
concerning itself under (a) Title 11 of the United States Code entitled
“Bankruptcy,” or (b) in the case of the UK Borrower and any Foreign Subsidiary
that is a Specified Subsidiary, the bankruptcy and/or insolvency legislation of
its jurisdiction of incorporation, in each case as now or hereafter in effect,
or any successor thereto (collectively, the “Bankruptcy Code”); or an
involuntary case is commenced against any of Holdings, the US Borrower, the UK
Borrower or any Specified Subsidiary and the petition is not controverted within
10 days after commencement of the case; or an involuntary case is commenced
against any of Holdings, the US Borrower, the UK Borrower or any Specified
Subsidiary and the petition is not dismissed within 60 days after commencement
of the case; or a custodian (as defined in the Bankruptcy Code) or similar
person is appointed for, or takes charge of, all or substantially all of the
property of any of Holdings, the US Borrower, the UK Borrower or any Specified
Subsidiary; or any of Holdings, the US Borrower, the UK Borrower or any
Specified Subsidiary commences any other proceeding under any reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar law of any jurisdiction whether now or hereafter in
effect relating to any of Holdings, the US Borrower, the UK Borrower or any
Specified Subsidiary; or there is commenced against any of the US Borrower, the
UK Borrower or any Specified Subsidiary any such proceeding that remains
undismissed for a period of 60 days; or any of the Holdings, the US Borrower,
the UK Borrower or any Specified Subsidiary is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or any of Holdings, the US Borrower, the UK Borrower or
any Specified Subsidiary suffers any appointment of any custodian or the like
for it or any substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or any of the Holdings, the US Borrower, the
UK Borrower or any

 

153

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

 

Specified Subsidiary makes a general assignment for the benefit of creditors; or
any corporate action is taken by any of Holdings, the US Borrower, the UK
Borrower or any Specified Subsidiary for the purpose of effecting any of the
foregoing; or

 

11.6.                        ERISA.  Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code; any Plan is or shall have been terminated or is the
subject of termination proceedings under ERISA (including the giving of written
notice thereof); an event shall have occurred or a condition shall exist in
either case entitling the PBGC to terminate any Plan or to appoint a trustee to
administer any Plan (including the giving of written notice thereof); any Plan
shall have an accumulated funding deficiency (whether or not waived); any of
Holdings, the US Borrower or any Subsidiary or any ERISA Affiliate has incurred
or is likely to incur a liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201 or 4204 of ERISA or
Section 4971 or 4975 of the Code (including the giving of written notice
thereof); (b) there could result from any event or events set forth in clause
(a) of this Section 11.6 the imposition of a lien, the granting of a security
interest, or a liability, or the reasonable likelihood of incurring a lien,
security interest or liability; and (c) such lien, security interest or
liability will or would be reasonably likely to have a Material Adverse Effect;
or

 

11.7.                        Guarantee.  The Guarantee or any material provision
thereof shall cease to be in full force or effect or any Guarantor thereunder or
any Credit Party shall deny or disaffirm in writing any Guarantor’s obligations
under the Guarantee (other than pursuant to the terms thereof); or

 

11.8.                        Pledge Agreement.  The Pledge Agreement or any
material provision thereof shall cease to be in full force or effect (other than
pursuant to the terms hereof or thereof or as a result of acts or omissions of
the Administrative Agent or any Lender) or any pledgor thereunder or any Credit
Party shall deny or disaffirm in writing any pledgor’s obligations under the
Pledge Agreement (other than pursuant to the terms thereof); or

 

11.9.                        Security Agreement.  The Security Agreement or any
material provision thereof shall cease to be in full force or effect (other than
pursuant to the terms hereof or thereof or as a result of acts or omissions of
the Administrative Agent or any Lender) or any grantor thereunder or any Credit
Party shall deny or disaffirm in writing any grantor’s obligations under the
Security Agreement (other than pursuant to the terms thereof); or

 

11.10.                  Mortgages.  Any Mortgage or any material provision of
any Mortgage shall cease to be in full force or effect (other than pursuant to
the terms hereof or thereof or as a result of acts or omissions of the
Administrative Agent or any Lender) or any Mortgagor thereunder or any Credit
Party shall deny or disaffirm in writing any Mortgagor’s obligations under any
Mortgage (other than pursuant to the terms thereof); or

 

154

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

 

11.11.                  Foreign Guarantees.  Any Foreign Guarantee or any
material provision of any Foreign Guarantee shall cease to be in full force or
effect or any grantor thereunder or any Credit Party shall deny or disaffirm in
writing any grantor’s obligations under any Foreign Guarantee (other than
pursuant to the terms thereof); or

 

11.12.                  Foreign Security Documents.  Any Foreign Security
Document or any material provision of any Foreign Security Document shall cease
to be in full force or effect (other than pursuant to the terms hereof or
thereof or as a result of acts or omissions of the Administrative Agent or any
Lender) or any grantor thereunder or any Credit Party shall deny or disaffirm in
writing any grantor’s obligations under any Foreign Security Document (other
than pursuant to the terms thereof); or

 

11.13.                  Subordination.  The Obligations of the US Borrower and
the UK Borrower, or the obligations of Holdings or any Subsidiaries pursuant to
the Guarantee or any of the Foreign Subsidiary Guarantees, shall cease to
constitute senior Indebtedness under the subordination provisions of any
document or instrument evidencing the Subordinated Notes, the Senior
Subordinated Notes, any loans under the Senior Subordinated Loan Agreement or
any other permitted subordinated Indebtedness or such subordination provisions
shall be invalidated or otherwise cease to be legal, valid and binding
obligations of the parties thereto, enforceable in accordance with their terms;
or

 

11.14.                  Judgments.  One or more judgments or decrees shall be
entered against the US Borrower, the UK Borrower or any of the Restricted
Subsidiaries involving a liability of $30,000,000 or more in the aggregate for
all such judgments and decrees for the US Borrower and the Restricted
Subsidiaries (to the extent not paid or fully covered by insurance provided by a
carrier not disputing coverage) and any such judgments or decrees shall not have
been satisfied, vacated, discharged or stayed or bonded pending appeal within 60
days from the entry thereof; or

 

11.15.                  Change of Control.  A Change of Control shall occur;

 

then, and in any such event, and at any time thereafter, in each case subject to
Section 7.4, if any Event of Default shall then be continuing, the
Administrative Agent shall, upon the written request of the Required Lenders, by
written notice to the US Borrower, take any or all of the following actions,
without prejudice to the rights of the Administrative Agent or any Lender to
enforce its claims against the US Borrower and the UK Borrower, except as
otherwise specifically provided for in this Agreement (provided, that, if an
Event of Default specified in Section 11.5 shall occur with respect to the US
Borrower, the UK Borrower or any Specified Subsidiary, the result that would
occur upon the giving of written notice by the Administrative Agent as specified
in clauses (i), (ii) and (iv) below shall occur automatically without the giving
of any such notice):  (i) declare the Total Term Loan Commitment, the Total
Revolving Credit Commitment and the Total Extended Revolving Credit Commitment
terminated, whereupon the Commitments and Swingline Commitment, if any, of each
Lender or the Swingline Lender, as the case may be, shall forthwith terminate
immediately and any Fees theretofore accrued shall forthwith become due and
payable without any other notice of any kind; (ii) declare the principal of and
any accrued interest in respect of all

 

155

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

 

Loans and all Obligations owing hereunder and thereunder to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the US
Borrower and the UK Borrower; (iii) terminate any Letter of Credit that may be
terminated in accordance with its terms; and/or (iv) direct the US Borrower and
the UK Borrower to pay (and the US Borrower and the UK Borrower agree that upon
receipt of such notice, or upon the occurrence of an Event of Default specified
in Section 11.5 with respect to the US Borrower, the UK Borrower or any
Specified Subsidiary, it will pay) to the Administrative Agent at the
Administrative Agent’s Office such additional amounts of cash, to be held as
security for the US Borrower’s and the UK Borrower’s respective reimbursement
obligations for Drawings that may subsequently occur thereunder, equal to the
aggregate Stated Amount of all Letters of Credit issued and then outstanding.

 

SECTION 12.                          The Administrative Agent

 

12.1.                        Appointment.  Each Lender hereby irrevocably
designates and appoints the Administrative Agent as the agent of such Lender
under this Agreement and the other Credit Documents, and each such Lender
irrevocably authorizes the Administrative Agent, in such capacity, to take such
action on its behalf under the provisions of this Agreement and the other Credit
Documents and to exercise such powers and perform such duties as are expressly
delegated to the Administrative Agent by the terms of this Agreement and the
other Credit Documents, together with such other powers as are reasonably
incidental thereto.  Notwithstanding any provision to the contrary elsewhere in
this Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein, or any fiduciary
relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Credit Document or otherwise exist against the
Administrative Agent.  Neither Co-Syndication Agent, in its capacity as such,
shall have any obligations, duties or responsibilities under this Agreement.

 

12.2.                        Delegation of Duties.  The Administrative Agent may
execute any of its duties under this Agreement and the other Credit Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties.  The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.

 

12.3.                        Exculpatory Provisions.  Neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Credit Document (except for its or such Person’s own gross negligence or
willful misconduct) or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the US Borrower,
the UK Borrower, any Guarantor, any Foreign Subsidiary Guarantor, any other
Credit Party or any officer thereof contained in this Agreement or any other
Credit Document or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in

 

156

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

 

connection with, this Agreement or any other Credit Document or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Credit Document or for any failure of the US Borrower,
the UK Borrower, any Guarantor, any Foreign Subsidiary Guarantor or any other
Credit Party to perform its obligations hereunder or thereunder.  The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Credit
Document, or to inspect the properties, books or records of the US Borrower or
the UK Borrower.

 

12.4.                        Reliance by Administrative Agent.  The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it to be genuine and correct and to have been
signed, sent or made by the proper Person or Persons and upon advice and
statements of legal counsel (including counsel to the US Borrower and/or the UK
Borrower), independent accountants and other experts selected by the
Administrative Agent.  The Administrative Agent may deem and treat the Lender
specified in the Register with respect to any amount owing hereunder as the
owner thereof for all purposes unless a written notice of assignment,
negotiation or transfer thereof shall have been filed with the Administrative
Agent.  The Administrative Agent shall be fully justified in failing or refusing
to take any action under this Agreement or any other Credit Document unless it
shall first receive such advice or concurrence of the Required Lenders as it
deems appropriate or it shall first be indemnified to its satisfaction by the
Lenders against any and all liability and expense that may be incurred by it by
reason of taking or continuing to take any such action.  The Administrative
Agent shall in all cases be fully protected in acting, or in refraining from
acting, under this Agreement and the other Credit Documents in accordance with a
request of the Required Lenders, and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.

 

12.5.                        Notice of Default.  The Administrative Agent shall
not be deemed to have knowledge or notice of the occurrence of any Default or
Event of Default hereunder unless the Administrative Agent has received notice
from a Lender or the US Borrower referring to this Agreement, describing such
Default or Event of Default and stating that such notice is a “notice of
default”.  In the event that the Administrative Agent receives such a notice,
the Administrative Agent shall give notice thereof to the Lenders.  The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders;
provided, that unless and until the Administrative Agent shall have received
such directions, the Administrative Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Lenders (except to the extent that this Agreement requires that such action
be taken only with the approval of the Required Lenders or each of the Lenders,
as applicable).

 

157

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

 

12.6.                        Non-Reliance on Administrative Agent and Other
Lenders.  Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or Affiliates has made any representations or warranties to it and that no act
by the Administrative Agent hereinafter taken, including any review of the
affairs of the US Borrower, the UK Borrower, any Guarantor, any Foreign
Subsidiary Guarantor or any other Credit Party, shall be deemed to constitute
any representation or warranty by the Administrative Agent to any Lender.  Each
Lender represents to the Administrative Agent that it has, independently and
without reliance upon the Administrative Agent or any other Lender, and based on
such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the US Borrower, the UK
Borrower, any Guarantor, any Foreign Subsidiary Guarantor and any other Credit
Party and made its own decision to make its Loans hereunder and enter into this
Agreement.  Each Lender also represents that it will, independently and without
reliance upon the Administrative Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit analysis, appraisals and decisions in taking or not taking
action under this Agreement and the other Credit Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
US Borrower, the UK Borrower, any Guarantor, any Foreign Subsidiary Guarantor
and any other Credit Party.  Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Administrative Agent
hereunder, the Administrative Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
assets, operations, properties, financial condition, prospects or
creditworthiness of the US Borrower, the UK Borrower, any Guarantor, any Foreign
Subsidiary Guarantor or any other Credit Party that may come into the possession
of the Administrative Agent or any of its officers, directors, employees,
agents, attorneys-in-fact or Affiliates.

 

12.7.                        Indemnification.  The Lenders agree to indemnify
the Administrative Agent in its capacity as such (to the extent not reimbursed
by the US Borrower or the UK Borrower and without limiting the obligation of the
US Borrower and the UK Borrower to do so), ratably according to their respective
portions of the Total Credit Exposure in effect on the date on which
indemnification is sought (or, if indemnification is sought after the date upon
which the Commitments shall have terminated and the Loans shall have been paid
in full, ratably in accordance with their respective portions of the Total
Credit Exposure in effect immediately prior to such date), from and against any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind whatsoever that
may at any time (including at any time following the payment of the Loans) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of, the Commitments, this Agreement, any of the other
Credit Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Administrative Agent under or in connection with any of the
foregoing; provided, that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages,

 

158

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

 

penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from the Administrative Agent’s gross negligence or willful misconduct.  The
agreements in this Section 12.7 shall survive the payment of the Loans and all
other amounts payable hereunder.

 

12.8.        Administrative Agent in its Individual Capacity.  The
Administrative Agent and its Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the US Borrower, the UK
Borrower, any Guarantor, any Foreign Subsidiary Guarantor and any other Credit
Party as though the Administrative Agent were not the Administrative Agent
hereunder and under the other Credit Documents.  With respect to the Loans made
by it, the Administrative Agent shall have the same rights and powers under this
Agreement and the other Credit Documents as any Lender and may exercise the same
as though it were not the Administrative Agent, and the terms “Lender” and
“Lenders” shall include the Administrative Agent in its individual capacity.

 

12.9.        Successor Agent.  The Administrative Agent may resign as
Administrative Agent upon 20 days’ prior written notice to the Lenders and the
US Borrower.  If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Credit Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall be approved by the US Borrower (which approval shall not
be unreasonably withheld), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
“Administrative Agent” shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent’s rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans.  After any retiring
Administrative Agent’s resignation as Administrative Agent, the provisions of
this Section 12 shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Administrative Agent under this Agreement and the
other Credit Documents.

 

12.10.      Withholding Tax.  To the extent required by any applicable law, the
Administrative Agent may withhold from any interest payment to any Lender an
amount equivalent to any applicable withholding tax.  If the Internal Revenue
Service or any other Governmental Authority asserts a claim that the
Administrative Agent did not properly withhold tax from amounts paid to or for
the account of any Lender because the appropriate form was not delivered or was
not properly executed or because such Lender failed to notify the Administrative
Agent of a change in circumstance which rendered the exemption from, or
reduction of, withholding tax ineffective or for any other reason, such Lender
shall indemnify the Administrative Agent fully for all amounts paid, directly or
indirectly, by the Administrative Agent as tax or otherwise, including any
penalties or interest and together with all expenses (including legal expenses,
allocated internal costs and out-of-pocket expenses) incurred.  For the
avoidance of doubt, the foregoing shall have no effect on any obligations of the
Borrowers hereunder.

 

159

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

 

SECTION 13.         Collateral Allocation Mechanism

 

13.1.        Implementation of CAM.  (a)    On the CAM Exchange Date, (i) the
Commitments shall automatically and without further act be terminated as
provided in Section 11, (ii) the Lenders shall automatically and without further
act (and without regard to the provisions of Section 14.6) be deemed to have
exchanged interests in the Credit Facilities such that in lieu of the interest
of each Lender in each Credit Facility in which it shall participate as of such
date (including such Lender’s interest in the Specified Obligations of each
Credit Party in respect of each such Credit Facility), such Lender shall hold an
interest in every one of the Credit Facilities (including the Specified
Obligations of each Credit Party in respect of each such Credit Facility and
each L/C Reserve Account established pursuant to Section 13.2 below), whether or
not such Lender shall previously have participated therein, equal to such
Lender’s CAM Percentage thereof and (iii) simultaneously with the deemed
exchange of interests pursuant to clause (ii) above, in the case of any CAM
Dollar Lender that has prior to the date thereof notified the Administrative
Agent and the US Borrower in writing that it has elected to have this clause
(iii) apply to it, the interests in the Loans to be received by such CAM Dollar
Lender in such deemed exchange shall, automatically and with no further action
required, be converted into the Dollar Equivalent, determined using the Exchange
Rate calculated as of such date, of such amount and on and after such date all
amounts accruing and owed to such CAM Dollar Lender in respect of such
Obligations shall accrue and be payable in Dollars at the rate otherwise
applicable hereunder; provided, that such CAM Exchange will not affect the
aggregate amount of the Obligations of the US Borrower and the UK Borrower to
the Lenders under the Credit Documents.  Each Lender and each Credit Party
hereby consents and agrees to the CAM Exchange, and each Lender agrees that the
CAM Exchange shall be binding upon its successors and assigns and any person
that acquires a participation in its interests in any Credit Facility.  Each
Credit Party agrees from time to time to execute and deliver to the
Administrative Agent all promissory notes and other instruments and documents as
the Administrative Agent shall reasonably request to evidence and confirm the
respective interests of the Lenders after giving effect to the CAM Exchange, and
each Lender agrees to surrender any promissory notes originally received by it
in connection with its Loans hereunder to the Administrative Agent against
delivery of new promissory notes evidencing its interests in the Credit
Facilities; provided, however, that the failure of any Credit Party to execute
or deliver or of any Lender to accept any such promissory note, instrument or
document shall not affect the validity or effectiveness of the CAM Exchange.

 

(b)  As a result of the CAM Exchange, upon and after the CAM Exchange Date, each
payment received by the Administrative Agent pursuant to any Credit Document in
respect of the Specified Obligations, and each distribution made by the
Administrative Agent pursuant to any Credit Document in respect of the Specified
Obligations, shall be distributed to the Lenders pro rata in accordance with
their respective CAM Percentages.  Any direct payment received by a Lender upon
or after the CAM Exchange Date, including by way of setoff, in respect of a
Specified Obligation shall be paid over to the Administrative Agent for
distribution to the Lenders in accordance herewith.

 

160

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

 

13.2.        Letters of Credit.  (a)    In the event that on the CAM Exchange
Date any Letter of Credit shall be outstanding and undrawn in whole or in part,
or any amount drawn under a Letter of Credit shall constitute an Unpaid Drawing,
each Lender in respect of Unpaid Drawings on Letters of Credit shall, before
giving effect to the CAM Exchange, promptly pay over to the Administrative
Agent, in immediately available funds and in the currency that such Letters of
Credit are denominated, an amount equal to such Lender’s Revolving Credit
Commitment Percentage or Extended Revolving Credit Commitment Percentage, as
applicable, (as notified to such Lender by the Administrative Agent), of such
Letter of Credit’s undrawn face amount or (to the extent it has not already done
so) such Letter of Credit’s Unpaid Drawing, as the case may be, together with
interest thereon from the CAM Exchange Date to the date on which such amount
shall be paid to the Administrative Agent at the rate that would be applicable
at the time to an Extended Revolving Credit Loan or, with respect to Letters of
Credit issued under the Revolving Credit Commitments, a Revolving Credit Loan,
that is an ABR Loan in a principal amount equal to such amount, as the case may
be.  The Administrative Agent shall establish a separate account or accounts for
each Lender (each, an “L/C Reserve Account”) for the amounts received with
respect to each such Letter of Credit pursuant to the preceding sentence.  The
Administrative Agent shall deposit in each Lender’s L/C Reserve Account such
Lender’s CAM Percentage of the amounts received from the Lenders as provided
above.  The Administrative Agent shall have sole dominion and control over each
L/C Reserve Account, and the amounts deposited in each L/C Reserve Account shall
be held in such L/C Reserve Account until withdrawn as provided in
paragraph (b), (c), (d) or (e) below.  The Administrative Agent shall maintain
records enabling it to determine the amounts paid over to it and deposited in
the L/C Reserve Accounts in respect of each Letter of Credit and the amounts on
deposit in respect of each Letter of Credit attributable to each Lender’s CAM
Percentage.  The amounts held in each Lender’s L/C Reserve Account shall be held
as a reserve against the Letter of Credit Exposure, shall be the property of
such Lender, shall not constitute Loans to or give rise to any claim of or
against any Credit Party and shall not give rise to any obligation on the part
of the US Borrower or the UK Borrower to pay interest to such Lender, it being
agreed that the reimbursement obligations in respect of Letters of Credit shall
arise only at such times as drawings are made thereunder, as provided in
Section 3.

 

(b)  In the event that after the CAM Exchange Date any drawing shall be made in
respect of a Letter of Credit, the Administrative Agent shall, at the request of
the Letter of Credit Issuer withdraw from the L/C Reserve Account of each Lender
any amounts, up to the amount of such Lender’s CAM Percentage of such drawing,
deposited in respect of such Letter of Credit and remaining on deposit and
deliver such amounts to the Letter of Credit Issuer in satisfaction of the
reimbursement obligations of the Lenders under Section 3 (but not of the US
Borrower and the UK Borrower under Section 3, respectively).  In the event any
Lender shall default on its obligation to pay over any amount to the
Administrative Agent in respect of any Letter of Credit as provided in this
Section 13.2, the Letter of Credit Issuer shall, in the event of a drawing
thereunder, have a claim against such Lender to the same extent as if such
Lender had defaulted on its obligations under Section 2.05(e), but shall have no
claim against any other Lender in respect of such defaulted amount,
notwithstanding the exchange of interests in the reimbursement obligations
pursuant to Section 13.1.  Each other Lender shall have a

 

161

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

 

claim against such defaulting Lender for any damages sustained by it as a result
of such default, including, in the event such Letter of Credit shall expire
undrawn, its CAM Percentage of the defaulted amount.

 

(c)  In the event that after the CAM Exchange Date any Letter of Credit shall
expire undrawn, the Administrative Agent shall withdraw from the L/C Reserve
Account of each Lender the amount remaining on deposit therein in respect of
such Letter of Credit and distribute such amount to such Lender.

 

(d)  With the prior written approval of the Administrative Agent and the Letter
of Credit Issuer, any Lender may withdraw the amount held in its L/C Reserve
Account in respect of the undrawn amount of any Letter of Credit.  Any Lender
making such a withdrawal shall be unconditionally obligated, in the event there
shall subsequently be a drawing under such Letter of Credit, to pay over to the
 Administrative Agent, for the account of the Letter of Credit Issuer on demand,
its CAM Percentage of such drawing.

 

(e)  Pending the withdrawal by any Lender of any amounts from its L/C Reserve
Account as contemplated by the above paragraphs, the Administrative Agent will,
at the direction of such Lender and subject to such rules as the Administrative
Agent may prescribe for the avoidance of inconvenience, invest such amounts in
Permitted Investments.  Each Lender that has not withdrawn the amounts in its
L/C Reserve Account as provided in paragraph (d) above shall have the right, at
intervals reasonably specified by the Administrative Agent, to withdraw the
earnings on investments so made by the Administrative Agent with amounts in its
L/C Reserve Account and to retain such earnings for its own account.

 

13.3.        Net Payments Upon Implementation of CAM Exchange.  Notwithstanding
any other provision of this Agreement, if, as a direct result of the
implementation of the CAM Exchange, the US Borrower or the UK Borrower is
required to withhold Non-Excluded Taxes from amounts payable to the
Administrative Agent, any Lender or any Participant hereunder, the amounts so
payable to the Administrative Agent, such Lender or such Participant shall be
increased to the extent necessary to yield to the Administrative Agent, such
Lender or such Participant (after payment of all Non-Excluded Taxes) interest or
any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement; provided, however, that the US Borrower and the UK
Borrower shall not be required to increase any such amounts payable to such
Lender or Participant under this Section 13.3 (but, rather, shall be required to
increase any such amounts payable to such Lender or Participant to the extent
required by Section 5.4) if such Lender or Participant was prior to or on the
CAM Exchange Date already a Lender or Participant with respect to such US
Borrower or UK Borrower.  If a Non-U.S. Lender (or Non-U.S. Participant), in its
good faith judgment, is eligible for an exemption from, or reduced rate of, U.S.
Federal withholding tax on payments by the US Borrower under this Agreement, the
US Borrower shall not be required to increase any such amounts payable to such
Non-U.S. Lender (or Non-U.S. Participant) if such Non-U.S. Lender (or Non-U.S.
Participant) fails to comply with the requirements of paragraph (b) of
Section 5.4.  Upon a CAM Exchange, a Lender (or Participant) will use
commercially

 

162

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

 

reasonable efforts, and complete any procedural formalities necessary, to become
an Eligible Lender with respect to the UK Borrower and, if such Lender (or
Participant) fails to do so, the UK Borrower shall not be required to increase
any such amounts payable to such Lender (or Participant).  If the US Borrower or
the UK Borrower, as the case may be, fails to pay any such Non-Excluded Taxes
when due to the appropriate taxing authority or fails to remit to the
Administrative Agent the required receipts or other required documentary
evidence, such US Borrower or UK Borrower shall indemnify the Administrative
Agent, the Lenders and the Participants for any incremental taxes, interest,
costs or penalties that may become payable by the Administrative Agent, such
Lenders or such Participants as a result of any such failure.

 

SECTION 14.         Miscellaneous

 

14.1.        Amendments and Waivers.  Neither this Agreement nor any other
Credit Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 14.1.  The
Required Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agent may, from time to time, (a) enter into with the relevant
Credit Party or Credit Parties written amendments, supplements or modifications
hereto and to the other Credit Documents for the purpose of adding any
provisions to this Agreement or the other Credit Documents or changing in any
manner the rights of the Lenders or of the Credit Parties hereunder or
thereunder or (b) waive, on such terms and conditions as the Required Lenders or
the Administrative Agent, as the case may be, may specify in such instrument,
any of the requirements of this Agreement or the other Credit Documents or any
Default or Event of Default and its consequences; provided, however, that no
such waiver and no such amendment, supplement or modification shall directly
(i) forgive any portion of any Loan or extend the final scheduled maturity date
of any Loan or reduce the stated rate, or forgive any portion, or extend the
date for the payment, of any interest or fee payable hereunder (other than as a
result of waiving the applicability of any post-default increase in interest
rates) or extend the final expiration date of any Lender’s Commitment or extend
the final expiration date of any Letter of Credit beyond the L/C Maturity Date
or increase the aggregate amount of the Commitments of any Lender, in each case
without the written consent of each Lender directly and adversely affected
thereby, or (ii) amend, modify or waive any provision of this Section 14.1 or
reduce the percentages specified in the definitions of the terms “Required
Lenders”, “Required Revolving Credit Lenders”, “Required Extended Revolving
Credit Lenders”, “Required Tranche A Lenders”, “Required Tranche E Lenders”,
“Required Tranche G Lenders”, “Required Tranche H Lenders”, “Required Tranche I
Lenders” or consent to the assignment or transfer by the US Borrower or the UK
Borrower of its rights and obligations under any Credit Document to which it is
a party (except as permitted pursuant to Section 10.3), in each case without the
written consent of each Lender directly and adversely affected thereby, or
(iii) amend, modify or waive any provision of Section 12 without the written
consent of the then-current Administrative Agent, or (iv) amend, modify or waive
any provision of Section 3 without the written consent of the Letter of Credit
Issuer, or (v) amend, modify or waive any provisions hereof relating to
Swingline Loans without the written consent of the Swingline Lender, or
(vi) change any Revolving Credit Commitment or Extended Revolving Credit
Commitment to a Term

 

163

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

 

Loan Commitment, or change any Term Loan Commitment to a Revolving Credit
Commitment or an Extended Revolving Credit Commitment, in each case without the
prior written consent of each Lender directly and adversely affected thereby, or
(vii) release all or substantially all of the Guarantors under the Guarantee
(except as expressly permitted by the Guarantee Agreement), release all or
substantially all of the Foreign Subsidiary Guarantors under any Foreign
Subsidiary Guarantee (except as permitted by any Foreign Subsidiary Guarantee)
or release all or substantially all of the Collateral under the Pledge
Agreement, the Security Agreement, the Foreign Security Documents and the
Mortgages, in each case without the prior written consent of each Lender, or
(viii) decrease any Tranche A-1 Repayment Amount, extend any scheduled
Tranche A-1 Repayment Date or decrease the amount or allocation of any mandatory
prepayment to be received by any Lender holding any Tranche A-1 Loans (other
than a decrease in such mandatory prepayment amount that is accompanied by a
proportionate decrease in mandatory prepayments to be allocated to other Term
Loans pursuant to Section 5.2(c)), in each case without the written consent of
the Required Tranche A Lenders, or (ix) decrease any Tranche A-2 Repayment
Amount, extend any scheduled Tranche A-2 Repayment Date or decrease the amount
or allocation of any mandatory prepayment to be received by any Lender holding
any Tranche A-2 Loans (other than a decrease in such mandatory prepayment amount
that is accompanied by a proportionate decrease in mandatory prepayments to be
allocated to other Term Loans pursuant to Section 5.2(c)), in each case without
the written consent of the Required Tranche A Lenders, or (x) decrease any
Tranche E Repayment Amount, extend any scheduled Tranche E Repayment Date or
decrease the amount or allocation of any mandatory prepayment to be received by
any Lender holding any Tranche E Term Loans (other than a decrease in such
mandatory prepayment amount that is accompanied by a proportionate decrease in
mandatory prepayments to be allocated to other Term Loans pursuant to
Section 5.2(c)), in each case without the written consent of the Required
Tranche E Term Loan Lenders, or (xi) decrease any Tranche G Repayment Amount,
extend any scheduled Tranche G Repayment Date or decrease the amount or
allocation of any mandatory prepayment to be received by any Lender holding any
Tranche G Term Loans (other than a decrease in such mandatory prepayment amount
that is accompanied by a proportionate decrease in mandatory prepayments to be
allocated to other Term Loans pursuant to Section 5.2(c)), in each case without
the written consent of the Required Tranche G Term Loan Lenders, or
(xii) decrease any Tranche H Repayment Amount, extend any scheduled Tranche H
Repayment Date or decrease the amount or allocation of any mandatory prepayment
to be received by any Lender holding any Tranche H Term Loans (other than a
decrease in such mandatory prepayment amount that is accompanied by a
proportionate decrease in mandatory prepayments to be allocated to other Term
Loans pursuant to Section 5.2(c)), in each case without the written consent of
the Required Tranche H Term Loan Lenders, (xiii) decrease any Tranche I
Repayment Amount, extend any scheduled Tranche I Repayment Date or decrease the
amount or allocation of any mandatory prepayment to be received by any Lender
holding any Tranche I Term Loans (other than a decrease in such mandatory
prepayment amount that is accompanied by a proportionate decrease in mandatory
prepayments to be allocated to other Term Loans pursuant to Section 5.2(c)), in
each case without the written consent of the Required Tranche I Term Loan
Lenders; and; provided further, that at any time that no Default or

 

164

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

 

Event of Default has occurred and is continuing, the Revolving Credit Commitment
of any Lender may be increased to finance a Permitted Acquisition, with the
consent of such Lender, the US Borrower and the Administrative Agent (which
consent, in the case of the Administrative Agent, shall not be unreasonably
withheld) and without the consent of the Required Lenders, so long as (i) the
Increased Commitment Amount at such time, when added to the amount of
Indebtedness incurred pursuant to Section 10.1(k) and outstanding at such time,
does not exceed the limits set forth therein, (ii) the US Borrower or its
applicable Restricted Subsidiary shall pledge the capital stock of any person
acquired pursuant thereto to the Administrative Agent for the benefit of the
Lenders to the extent required under Section 9.12 and (iii) to the extent
determined by the Administrative Agent to be necessary to ensure pro rata
borrowings commencing with the initial borrowing after giving effect to such
increase, the US Borrower shall prepay any Eurodollar Loans outstanding
immediately prior to such initial borrowing; as used herein, the “Increased
Commitment Amount” means, at any time, the aggregate amount of all increases
pursuant to this proviso made at or prior to such time less the aggregate amount
of all voluntary reductions of the Revolving Credit Commitments made prior to
such time and provided further, that without the consent of any Lender, the
relevant Credit Party or Credit Parties and the Administrative Agent and/or
Collateral Agent may (in their respective sole discretion, or shall, to the
extent required by any other Credit Document) enter into any amendment,
modification or waiver of any Credit Document, or enter into any new agreement
or instrument, to effect the granting, perfection, protection, expansion or
enhancement of any security interest in any Collateral or additional property to
become Collateral for the benefit of the Secured Parties, or as required by
local law to give effect to, or protect any security interest for the benefit of
the Secured Parties, in any property or so that the security interests therein
comply with applicable law.  Any such waiver and any such amendment, supplement
or modification shall apply equally to each of the affected Lenders and shall be
binding upon the US Borrower, the UK Borrower, such Lenders, the Administrative
Agent and all future holders of the affected Loans.  In the case of any waiver,
the US Borrower, the Lenders and the Administrative Agent shall be restored to
their former positions and rights hereunder and under the other Credit
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing, it being understood that no such waiver shall extend
to any subsequent or other Default or Event of Default or impair any right
consequent thereon.  Upon any sale or other transfer to any Person (other than
the US Borrower and any Restricted Domestic Subsidiary) by any Credit Party of
any Collateral that is permitted under the Credit Agreement, the relevant Credit
Party, together with the Administrative Agent and/or Collateral Agent, shall be
permitted, without consent of any Lender, to amend, modify or waive any
provision of the Pledge Agreement, the Security Agreement, the Foreign Security
Documents or the Mortgages, as applicable, to the extent necessary to effect
release of the security interest in such Collateral.

 

14.2.        Notices.  All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission), and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made when delivered, or three days after
being deposited in the mail, postage prepaid, or, in the case of telecopy
notice, when received, addressed as follows in the case of the US Borrower, the
UK Borrower and the Administrative Agent, and as set

 

165

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

 

forth on Schedule 1.1(c) in the case of the other parties hereto, or to such
other address as may be hereafter notified by the respective parties hereto:

 

 

The US Borrower and the UK Borrower:

Rockwood Specialties Group, Inc.

100 Overlook Center

Princeton, NJ 08540

Attention:      Tom Riordan

Fax:                 +1-609-514-8722

 

 

 

 

 

with a copy to:

 

Kohlberg Kravis Roberts & Co., L.P.

9 West 57th Street

Suite 4200

New York, NY 10019

Attention:      Brian Carroll

Fax:                 +1-212-750-0003

 

 

 

 

The Administrative Agent:

Credit Suisse

Eleven Madison Avenue

New York, NY 10010

Attention:      Carloyn Tee

Fax:                 +1-212-325-8304

 

provided, that any notice, request or demand to or upon the Administrative Agent
or the Lenders pursuant to Sections 2.3, 2.6, 2.9, 4.2 and 5.1 shall not be
effective until received.

 

Notices and other communications to the Lenders and the Letter of Credit Issuer
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by the
Administrative Agent and, with regard to Letters of Credit, the Letter of Credit
Issuer.  The Administrative Agent or the Borrowers may, in their discretion,
agree to accept notices and other communications to it hereunder by electronic
communications pursuant to procedures approved by it; provided, that approval of
such procedures  may be limited to particular notices or communications.

 

14.3.        No Waiver; Cumulative Remedies.  No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Credit Documents
shall operate as a waiver thereof, nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.

 

166

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

 

14.4.        Survival of Representations and Warranties.  All representations
and warranties made hereunder, in the other Credit Documents and in any
document, certificate or statement delivered pursuant hereto or in connection
herewith shall survive the execution and delivery of this Agreement and the
making of the Loans hereunder.

 

14.5.        Payment of Expenses and Taxes.  The US Borrower and the UK Borrower
agree (a) to pay or reimburse the Agents for all their reasonable out-of-pocket
costs and expenses incurred in connection with the development, preparation and
execution of, and any amendment, supplement or modification to, this Agreement
and the other Credit Documents and any other documents prepared in connection
herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees,
disbursements and other charges of counsel to the Agents, (b) to pay or
reimburse each Lender and the Administrative Agent for all its reasonable and
documented costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Credit Documents and
any such other documents, including the reasonable fees, disbursements and other
charges of counsel to each Lender and of counsel to the Administrative Agent,
(c) to pay, indemnify, and hold harmless each Lender and the Administrative
Agent from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any, that may be payable or determined to be payable in
connection with the execution and delivery of, or consummation or administration
of any of the transactions contemplated by, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of, this
Agreement, the other Credit Documents and any such other documents, and (d) to
pay, indemnify, and hold harmless each Lender and the Administrative Agent and
their respective directors, officers, employees, trustees and agents from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever, including reasonable and documented fees, disbursements and
other charges of counsel, with respect to the execution, delivery, enforcement,
performance and administration of this Agreement, the other Credit Documents and
any such other documents, including any of the foregoing relating to the
violation of, noncompliance with or liability under, any Environmental Law or
any actual or alleged presence of Hazardous Materials applicable to the
operations of the US Borrower, any of its Subsidiaries or any of the Real Estate
(all the foregoing in this clause (d), collectively, the “indemnified
liabilities”); provided, that the US Borrower and the UK Borrower shall have no
obligation hereunder to the Administrative Agent or any Lender nor any of their
respective directors, officers, employees, trustees and agents with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the party to be indemnified or (ii) disputes among the
Administrative Agent, the Lenders and/or their transferees.  The agreements in
this Section 14.5 shall survive repayment of the Loans and all other amounts
payable hereunder.

 

14.6.        Successors and Assigns; Participations and Assignments.  (a)    The
provisions of this Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns permitted hereby
(including any Affiliate of the Letter of Credit Issuer that issues any Letter
of Credit), except that

 

167

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

 

(i) other than as provided in Section 10.3, the US Borrower and the UK Borrower
may not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the US Borrower or the UK Borrower without such consent shall be
null and void) and (ii) no Lender may assign or otherwise transfer its rights or
obligations hereunder except in accordance with this Section.  Nothing in this
Agreement, expressed or implied, shall be construed to confer upon any Person
(other than the parties hereto, their respective successors and assigns
permitted hereby (including any Affiliate of the Letter of Credit Issuer that
issues any Letter of Credit), Participants (to the extent provided in paragraph
(c) of this Section) and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent, the Letter of Credit Issuer
and the Lenders) any legal or equitable right, remedy or claim under or by
reason of this Agreement.

 

(b)  (i)  Subject to the conditions set forth in paragraph (b)(ii) below, any
Lender may assign to one or more assignees all or a portion of its rights and
obligations under this Agreement (including all or a portion of its Commitments
and the Loans at the time owing to it) with the prior written consent (such
consent not be unreasonably withheld; it being understood that, without
limitation, the US Borrower shall have the right to withhold its consent to any
assignment if, in order for such assignment to comply with applicable law, the
US Borrower would be required to obtain the consent of, or make any filing or
registration with, any Governmental Authority) of:

 

(A) the US Borrower; provided, that no consent of the US Borrower shall be
required for an assignment to a Lender, an Affiliate of a Lender (unless
increased costs would result therefrom except if an Event of Default under
Section 11.1 or Section 11.5 has occurred and is continuing), an Approved Fund
or, if an Event of Default under Section 11.1 or Section 11.5 has occurred and
is continuing, any other assignee; and

 

(B) the Administrative Agent and, in the case of an assignment of a Extended
Revolving Credit Commitment, the Letter of Credit Issuer; provided, that no
consent of the Administrative Agent shall be required for an assignment of any
Term Loan to a Lender, an Affiliate of a Lender or an Approved Fund.

 

(ii) Assignments shall be subject to the following additional conditions:

 

(A) except in the case of an assignment to a Lender, an Affiliate of a Lender or
an Approved Fund or an assignment of the entire remaining amount of the
assigning Lender’s Commitment or Loans of any Class, the amount of the
Commitment or Loans of the assigning Lender subject to each such assignment
(determined as of the date the Assignment and Acceptance with respect to such
assignment is delivered to the Administrative Agent) shall not be less than the
Dollar Equivalent of $5,000,000 or, in the case of a Tranche E Term Loan
Commitment, Tranche G Term Loan Commitment, Tranche H Term Loan Commitment,

 

168

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

 

Tranche I Term Loan Commitment, Tranche E Term Loan, Tranche G Term Loan,
Tranche H Term Loan or Tranche I Term Loan, the Dollar Equivalent of $1,000,000
unless each of the US Borrower and the Administrative Agent otherwise consents;
provided, that no such consent of the US Borrower shall be required if an Event
of Default under Section 11.1 or Section 11.5 has occurred and is continuing;

 

(B) each partial assignment shall be made as an assignment of a proportionate
part of all the assigning Lender’s rights and obligations under this Agreement;
provided, that this clause shall not be construed to prohibit the assignment of
a proportionate part of all the assigning Lender’s rights and obligations in
respect of one Class of Commitments or Loans; provided further, however, that
any assignment of any right or interest in a Tranche A-1 Term Loan, a Tranche
A-2 Term Loan or a Tranche A Term Loan Commitment (collectively, “Tranche A
Loans”) shall be accompanied by, and shall not be permitted to be made
independently of, an assignment of a proportionate amount of such Lender’s other
Tranche A Loans;

 

(C) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance (such Assignment and
Acceptance to be (x) electronically executed and delivered to the Administrative
Agent via an electronic settlement system then acceptable to the Administrative
Agent, which shall initially be the settlement system of ClearPar, LLC or
(y) manually executed and delivered together with a processing and recordation
fee of $3,500; provided, that only one such fee shall be payable in the event of
simultaneous assignments to or from two or more Approved Funds); and

 

(D) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire in a form approved by the
Administrative Agent.

 

For the purpose of this Section 14.6(b), the term “Approved Fund” has the
following meaning:

 

“Approved Fund” means any Person (other than a natural person) that is engaged
in making, purchasing, holding or investing in bank loans and similar extensions
of credit in the ordinary course of its business and that is administered or
managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an
Affiliate of an entity that administers or manages a Lender.

 

(iii)  Subject to acceptance and recording thereof pursuant to
paragraph (b)(v) of this Section, from and after the effective date specified in
each Assignment and Acceptance, the assignee thereunder shall be a party hereto
and, to the extent of the interest assigned by such Assignment and Acceptance,
have the rights and obligations of a Lender under this Agreement, and the
assigning Lender thereunder shall,

 

169

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

 

to the extent of the interest assigned by such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the assigning Lender’s rights and
obligations under this Agreement, such Lender shall cease to be a party hereto
but shall continue to be entitled to the benefits of Sections 2.10, 2.11, 3.5,
5.4 and 14.5).  Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this Section 14.6 shall be
treated for purposes of this Agreement as a sale by such Lender of a
participation in such rights and obligations in accordance with paragraph (c) of
this Section.

 

(iv)  The Administrative Agent, acting for this purpose as an agent of the US
Borrower and the UK Borrower, shall maintain at the Administrative Agent’s
Office a copy of each Assignment and Acceptance delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amount of the Loans and any payment made by the
Letter of Credit Issuer under any Letter of Credit owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in
the Register shall be conclusive, and the US Borrower, the UK Borrower, the
Administrative Agent, the Letter of Credit Issuer and the Lenders may treat each
Person whose name is recorded in the Register pursuant to the terms hereof as a
Lender hereunder for all purposes of this Agreement, notwithstanding notice to
the contrary.  The Register shall be available for inspection by the US
Borrower, the UK Borrower, the Letter of Credit Issuer and by the Administrative
Agent on behalf of any Lender, at any reasonable time and from time to time upon
reasonable prior notice.

 

(v)  Upon its receipt of a duly completed Assignment and Acceptance executed by
an assigning Lender and an assignee, the assignee’s completed Administrative
Questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance
and record the information contained therein in the Register.  No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.

 

(c)(i)  Any Lender may, without the consent of the US Borrower, the UK Borrower,
the Administrative Agent, the Letter of Credit Issuer or the Swingline Lender,
sell participations to one or more banks or other entities (each, a
“Participant”) in all or a portion of such Lender’s rights and obligations under
this Agreement (including all or a portion of its Commitments and the Loans
owing to it); provided, that (A) such Lender’s obligations under this Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (C) the US
Borrower, the UK Borrower, the Administrative Agent, the Letter of Credit Issuer
and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement.  Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement or

 

170

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

 

any other Credit Document; provided, that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver described in the first proviso to
Section 14.1 that affects such Participant.  Subject to paragraph (c)(ii) of
this Section, the US Borrower and the UK Borrower agree that each Participant
shall be entitled to the benefits of Sections 2.10, 2.11 and 5.4 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section.  To the extent permitted by law, each
Participant also shall be entitled to the benefits of Section 14.8(b) as though
it were a Lender; provided, such Participant agrees to be subject to
Section 14.8(a) as though it were a Lender.

 

(ii)  A Participant shall not be entitled to receive any greater payment under
Section 2.10 or 5.4 than the applicable Lender would have been entitled to
receive with respect to the participation sold to such Participant, unless the
sale of the participation to such Participant is made with the US Borrower’s
prior written consent.  A Participant that would be a Non-U.S. Lender if it were
a Lender shall not be entitled to the benefits of Section 5.4 unless the US
Borrower is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of the US Borrower and the UK Borrower, to
comply with Section 5.4(b) as though it were a Lender.

 

(d)  Any Lender may, without the consent of the Borrower or the Administrative
Agent, at any time pledge or assign a security interest in all or any portion of
its rights under this Agreement to secure obligations of such Lender, including
any pledge or assignment to secure obligations to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a security
interest; provided, that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such pledgee or assignee for such Lender as a party hereto.  In order to
facilitate such pledge or assignment, the US Borrower and the UK Borrower hereby
agree that, upon request of any Lender at any time and from time to time after
the US Borrower has made its initial borrowing hereunder, the US Borrower or the
UK Borrower, as the case may be, shall provide to such Lender, at the US
Borrower’s or the UK Borrower’s own expense, a promissory note, substantially in
the form of Exhibit R-1, R-2, R-3, R-4, R-5, R-6, R-7 or R-8, as the case may
be, evidencing the Tranche A-1 Term Loans, Tranche A-2 Term Loans, Tranche E
Term Loans, Tranche G Term Loans, Tranche H Term Loans, Tranche I Term Loans,
Revolving Credit Loans, Extended Revolving Credit Loans and Swingline Loans,
respectively, owing to such Lender.

 

(e)  Subject to Section 14.16, the US Borrower and the UK Borrower authorize
each Lender to disclose to any Participant, secured creditor of such Lender or
assignee (each, a “Transferee”) and any prospective Transferee any and all
financial information in such Lender’s possession concerning the US Borrower and
its Affiliates that has been delivered to such Lender by or on behalf of the US
Borrower and its Affiliates pursuant to this Agreement or which has been
delivered to such Lender by or on behalf of the US Borrower and its Affiliates
in connection with such Lender’s credit evaluation of the US Borrower and its
Affiliates prior to becoming a party to this Agreement; provided, that neither
the Administrative Agent nor any Lender shall provide

 

171

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

 

to any Transferee or prospective Transferee any of the Confidential Information
unless such person shall have previously executed a Confidentiality Agreement in
the form of Exhibit S.

 

14.7.        Replacements of Lenders under Certain Circumstances.  The US
Borrower (on its own behalf and on behalf of the UK Borrower) shall be permitted
to replace any Lender that (a) requests reimbursement for amounts owing pursuant
to Section 2.10, 2.11, 3.5 or 5.4, (b) is affected in the manner described in
Section 2.10(a)(iii) and as a result thereof any of the actions described in
such Section is required to be taken or (c) becomes a Defaulting Lender, with a
replacement bank or other financial institution; provided, that (i) such
replacement does not conflict with any Requirement of Law, (ii) no Event of
Default shall have occurred and be continuing at the time of such replacement,
(iii) the US Borrower and/or the UK Borrower, as applicable, shall repay (or the
replacement bank or institution shall purchase, at par) all Loans and other
amounts (other than any disputed amounts, pursuant to Section 2.10, 2.11, 3.5 or
5.4, as the case may be) owing to such replaced Lender prior to the date of
replacement, (iv) the replacement bank or institution, if not already a Lender,
and the terms and conditions of such replacement, shall be reasonably
satisfactory to the Administrative Agent, (v) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of
Section 14.6 (provided, that the US Borrower shall be obligated to pay the
registration and processing fee referred to therein) and (vi) any such
replacement shall not be deemed to be a waiver of any rights that the US
Borrower, the UK Borrower, the Administrative Agent or any other Lender shall
have against the replaced Lender.

 

14.8.        Adjustments; Set-off.  (a)    If any Lender (a “benefited Lender”)
shall at any time receive any payment of all or part of its Loans, or interest
thereon, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 11.5, or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender’s Loans, or interest thereon, such benefited Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of each such other Lender’s Loan, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such benefited Lender to share the excess payment or benefits
of such collateral or proceeds ratably with each of the Lenders; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from such benefited Lender, such purchase shall be
rescinded, and the purchase price and benefits returned, to the extent of such
recovery, but without interest.

 

(b)  After the occurrence and during the continuance of an Event of Default, in
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, without prior notice to the US Borrower or the UK
Borrower, any such notice being expressly waived by the US Borrower and the UK
Borrower to the extent permitted by applicable law, upon any amount becoming due
and payable by the US Borrower or the UK Borrower hereunder (whether at the
stated maturity, by acceleration or otherwise) to set-off and appropriate and
apply against such amount any

 

172

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

 

and all deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch or agency
thereof to or for the credit or the account of the US Borrower or the UK
Borrower, as the case may be.  Each Lender agrees promptly to notify the US
Borrower or the UK Borrower, as the case may be, and the Administrative Agent
after any such set-off and application made by such Lender; provided, that the
failure to give such notice shall not affect the validity of such set-off and
application.

 

14.9.        Counterparts.  This Agreement may be executed by one or more of the
parties to this 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 Agreement signed by all the parties shall be lodged with the
US Borrower and the Administrative Agent.

 

14.10.      Severability.  Any provision of this 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.

 

14.11.      Integration.  This Agreement and the other Credit Documents
represent the agreement of the US Borrower, the UK Borrower, the Administrative
Agent and the Lenders with respect to the subject matter hereof, and there are
no promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Credit Documents.

 

14.12.      GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

14.13.      Submission to Jurisdiction; Waivers.  The US Borrower and the UK
Borrower each hereby irrevocably and unconditionally:

 

(a)  submits for itself and its property in any legal action or proceeding
relating to this 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

 

173

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

 

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 the US Borrower at its
address set forth in Section 14.2 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 to effect service of
process in any other manner permitted by law or shall limit the right 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 14.13 any special, exemplary, punitive or consequential damages.

 

14.14.      Acknowledgments.  The US Borrower and the UK Borrower each hereby
acknowledge that:

 

(a)  it has been advised by counsel in the negotiation, execution and delivery
of this Agreement and the other Credit Documents;

 

(b)  neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the US Borrower or the UK Borrower arising out of
or in connection with this Agreement or any of the other Credit Documents, and
the relationship between Administrative Agent and Lenders, on one hand, and the
US Borrower or the UK Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

 

(c)  no joint venture is created hereby or by the other Credit Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the US Borrower, the UK Borrower and the Lenders.

 

14.15.     WAIVERS OF JURY TRIAL.  THE US BORROWER, THE UK BORROWER, THE
ADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

14.16.      Confidentiality.  The Administrative Agent and each Lender shall
hold all non-public information furnished by or on behalf of the US Borrower or
the UK Borrower in connection with such Lender’s evaluation of whether to become
a Lender hereunder or obtained by such Lender or the Administrative Agent
pursuant to the requirements of this Agreement (“Confidential Information”),
confidential in accordance with its customary procedure for handling
confidential information of this nature and (in the case of a Lender that is a
bank) in accordance with safe and sound banking practices

 

174

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

 

and in any event may make disclosure as required or requested by any
governmental agency or representative thereof or pursuant to legal process or to
such Lender’s or the Administrative Agent’s attorneys, professional advisors or
independent auditors or Affiliates; provided, that unless specifically
prohibited by applicable law or court order, each Lender and the Administrative
Agent shall notify the US Borrower of any request by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Lender by such governmental
agency) for disclosure of any such non-public information prior to disclosure of
such information; and provided further, that in no event shall any Lender or the
Administrative Agent be obligated or required to return any materials furnished
by the US Borrower or any Subsidiary of the US Borrower.  Each Lender and the
Administrative Agent agrees that it will not provide to prospective Transferees
or to prospective direct or indirect contractual counterparties in swap
agreements to be entered into in connection with Loans made hereunder any of the
Confidential Information unless such Person shall have previously executed a
Confidentiality Agreement in the form of Exhibit S.

 

14.17.      Judgment Currency.  (a)    The obligations of the US Borrower and
the UK Borrower hereunder and under the other Loan Documents to make payments in
Dollars or in the Foreign Currencies, as the case may be (the “Obligation
Currency”), shall not be discharged or satisfied by any tender or recovery
pursuant to any judgment expressed in or converted into any currency other than
the Obligation Currency, except to the extent that such tender or recovery
results in the effective receipt by the Administrative Agent or a Lender of the
full amount of the Obligation Currency expressed to be payable to the
Administrative Agent or Lender under this Agreement or the other Credit
Documents.  If, for the purpose of obtaining or enforcing judgment against the
US Borrower, the UK Borrower or any other Credit Party in any court or in any
jurisdiction, it becomes necessary to convert into or from any currency other
than the Obligation Currency (such other currency being hereinafter referred to
as the “Judgment Currency”) an amount due in the Obligation Currency, the
conversion shall be made, at the Dollar Equivalent of such amount, in each case,
as of the date immediately preceding the day on which the judgment is given
(such Business Day being hereinafter referred to as the “Judgment Currency
Conversion Date”).

 

(b)  If there is a change in the rate of exchange prevailing between the
Judgment Currency Conversion Date and the date of actual payment of the amount
due, the US Borrower and the UK Borrower each covenant and agree to pay, or
cause to be paid, such additional amounts, if any (but in any event not a lesser
amount), as may be necessary to ensure that the amount paid in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of Judgment Currency stipulated in the judgment
or judicial award at the rate of exchange prevailing on the Judgment Currency
Conversion Date.

 

(c)  For purposes of determining the Dollar Equivalent, such amounts shall
include any premium and costs payable in connection with the purchase of the
Obligation Currency.

 

175

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

 

14.18.      Permitted Amendments.  (a)    The US Borrower may, by written notice
to the Administrative Agent from time to time, make one or more offers to all
Lenders holding Extended Revolving Credit Commitments to make one or more
Permitted Amendments pursuant to procedures reasonably specified by the
Administrative Agent and reasonably acceptable to the US Borrower.  Such notice
shall set forth (i) the terms and conditions of the requested Permitted
Amendments and (ii) the date on which each such Permitted Amendment is requested
to become effective (which shall not be less than 10 Business Days no more than
30 Business Days after the date of such notice).  Only those Lenders holding
Extended Revolving Credit Commitments that consent to such Permitted Amendment
(“Accepting Lenders”) will have the maturity of their Extended Revolving Credit
Commitments extended and be entitled to receive any increase in the Applicable
ABR Margin or Applicable Eurodollar Margin and any fees, in each case, as
provided therein.

 

(b)  The US Borrower, the UK Borrower, Holdings and each Accepting Lender shall
execute and deliver to the Administrative Agent such documentation as the
Administrative Agent shall reasonably specify to evidence the acceptance of the
Permitted Amendments and the terms and conditions thereof.  The Administrative
Agent shall promptly notify each Lender as to the effectiveness of each
Permitted Amendment.  Each of the parties hereto hereby agrees that, upon the
effectiveness of any Permitted Amendment, the Agreement shall be deemed amended
to the extent (but only to the extent) necessary to reflect the existence and
terms of the Permitted Amendment evidenced thereby and only with respect to the
Loans and Commitments of the Accepting Lenders (including any amendments
necessary to treat the Loans and Commitments of the Accepting Lenders in a
manner consistent with the other Loans and Commitments under this Agreement). 
Notwithstanding the foregoing, no Permitted Amendment shall become effective
under this Section 14.18 unless the Administrative Agent, to the extent so
reasonably requested by the Administrative Agent, shall have received legal
opinions, board resolutions and officer’s certificates consistent with those
delivered on the Restatement Date.

 

14.19.      Effect of the Amendment and Restatement.  (a)  On the Restatement
Date, the Existing Credit Agreement shall be amended and restated in its
entirety by this Agreement, and the Existing Credit Agreement shall thereafter
be of no further force and effect and shall be deemed replaced and superseded in
all respects by this Agreement, except to evidence (i) the incurrence by the
Borrowers of the Obligations under and as defined in the Existing Credit
Agreement (whether or not such Obligations are contingent as of the Restatement
Date), (ii) the representations and warranties made by the Borrowers prior to
the Restatement Date (which representations and warranties made prior to the
Restatement Date shall not be superseded or rendered ineffective by this
Agreement as they pertain to the period prior to the Restatement Date) and
(iii) any action or omission performed or required to be performed pursuant to
such Existing Credit Agreement prior to the Restatement Date (including any
failure, prior to the Restatement Date, to comply with the covenants contained
in Existing Credit Agreement).  The parties hereto acknowledge and agree that
(a) this Agreement and the other Credit Documents, whether executed and
delivered in connection herewith or otherwise, do not constitute a novation or
termination of the Obligations under the

 

176

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

 

Existing Credit Agreement or the other Credit Documents as in effect prior to
the Restatement Date and which remain outstanding as of the Restatement Date,
(b) the Obligations under the Existing Credit Agreement and the other Security
Documents are in all respects continuing (as amended and restated hereby and
which are in all respects hereinafter subject to the terms herein) and (c) the
Liens and security interests as granted under the applicable Credit Documents
securing payment of such Obligations are in all respects continuing and in full
force and effect and are reaffirmed hereby.

 

(b)  On and after the Restatement Date, (i) all references to the Existing
Credit Agreement or the Credit Agreement in the Credit Documents (other than
this Agreement) shall be deemed to refer to the Existing Credit Agreement, as
amended and restated hereby, (ii) all references to any section (or subsection)
of the Existing Credit Agreement or the Credit Agreement in any Credit Document
(but not herein) shall be amended to become, mutatis mutandis, references to the
corresponding provisions of this Agreement and (iii) except as the context
otherwise provides, on or after the Restatement Date, all references to this
Agreement herein (including for purposes of indemnification and reimbursement of
fees) shall be deemed to be reference to the Existing Credit Agreement as
amended and restated hereby.

 

(c)  This amendment and restatement is limited as written and is not a consent
to any other amendment, restatement or waiver or other modification, whether or
not similar and, except as expressly provided herein or in any other Credit
Document, all terms and conditions of the Credit Documents remain in full force
and effect unless otherwise specifically amended hereby or by any other Credit
Document.

 

(d)  Except to the extent specifically amended on the Restatement Date, this
amendment and restatement shall not alter, modify or in any way amend the
schedules and exhibits to the Existing Credit Agreement (and such schedules and
exhibits shall continue to be schedules and exhibits hereto).

 

[Signature pages follow]

 

177

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

 

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers as of the day and year first above
written.

 

 

 

 

ROCKWOOD SPECIALTIES GROUP, INC.

 

 

 

 

 

 

 

 

By:

/s/ Thomas J. Riordan

 

 

 

Name: Thomas J. Riordan

 

 

 

Title: Senior Vice President, Law and Administration

 

 

 

 

 

 

 

 

ROCKWOOD SPECIALTIES LIMITED

 

 

 

 

 

 

 

 

By:

/s/ Thomas J. Riordan

 

 

 

Name: Thomas J. Riordan

 

 

 

Title: Director

 

 

 

 

 

 

 

 

ROCKWOOD SPECIALTIES INTERNATIONAL, INC.

 

 

 

 

 

 

 

 

By:

/s/ Thomas J. Riordan

 

 

 

Name: Thomas J. Riordan

 

 

 

Title: Senior Vice President, Law and Administration

 

 

 

 

 

 

 

 

CREDIT SUISSE,

 

 

Cayman Islands Branch, as Administrative Agent, Collateral Agent, Letter of
Credit Issuer and Swingline Lender

 

 

 

 

 

 

 

 

By:

/s/ Karl M. Studer

 

 

 

Name: Karl M. Studer

 

 

 

Title: Director

 

 

 

 

 

 

 

 

 

 

By:

/s/ Jay Chall

 

 

 

Name: Jay Chall

 

 

 

Title: Director

 

[Signature Page to Amended and Restated Credit Agreement]

 

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

 

Schedule 1.1(a)

 

Additional Cost Formulae

 

The Additional Cost is an addition to the interest rate to compensate Lenders
for the cost of compliance with (a) the requirements of the Bank of England
and/or the Financial Services Authority (or, in either case, any other authority
which replaces all or any of its functions) or (b) the requirement of the
European Central Bank.

 

On the first day of each Interest Period (or as soon as possible thereafter) the
Administrative Agent shall calculate, as a percentage rate, a rate (the
“Additional Cost Rate”) for each Lender, in accordance with the paragraphs set
out below.  The Additional Cost will be calculated by the Administrative Agent
as a weighted average of the Lenders’ Additional Cost Rates (weighted in
proportion to the percentage participation of each Lender in the relevant Loan)
and will be expressed as a percentage rate per annum.

 

The Additional Cost Rate for any Lender lending from a Facility Office in a
Participating Member State will be the percentage notified by that Lender to the
Administrative Agent.  This percentage will be certified by that Lender in its
notice to the Administrative Agent to be its reasonable determination of the
cost (expressed as a percentage of that Lender’s participation in all Loans made
from that Facility Office) of complying with the minimum reserve requirements of
the European Central Bank in respect of loans made from that Facility Office.

 

The Additional Cost Rate for any Lender lending from a Facility Office in the
United Kingdom will be calculated by the Administrative Agent as follows:

 

In relation to a Sterling Loan:

 

AB + C(B - D) + E x 0.01

Per cent. per annum

100 - (A + C)

 

in relation to a Loan in any currency other than Sterling:

 

E x 0.01

Per cent. per annum

300

 

Where:

 

A             is the percentage of Eligible Liabilities (assuming these to be in
excess of any stated minimum) which that Lender is from time to time required to
maintain as

 

[Signature Page to Amended and Restated Credit Agreement]

 

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

 

an interest free cash ratio deposit with the Bank of England to comply with cash
ratio requirements.

 

B             is the percentage rate of interest (excluding the applicable
Foreign Currency Borrowing margin and the Additional Cost and, if the Loan is an
overdue amount, the additional rate of interest specified in Section 2.8(c))
payable for the relevant Interest Period on the Loan.

 

C                                        is the percentage (if any) of Eligible
Liabilities which that Lender is required from time to time to maintain as
interest bearing Special Deposits with the Bank of England.

 

D                                       is the percentage rate per annum payable
by the Bank of England to the Administrative Agent on interest bearing Special
Deposits.

 

E                                         is designed to compensate Lenders for
amounts payable under the Fees Rules and is calculated by the Administrative
Agent as being the average of the most recent rates of charge supplied by the
Reference Lender to the Administrative Agent pursuant to paragraph 7 below and
expressed in pounds per ₤1,000,000.

 

For the purposes of this Schedule:

 

(a)                                  “Eligible Liabilities” and “Special
Deposits” have the meanings given to them from time to time under or pursuant to
the Bank of England Act 1998 or (as may be appropriate) by the Bank of England;

 

(b)                                 “Facility Office” means the office or
offices notified by a Lender to the Administrative Agent in writing on or before
the date it becomes a Lender (or, following the date, by not less than five
Business Days’ written notice) as the office or offices through which it will
perform its obligations under this Agreement;

 

(c)                                  “Fees Rules” means the rules on periodic
fees contained in the FSA Supervision Manual or such other law or regulation as
may be in force from time to time in respect of the payment of fees for the
acceptance of deposits;

 

(d)                                 “Fee Tariffs” means the fee tariffs
specified in the Fees Rules under the activity group A.I.  Deposit acceptors
(ignoring any minimum fee or zero rated fee required pursuant to the Fee
rules but taking into account any applicable discount rate);

 

(e)                                  “Participating Member State” means any
member state of the European Communities that adopts or has adopted the Euro as
its lawful currency in accordance with legislation of the European Community
relating to Economic and Monetary Union; and

 

(f)                                    “Tariff Base” has the meaning given to it
in, and will be calculated in accordance with, the Fees Rules.

 

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

 

In application of the above formulae, A, B, C and D will be included in the
formulae as percentages (i.e. 5 per cent. will be included in the formula as 5
and not as 0.05).  A negative result obtained by subtracting D from B shall be
taken as zero.  The resulting figures shall be rounded to four decimal places.

 

If requested by the Administrative Agent, the Reference Lender shall, as soon as
practicable after publication by the Financial Services Authority, supply to the
Administrative Agent, the rate of charge payable by the Reference Lender to the
Financial Services Authority pursuant to the Fees Rules in respect of the
relevant financial year of the Financial Services Authority (calculated for this
purpose by the Reference Lender as being the average of the Fee Tariffs
applicable to the Reference Lender for that financial year) and expressed in
pounds per £1,000,000 of the Tariff Base of the Reference Lender.

 

Each Lender shall supply any information required by the Administrative Agent
for the purpose of calculating its Additional Cost Rate.  In particular, but
without limitation, each Lender shall supply the following information on or
prior to the date on which it becomes a Lender:

 

the jurisdiction of its Facility Office; and

 

any other information that the Administrative Agent may reasonably require for
such purpose.

 

Each Lender shall promptly notify the Administrative Agent of any change to the
information provided by it pursuant to this paragraph.

 

The percentages of each Lender for the purpose of A and C above and the rates of
charge of the Reference Lender for the purposes of E above shall be determined
by the Administrative Agent based upon the information supplied to it pursuant
to paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies
the Administrative Agent to the contrary, each Lender’s obligations in relation
to cash ratio deposits and Special Deposits are the same as those of a typical
bank from its jurisdiction of incorporation with a Facility Office in the same
jurisdiction as its Facility Office.

 

The Administrative Agent shall have no liability to any person if such
determination results in an Additional Cost Rate which over or under compensates
any Lender and shall be entitled to assume that the information provided by any
Lender including the Reference Lender pursuant to paragraphs 3, 7 and 8 above is
true and correct in all respects.

 

The Administrative Agent shall distribute the additional amounts received as a
result of the Additional Cost to the Lenders on the basis of the Additional Cost
Rate for each Lender based on the information provided by each Lender and the
Reference Lender pursuant to paragraphs 3, 7 and 8 above.

 

Any determination by the Administrative Agent pursuant to this Schedule in
relation to a formula, the Additional Cost, an Additional Cost Rate or any
amount payable to a Lender shall, in the absence of manifest error, be
conclusive and binding on all parties to this Agreement.

 

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

 

The Administrative Agent may from time to time, after consultation with the US
Borrower (on behalf of itself and the UK Borrower) and the Lenders, determine
and notify to all parties to this Agreement any amendments which are required to
be made to this Schedule in order to comply with any change in law, regulation
or any requirements from time to time imposed by the Bank of England, the
Financial Services Authority or the European Central Bank (or, in any case, any
other authority which replaces all or any of its functions) and any such
determination shall, in the absence of manifest error, be conclusive and binding
on all parties to this Agreement.

 

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

 

Schedule 1.1(b)

 

to the Credit Agreement

 

MORTGAGED PROPERTIES

 

1.             3700 E. Olympic Blvd.

Los Angeles, CA 90023

(Los Angeles County)

 

USA

 

Owner: Rockwood Pigments N.A., Inc.

 

2.             170 Pioneer Drive

Leominster, MA 01453

(Worcester County)

 

USA

 

Owner: AlphaGary Corporation

 

3.             5910 Pharr Mill Road

Harrisburg, NC 28075

(Cabarrus County)

USA

 

Owner: Chemical Specialties, Inc.

 

4.             5630 Pioneer Creek Drive

Maple Plain, MN 55359

(Hennepin County)

USA

Owner: Electrochemicals Inc.

 

5.             15 Clarkson Street

Providence, RI 02908

(Providence County)

 

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

 

USA

 

Owner: Exsil, Inc.

 

6.             7011 Muirkirk Road

Beltsville, MD 20705

(Prince George’s County)

USA

Owner: Rockwood Pigments N.A., Inc.

 

7.             303 East Hoffmeister

Lemay, MO 63125

(St. Louis County)

USA

Owner: Rockwood Pigments N.A., Inc.

 

8.             1 & 7 Swisher Drive

 

Cartersville, GA 30120

(Bartow County)

USA

Owner: Southern Color N.A., Inc.

 

9.             13177 Huran River Drive

Romulus, MI 48174

(Wayne County)

USA

Owner: Oakite Products, Inc.

 

10.           50 Valley Road

Berkeley Heights, NJ 07922

(Union County)

USA

Owner: Oakite Products, Inc.

 

11.           1033 State Route 20

New Lebanon, NY 12125

(Columbia County)

USA

Owner: CeramTec North America Innovative Ceramic Engineering Corporation

 

12.           One Technology Place — Highway 14

Laurens, SC 29360

 

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

 

(Laurens County)

USA

Owner: CeramTec North America Innovative Ceramic Engineering Corporation

 

13.           9635 Industrial Drive

Pineville, NC 28134

(Mecklenburg County)

USA

Owner: AlphaGary Corporation

 

14.           348 Holiday Inn Drive

Kings Mountain, NC 28086

(Cleveland County)

USA

Owner: Chemetall Foote Corp.

 

15.          Beler Way

Leicester Road Industrial Estate

Melton Mowbray

Leicestershire B60 1BS

United Kingdom

(registered at HM Land Registry under Title Number LT303692)

 

16.           Property in Widnes

United Kingdom

 

17.           Units B, F and G West

Newark Road North

Eastfield Industrial Estate,

Glenrothes

Scotland

 

18.           Netherfield Chemical Works

Duke Street

Glasgow

Scotland

 

19.           Real estate located in Turin

Italy

 

20.           Real estate located in Azeglio

Italy

 

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

 

Schedule 1.1(c)

Commitments and Address of Lenders

 

Commitments

 

 

 

 

 

Lender

 

 

 

Total
100%

 

CSKB
40%

 

GSCP
30%

 

UBS
30%

 

Revolver

 

$

250,000,000.00

 

$

100,000,000.00

 

$

75,000,000.00

 

$

75,000,000.00

 

 

 

 

 

 

 

 

 

 

 

Tranche A1-Drawn

 

€

39,129,762.71

 

€

15,651,905.08

 

€

11,738,928.81

 

€

11,738,928.81

 

 

 

 

 

 

 

 

 

 

 

Tranche A1-Delayed Draw

 

€

41,907,635.58

 

€

16,763,054.23

 

€

12,572,290.67

 

€

12,572,290.67

 

 

 

 

 

 

 

 

 

 

 

Total A1 Facility

 

€

81,037,398.29

 

€

32,414,959.32

 

€

24,311,219.49

 

€

24,311,219.49

 

 

 

 

 

 

 

 

 

 

 

Tranche A2

 

€

128,500,779.57

 

€

51,400,311.83

 

€

38,550,233.87

 

€

38,550,233.87

 

 

 

 

 

 

 

 

 

 

 

Tranche B

 

$

985,000,000.00

 

$

394,000,000.00

 

$

295,500,000.00

 

$

295,500,000.00

 

 

 

 

 

 

 

 

 

 

 

Tranche C

 

€

222,110,468.53

 

€

88,844,187.41

 

€

66,633,140.56

 

€

66,633,140.56

 

 

Addresses

 

Credit Suisse First Boston, acting through its Cayman Islands branch

Eleven Madison Avenue

New York, New York 10011

 

Goldman Sachs Credit Partners L.P.

85 Broad Street

New York, New York 10004

 

UBS Loan Finace LLC

677 Washington Boulevard

Stamford, Connecticut 06901

 

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

 

SCHEDULE 8.12

to the Credit Agreement

 

SUBSIDIARIES

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US

Borrower

Rockwood America Inc.*

 

Delaware

 

100% directly

RS Funding Corporation *

 

Delaware

 

100% indirectly through Rockwood America Inc.

Rockwood Specialties Inc.*

 

Delaware

 

100% indirectly through Rockwood America Inc.

Rockwood Pigments NA, Inc.*

 

Delaware

 

100% indirectly through Rockwood Specialties Inc.

Advantis Technologies, Inc.

 

Delaware

 

100% indirectly through Rockwood Specialties Inc.

AlphaGary Corporation

 

Delaware

 

100% indirectly through Rockwood Specialties Inc.

Chemical Specialties, Inc.

 

North Carolina

 

100% indirectly through Rockwood Specialties Inc.

Compugraphics U.S.A. Inc.

 

Delaware

 

100% indirectly through Rockwood Specialties Inc.

Cyantek Corporation

 

Delaware

 

100% indirectly through Rockwood

 

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

* Denotes a Material Subsidiary

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US

Borrower

 

 

 

 

Specialties Inc.

Electrochemicals Inc.

 

Delaware

 

100% indirectly through Rockwood Specialties Inc.

Exsil, Inc.

 

Delaware

 

100% indirectly through Rockwood Specialties Inc.

Southern Clay Products, Inc.

 

Texas

 

100% indirectly through Rockwood Specialties Inc.

RS Receivables Corporation

 

Delaware

 

100% indirectly through Rockwood Specialties Inc.

RS Receivables II Corporation

 

Delaware

 

100% indirectly through Rockwood Specialties Inc.

RS Receivables III Corporation

 

Delaware

 

100% indirectly through Rockwood Specialties Inc.

Lurex, Inc

 

Delaware

 

100% indirectly through Rockwood Pigments NA, Inc.

Southern Color N.A., Inc.

 

Delaware

 

100% indirectly through Rockwood Pigments NA, Inc.

Rockwood Specialties Limited *

 

United Kingdom

 

100% directly

Creambay Limited

 

United Kingdom

 

100% indirectly through Rockwood Specialties Limited

Chillihurst Limited

 

United Kingdom

 

100%

 

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

* Denotes a Material Subsidiary

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US

Borrower

 

 

 

 

indirectly through Rockwood Specialties Limited

Creamglade Limited

 

United Kingdom

 

100% indirectly through Rockwood Specialties Limited

Mustardgrange Limited

 

United Kingdom

 

100% indirectly through Rockwood Specialties Limited

CSI Wood Protection Limited

 

United Kingdom

 

100% indirectly through Rockwood Specialties Limited

Rockwood Additives Limited

 

United Kingdom

 

100% indirectly through Rockwood Specialties Limited

Rockwood Absorbents (Baulking) Limited

 

United Kingdom

 

100% indirectly through Rockwood Additives Limited

AlphaGary Limited

 

United Kingdom

 

100% indirectly through Rockwood Additives Limited

Caledonian Applied Technology Limited

 

United Kingdom

 

100% indirectly through Creamglade Limited

Rockwood Pigments (UK) Limited

 

United Kingdom

 

100% indirectly through Creambay Limited

Inorganic Pigments Limited

 

United Kingdom

 

100% indirectly through Creambay Limited

Rockwood Electronic Materials Limited

 

United Kingdom

 

100% indirectly through Mustardgrange Limited

Compugraphics International Limited

 

United Kingdom

 

100% indirectly through Caledonian Applied

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US

Borrower

 

 

 

 

Technology Limited

IC Masks Limited

 

United Kingdom

 

100% indirectly through Caledonian Applied Technology Limited

Colorbatch Limited

 

United Kingdom

 

100% indirectly through Rockwood Pigments (UK) Limited

Rockwood (Ningbo) Chemicals Corporation Limited

 

China

 

100% indirectly through Inorganic Pigments Limited

Changshu Rockwood Pigments Company Limited

 

China

 

51% indirectly through Inorganic Pigments Limited

Fuyang Golden Autumn Chemicals Company Limited

 

China

 

30% indirectly through Inorganic Pigments Limited

Rockwood Specialties GmbH

 

Germany

 

100% directly

Rockwood Pigmente Holding GmbH

 

Germany

 

100% indirectly through Rockwood Specialties GmbH

Silo Pigmente GmbH

 

Germany

 

100% indirectly through Rockwood Specialties GmbH

Brockhues GmbH & Co. KG

 

Germany

 

10.00% indirectly through Silo Pigmente GmbH and 89.93% indirectly through
Rockwood Pigmente Holding GmbH **

Rockwood Italia SpA

 

Italy

 

100% directly

Rockwood Industries Spain SL

 

Spain

 

100%

 

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

**           The remaining 0.07% interest held by minority shareholders.

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US

Borrower

 

 

 

 

directly

Rockwood Specialties (Singapore) Pte Limited

 

Singapore

 

100% directly

CSI Kemwood AB

 

Sweden

 

100% directly

CSI Kemwood Oy

 

Finland

 

100% directly

Rockwood Electrochemicals Asia Limited

 

Taiwan

 

99.9% directly and 0.0012% indirectly through Subsidiaries(1)

AlphaGary (Canada) Limited

 

Canada

 

100% directly

Rockwood Chemicals (Ireland) Limited

 

Ireland

 

100% directly

Rockwood Group Pension Trustees (Ireland) Limited

 

Ireland

 

100% indirectly through Rockwood Chemicals (Ireland) Limited

Rockwood Electronic Materials France

 

France

 

100% directly(2)

Rockwood Electrochemicals (Suzhou) Co., Ltd.

 

China

 

100% indirectly through Rockwood Electronic Materials Limited

ISiltec Innovative Silicon Technologies GmbH

 

Germany

 

85% indirectly through

 

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

(1)           Each of Compugraphics U.S.A., Inc., Cyantek Corp.oration, Southern
Clay Products, Inc.., Exsil, Inc.., Eletrochemicals, Inc.. and Rockwood
Specialties, Inc.. own a 0.0002% interest in Rockwood Electrochemicals Asia
Limited.

 

(2)           Rockwood Specialties Group, Inc.. holds 275,514 of the 275,520
issued and outstanding ordinary shares of Rockwood Electronic Materials SA.
Under French law, a société anonyme type of company, such as the Company is
required to have at least 7 shareholders. Therefore, 6 minority shareholders
hold 1 ordinary share each.

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

 

 

 

 

Rockwood Specialities GmbH(3)

Isiltec, Inc.

 

Georgia

 

100% indirectly through ISiltec Innovative Silicon Technologies GmbH

Isiltec Wafer Reclaim GmbH

 

Germany

 

100% indirectly through ISiltec Innovative Silicon Technologies GmbH

RW Holding Corp.

 

Delaware

 

100% directly

Ceram Tec North America Corp.

 

Delaware

 

100% indirectly through RW Holding Corp.

Sachtleben Corporation

 

Delaware

 

100% indirectly through R W Holding Corp.

Chemetall Corp.

 

Delaware

 

100% indirectly through R W Holding Corp.

Oakite Products, Inc.

 

Delaware

 

100% indirectly through Chemetall Corporation.

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

 

Mexico

 

99.99% indirectly through Chemetall Corporation.

Oakite Canada Ltd.

 

Canada

 

100% indirectly through Chemetall Corporation.

 

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

(3)  The remaining 15% interest held by minority shareholders

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

Chemetall Chemical Products Inc.

 

Delaware

 

100% indirectly through Chemetall Corporation.

Chemetall Foote Corp.

 

Delaware

 

100% indirectly through Chemetall Corporation.

Foote Chile Holding Company

 

Delaware

 

100% indirectly through Chemetall Corporation.

Foote Minera a Inversiones Ltda.

 

Chile

 

50% indirectly through Chemetall Corporation.

Sociedad Chilena de Litio Ltda.

 

Chile

 

55% indirectly through Chemetall Corporation.

Sales de Magnesio Ltda.

 

Chile

 

50% indirectly through Chemetall Corporation.

Knight Lux 1 Sa.r.l.

 

Luxembourg

 

89.6% directly and 10.4% indirectly through RS Funding Corporation

Knight Lux 2 Sa.r.l.

 

Luxembourg

 

100% indirectly through Knight Lux 1 Sa.r.l.

Knight Erste Beteiligungs GmbH

 

Germany

 

100% indirectly through Knight Lux 2 Sa.r.l.

Knight Zweite Beteiligungs GmbH

 

Germany

 

100% indirectly through Knight Erste Beteiligungs GmbH

Knight Dritte Beteiligungs

 

Germany

 

100%

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

GmbH

 

 

 

indirectly through Knight Erste Beteiligungs GmbH

Knight Vierte Beteiligungs GmbH

 

Germany

 

100% indirectly through Knight Erste Beteiligungs GmbH

Knight Fünfte Beteiligungs GmbH

 

Germany

 

100% indirectly through Knight Erste Beteiligungs GmbH

Knight Chimiques De Specialite SAS

 

France

 

100% indirectly through Knight Erste Beteiligungs GmbH

Knight Specialite Synthesis SAS

 

France

 

100% indirectly through Knight Vierte Beteiligungs GmbH

Dynamit Nobel AG

 

Germany

 

100% indirectly through Knight Erste Beteiligungs GmbH

DNJV Vermögensverwaltung GmbH

 

Germany

 

99.95% indirectly through Dynamit Nobel AG

Dynamit Nobel Beteiligungen GmbH

 

Germany

 

100% indirectly through Dynamit Nobel AG

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

Germany

 

100% indirectly through Dynamit Nobel AG

Dynamit Nobel AIS GmbH Automotive Ignition Systems

 

Germany

 

100% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

LRG Recycling GmbH

 

Germany

 

33.33% indirectly through Dynamit Nobel GmbH Explosivstoff-und

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

 

 

 

 

Systemtechnik

GHGS Gesellschaft für Hülsenlose Gewehrsysteme GmbH

 

Germany

 

100% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

Petri-DN GmbH Inflator Systems

 

Germany

 

30% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

Würgendorf Gehemigungshaltergesellschaft mbH

 

Germany

 

34% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

RUAG Deutschland GmbH

 

Germany

 

20% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

Dynamic Synthesis GmbH

 

Germany

 

100% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

Troisdorf Genehmigungshaltergesellschaft mbH

 

Germany

 

16% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

DynITEC GmbH

 

Germany

 

15% indirectly through Dynamit Nobel GmbH

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

 

 

 

 

Explosivstoff-und Systemtechnik

Rohner AG

 

Switzerland

 

100% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

bci Betriebs-AG

 

Switzerland

 

3.86% indirectly through Rohner AG

Dynamit Nobel Chimie Specialisée Pharmaceutique SAS

 

France

 

100% indirectly through Knight Chimiques De Specialite SAS

Finorga S.A.

 

France

 

100% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

Bedec Tir S.A.

 

France

 

30% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

DICON Explosives Company Ltd.

 

Nigeria

 

34.08% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

Nigerian Development and Construction Company Ltd.

 

Nigeria

 

25% indirectly through Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

CHEMETALL GmbH

 

Germany

 

49% indirectly through Dynamit Nobel AG and 51% indirectly through Dynamit Nobel
Beteiligungen GmbH

Chemetall Sp. zo.o.

 

Poland

 

100% indirectly through CHEMETALL GmbH

CM-Hilfe GmbH Unterstützungskasse

 

Germany

 

100% indirectly through CHEMETALL GmbH

CHEMETALL TAIWAN CO., LTD.

 

Taiwan

 

100% indirectly through CHEMETALL GmbH

Shanghai Chemetall Chemicals Co., Ltd.

 

China

 

60% indirectly through CHEMETALL GmbH

Chongqing Chemetall Chemicals Co., Ltd.

 

China

 

35% indirectly through CHEMETALL GmbH

CHEMETALL SA

 

France

 

99.98% indirectly through Knight Specialite Synthesis SAS

CHEMETALL TRAITEMENT DE SURFACE SAS

 

France

 

100% indirectly through CHEMETALL GmbH

Chemical Spécialités Chimiques S.A.S.

 

France

 

100% indirectly through CHEMETALL

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

 

 

 

 

GmbH

Chemetall Lusitana-Sociedade Tratamento

 

Portugal

 

99.98% indirectly owned through CHEMETALL GmbH and 0.02% indirectly through
CHEMETALL SA

Superficies Metalicas

 

Portugal

 

100% indirectly through CHEMETALL GmbH

SureChem Industries Pty Ltd.

 

Australia

 

100% indirectly through CHEMETALL GmbH

Chemetall s.r.o.

 

Prague

 

90% indirectly through CHEMETALL GmbH

Cetema B.V.

 

Netherlands

 

100% CHEMETALL GmbH

Chemetall N.V.

 

Belgium

 

58.88% indirectly through CHEMETALL GmbH

CM Services B.V.

 

Netherlands

 

100% indirectly through CHEMETALL GmbH

CHEMETALL (PROPRIETARY) LTD.

 

South Africa

 

100% indirectly through CHEMETALL GmbH

Metalon Stolberg Gesellschaft mit beschränkter Haftung

 

Germany

 

100% indirectly through CHEMETALL GmbH

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

ChemStore GmbH

 

Germany

 

50% indirectly through CHEMETALL GmbH

Chemetall (Australasia) Pty. Ltd.

 

Australia

 

100% indirectly through CHEMETALL GmbH

Chemetall Japan K.K.

 

Japan

 

100% indirectly through CHEMETALL GmbH

Bonder Iran S.S.K.

 

Iran

 

100% indirectly through CHEMETALL GmbH

Chemetall do Brasil Ltda.

 

Brasil

 

100% indirectly through CHEMETALL GmbH

Breisach Empreendimentos e Participações Ltda.

 

Brasil

 

99% indirectly through CHEMETALL GmbH

Chemetall Sanayi Kimyasallari Ticaret ve Sanayi A.S.

 

Turkey

 

100% indirectly through CHEMETALL GmbH

Chemetall Polska Sp.zo.o.

 

Poland

 

100% indirectly through CHEMETALL GmbH

Chemetall Hungaria Vegyianyagokat Gyártó es Fomalmazó Kft

 

Hungary

 

100% indirectly through CHEMETALL GmbH

PMG Corp.

 

Japan

 

50%

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

 

 

 

 

indirectly owned by CHEMETALL GmbH

Chemetall (Schweiz) AG

 

Switzerland

 

100% indirectly through CHEMETALL GmbH

CM Gesellschaft für Funktionsadditive GmbH

 

Germany

 

100% indirectly through CHEMETALL GmbH

CHEMETALL Ges.m.b.H.

 

Austria

 

100% indirectly through CHEMETALL GmbH

Industrieservice Ges.mbH

 

Austria

 

10% indirectly through CHEMETALL GmbH

Aachener Chemische Werke Ges.für Glastechnische Produckte und Verfahren mbH

 

Germany

 

100% indirectly through CHEMETALL GmbH

CHEMETALL INDIA COMPANY LTD.

 

UK

 

100% indirectly through CHEMETALL GmbH

Chemetall-Rai India Ltd.

 

India

 

40% indirectly through CHEMETALL GmbH

Brent International GmbH

 

Germany

 

100% indirectly through CHEMETALL GmbH

hebro chemie GmbH

 

Germany

 

100% indirectly through

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

 

 

 

 

CHEMETALL GmbH

Chemetall Hispania S.A.

 

Spain

 

100% indirectly through CHEMETALL GmbH

Agena Resinas y Colas Ltda.

 

Brasil

 

20% indirectly through CHEMETALL GmbH

Ardrox – Agena Quimica Ltda.

 

Brasil

 

49% indirectly through CHEMETALL GmbH

SMC Productos Fundicion S.A.

 

Spain

 

56.56% indirectly through CHEMETALL GmbH and 43.44% indirectly through Chemetall
Hispania S.A.

Chemetall Asia Pte. Ltd.

 

Singapore

 

100% indirectly through CHEMETALL GmbH

CHEMETALL HONG KONG LTD.

 

China

 

100% indirectly through CHEMETALL GmbH

Chemetall Philippines Co. Ltd., Inc.

 

Philippines

 

100% indirectly through CHEMETALL GmbH

CHEMETALL s.r.l.

 

Italy

 

100% indirectly through CHEMETALL GmbH

CHEMETALL ITALIA s.r.l.

 

Italy

 

100% indirectly through CHEMETALL GmbH

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

KENDELL s.r.l.

 

Italy

 

75% indirectly through CHEMETALL GmbH

CHEMETALL SPECIALITY CHEMICALS LTD.

 

UK

 

100% indirectly through CHEMETALL GmbH

SMC FOUNDRY PRODUCTS LTD.

 

UK

 

100% indirectly through CHEMETALL GmbH

CHEMETALL PLC

 

UK

 

100% indirectly through CHEMETALL GmbH

AM Craig Ltd.

 

UK

 

100% indirectly through CHEMETALL GmbH

Brent International B.V.

 

UK

 

100% indirectly through CHEMETALL GmbH

THE BRENT MANUFACTURING COMPANY LTD.

 

UK

 

100% indirectly through CHEMETALL GmbH

CHEMSERVE LTD.

 

UK

 

100% indirectly through CHEMETALL GmbH

ARDROX LTD.

 

UK

 

100% indirectly through CHEMETALL GmbH

WINNETS INKS LTD.

 

UK

 

100%

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

 

 

 

 

indirectly through CHEMETALL GmbH

BCI PENSIONS TRUSTEE LTD.

 

UK

 

100% indirectly through CHEMETALL GmbH

BRENT EUROPE LTD.

 

UK

 

100% indirectly through CHEMETALL GmbH

PROCESS INK HOLDINGS LTD.

 

UK

 

100% indirectly through CHEMETALL GmbH

PROCESS INKS AND COATINGS LTD.

 

UK

 

100% indirectly through PROCESS INKS HOLDINGS LTD.

Chemetall Skandinavien Ytteknik AB

 

Sweden

 

100% indirectly through CHEMETALL GmbH

Chemetall Danmark A/S

 

Denmark

 

100% indirectly through CHEMETALL GmbH

Chemetall Finland Oy

 

Finland

 

100% indirectly through CHEMETALL GmbH

CeramTec AG Innovative Ceramic Engineering

 

Germany

 

51% indirectly through Dynamit Nobel Beteiligungen GmbH and 49% indirectly
through

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

 

 

 

 

Dynamit Nobel AG

Cerasiv GmbH Innovatives Keramik-Engineering

 

Germany

 

100% indirectly through CeramTec AG Innovative Ceramic Engineering

CeramTec Italia S.r.l.

 

Italy

 

100% indirectly through CeramTec AG Innovative Ceramic Engineering

CeramTec UK Ltd.

 

UK

 

100% indirectly through CeramTec AG Innovative Ceramic Engineering

CeramTec Czech Republic spol s.r.o.

 

Czech Republic

 

100% indirectly through CeramTec AG Innovative Ceramic Engineering

CeramTec Innovativ Ceramic Engineering (M) Sdn. Bhd.

 

Malaysia

 

100% indirectly through CeramTec AG Innovative Ceramic Engineering

CeramTec Substrates s.r.o.

 

Czech Republic

 

100% indirectly through CeramTec AG Innovative Ceramic Engineering

CeramTec France S.A.R.L.

 

France

 

100% indirectly through CeramTec AG Innovative Ceramic Engineering

CeramTec Ibérica Innovative Ceramic Engineering s.l.

 

Spain

 

100% indirectly through CeramTec AG Innovative Ceramic Engineering

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

CeramTec Korea Ltd.

 

Korea

 

100% indirectly through CeramTec AG Innovative Ceramic Engineering

Suzhou CeramTec High-Tech Ceramics Co., Ltd.

 

China

 

100% indirectly through CeramTec AG Innovative Ceramic Engineering

Shanghai CeramTec Innovative Ceramic Engineering Co., Ltd.

 

China

 

90% indirectly through CeramTec AG Innovative Ceramic Engineering

ProCeram spol. s.r.o.

 

Czech Republic

 

55.8% indirectly through CeramTec AG Innovative Ceramic Engineering

Sachtleben Chemie GmbH

 

Germany

 

51% indirectly through Dynamit Nobel Beteiligungen GmbH and 49% indirectly
through Dynamit Nobel AG

Deutsche Baryt-Industrie Dr. Rudolf Albert GmbH & Co. KG

 

Germany

 

25% indirectly through Sachtleben Chemie GmbH

Alberti & Co. GmbH

 

Germany

 

25% indirectly through Sachtleben Chemie GmbH

Guangzhou Huali Sachtleben Chemicals Company Ltd.

 

China

 

40% indirectly through Dynamit Nobel AG

Pigment Chemie GmbH

 

Germany

 

100% indirectly through

 

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

 

Name of Subsidiary

 

State/Jurisdiction of
Incorporation

 

Ownership
Interest of US
Borrower

 

 

 

 

Sachtleben Chemie GmbH

MIWAC Mitteldeutsche Wasserchemie GmbH

 

Germany

 

100% indirectly through Dynamit Nobel AG

EKOKEMI GmbH

 

Germany

 

96.64% indirectly through Dynamit Nobel AG

CeramTec Anlagen und Betriebs GmbH I.G.

 

Germany

 

100% indirectly through Dynamit Nobel AG

BAE Vermögensverwaltungs GmbH

 

Germany

 

100% indirectly through Dynamit Nobel AG

Dynamit Nobel Unterstützungsfonds GmbH

 

Germany

 

100% indirectly through Dynamit Nobel AG

SERTO Beteiligungs GmbH & Co. Vermietungs KG

 

Germany

 

94% indirectly through Dynamit Nobel AG

Chemetall Anlagen-und Betriebs-GmbH

 

Germany

 

100% indirectly through Dynamit Nobel AG

hebro chemie Anlagen-und Betriebs-GmbH

 

Germany

 

100% indirectly through Dynamit Nobel AG

Sachtleben Chemie Anlagen-und Betriebs-GmbH

 

Germany

 

100% indirectly through Dynamit Nobel AG

Dynamit Nobel Kunststoff Anlagen-und Betriebs-GmbH

 

Germany

 

100% indirectly through Dynamit Nobel AG

 

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

 

Schedule 10.1

 

CLOSING DATE INDEBTEDNESS
(Excluding Trade Payables and Accrued Liabilities)

 

Bank Debt – Consolidated under US Gaap

 

Company

 

Bank

 

Amount

 

Maturity Date

 

Interest Rate

Dynamit Nobel AG

 

WestLB

 

EUR 5,112,918.81

 

7/17/2006

 

6-M-Euribor+0,49%

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

WestLB Düsseldorf

 

EUR 219,855.53

 

9/30/2005

 

5.00%

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

WestLB Düsseldorf

 

EUR 40,392.04

 

9/30/2004

 

6.25%

Chemetall GmbH

 

WestLB AG

 

EUR 2,556,459.41

 

11/21/2004

 

5.91%

MIWAC Mitteldeutsche Wasserchemie GmbH

 

Dresdner Bank AG, Duisburg / KfW

 

EUR 639,114.85

 

9/30/2006

 

4.75%

Rohner AG Pratteln

 

Bassellandschaftliche Kantonalbank

 

CHF 3,000,000.00

 

8/02/2004

 

3.50%

Rohner AG Pratteln

 

Bassellandschaftliche Kantonalbank

 

CHF 5,000,000.00

 

12/15/2004

 

4.02%

Dynamit Nobel AG

 

Commerzbank AG

 

EUR 5,112,918.81

 

6/30/2007

 

3-M-Euribor+1,45%

Dynamit Nobel AG

 

Commerzbank AG

 

EUR 7,669,378.22

 

8/15/2008

 

3-M-Euribor+1,40%

Dynamit Nobel GmbH Explosivstoff uns Systemtechnik

 

WestLB Irland

 

EUR 5,112,577.00

 

12/31/2008

 

Libor+039%

Chemetall GmbH

 

Westfalenbank AG (KfW- Umweltdarlehen)

 

EUR 3,834,689.10

 

6/30/2008

 

4.25%

Chemetall GmbH

 

Westfalenbank AG (DtA Umweltprogramm)

 

EUR 876,221.33

 

3/31/2008

 

4.25%

Chemetall GmbH

 

Westfalenbank AG (ERP - Energiesparprogramm)

 

EUR 1,079,935.38

 

9/30/2008

 

4.25%

Chemetalll Taiwan Co., Ltd.

 

Commerzbank AG – Koeln

 

JPY 410,000,000.00

 

3/31/2006

 

1.38%

Chemetalll Taiwan Co., Ltd.

 

The International Commercial Bank of China, Dah Tong

 

TWD 59,400,000.00

 

12/30/2005

 

2.50%

 

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

 

Company

 

Bank

 

Amount

 

Maturity Date

 

Interest Rate

 

 

Branch

 

 

 

 

 

 

Chemetalll Taiwan Co., Ltd.

 

The International Commercial Bank of China, Dah Tong Branch

 

TWD 66,000,000.00

 

12/31/2008

 

2.50%

Chemetalll Taiwan Co., Ltd.

 

First Commercial Bank, Shuang Ho Branch

 

TWD 14,500,000.00

 

12/31/2005

 

3.50%

Chemetalll Taiwan Co., Ltd.

 

First Commercial Bank, Shuang Ho Branch

 

TWD 3,194,200.00

 

12/31/2005

 

3.50%

Chemetalll Taiwan Co., Ltd.

 

First Commercial Bank, Shuang Ho Branch

 

TWD 14,555,800.00

 

12/31/2005

 

3.50%

Chemetall Ges.m.b.H., Wien

 

Bank Austria Creditanstalt AG

 

EUR 3,840,000.00

 

unlimited

 

2.05%

Chemetall Ges.m.b.H., Wien

 

Bank Austria Creditanstalt AG

 

EUR 315,109.40

 

1/1/2006

 

2.50%

Chemetall Ges.m.b.H., Wien

 

Bank Austria Creditanstalt AG

 

EUR 435,000.00

 

1/1/2009

 

2.90%

Sachtleben Chemie GmbH

 

WestLB / KfW

 

EUR 498,509.64

 

5/15/2010

 

1.40%

Sachtleben Chemie GmbH

 

WestLB / KfW

 

EUR 612,906.04

 

5/15/2011

 

1.20%

Rohner AG Pratteln

 

Dresdner Bank AG

 

CHF 32,500,000.00

 

12/31/2010

 

3.61%

Rohner AG Pratteln

 

Dresdner Bank AG

 

CHF 21,875,000.00

 

3/31/2011

 

4.02%

 

Other debt-like instruments under US Gaap

 

Company

 

Bank/Instrument

 

Amount

Dynamit Nobel AG

 

Commerzbank AG, Leases “SERTO” *

 

EUR 7,881,000.00

Chemetall GmbH

 

Bayrische Landesbank, Leases “Costa” *

 

EUR 168,000.00

Sachtleben Chemie GmbH

 

Skandifinanz Bank AG

 

EUR 12,000,000.00

Dynamit companies

 

Capital Leases

 

EUR 35,600,000.00

Dynamit companies

 

Preferred Dividend Shares

 

EUR 18,000,000.00

 

Indebtedness of a second person secured by a lien on Rockwood property:

 

Southern Clay Products, Inc.

 

Real Estate Lien Note due September 2, 2013
(Gonzales County, Texas)

 

$300,000.00 initial principal amt.
($246,292.23 outstanding as of July 23, 2003)

 

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

* the leasing entities SERTO and costa are not owned by Dynamit Nobel but have
to be consolidated according to US Gaap.

 

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

 

Interest rate swap, cap or other hedge agreement:

 

(e) Company

 

(f) Interest Rate Product

 

(g) Counterparty

 

(h) Current Notional
Amount
(as of July 31, 2004)

(i) Rockwood Specialties Group, Inc.

 

(j) EUR Swap due February 26, 2006

 

(k) Goldman Sachs International

 

(l) EUR 18,519,000.00

(m) Rockwood Specialties Group, Inc.

 

(n) USD Swap due February 26, 2006

 

(o) Goldman Sachs International

 

(p) USD 83,080,000.00

(q) Rockwood Specialties Group, Inc.

 

(r) USD Collar due February 26, 2006

 

(s) Goldman Sachs International

 

(t) USD 83,080,000.00

(u) Rockwood Specialties Group, Inc.

 

(v) EUR Collar due February 26, 2006

 

(w) Goldman Sachs International

 

(x) USD 18,519,000.00

(y) Rockwood Specialties Limited

 

(z) EUR Swap due February 26, 2006

 

(aa) Goldman Sachs International

 

(bb) EUR 43,211,000.00

(cc) Rockwood Specialties Limited

 

(dd) EUR Collar due February 26, 2006

 

(ee) Goldman Sachs International

 

(ff) EUR 43,211,000.00

(gg) Rockwood Specialties Limited

 

(hh) Cross currency swap

 

(ii) Goldman Sachs International

 

(jj) EUR 49,500,000.00

 

(kk)

 

(ll)  Guarantee Obligations:

 

Guarantor

 

Beneficiary

 

Maximum Amount

Rockwood Specialties Group, Inc.

 

Adva 15(GA) LLC

 

15-year lease with two 10-year renewals; $1,275,000 per year; payable quarterly
in advance and subject to CPI adjustments

Rockwood Specialties Inc.

 

Vic-Vin Enterprises

 

USD 280,000.00

Rockwood Specialties Inc.

 

Travelers Casualty

 

USD 235,052.00

Rockwood Specialties Inc.

 

Berg Family Trust

 

USD 950,000

Rockwood Specialties Inc.

 

Bedford Property Investment

 

USD 263,240.00

 

Other Guarantee or Similar Obligations:

 

Obligor

 

Guarantor

 

Beneficiary

 

Maximum Amount

Rockwood Italia SpA

 

IntesaBci Spa

 

Guarantee in connection with litigation re: Mssr. Jungk

 

EUR 164,000.00

Rockwood Specialties Limited and its UK

 

Barclays Bank

 

HM Customs & Excise (bond issued by Barclays)

 

EUR 800,000.00

 

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

 

Subsidiaries

 

 

 

 

 

 

Rockwood Specialties Limited and its UK Subsidiaries

 

Barclays Bank

 

Charge cards (credit line)

 

GBP 700,000.00

Dynamit Nobel AG

 

Dynamit Nobel AG

 

KSK Siegburg

 

EUR 6,340

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

Dynamit Nobel AG

 

Orica Europe Gmbh

 

EUR 43,459,809

Rohner AG

 

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

Dresdner Bank AG, Köln

 

CHF 40,000,000

Suzhou CeramTec High-Tech Ceramics Co.Ltd.

 

CeramTec AG Innovative Ceramic Engineering

 

Dresdner Bank AG, Esslingen

 

EUR 1,700,000

Chemetall Japan KK

 

Chemetall GMBH

 

HypoVereinsbank München

 

JPY 500,000,000

Chemetall (Pty.) Ltd.

 

Chemetall GMBH

 

First National Bank of Southern Africa

 

ZAR 6,000,000

Chemetall GMBH

 

Chemetall GMBH

 

Commerzbank AG

 

JPY 410,000,000

Chemetall GMBH

 

Chemetall GMBH

 

Commerzbank AG

 

TWD 70,000,000

Chemetall GMBH

 

Chemetall GMBH

 

Commerzbank AG

 

TWD 64,000,000

Chemetall GMBH

 

Chemetall GMBH

 

Commerzbank AG

 

TWD 49,000,000

Chemetall GMBH

 

Chemetall GMBH

 

Commerzbank AG

 

TWD 30,000,000

Chemetall GMBH

 

Chemetall GMBH

 

Commerzbank AG

 

TWD 24,800,000

Sachtleben Chemie GmbH

 

Satchtleben Chemie GmbH

 

Dresdner Bank AG

 

EUR 639,115

Sachtleben Chemie GmbH

 

Satchtleben Chemie GmbH

 

Investitutionsbank des Landes Brandenburg

 

EUR 50,000

Dynamit Nobel AG

 

Deutsche Bank Köln

 

Changchun AOQI Automobile Plastic Pint Comp., China

 

EUR 428,898.18

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Commerzbank Köln

 

Novartis Pharma AG, Basel, Schweiz

 

EUR 10,000,000.00

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Commerzbank Köln

 

Dynamit Nobel Defence GmbH

 

EUR 5,000,000.00

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Commerzbank Köln

 

Government of the Republic of Singapore

 

EUR 3,237,000.00

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Commerzbank Köln

 

Government of the Republic of Singapore

 

EUR 1,879,704.00

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Commerzbank Köln

 

Government of the Republic of Singapore

 

EUR 647,400.00

Dynamit Nobel GmbH

 

Commerzbank Köln

 

Hauptzollamt Köln

 

EUR 25,000.00

Dynamit Nobel GmbH

 

Deutsche Bank Köln

 

Government of the Republic of Singapore

 

EUR 2,556,600.00

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Deutsche Bank Köln

 

Government of the Republic of Singapore

 

EUR 720,498.00

Dynamit Nobel GmbH Explosivstoff- uns

 

West LB Düsseldorf

 

Hauptzollamt Köln

 

EUR 10,225.84

 

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

 

Systemtechnik

 

 

 

 

 

 

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

West LB Düsseldorf

 

Hauptzollamt Köln

 

EUR 29,143.64

Chemetall Hispania, S.A.

 

Deutsche Bank Sociedad Anonima Espanola

 

CENTRO MANT.HELICOP

 

EUR  1,000.00

Chemetall Hispania, S.A.

 

Deutsche Bank Sociedad Anonima Espanola

 

FAMET

 

EUR 1,000.00

Chemetall Hispania, S.A.

 

Deutsche Bank Sociedad Anonima Espanola

 

PURIFICACION GARCIA

 

EUR 6,000.00

Chemetall Hispania, S.A.

 

Deutsche Bank Sociedad Anonima Espanola

 

MAESTRANZA SEVILLA

 

EUR 2,000.00

Chemetall Hispania, S.A.

 

Deutsche Bank Sociedad Anonima Espanola

 

FAMET

 

EUR 1,000.00

hebro chemie GmbH

 

Stadtsparkasse Moenchengladbach

 

FBB Frankfurter Bau-Beteiligungs GmbH

 

EUR 86,000.00

Aachener Chemische Werke GmbH

 

Deutsche Bank AG

 

Hanseatische Investment GmbH

 

EUR 48,600.00

CHEMETALL GMBH

 

Deutsche Bank AG

 

Familie Hermann

 

EUR 2,147.43

CHEMETALL GMBH

 

Deutsche Bank AG

 

Andrea Miosga

 

EUR 1,500.00

CHEMETALL GMBH

 

Deutsche Bank AG

 

Dr. Gerald Miosga

 

EUR 1,500.00

CM Services B.V.

 

ABN Amro Bank N.V.

 

Tax authorities BE

 

EUR 17,000.00

Chemetall S.r.l.

 

Banca Popolare Commercio E Industria S.C.A.R.L.

 

COMUNE DI GIUSSANO

 

EUR 70,000.00

Chemetall Italia Srl

 

Banca Popolare Commercio E Industria S.C.A.R.L.

 

LA MAGONA D’ITALIA

 

EUR 155,000.00

CHEMETALL GMBH

 

Deutsche Bank AG

 

Zollamt Goslar

 

EUR 1,000.00

Chemetall Traitements de Surface SAS

 

Credit Lyonnais

 

SNVI

 

EUR 5,000.00

Chemetall Traitements de Surface SAS

 

BNP-Paribas SA

 

OLTCIT

 

EUR 1,000.00

Chemetall Traitements de Surface SAS

 

BNP-Paribas SA

 

STE TUNISIENNE DE LUBRIFIANTS

 

EUR 10,000.00

Chemetall Traitements de Surface SAS

 

BNP-Paribas SA

 

METAFRAM

 

EUR 2,000.00

Chemetall Traitements de Surface SAS

 

BNP-Paribas SA

 

PHILIPS

 

EUR 3,000.00

Chemetall Traitements de Surface SAS

 

BNP-Paribas SA

 

CIAPEM

 

EUR 29,000.00

Chemetall Traitements de Surface SAS

 

BNP-Paribas SA

 

CIAPEM

 

EUR 20,000.00

Chemetall Traitements de Surface SAS

 

BNP-Paribas SA

 

CIAPEM

 

EUR 5,000.00

Chemetall Traitements de Surface SAS

 

BNP-Paribas SA

 

MACHINEXPORT

 

EUR 7,000.00

Chemetall Traitements de Surface SAS

 

BNP-Paribas SA

 

MACHINEXPORT

 

EUR 4,000.00

Chemetall Traitements de Surface SAS

 

BNP-Paribas SA

 

MERS EL KEBIR

 

EUR 1,000.00

Chemetall Hispania, S.A.

 

Deutsche Bank Sociedad Anonima Espanola

 

SOLRED

 

EUR 14,000.00

Chemetall Ges.mbH

 

Österreichische Kontrollbank AG

 

Bank Austria Creditanstalt AG

 

EUR 3,840,000.00

 

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

 

Chemetall Ges.mbH

 

Bank Austria Creditanstalt AG

 

Österr. Verkehrskreditbank AG / ÖBB

 

EUR 101,741.00

Chemetall Ges.mbH

 

Bank Austria Creditanstalt AG

 

Zollamt, Wien

 

EUR 21,801.00

Chemetall Ges.mbH

 

Bank Austria Creditanstalt AG

 

ERP-Fonds

 

EUR 236,404.00

Chemetall Plc

 

Barclays Bank PLC

 

HM Customs & Excise

 

GBP 30,000.00

Chemetall Plc

 

Barclays Bank PLC

 

HM Customs & Excise

 

GBP 10,000.00

Sachtleben Chemie GmbH

 

Dresdner Bank AG, Duisburg

 

Hauptzollamt Krefeld

 

EUR 2,560.00

Sachtleben Chemie GmbH

 

Dresdner Bank AG, Duisburg

 

Rhodia Acetow Venezuela C.A.

 

USD 108,004.00

Sachtleben Chemie GmbH

 

Deutsche Bank AG,Duisburg

 

Soc.Wallonne des Destribution d Eau, Belgien

 

EUR 64,080.00

Sachtleben Chemie GmbH

 

Deutsche Bank AG,Duisburg

 

Soc.Wallonne des Destribution d Eau, Belgien

 

EUR 3,990.00

Sachtleben Chemie GmbH

 

Deutsche Bank AG,Duisburg

 

Pen 1 CV, Amsterdam

 

EUR 7,108.11

CeramTec AG Innovative Ceramic Engineering

 

Dresdner Bank AG

 

The European Organization for Nuclear Research - CERN

 

CHF 5,955.60

CeramTec AG Innovative Ceramic Engineering

 

Dresdner Bank AG

 

Frantschach Pulp and Paper Ctech a.s.

 

EUR 90,000.00

CeramTec AG Innovative Ceramic Engineering

 

Dresdner Bank AG

 

JSC ‘Solikamskbumprom’

 

EUR 61,000.00

CeramTec AG Innovative Ceramic Engineering

 

Dresdner Bank AG

 

Belgian Ministry of Finance

 

EUR 24,789.35

CeramTec AG Innovative Ceramic Engineering

 

Dresdner Bank AG

 

ITC Limited

 

EUR 20,300.00

CeramTec AG Innovative Ceramic Engineering

 

Dresdner Bank AG

 

The European Organization for Nuclear Research - CERN

 

USD 89,752.40

CeramTec AG Innovative Ceramic Engineering

 

ING BHF-Bank AG

 

Islamic Republic of Iran HOREC

 

EUR 33,088.51

CeramTec Italia S.r.L.

 

Banca Popolare di Bergamo

 

Regione Lombardia

 

EUR 854.56

CeramTec Italia S.r.L.

 

Allianz ins. Co.

 

Municipality Caravaggio

 

EUR 60,000.00

CeramTec UK Ltd.

 

Lloyds TSB Bank

 

HM Customs & Excise

 

GBP 8,000.00

CeramTec Innovative Ceramic Engineering (M) Sdn. Bhd.

 

Bumiputra-Commerce Bank Berhad

 

Malaysia Ministry of Health

 

MYR 2,500.00

CeramTec Innovative Ceramic Engineering (M) Sdn. Bhd.

 

Bumiputra-Commerce Bank Berhad

 

Gas Malaysia Sdn. Bhd.

 

MYR 42,000.00

CeramTec Innovative Ceramic Engineering (M) Sdn. Bhd.

 

Bumiputra-Commerce Bank Berhad

 

Tenaga Nasional Berhad Distribution

 

MYR 130,000.00

FINORGA SA

 

Auxi assurance / Zurich Versicherung

 

Local environmental authority

 

EUR 527,474.00

FINORGA SA

 

Auxi assurance / Zurich Versicherung

 

Local environmental authority

 

EUR 426,095.00

Rohner AG Pratteln

 

Credit-Suisse

 

Oberzolldirektion, CH-Bern

 

CHF 260,000.00

 

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

 

(mm)  Performance Bonds:

 

Obligor

 

Underwriter

 

Beneficiary

 

Outstanding Amount
(as of July 23, 2003)

Chemical Specialties, Inc.

 

Travelers

 

Commonwealth of Puerto Rico

 

USD 2,000.00

Chemical Specialties, Inc.

 

Travelers

 

Our Sovereign Lady

 

USD 30,000.00

Lurex, Inc.

 

American Motorist

 

U.S. Customs

 

USD 100,000.00

Advantis Technologies, Inc.

 

Travelers

 

City of Riverside, California

 

USD 39,996.00

Advantis Technologies, Inc.

 

Travelers

 

N/A

 

USD 467,523.00

 

(nn)

 

(oo)  Letters of Credit:

 

(pp) Issue Date

 

(qq) Issuer

 

(rr) For the
Account of

 

(ss) Beneficiary

 

(tt) Amount

 

(uu) Expiry
Date

(vv) 2/4/1999

 

(ww) JPMorgan Chase

 

(xx)  Royal Indemnity Company

 

(yy) Rockwood Specialties Inc. (f/k/a Laporte Inc.)

 

(zz) USD 200,000.00

 

(aaa) 2/4/2005

(bbb) 2/4/1999

 

(ccc) JPMorgan Chase

 

(ddd) The Travelers Indemnity Company

 

(eee) Rockwood Specialties Inc. (f/k/a Laporte Inc.)

 

(fff) USD 100,000.00

 

(ggg) 2/4/2005

(hhh) 1/14/1999

 

(iii)  JPMorgan Chase

 

(jjj) Hennepin County

 

(kkk) Electrochemicals Inc.

 

(lll) USD 39,200.00

 

(mmm) 1/14/2005

(nnn) 1/14/1999

 

(ooo) JPMorgan Chase

 

(ppp) United Pacific Insurance Company

 

(qqq) Advantis Technologies, Inc. (f/k/a Laporte Water Technologies &
Biochem, Inc.)

 

(rrr) USD 98,100.00

 

(sss) 1/14/2005

(ttt) 10/16/1998

 

(uuu) JPMorgan Chase

 

(vvv) Environmental Protection Division Department of Natural Resources

 

(www) Chemical Specialties, Inc.

 

(xxx)  USD 2,612,940.00

 

(yyy) 10/13/2005

(zzz) 3/2/2004

 

(aaaa) JPMorgan Chase

 

(bbbb) Dept. of Conservation, Barstow or Bureau of Land Management Barstow
Resource

 

(cccc) Southern Clay Products, Inc.

 

(dddd) USD 7,300.00

 

(eeee) 2/25/2005

 

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

 

 

 

 

 

Area or County of Inyo

 

 

 

 

 

 

(ffff) 1/16/2004

 

(gggg) JPMorgan Chase

 

(hhhh) ACE American Insurance Company

 

(iiii) Rockwood Holdings Inc. c/o Rockwood Specialties Inc.

 

(jjjj) USD 1,850,000.00

 

(kkkk) 1/15/2005

(llll) 12/19/2002

 

(mmmm) JPMorgan Chase

 

(nnnn) North Carolina Department of Environmental and Natural Resources Division
of Waste Management Hazardous Waste Section

 

(oooo) Rockwood Specialties Inc.

 

(pppp) USD 353,361.69

 

(qqqq) 12/20/2004

(rrrr) 11/25/2002

 

(ssss) JPMorgan Chase

 

(tttt) Lumbermens Mutual Casualty Company

 

American Motorists Insurance Company

 

American Manufacturers Mutual Insurance Company

 

American Protection Insurance Company

 

Natlsco, Inc.

 

National Loss Control Service Corporation

 

(uuuu) Rockwood Specialties Inc.

 

(vvvv) USD 1,600,000.00

 

(wwww) 11/25/2004

(xxxx)  6/24/2002

 

(yyyy) JPMorgan Chase

 

(zzzz) ADVA 15 (GA) LLC

 

(aaaaa) Advantis Technologies, Inc.

 

(bbbbb) USD 637,500.00

 

(ccccc) 6/24/2005

(ddddd) 2/28/2002

 

(eeeee) JPMorgan Chase

 

(fffff) Princeton Overlook Realty LLC

 

(ggggg) Rockwood Holdings Inc.

 

(hhhhh) USD 111,411.67

 

(iiiii) 3/31/2005

(jjjjj) 1/18/2002

 

(kkkkk) JPMorgan Chase

 

(lllll) Lumbermens Mutual Casualty Company

 

American Motorists Insurance Company

 

American Manufacturers Mutual Insurance Company

 

(nnnnn) Rockwood Specialties Inc.

 

(ooooo) USD 2,650,000.00

 

(ppppp) 12/31/2004

 

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

 

 

 

 

 

American Protection Insurance Company

 

Natlsco, Inc.

 

(mmmmm) National Loss Control Service Corporation

 

 

 

 

 

 

(qqqqq) 12/21/2002

 

(rrrrr) JPMorgan Chase

 

(sssss) KL Holdings Inc.

 

(ttttt) Rockwood Electronic Materials S.A.

 

(uuuuu) EUR 1,486,073.00

 

(vvvvv) 1/31/2005

(wwwww) 7/10/2001

 

(xxxxx) JPMorgan Chase

 

(yyyyy) County of Inyo Planning Department

 

(zzzzz) Southern Clay Products, Inc.

 

(aaaaaa) USD 38,640.00

 

(bbbbbb) 7/10/2005

(cccccc) 2/6/2001

 

(dddddd) JPMorgan Chase

 

(eeeeee) Travelers Casualty and Surety Company of America

 

(ffffff) Rockwood Pigments NA, Inc.

 

(gggggg) USD 683,023.60

 

(hhhhhh) 2/6/2005

(iiiiii) 1/17/2001

 

(jjjjjj) JPMorgan Chase

 

(kkkkkk) National Union Fire Insurance Co. of Pittsburgh, PA

 

(llllll) Rockwood Specialties Inc.

 

(mmmmmm) USD 1,450,000.00

 

(nnnnnn) 11/20/2004

10/1/2003

 

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Ministerio della Difesa Rom, Italien

 

Commerzbank Köln

 

EUR 731,120.00

 

Unlimited

1/31/2003

 

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Ministerio della Difesa Rom, Italien

 

Commerzbank Köln

 

EUR 458,957.89

 

unlimited

4/8/2003

 

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Ministerio della Difesa Rom, Italien

 

Commerzbank Köln

 

EUR 258,768.00

 

unlimited

4/8/2003

 

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Defence Procurement Korea

 

Commerzbank Köln

 

EUR 100,632.00

 

unlimited

1/10/2002

 

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Ministero della Difesa Rom, Italien

 

Commerzbank Köln

 

EUR 6,120.00

 

unlimited

11/14/2000

 

Dynamit Nobel GmbH Explosivstoff- uns

 

Defence Procurement Korea

 

Deutsche Bank Köln

 

EUR 177,950.03

 

unlimited

 

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

 

 

 

Systemtechnik

 

 

 

 

 

 

 

 

3/21/2003

 

Chemetall GmbH

 

First Commercial Bank, Taipei

 

Commerzbank AG

 

TWD 24,800,000.00

 

12/30/2005

3/21/2003

 

Chemetall GmbH

 

The International Commercial Bank of China

 

Commerzbank AG

 

TWD 64,000,000.00

 

12/30/2005

2/22/1999

 

Chemetall GmbH

 

The International Commercial Bank of China

 

Commerzbank AG

 

TWD 49,000,000.00

 

12/302005

3/21/2003

 

Chemetall GmbH

 

First Commercial Bank, Taipei

 

Commerzbank AG

 

TWD 30,000,000.00

 

12/31/2005

5/5/2004

 

Chemetall GmbH

 

The International Commercial Bank of China

 

Commerzbank AG

 

TWD 70,000,000.00

 

12/31/2008

7/14/1999

 

CeramTec AG Innovative Ceramic Engineering

 

The Israel Electric Corporation Ltd.

 

Dresdner Bank AG

 

EUR 8,208.24

 

6/12/2005

1/21/2000

 

CeramTec AG Innovative Ceramic Engineering

 

The Israel Electric Corporation Ltd.

 

Dresdner Bank AG

 

EUR 29,754.87

 

2/20/2005

 

(oooooo)

 

Bank Debt Non-Consolidated Entities (not required to be consolidated for US Gaap
purposes):

 

Company

 

Bank

 

Amount

 

Maturity Date

 

Interest Rate

Chemetall Japan K.K.

 

HypoVereinsbank, Tokyo Branch

 

JPY 250,000,000.00

 

7/22/2005

 

1.54%

Chemetall Japan K.K.

 

Mitsui Sumitomo Bank

 

JPY 90,000,000.00

 

8/23/2004

 

2.25%

Chemetall Japan K.K.

 

Mizuho Bank (DKB)

 

JPY 40,000,000.00

 

7/12/2004

 

2.38%

Chemetall Japan K.K.

 

UFJ Bank (Sanwa)

 

JPY 50,000,000.00

 

12/20/2005

 

3.31%

Ticaret ve Sanayi A.S.

 

Kocbank A.S./ Zincirlikuyu Sb.

 

TRL 27,207,255,000

 

11/8/2004

 

28%

Chemetall-Rai India Limited

 

Canara Bank, Fort Main Branch

 

INR 1,063,199.00

 

7/31/2008

 

11.50%

Chemetall-Rai India Limited

 

Canara Bank, Fort Main Branch

 

INR 557,830.00

 

1/11/2008

 

11.50%

Chemetall-Rai India Limited

 

Canara Bank, Fort Main Branch

 

INR 875,957.00

 

8/1/2009

 

11.50%

Chemetall-Rai India Limited

 

Canara Bank, Fort Main Branch

 

INR 404,202.00

 

8/1/2009

 

11.50%

Chemetall-Rai India Limited

 

HDFC Bank

 

INR 448,400.74

 

7/12/2007

 

10.25%

Chemetall-Rai India Limited

 

HDFC Bank

 

INR 69,807.97

 

7/12/2004

 

8.00%

 

Working Capital Facilities:

 

Company

 

Bank

 

Facility Amount

 

Revolver

 

Maturity Date

 

Type

Dynamit Nobel AG

 

Deutsche Bank AG

 

EUR 20,000,000.00

 

N/A

 

open ended

 

Overdraft

 

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

 

Company

 

Bank

 

Facility Amount

 

Revolver

 

Maturity Date

 

Type

Dynamit Nobel AG

 

Deutsche Bank AG

 

EUR 10,000,000.00

 

N/A

 

open ended

 

FX-Hedging

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Commerzbank Köln

 

EUR 23,000,000.00

 

N/A

 

open ended

 

Bank guarantees

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Commerzbank Köln

 

EUR 5,000,000.00

 

N/A

 

open ended

 

Overdraft or bank guarantees

Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik

 

Deutsche Bank Köln

 

EUR no given limit

 

N/A

 

N/A

 

Bank guarantees

Chemetall Ges. m.b.H., Wien

 

Bank Austria Creditanstalt AG

 

EUR 726,728.34

 

Zero

 

unlimited

 

Overdraft

Chemetall Ges. m.b.H., Wien

 

Bank Austria Creditanstalt AG

 

EUR 359,948.55

 

N/A

 

N/A

 

Bank guarantees

Chemetall Pty Ltd.

 

First National Bank of Southern Africa Ltd.

 

ZAR 6,000,000.00

 

Zero

 

12/31/2004

 

Overdraft

Chemetall GmbH

 

Commerzbank AG, Koeln

 

TWD 237,800,000.00

 

N/A

 

N/A

 

Stand-by LC’s

Chemetall GmbH, Frankfurt

 

Deutsche Bank AG

 

EUR no given limit

 

N/A

 

N/A

 

Bank guarantees

Aachener Chemische Werke GmbH

 

Deutsche Bank AG

 

EUR no given limit

 

N/A

 

8/31/2007

 

Bank guarantees

CM Hispania S.A.

 

Deutsche Bank AG, Hispania

 

EUR 25,000.00

 

N/A

 

N/A

 

Bank guarantees

CM Services B.V.

 

ABN Amro Bank N.V.

 

EUR 17,000.00

 

N/A

 

unlimited

 

Bank guarantees

hebro chemie GmbH

 

Stadtsparkass M´gladbach

 

EUR 86,000.00

 

N/A

 

unlimited

 

Bank guarantees

Chemetall s.r.l.

 

Banca Populare Commercio E Industria S.C.A.R.L.

 

EUR 70,000.00

 

N/A

 

12/23/2004

 

Bank guarantees

Chemetall Italia S.R.L.

 

Banca Populare Commercio E Industria S.C.A.R.L.

 

EUR 155,000.00

 

N/A

 

2/26/2005

 

Bank guarantees

Chemetall TdS

 

Credit Lyonnais

 

EUR 5,000.00

 

N/A

 

8/6/2004

 

Bank guarantees

Chemetall TdS

 

BNP Paribas S.A.

 

EUR 82,000.00

 

N/A

 

N/A

 

Bank guarantees

Chemetall PLC

 

Barclays Bank

 

GBP 30,000.00

 

N/A

 

unlimited

 

Bank guarantees

Chemetall PLC

 

Barclays Bank

 

GBP 10,000.00

 

N/A

 

unlimited

 

Bank guarantees

 

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

 

Company

 

Bank

 

Facility Amount

 

Revolver

 

Maturity Date

 

Type

Chemetall PLC

 

Barclays Bank

 

GBP 2,000,000.00

 

Zero

 

unlimited

 

Overdraft

Sachtleben Chemie GmbH

 

Dresdner Bank AG, Duisburg

 

EUR 500,000.00

 

EUR 1,500,000.00

 

N/A

 

Overdraft/Bank guarantee/stand-by L/Cs

Sachtleben Chemie GmbH

 

Deutsche Bank AG

 

EUR no given limit

 

N/A

 

N/A

 

Bank guarantees

Sachtleben Chemie GmbH

 

Deutsche Bank AG, Amsterdam

 

EUR no given limit

 

Zero

 

N/A

 

Overdraft

Sachtleben Chemie GmbH

 

Commerzbank, Duisburg

 

EUR no given limit

 

EUR 300,000.00

 

N/A

 

Overdraft

Sachtleben Chemie GmbH

 

Degussa Bank AG, Frankfurt

 

EUR no given limit

 

Zero

 

N/A

 

Overdraft

Rohner AG Pratteln

 

Credit-Suisse, Postfach, CH-4002 Basel

 

CHF no given limit

 

Zero

 

ongoing

 

Overdraft

CeramTec AG Innovative Ceramic Engineering

 

Kreissparkasse Esslingen-Nürtingen

 

EUR 1,000,000.00

 

Zero

 

ongoing

 

Multipurpose

CeramTec AG Innovative Ceramic Engineering

 

Dresdner Bank AG

 

EUR 2,300,000,00

 

Zero

 

ongoing

 

Multipurpose

CeramTec AG Innovative Ceramic Engineering

 

ING BHF-Bank AG

 

EUR 33,088.51

 

Zero

 

ongoing

 

Bank Guarantee

CeramTec Italia S.r.L.

 

Banca Popolare di Bergamo

 

EUR 854.56

 

Zero

 

ongoing

 

Bank Guarantee

CeramTec Italia S.r.L.

 

Allianz ins. Co.

 

EUR 60,000.00

 

Zero

 

ongoing

 

Bank Guarantee

CeramTec UK Ltd.

 

Lloyds TSB Bank

 

GBP 8,000.00

 

Zero

 

ongoing

 

Bank Guarantee

CeramTec Innovative Ceramic Engineering (M) Sdn. Bhd.

 

Bumiputra-Commerce Bank Berhad

 

MYR 174,500.00

 

Zero

 

ongoing

 

Bank Guarantee

FINORGA SA

 

Credit Lyonnais

 

EUR no given limit

 

N/A

 

N/A

 

EONIA + 0,35%

 

Working Capital Facilities Non-Consolidated Entities (not required to be
consolidated for US Gaap purposes):

 

Company

 

Bank

 

Facility Amount

 

Revolver

 

Maturity Date

 

Type

Chemetall Australasia Pty Ltd

 

Commonwealth Bank of Australia

 

AUD 200,000.00

 

Zero

 

N/A

 

Overdraft

Chemetall Japan K.K.

 

HypoVereinsbank , Tokyo Branch

 

JPY 250,000,000.00

 

Zero

 

N/A

 

Overdraft

 

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

 

Chemetall Sanayi Kimyasalları Ticaret ve Sanayi A.S.

 

Turkiye Is Bankasi A.S.

 

TRL 5,700,000,000

 

N/A

 

6/30/2005

 

Bank Guarantee

Chemetall Sanayi Kimyasalları Ticaret ve Sanayi A.S.

 

Turkiye Is Bankasi A.S.

 

TRL 8,217,758,000

 

N/A

 

5/20/2006

 

Bank Guarantee

Chemetall Sanayi Kimyasalları Ticaret ve Sanayi A.S.

 

Turkiye Is Bankasi A.S.

 

TRL 3,562,500,000

 

N/A

 

6/1/2015

 

Bank Guarantee

Chemetall Sanayi Kimyasalları Ticaret ve Sanayi A.S.

 

Turkiye Is Bankasi A.S.

 

TRL 750,000,000

 

N/A

 

6/1/2005

 

Bank Guarantee

Suzhou CeramTec High-Tech Ceramics Co., Ltd.

 

Dresdner Bank Shanghai

 

CNY 17,000,000

 

N/A

 

ongoing

 

Multi-purpose

 

Other Guarantee or Similar Obligations Non-Consolidated Entities:

 

Obligor

 

Guarantor

 

Beneficiary

 

Maximum Amount

Chemtall Sanayi Kimya. Ticaret ve Sanayi A.S.

 

Turkiye Is. Bankasi A.S.

 

Ist.9.Tic.Mahk

 

TRL 750,000,000.00

Chemtall Sanayi Kimya. Ticaret ve Sanayi A.S.

 

Turkiye Is. Bankasi A.S.

 

Eregli Demir Celik

 

TRL 5,700,000.00

Chemtall Sanayi Kimya. Ticaret ve Sanayi A.S.

 

Turkiye Is. Bankasi A.S.

 

Eregli Demir Celik

 

TRL 8,217,758.00

Chemtall Sanayi Kimya. Ticaret ve Sanayi A.S.

 

Turkiye Is. Bankasi A.S.

 

Korfez Electric A.S.

 

TRL 3,562,500.00

 

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

 

SCHEDULE 10.2

 

to the Credit Agreement

 

CLOSING DATE LIENS

 

SECTION 15.
SECTION 16. Debtor

 

Secured Party

 

SECTION 17.
SECTION 18. Collateral

 

State

 

(a)
Jurisdiction

 

Original File Date
and Number

Advantis Technologies, Inc.

 

RS Receivables Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

12/31/2001

#11807630

Advantis Technologies, Inc.

 

RS Receivables Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

3/26/2002

#20773915

Advantis Technologies, Inc.

 

RS Receivables II Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

6/27/2002

#21574502

Advantis Technologies, Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920068

Alpha Gary Corporation

 

Climax Molybdenum Company

 

consigned product

 

DE

 

Secretary of State

 

11/8/2001

#11419089

Alphagary Corporation

 

RS Receivables Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

12/31/2001

#11807689

Alphagary Corporation

 

ExxonMobil Chemical Company, a division of Exxon Mobil Corporation

 

consigned product

 

DE

 

Secretary of State

 

12/11/2001

#20115000

Alphagary Corporation

 

RS Receivables Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

3/26/2002

#20773642

 

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

* To be released as of 24:00 (German time) on the Closing Date.

 

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

 

SECTION 15.
SECTION 16. Debtor

 

Secured Party

 

SECTION 17.
SECTION 18. Collateral

 

State

 

(a)
Jurisdiction

 

Original File Date
and Number

Alphagary Corporation

 

RS Receivables II Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

6/27/2002

#21575038

Alphagary Corporation

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920100

Alphagary Corporation

 

CIT Communications Finance Corporation

 

leased equipment

 

DE

 

Secretary of State

 

5/5/2004

#41420662

Ceramtec, N.A.

 

General Electric Capital Corporation

 

Accounts under Receivables Purchase Agreement

 

SC

 

Secretary of State

 

12/28/1999

#991228-154508A

Ceramtec North America

 

Inacom Technology Financial Services

 

leased equipment

 

SC

 

Secretary of State

 

7/21/1999

#990721-095337A

Ceramtec North America

 

NMHG Financial Services, Inc.

 

leased equipment

 

SC

 

Secretary of State

 

10/24/2000

#001024-112034A

Ceramtec North America Innovative Ceramic Engineering Corporation

 

NEC America, Inc.

 

leased telephone system

 

DE

 

Secretary of State

 

2/26/2002

#20709059

Ceramtec North America Innovative Ceramic Engineering Corporation

 

Pullman Bank & Trust Company

 

leased equipment

 

DE

 

Secretary of State

 

6/6/2002

#21394562

Ceramtec North America Innovative Ceramic Engineering Corporation

 

Pullman Bank & Trust Company

 

leased equipment

 

DE

 

Secretary of State

 

6/6/2002

#21394919

Ceramtec North America Innovative Ceramic Engineering Corporation

 

Celtic Leasing Corp.

 

leased computer equipment

 

DE

 

Secretary of State

 

5/20/2002

#21473374

 

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

* To be released as of 24:00 (German time) on the Closing Date.

 

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

 

SECTION 15.
SECTION 16. Debtor

 

Secured Party

 

SECTION 17.
SECTION 18. Collateral

 

State

 

(a)
Jurisdiction

 

Original File Date
and Number

 

 

 

 

 

 

 

 

 

 

 

Ceramtec North America Innovative Ceramic Engineering Corporation

 

U.S. Bancorp Equipment Finance, Inc.

 

Studer Grinder etc.

 

DE

 

Secretary of State

 

12/2/2002

 

#23007592

Ceramtec North America Innovative Ceramic Engineering Corporation

 

Dell Financial Services, L.P.

 

leased computer equipment

 

DE

 

Secretary of State

 

10/14/2003

#32674003

Chemetall Foote Corporation

 

Toyota Motor Credit Corporation

 

leased Toyota

 

NC

 

Secretary of State

 

5/31/2000

#20000055229

Chemetall Foote Corporation

 

Toyota Motor Credit Corporation

 

leased Toyota

 

NC

 

Secretary of State

 

7/27/2000

#20000075472

Chemetall Foote Corporation

 

Toyota Motor Credit Corporation

 

leased Toyota

 

NC

 

Cleveland County

 

5/24/2000

#000577

Chemetall Foote Corporation

 

Toyota Motor Credit Corporation

 

leased Toyota

 

NC

 

Cleveland County

 

7/24/2000

#000849

Chemetall Foote Corp.

 

Dynamit Nobel Aktiengesellschaft; Siemens Financial Services GMBH

 

Receivables

 

PA

 

Secretary of State

 

6/26/2002

#36390454

Chemetall Ges.m.b.H., Wien

 

Bank Austria Creditantstalt AG

 

A3 Investementfonds

 

 

 

Austria

 

N/A

Chemetall Ges.m.b.H., Wien

 

Bank Austria Creditantstalt AG

 

CA Pfandbriefe and Bundesanleihe

 

 

 

Austria

 

N/A

Chemetall-Rai India Limited

 

Canara Bank, Frot Main Branch

 

All cars

 

 

 

India

 

N/A

Chemetall-Rai India Limited

 

Canara Bank, Frot Main Branch

 

All cars

 

 

 

India

 

N/A

Chemetall-Rai India Limited

 

Canara Bank, Frot Main Branch

 

All cars

 

 

 

India

 

N/A

Chemetall-Rai India Limited

 

Canara Bank, Frot Main Branch

 

All cars

 

 

 

India

 

N/A

Chemetall-Rai India Limited

 

HDFC Bank

 

All cars

 

 

 

India

 

N/A

Chemetall-Rai India Limited

 

HDFC Bank

 

All cars

 

 

 

India

 

N/A

Chemical Specialties, Inc.

 

Caterpillar Financial Services Corporation

 

lift truck

 

NC

 

Secretary of State

 

12/22/1999

#19990122708

Chemical Specialties, Inc.

 

Connected Office Products Inc.

 

leased imaging system

 

NC

 

Secretary of State

 

4/11/2000

#20000037523

 

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

 

SECTION 15.
SECTION 16. Debtor

 

Secured Party

 

SECTION 17.
SECTION 18. Collateral

 

State

 

(a)
Jurisdiction

 

Original File Date
and Number

Chemical Specialties, Inc.

 

RS Receivables Corporation

 

Accounts under Receivables Purchase Agreement

 

NC

 

Secretary of State

 

12/31/2001

#20020002567J

Chemical Specialties, Inc.

 

RS Receivables Corporation

 

Accounts under Receivables Purchase Agreement

 

NC

 

Secretary of State

 

3/26/2002

#20020035715G

Chemical Specialties, Inc.

 

Thompson Tractor Co., Inc.

 

1 Tractor

 

NC

 

Secretary of State

 

4/16/2003

#20030038118H

Chemical Specialties, Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

NC

 

Secretary of State

 

7/28/2003

#20030075966K

Compugraphics U.S.A. Inc.

 

RS Receivables Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

3/26/2002

#20773816

Compugraphics U.S.A. Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920167

Cyantek Corporation

 

RS Receivables Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

3/26/2002

#20773865

Cyantek Corporation

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920191

Dynamit Nobel GmbH Explosivstoff uns Systemtechnik

 

WestLB Düsseldorf

 

Plant Hermann-Fleck-Allee 8 57299 Burbach/Würgendorf

 

 

 

Germany

 

N/A

Dynamit Nobel GmbH

 

WestLB Düsseldorf

 

Plant Hermann-Fleck-Allee 8 57299 Burbach/Würgendorf

 

 

 

Germany

 

N/A

Electrochemicals Inc.

 

RS Receivables Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

3/26/2002

#20773956

 

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

* To be released as of 24:00 (German time) on the Closing Date.

* To be released as of 24:00 (German time) on the Closing Date.

* To be released as of 24:00 (German time) on the Closing Date.

 

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

 

SECTION 15.
SECTION 16. Debtor

 

Secured Party

 

SECTION 17.
SECTION 18. Collateral

 

State

 

(a)
Jurisdiction

 

Original File Date
and Number

Electrochemicals Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920308

Exsil, Inc.

 

RS Receivables Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

3/26/2002

#20774087

Exsil, Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920340

LaPorte Pigment Corp.*

 

Potomac Industrial Trucks, Inc.

 

3 Forklift Trucks

 

MD

 

Secretary of State

 

6/14/2000

#181049638

Lurex, Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920373

Oakite Products, Inc.

 

Dynamit Nobel Aktiengesellschaft; Siemens Financial Services GMBH

 

Receivables

 

DE

 

Secretary of State

 

6/25/2002

#21558570

Oakite Products, Inc.

 

Associates Commmercial Corporation

 

forklift

 

MI

 

Secretary of State

 

9/14/2000

#D694296

Oakite Products, Inc.

 

NMHG Financial Services, Inc.

 

leased equipment

 

NJ

 

Secretary of State

 

12/11/2000

#2012589

Oakite Products, Inc.

 

Ameritech Credit Corporation

 

leased security equipment

 

NJ

 

Secretary of State

 

6/15/2001

#2049416

Oakite Products, Inc.

 

Canon Financial Services, Inc.

 

leased copier equipment

 

NJ

 

Secretary of State

 

7/11/2003

#21685842

Oakite Products, Inc.

 

Leonard H Gilman

 

Judgment 5/7/01 $8,051.

 

NJ

 

Superior Court

 

 

Rockwood America Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920415

 

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

* To be released as of 24:00 (German time) on the Closing Date.

* To be released as of 24:00 (German time) on the Closing Date.

* To be released as of 24:00 (German time) on the Closing Date.

 

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

 

SECTION 15.
SECTION 16. Debtor

 

Secured Party

 

SECTION 17.
SECTION 18. Collateral

 

State

 

(a)
Jurisdiction

 

Original File Date
and Number

Rockwood Italia SpA

 

Elyo Italia

 

Negative Pledge over sqm. 1,980 of Turin real estate.

 

 

 

Italy

 

 

Rockwood Pigments NA, Inc.

 

RS Receivables Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

12/31/2001

#11807788

Rockwood Pigments NA, Inc.

 

RS Receivables II Corporation

 

Accounts under Receivables Purchase Agreement

 

DE

 

Secretary of State

 

6/27/2002

#21575210

Rockwood Pigments NA, Inc.

 

CIT Communications Finance Corporation

 

leased equipment

 

DE

 

Secretary of State

 

1/31/2003

#30273949

Rockwood Pigments NA, Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920449

Rockwood Specialties Group, Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920464

Rockwood Specialties Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920514

Rockwood Specialties Inc.

 

Wells Fargo Financial Leasing

 

leased digital copier system

 

DE

 

Secretary of State

 

1/5/2004

#40217044

Rockwood Specialties Inc.

 

Wells Fargo Financial Leasing

 

leased digital copier system

 

DE

 

Secretary of State

 

5/13/2004

#41520453

Rockwood Specialties International, Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920472

 

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

* To be released as of 24:00 (German time) on the Closing Date.

* To be released as of 24:00 (German time) on the Closing Date.

* To be released as of 24:00 (German time) on the Closing Date.

* To be released as of 24:00 (German time) on the Closing Date.

* To be released as of 24:00 (German time) on the Closing Date.

 

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

 

SECTION 15.
SECTION 16. Debtor

 

Secured Party

 

SECTION 17.
SECTION 18. Collateral

 

State

 

(a)
Jurisdiction

 

Original File Date
and Number

Rockwood Specialties Limited

 

Barlcays Bank plc

 

All monies due or to become due from the Company to Barclays Bank plc on any
account

 

 

 

UK

 

03/09/2001

Rohner AG Prattein

 

Basellandschaftliche Kantonalbank, CH-4410 Liestal

 

Plant Gempenstr, 6 CH-4133 Prattin, Switzerland

 

 

 

Switzerland

 

N/A

Rohner AG Prattein

 

Dresdner Bank AG

 

Plant Gempenstr, 6 CH-4133 Prattin, Switzerland

 

 

 

Switzerland

 

N/A

RS Funding Corporation

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920548

Southern Color N.A., Inc.

 

JPMorgan Chase Bank, as Administrative Agent*

 

all assets

 

DE

 

Secretary of State

 

7/25/2003

#31920555

Southern Color N.A., Inc.

 

Citicorp Leasing, Inc.

 

one Nissan forks & sideshifter

 

DE

 

Secretary of State

 

4/26/2004

#41158783

 

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

* To be released as of 24:00 (German time) on the Closing Date.

* To be released as of 24:00 (German time) on the Closing Date.

 

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

 

SCHEDULE 10.5

 

TO THE CREDIT AGREEMENT

 

CLOSING DATE INVESTMENTS

 

18.2. Investor

 

18.3. Amount of
Investment

 

Type of
Investment

Inorganic Pigments Limited

 

30% capital investment (representing an original investment of $649,000.00(4))
in Fuyang Golden Autumn Chemicals Company Ltd.

 

Equity

 

 

 

 

 

Inorganic Pigments Limited

 

51% capital investment (representing $885,599.00 capital investment) in Changsu
Rockwood Pigments Company Limited

 

Equity

 

 

 

 

 

Inorganic Pigments Limited

 

100% capital investment (representing an original investment of $200,000(5)) in
Rockwood (Ningbo) Chemicals Corp. Ltd.

 

Equity

 

 

 

 

 

Rockwood Pigments NA, Inc.

 

Investment in Anirox Pigments Ltd (supplier)

 

Advance with equity conversion rights

 

 

 

 

 

Rockwood Specialties GmbH

 

85% capital investment (representing an original investment $3,877,000.00) in
Isiltec Innovative Silicon Technologies GmbH

 

Equity

 

 

 

 

 

Chemetall GmbH

 

99.98% capital investment (representing an original investment $22,950,000.00)
in Chemetall SA

 

Equity

 

 

 

 

 

Oakite Products Inc.

 

99.99% capital investment (representing an original investment $3,575,000.00) in
Chemetall

 

Equity

 

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

(4)           This investment was written off for accounting purposes at the
initial funding.

(5)           This investment was written off for accounting purposes at the
initial funding.

 

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

 

 

 

Mexicana SA de CV

 

 

 

 

 

 

 

Dynamit Nobel Aktiengesellschaft

 

99.95% capital investment (representing an original investment $4,343,000.00) in
DNVJ Vermögensverwaltung GmbH

 

Equity

 

 

 

 

 

Sachtleben Chemie GmbH

 

40% capital investment (representing an original investment $630,000.00) in
Guangzhou Huali Sachtleben Chemicals Company Ltd

 

Equity

 

 

 

 

 

Chemetall GmbH

 

50% capital investment (representing an original investment $713,000.00) in
ChemStore GmbH

 

Equity

 

 

 

 

 

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

30% capital investment (representing an original investment $61,000.00(6)) in
Bedec Tir SA

 

Equity

 

 

 

 

 

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

33.33% capital investment (representing an original investment $19,000.00) in
LRG Recycling GmbH Leverkusen

 

Equity

 

 

 

 

 

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

34.08% capital investment (representing an original investment $334,000.00(7))
in DICON Explosives Company Ltd.

 

Equity

 

 

 

 

 

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

30% capital investment (representing an original investment $23,000.00(8)) in
Petri-DN GmbH Inflator Systems

 

Equity

 

 

 

 

 

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

25% capital investment (representing an original investment $43,000.00(9)) in
Nigerian Development and Construction Company Ltd.

 

Equity

 

 

 

 

 

Dynamit Nobel GmbH

 

34% capital investment (representing

 

Equity

 

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

(6)           This investment was written-off due for accounting purposes.

(7)           This investment was written-off due for accounting purposes.

(8)           This investment was written-off due for accounting purposes.

(9)           This investment was written-off due for accounting purposes.

 

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

 

Explosivstoff-und Systemtechnik

 

an original investment $13,000.00) in Würgendorf
GenehmigungshaltersgesellschaftmbH

 

 

 

 

 

 

 

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

20% capital investment (representing an original investment $25,000.00) in RUAG
Deutschland GmbH

 

Equity

 

 

 

 

 

CeramTec AG Innovative Ceramic Engineering

 

55.8% capital investment (representing an original investment $72,000.00) in
ProCeram spol. s.r.o.

 

Equity

 

 

 

 

 

CeramTec AG Innovative Ceramic Engineering

 

90% capital investment (representing an original investment $814,000.00) in
Shanghai CeramTec Innovative Ceramic Engineering Co., Ltd.

 

Equity

 

 

 

 

 

Chemetall Hispania S.A.

 

20% capital investment (representing an original investment $141,000.00) in
Agena Resinas e Colas Ltda.

 

Equity

 

 

 

 

 

Chemetall Hispania S.A.

 

49% capital investment (representing an original investment $10,000.00) in
Ardrox-Agena Quimica Ltda.

 

Equity

 

 

 

 

 

Chemetall India Company Limited & Chemetall GmbH

 

40% and 10% capital investment, respectively, (representing an original
investment $1,300,00.00) in Chemetall-Rai India Ltd.

 

Equity

 

 

 

 

 

Chemetall GmbH

 

60% capital investment (representing an original investment $1,118,000.00) in
Shanghai Chemetall Chemicals Co., Ltd.

 

Equity

 

 

 

 

 

Chemetall do Brasil Ltda.

 

99% capital investment (representing an original investment $329.00) in Breisach
Empreendimentos e Participacoes Ltda.

 

Equity

 

 

 

 

 

Sociedad Chilena de Litio Ltda.

 

50% capital investment (representing an original investment $89,000.00) in Sales
de Magnesio Limitida

 

Equity

 

 

 

 

 

Chemetall GmbH & Shanghai Chemetall Chemicals Co., Ltd.

 

35% and 20% capital investment, respectively, (representing an original
investment $507,000.00) in

 

Equity

 

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

 

 

 

Chongqing Chemetall Chemicals Co., Ltd

 

 

 

 

 

 

 

Chemetall s.r.l.

 

75% capital investment (representing an original investment $1,858,000.00) in
Kendell s.r.l.

 

Equity

 

 

 

 

 

Chemetall GmbH

 

90% capital investment (representing an original investment $8,000.00) in
Chemetall s.r.o.

 

Equity

 

 

 

 

 

Sachtleben Chemie GmbH

 

25% capital investment (representing an original investment $16,000.00) in
Alberti & Co. GmbH

 

Equity

 

 

 

 

 

Sachtleben Chemie GmbH

 

25% capital investment (representing an original investment $727,000.00) in
Deutsche Baryt-Industrie, Dr. Rudolf Alberti GmbH & Co. KG

 

Equity

 

 

 

 

 

Dynamit Nobel Aktiengesellschaft

 

94% capital investment (representing an original investment $30,000.00) in SERTO
Beteiligungs GmbH & Co. Vermietungs-KG

 

Equity

 

 

 

 

 

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

16% capital investment (representing an original investment $6,000.00) in
Troisdorf Genehmigungshaltergesellschaft mbH

 

Equity

 

 

 

 

 

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

15% capital investment (representing an original investment $10,000.00) in
DynITEC GmbH

 

Equity

 

 

 

 

 

Chemetall Ges.m.b.H

 

10% capital investment (representing an original investment $28,000.00) in
Industrieservice Ges.m.b.H.

 

Equity

 

SECTION 19.  Commitments for Future Capital Contribution

 

Chemetall GmbH & Shanghai Chemetall Chemicals Co., Ltd.

 

57% Investment in Changchun Chemetall Chemicals Co., Ltd. (approximately $2.3
million)

 

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

 

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

Investment in Customer Synthesis Leasing SPV (approximately $30,000.00)

Dynamit Nobel GmbH Explosivstoff-und Systemtechnik

 

Investment in Advanced Ceramics Leasing SPV (approximately $30,000.00)

 

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

 

EXHIBIT A-1

 

[FORM OF]

 

CANADIAN GUARANTEE

 

CANADIAN GUARANTEE dated as of July 30, 2004, made by each of the Canadian
subsidiaries of ROCKWOOD SPECIALTIES GROUP, INC., a Delaware corporation (the
“US Borrower”), listed on Annex A hereto (each such subsidiary individually, a
“Guarantor” and, collectively, the “Guarantors”) in favour of CREDIT SUISSE
FIRST BOSTON, acting through its Cayman Islands Branch, acting as administrative
agent (in such capacity, the “Administrative  Agent”) for the lenders (the
“Lenders”) from time to time parties to the Credit Agreement dated as of
July 30, 2004 (as the same may be amended, supplemented or otherwise modified or
restated from time to time, the “Credit Agreement”), among the US Borrower,
Rockwood Specialties Limited, a company incorporated under the laws of England
and Wales (the “UK Borrower” and, together with the US Borrower, the
“Borrowers”), Rockwood Specialties International, Inc., a Delaware corporation
(“Holdings”), the Lenders, the Administrative Agent, and UBS Securities LLC and
Goldman Sachs Credit Partners L.P., as co-syndication agents (in such capacity,
the “Co-Syndication Agents”).

 

WITNESSETH:

 

WHEREAS, (a) pursuant to the Credit Agreement, the Lenders have severally agreed
to make Loans to the UK Borrower and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the UK 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 UK Borrower or any of the Restricted
Subsidiaries of the UK Borrower;

 

WHEREAS, each Guarantor is a Subsidiary of the US Borrower and is incorporated
under the laws of Canada or a province or territory thereof;

 

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

 

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

 

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

 

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 UK
Borrower under the Credit Agreement that the Guarantors shall have executed and
delivered this Guarantee to the Administrative Agent for the ratable benefit of
the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Co-Syndication 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
UK Borrower under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the UK Borrower and/or
the Restricted Subsidiaries of the UK Borrower, the Guarantors hereby agree with
the Administrative Agent, for the ratable benefit of the Secured Parties, as
follows:

 

1.             Defined Terms.

 

Unless otherwise defined herein, terms defined in the Credit Agreement and used
herein shall have the meanings given to them in the Credit Agreement.

 

As used herein, the term “Closing Time” means 24:00 (German time) on the Closing
Date.

 

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 extended to the UK Borrower, 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 UK 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,
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 UK Borrower or any other Credit Party that
is a Foreign Subsidiary 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 UK 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 other Credit Party that is a Foreign
Subsidiary under or pursuant to this Guarantee Agreement or the other Credit
Documents, (iv) the due and punctual payment and performance of all obligations
of the UK Borrower and each Borrower or Restricted Subsidiary that is a Foreign
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 by the UK Borrower or any other Credit
Party that is a Foreign Subsidiary arising from or in connection with treasury,
depositary or cash management services or in connection with any automated
clearinghouse transfer of funds.

 

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 Co-Syndication Agents, (vi) each counterparty to a Hedge
Agreement the obligations under which constitute Obligations, (vii) the
beneficiaries of each indemnification obligation undertaken by any Credit Party
under any Credit Document and (viii) any successors, indorsees, transferees and
assigns of each of the foregoing.

 

References to “Lenders” in this Guarantee shall be deemed to include Affiliates
of Lenders that may from time to time enter into Hedge Agreements with the UK
Borrower or any Restricted Subsidiary of the UK Borrower.

 

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

 

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

 

2.             Guarantee.

 

Effective immediately upon the Closing Time, each of the Guarantors hereby,
jointly and severally, unconditionally and irrevocably, guarantees 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.

 

Each Guarantor further agrees to pay any and all expenses (including all fees
and disbursements of counsel) that may be paid or incurred by the Administrative
Agent or any other Secured Party in enforcing, or obtaining advice of counsel in
respect of, any rights with respect to, or collecting, any or all of the
Obligations and/or enforcing any rights with respect to, or collecting against,
such Guarantor under this Guarantee.

 

No payment or payments made by the UK Borrower, any of the Guarantors, any other
guarantor or any other Person or received or collected by the Administrative
Agent or any other Secured Party from the UK Borrower, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or proceeding or
any set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of any Guarantor hereunder, which
shall, notwithstanding any such payment or payments other than payments made by
such Guarantor in respect of the Obligations or payments received or collected
from such Guarantor in respect of the Obligations, remain liable for the
Obligations up to the maximum liability of such Guarantor hereunder until the
Obligations under the Credit Documents are paid in full, the

 

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

 

Commitments are terminated and no Letters of Credit drawn by the UK Borrower
shall be outstanding.

 

Each Guarantor agrees that whenever, at any time, or from time to time, it shall
make any payment to the Administrative Agent or any other Secured Party on
account of its liability hereunder, it will notify the Administrative Agent in
writing that such payment is made under this Guarantee for such purpose.

 

If any amount in respect of the Obligations is not recoverable from a Guarantor
hereunder on the basis of a guarantee, then, notwithstanding any other provision
hereof, each Guarantor shall be liable hereunder as principal obligor and shall
indemnify the Administrative in respect of the due payment of such amount, and
shall pay such amount to the Administrative after demand as herein provided.

 

Right of Contribution. Each Guarantor hereby agrees that to the extent that a
Guarantor shall have paid more than its proportionate share of any payment made
hereunder, such Guarantor shall be entitled to seek and receive contribution
from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment. Each Guarantor’s right of contribution
shall be subject to the terms and conditions of Section 5 hereof. The provisions
of this Section 3 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent and the other Secured Parties, and
each Guarantor shall remain liable to the Administrative Agent and the other
Secured Parties for the full amount guaranteed by such Guarantor hereunder.

 

Right of Set-off. In addition to any rights and remedies of the Secured Parties
provided by law, each Guarantor hereby irrevocably authorizes each Secured Party
at any time and from time to time following the occurrence and during the
continuance of an Event of Default without notice to such Guarantor or any other
Guarantor, any such notice being expressly waived by each Guarantor, upon any
amount becoming due and payable by such Guarantor hereunder (whether at stated
maturity, by acceleration or otherwise) to set-off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Secured
Party to or for the credit or the account of such Guarantor. Each Secured Party
shall notify such Guarantor promptly of any such set -off and the appropriation
and application made by such Secured Party, provided that the failure to give
such notice shall not affect the validity of such set-off and application.

 

No Subrogation. Notwithstanding any payment or payments made by any of the
Guarantors hereunder or any set-off or appropriation and application of funds of
any of the Guarantors by the Administrative Agent or any other Secured Party, no
Guarantor shall be entitled to be subrogated to any of the rights of the
Administrative Agent or any other Secured Party against the UK Borrower or any
other Guarantor or any collateral security or guarantee or right of offset held
by the Administrative Agent or any other Secured Party for the payment of the
Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from the UK Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the Administrative Agent and the other

 

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

 

Secured Parties by the Credit Parties on account of the Obligations under the
Credit Documents are paid in full, the Commitments are terminated and no Letters
of Credit drawn by the UK Borrower shall be outstanding. If any amount shall be
paid to any Guarantor on account of such subrogation rights at any time when all
the Obligations shall not have been paid in full, such amount shall be held by
such Guarantor in trust for the Administrative Agent and the other Secured
Parties, segregated from other funds of such Guarantor, and shall, forthwith
upon receipt by such Guarantor, be turned over to the Administrative Agent in
the exact form received by such Guarantor (duly indorsed by such Guarantor to
the Administrative Agent, if required), to be applied against the Obligations,
whether due or to become due, in such order as the Administrative Agent may
determine.

 

6.             Amendments., etc. with Respect to the Obligations; Waiver of
Rights.  Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, (a) 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) 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) 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 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,
the party thereto) may deem advisable from time to time, and (d) 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 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 Guarantee or any property subject thereto. When making any demand hereunder
against any Guarantor, the Administrative Agent may, but shall be under no
obligation to, make a similar demand on the UK Borrower or any Guarantor or
guarantor, and any failure by the Administrative Agent to make any such demand
or to collect any payments from the UK Borrower or any Guarantor or guarantor or
any release of the UK Borrower or any Guarantor or guarantor shall not relieve
any Guarantor in respect of which a demand or

 

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

 

collection is not made or any Guarantor 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 Guarantor. For the purposes hereof,
“demand” shall include the commencement and continuance of any legal
proceedings.

 

7.             Guarantee Absolute and Unconditional. Each Guarantor waives any
and all notice of the creation, contraction, incurrence, renewal, extension,
amendment, waiver or accrual of any of the Obligations, and notice of or proof
of reliance by the Administrative Agent or any other Secured Party upon this
Guarantee or acceptance of this Guarantee, the Obligations or any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended, waived or accrued, in reliance upon this Guarantee; and all
dealings between the UK Borrower and any of the Guarantors, on the one hand, and
the Administrative Agent and the other Secured Parties, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guarantee. Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
UK Borrower or any of the Guarantors with respect to the Obligations. Each
Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee without regard to (a) the
validity, regularity or enforceability of the Credit Agreement, any other Credit
Document, any Letter of Credit or any Hedge Agreement, any of the Obligations or
any other collateral security therefor or guarantee or right of offset with
respect thereto at any time or from time to time held by the Administrative
Agent or any other Secured Party, (b) any defense, set-off or counterclaim
(other than a defense of payment or performance) that may at any time be
available to or be asserted by the UK Borrower against the Administrative Agent
or any other Secured Party or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the UK Borrower or such Guarantor) that
constitutes, or might be construed to constitute, an equitable or legal
discharge, defence or limitation of the UK Borrower for the Obligations, or of
such Guarantor under this Guarantee, in bankruptcy or in any other instance.
When pursuing its rights and remedies hereunder against any Guarantor, the
Administrative Agent or and any other Secured Party may, but shall be under no
obligation to, pursue such rights and remedies as it may have against the UK
Borrower or any other Person or against any collateral security or guarantee for
the Obligations or any right of offset with respect thereto, and any failure by
the Administrative Agent or any other Secured Party to pursue such other rights
or remedies or to collect any payments from the UK Borrower or any such other
Person or to realize upon any such collateral security or guarantee or to
exercise any such right of offset, or any release of the UK Borrower or any such
other Person or any such collateral security, guarantee or right of offset,
shall not relieve such Guarantor of any liability hereunder, and shall not
impair or affect the rights and remedies, whether express, implied or available
as a matter of law, of the Administrative Agent and the other Secured Parties
against such Guarantor. This Guarantee shall remain in full force and effect and
be binding in accordance with and to the extent of its terms upon each Guarantor
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 drawn by the UK Borrower 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. A Guarantor shall
automatically be released from its obligations hereunder and the Guarantee of
such Guarantor shall be automatically released upon the consummation of any
transaction permitted by the Credit Agreement as a result of which such
Guarantor ceases to be a Subsidiary of the US Borrower. In connection with any
such release, the Administrative Agent shall execute and deliver to any
Guarantor, at such Guarantor’s expense, all documents that such Guarantor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to the preceding sentence of this Section 7 shall
be without recourse to or warranty by the Administrative Agent.

 

8.             Reinstatement. This Guarantee 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 the UK Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the UK Borrower or any
other Guarantor or any substantial part of its property, or otherwise, all as
though such payments had not been made.

 

9.             Payments. Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent in Dollars at the
Administrative Agent’s Office, without set-off or counterclaim and without
deduction for any taxes, levies, duties, fees, deductions, withholdings,
restrictions or conditions of any nature whatsoever (excluding taxes imposed on
the net income or capital of the Administrative Agent and Secured Parties). If
at any time any applicable law, regulation or international agreement requires
any Guarantor to make any such deduction or withholding from any such payment,
the sum due from such Guarantor with respect to such payment will be increased
to the extent necessary to ensure that, after the making of such deduction or
withholding, the Administrative Agent receives a net sum equal to the sum which
it would have received had no deduction or withholding been required.

 

10.           Representations and Warranties; Covenants.

 

Each Guarantor hereby represents and warrants that the representations and
warranties set forth in Section 8 of the Credit Agreement as they relate to such
Guarantor or in the other Credit Documents to which such Guarantor is a party,
each of which is hereby incorporated herein by reference, are true and correct,
and the Administrative Agent and each other Secured Party shall be entitled to
rely on each of them as if they were fully set forth herein.

 

Each Guarantor hereby covenants and agrees with the Administrative Agent and
each other Secured Party that, from and after the date of this Guarantee until
the Obligations under the Credit Documents are paid in full, the Commitments are
terminated and no Letter of Credit drawn by the UK Borrower remains outstanding,
such Guarantor shall take, or shall refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so

 

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

 

that no violation of any provision, covenant or agreement contained in Section 9
or 10 of the Credit Agreement, and so that no Default or Event of Default, is
caused by any act or failure to act of such Guarantor or any of its
Subsidiaries.

 

11.           Authority of Agent. Each Guarantor acknowledges that the rights
andresponsibilities of the Administrative Agent under this Guarantee with
respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resultingor arising out of this
Guarantee shall, as between the Administrative Agent and the other Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and such Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Guarantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

 

Notices. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 14.2 of the Credit Agreement. All communications and
notices hereunder to each Guarantor shall be given to it in care of the UK
Borrower at the UK Borrower’s address set forth in Section 14.2 of the Credit
Agreement.

 

Counterparts. This Guarantee may be executed by one or more of the parties to
this Guarantee 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 Guarantee signed by all the parties shall be lodged with the
Administrative Agent and the UK Borrower.

 

Severabilitv. Any provision of this Guarantee 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 enforceable provisions.

 

Integration. This Guarantee represents the agreement of each Guarantor and the
Administrative Agent 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.

 

Amendments in Writing; No Waiver; Cumulative Remedies.

 

None of the terms or provisions of this Guarantee may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the affected

 

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

 

Guarantor(s) and the Administrative Agent in accordance with Section 14.1 of the
Credit Agreement.

 

Neither the Administrative Agent nor any other Secured Party shall by any act
(except by a written instrument pursuant to Section 16(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 any Secured Party would otherwise have on any future occasion.

 

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.

 

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

 

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

 

Additional Guarantors.  Each Subsidiary of the US Borrower that is required to
become a party to this Guarantee pursuant to Section 9.11 of the Credit
Agreement shall become a Guarantor, with the same force and effect as if
originally named as a Guarantor herein, for all purposes of this Guarantee upon
execution and delivery by such Subsidiary of a Supplement in the form of Annex B
hereto. The execution and delivery of any instrument adding an additional
Guarantor as a party to this Guarantee shall not require the consent of any
other Guarantor hereunder. The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Guarantee.

 

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

 

21.           Submission to Jurisdiction; Waivers.  Each Guarantor hereby
irrevocably and unconditionally:

 

(a)   submits for itself and its property in any legal action or proceeding
relating to this Guarantee and the other Credit Documents to which it is a
party, or for

 

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

 

recognition and enforcement of any judgement in respect thereof, to the
non-exclusive general jurisdiction of the courts of the Province of Ontario, 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 Guarantor at its
address referred to in Section 12 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 21 any special, exemplary, punitive or consequential damages.

 

22.           GOVERNING LAW. THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO.

 

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

 

IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee to be duly
executed and delivered by its duly authorized officer as of the day and year
first above written, with effect from and after midnight (German time) on
July 31, 2004.

 

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

 

SUPPLEMENT NO. [   ] dated as of [   ], to the

 

Canadian Guarantee dated as of July 30, 2004 (the “Guarantee”), among each of
the Canadian subsidiaries of ROCKWOOD SPECIALTIES GROUP, INC., a Delaware
corporation (the “US Borrower”) listed on Annex A thereto (each such subsidiary
individually, a “Guarantor”, and, collectively, the “Guarantors”) in favour of
CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
administrative agent (in such capacity, the “Administrative Agent”) for the
lenders to the Borrowers (the “Lenders”) from time to time parties to the Credit
Agreement referred to below.

 

A             Reference is made to the Credit Agreement dated as of July 30,
2004 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”),  among the US Borrower, Rockwood Specialties Limited, a
company incorporated under the laws of England and Wales, Rockwood Specialities
International Inc., a Delaware corporation, the Lenders from time to time party
thereto, and UBS Securities LLC and Goldman Sachs Credit Partners L.P., as
co-syndication agents (in such capacity, the “Co-Syndication Agents”).

 

Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Guarantee (or, if not defined therein, in
the Credit Agreement).

 

The Guarantors have entered into the Guarantee in order to induce the
Administrative Agent, the Co-Syndication 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
UK Borrower under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the UK Borrower.
Section 9.11 of the Credit Agreement and Section 19 of the Guarantee provide
that additional Subsidiaries may become Guarantors under the Guarantee by
execution and delivery of an instrument in the form of this Supplement. Each
undersigned Subsidiary (each a “New Guarantor”) is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Guarantor
under the Guarantee in order to induce the Lenders and the Letter of Credit
Issuer to make additional Extensions of Credit to the UK Borrower and as
consideration for Extensions of Credit to the UK Borrower previously made.

 

Accordingly, the Administrative Agent and the New Guarantors agree as follows:

 

SECTION 1. In accordance with Section 19 of the Guarantee, each New Guarantor by
its signature below becomes a Guarantor under the Guarantee with the same force
and effect as if originally named therein as a Guarantor and each New Guarantor
hereby

 

(a) agrees to all the terms and provisions of the Guarantee applicable to it as
a Guarantor thereunder and (b) represents and warrants that the representations
and warranties made by it as a Guarantor thereunder are true and correct on and
as of the date hereof. Each reference to a Guarantor in the Guarantee shall be
deemed to include each New Guarantor. The Guarantee is hereby incorporated
herein by reference.

 

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

 

SECTION 2. Each New Guarantor represents and warrants to the Administrative
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, subject
to limitations which might result from bankruptcy, insolvency, moratorium and
other similar laws affecting creditors’ rights generally and subject to
limitations on the availability of equitable remedies.

 

SECTION 3. 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 UK
Borrower and the Administrative Agent. This Supplement shall become effective as
to each New Guarantor when the Administrative Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of such New Guarantor and the Administrative Agent.

 

SECTION 4. Except as expressly supplemented hereby, the Guarantee shall remain
in full force and effect.

 

SECTION 5. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE PROVINCE OF ONTARIO.

 

SECTION 6. 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 Guarantee, 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 enforceable
provisions.

 

SECTION 7. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 14.2 of the Credit Agreement. All communications and
notices hereunder to each New Guarantor shall be given to it in care of the UK
Borrower at the UK Borrower’s address set forth in Section 14.2 of the Credit
Agreement.

 

SECTION 8. Each New Guarantor agrees to reimburse the Administrative Agent for
its out-of-pocket expenses in connection with this Supplement, including the
fees, disbursements and other charges of counsel for the Administrative Agent.

 

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

 

IN WITNESS WHEREOF, each New Guarantor and the Administrative Agent have duly
executed this Supplement to the Guarantee as of the day and year first above
written.

 

[NAME OF NEW GUARANTOR]

 

By:

 

Name:

 

Title:

 

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
Administrative Agent

 

By:

 

Name:

 

Title:

 

By:

 

Name:

 

Title:

 

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

 

EXHIBIT A-2

 

[FORM OF]

 

CANADIAN PLEDGE AGREEMENT

 

THIS CANADIAN PLEDGE AGREEMENT (US OBLIGATIONS) dated as of July 30, 2004 is
made between ROCKWOOD SPECIALTIES GROUP, INC., a Delaware corporation (the
“Pledgor”) and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands
Branch as administrative agent (in such capacity, the “Administrative Agent”)
for the lenders (the “Lenders”) from time to time parties to the Credit
Agreement dated as of July 30, 2004 (as the same may be amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the
Pledgor, Rockwood Specialties Limited, a company incorporated under the laws of
England and Wales (the “UK Borrower” and, together with the Pledgor, the
“Borrowers”), Rockwood Specialties International, Inc., a Delaware corporation
(“Holdings”), the Lenders, the Administrative Agent, and UBS Securities LLC and
Goldman Sachs Credit Partners L.P., as co-syndication agents (in such capacity,
the “Co-Syndication Agents”).

 

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 Borrowers and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the Borrowers (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 Borrowers or any of the Restricted
Subsidiaries;

 

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

 

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
Borrowers under the Credit Agreement that the Pledgor shall have executed and
delivered this Pledge Agreement to the Administrative Agent for the ratable
benefit of the Secured Parties; and

 

WHEREAS, the Pledgor is the legal and beneficial owner of the Equity Interests
described under Schedule 1 hereto and issued by the entities named therein (such
pledged Equity Interests are, together with any Equity Interests obtained in the
future of the issuer of such Pledged Shares required to be pledged hereunder
(the “After-acquired Shares”), referred to collectively herein as the “Pledged
Shares”);

 

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

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Co-Syndication 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
Borrowers under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the Borrowers and/or
Restricted Subsidiaries, the Pledgor hereby agrees 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 Personal Property Security Act from time
to time in effect in the Province of Ontario (the “Ontario PPSA”) and not
defined herein shall have the meanings specified therein.

 

(b)           As used herein, the term “Closing Time” means 24:00 (German time)
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 Borrowers 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, 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 Borrowers 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
Pledgor 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 other 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 “Proceeds” means all “proceeds” as such term is
defined in the Ontario PPSA and, in any event, shall include any consideration
received from the sale, exchange, license, lease or other disposition of any
asset or property that constitutes Collateral, any value received as a
consequence of the possession of any Collateral and any payment received from
any insurer or other person or entity as a result of the destruction, loss,
theft, damage or other involuntary conversion of whatever nature of any asset or
property that constitutes Collateral, and shall include (a) all cash and
negotiable instruments received by or held on behalf of the Administrative Agent
and (b) any and all other amounts from time to time paid or payable under or in
connection with any of the Collateral.

 

(f)    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 Co-Syndication Agents, (vi) each counterparty to a
Hedge Agreement the obligations under which constitute Obligations, (vii) the
beneficiaries of each indemnification obligation undertaken by any Credit Party
under any Credit Document and (viii) any successors, indorsees, transferees and
assigns of each of the foregoing.

 

(g)   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.

 

(h)   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”.

 

(i)    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. As collateral security for the prompt and
complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations, the 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, in all of the 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 the Pledgor and the certificates
representing such Pledged Shares and any interest of the 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 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 issuer of the
Pledged Shares; and

 

(b)           to the extent not covered by clause (a) above, all Proceeds of any
or all of the foregoing Collateral.

 

3.             Security for Obligations. This Pledge Agreement secures the
payment of all Obligations. 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 the Pledgor 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 the Pledgor.

 

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 of transfer or assignment in blank, all in form and
substance reasonably satisfactory to the Administrative Agent. If the constating
documents of any issuer of any Pledged Shares restrict the transfer of the
securities of such issuer, then the Pledgor will also deliver to the
Administrative Agent a certified copy of a resolution of the directors or
shareholders of such issuer consenting to the transfer(s) contemplated by this
Pledge Agreement, including any prospective transfer of the Collateral by the
Administrative Agent upon a realization on the security constituted hereby in
accordance with this Pledge Agreement. 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 the 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 1
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. The Pledgor represents and
warrants as follows:

 

(a)           Schedule 1 hereto correctly represents as of the date hereof
(i) the issuer of the Pledged Shares, the certificate number(s) evidencing the
Pledged Shares, the Pledgor and the record and beneficial owner, the number and
class and the percentage of the issued and outstanding Equity Interests of the
issuer of such class of all Pledged Shares and (ii) together with the comparable
schedule to each supplement hereto, includes all Equity Interests required to be
pledged hereunder. The Pledged Shares represent 65% of the issued and
outstanding Equity Interests of each class of Equity Interests in the issuer on
the date hereof.

 

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

 

(b)           The Pledgor is the legal and beneficial owner of the Collateral
pledged to or assigned by the 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 the 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 the Pledgor of this Pledge Agreement
and the pledge of the Collateral pledged by the 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)           There is no existing agreement, option, right or privilege capable
of becoming an agreement or option pursuant to which the Pledgor would be
required to sell or otherwise dispose of any of the Pledged Shares.

 

6.             Further Assurances. The Pledgor agrees that at any time and from
time to time, at the expense of the 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 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.

 

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

 

(i)                                     The 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 the terms of
this Pledge Agreement or the other Credit Documents.

 

(ii)                                  The Administrative Agent shall execute and
deliver (or cause to be executed and delivered) to the Pledgor all such proxies
and other instruments as the Pledgor may reasonably request for the purpose of
enabling the 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, the Pledgor shall be entitled to
receive and retain and use, free and clear of the Lien of this Pledge Agreement,
any and all dividends and distributions made or paid in respect of the
Collateral to the extent permitted by the Credit Agreement; provided, however,
that any and all noncash dividends or other distributions that would constitute
Pledged Shares, 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,
amalgamation, 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 the Pledgor by the Administrative Agent
following theoccurrence and during the continuance of an Event of Default,

 

(i)                                         all rights of the Pledgor to
exercise or refrain from exercising the voting and other consensual rights that
it would otherwise be entitled to exercise pursuant to Section 7(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 Pledgor to exercise such rights. After all Events of Default have
been cured or waived and the Pledgor has delivered to the Administrative Agent a
certificate to that effect, the Pledgor will have the right to exercise the
voting and consensual rights that the Pledgor would otherwise be entitled to
exercise pursuant to the terms of Section 7(a)(i) (and the obligations of the
Administrative Agent under Section 7(a)(ii) shall be reinstated);

 

(ii)                                      all rights of the Pledgor to receive
the dividends and distributions that the Pledgor would otherwise be authorized
to receive and retain pursuant to Section 7(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 and distributions during the continuance of such Event of
Default. After all Events of Default have been cured or waived and the Pledgor
has delivered to the Administrative Agent a certificate to that effect, the
Administrative Agent shall repay to the Pledgor (without interest) all
dividends, and distributions that the Pledgor would otherwise be permitted to
receive, retain and use pursuant to the terms of Section 7(b);

 

(iii)                                   all dividends and distributions that are
received by the Pledgor contrary to the provisions of Section 7(b) shall be
received in trust for the benefit of the Administrative Agent, shall be
segregated from other property or funds of the 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 and distributions to which it may be entitled
under Section 7(b) above, to exercise the voting and other consensual rights
that it may be entitled to exercise pursuant to Section 7(c)(i) above, and to
receive all dividends, distributions and principal and interest payments that it
may be entitled to under Sections 7(c)(ii) and (c)(iii) above, the 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 as the Administrative
Agent may reasonably request.

 

8.             Transfers and Other Liens, Etc. The 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 the 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 free and clear of the Lien
under this Pledge Agreement concurrently with the consummation of such sale; and

 

(b)           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.

 

9.             Administrative Agent Appointed Attorney-in-Fact. The Pledgor
hereby appoints, which appointment is irrevocable and coupled with an interest,
the Administrative Agent as the Pledgor’s attorney-in-fact, with full authority
in the place and stead of the Pledgor and in the name of the Pledgor or
otherwise, to take any action and to execute any instrument, 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 or
distribution in respect of the Collateral or any part thereof and to give full
discharge for the same.

 

10.           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, except as required by applicable law, 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 powers conferred on the Administrative Agent
hereunder 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 and in accordance with
the requirements of applicable law.

 

11.           Remedies. If an Event of Default shall occur and be continuing,
the Administrative Agent may exercise in respect of the Collateral, in addition
to all 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
Ontario PPSA or any other applicable law and also may without notice except as
specified below, personally or by agent, at such time or times as the
Administrative Agent in its discretion may determine, do any one or more of the
following:

 

(a)           Rights under Ontario PPSA, etc. Exercise all of the rights and
remedies granted to secured parties under the Ontario PPSA and any other
applicable statute, or otherwise available to the Administrative Agent at law or
in equity.

 

(b)           Dispose of Collateral. Realize on any or all of the Collateral and
sell, lease, assign, give options to purchase, or otherwise dispose of and
deliver any or all of the Collateral (or contract to do any of the above), in
one or more parcels at any public or private sale, at any exchange, broker’s
board or office of the Administrative Agent or elsewhere, on such terms and
conditions as the Administrative may deem advisable and at such prices as it may
deem best, for cash or on credit or for future delivery.

 

(c)           Court-Approved Disposition of Collateral. Apply to a court of
competent jurisdiction for the sale or foreclosure of any or all of the
Collateral.

 

(d)           Purchase by Administrative Agent. At any public sale, and to the
extent permitted by law on any private sale, bid for and purchase any or all of
the Collateral offered for sale and, upon compliance with the terms of such
sale, hold, retain and dispose of such Collateral without any further
accountability to the Pledgor or any other Person with respect to such holding,
retention or disposition, except as required by law. In any such sale to the
Administrative Agent, the Administrative Agent may, for the purpose of making
payment for all or any part of the Collateral so purchased, use any claim for
Obligations then due and payable to it as a credit against the purchase price.

 

(e)           Transfer of Pledged Shares. Transfer all or part of the Collateral
into the name of the Administrative Agent or its nominee, with or without
disclosing that the Pledged Shares are subject to the Liens arising under this
Agreement.

 

(f)            Vote Pledged Shares. Vote any or all of the Pledged Shares
(whether or not transferred to the Administrative Agent or its nominee) and give
or withhold all consents, waivers and ratifications in respect thereof and
otherwise act with respect thereto as though it were the outright owner thereof.

 

(g)           Exercise Other Rights. Exercise any and all rights of conversion,
exchange, subscription or any other rights, privileges or options pertaining to
any of the Pledged Shares as if it were the absolute owner thereof, including
the right to exchange at its discretion any and all of the Pledged Shares upon
the merger, consolidation, reorganization, recapitalization or other
readjustment of any issuer of any Pledged Shares or upon the exercise by any
such

 

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

 

issuer or the Administrative Agent of any right, privilege or option pertaining
to any of the Pledged Shares, and in connection therewith, to deposit and
deliver any and all of the Pledged Shares with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as it may determine, all without liability except to account for
property actually received by the Administrative Agent and except as required by
applicable law.

 

The Administrative Agent may exercise any or all of the foregoing rights and
remedies without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except as required by applicable law) to or
on the Pledgor or any other Person, and the Pledgor by this Agreement waives
each such demand, presentment, protest, advertisement and notice to the extent
permitted by applicable law. None of the above rights or remedies will be
exclusive of or dependent on or merge in any other right or remedy, and one or
more of such rights and remedies may be exercised independently or in
combination from time to time. Without prejudice to the ability of the
Administrative Agent to dispose of the Collateral 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 Pledgor
acknowledges that, to the extent notice of sale shall be required by law, at
least ten days’ notice to the 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 Pledgor further acknowledges that a disposition of
Collateral by the Administrative Agent which takes place substantially in
accordance with the following provisions will be deemed to be commercially
reasonable:

 

(i)            Collateral may be disposed of in whole or in part;

 

(ii)           Collateral may be disposed of by public auction, public tender or
private contract, with or without advertising and without any other formality
except as required by applicable law;

 

(iii)          any purchaser or lessee of Collateral may be a customer of the
Administrative Agent;

 

(iv)          a disposition of Collateral may be on such terms and conditions as
to credit or otherwise as the Administrative Agent, in is sole discretion, may
deem advantageous; and

 

(v)           the Administrative Agent may establish an upset or reserve bid or
price in respect of Collateral.

 

12. Application of Proceeds. 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 the 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

 

(iii)                               third, any surplus then remaining shall be
paid to the Pledgor 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.

 

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

 

(c)           All payments received by the 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 the Pledgor and shall be forthwith
delivered to the Administrative Agent as Collateral in the same form as so
received (with any necessary indorsement).

 

13.             Amendments, etc. with Respect to the Obligations; Waiver of
Rights. The Pledgor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against the Pledgor and without notice to or
further assent by the Pledgor, (a) 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) 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) 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, and (d) 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 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.

 

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 the
Pledgor and its successors and assigns, 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 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 of the Obligations under the Credit Documents
shall have been satisfied by payment in full, the Commitments terminated and no
Letters of Credit shall be outstanding.

 

(b)           Upon any sale or other transfer by the 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 14.1 of the Credit Agreement, the obligations of
the 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.

 

(c)           In connection with any termination or release pursuant to
paragraph (a) or (b), the Administrative Agent shall execute and deliver to the
Pledgor, at the Pledgor’s expense, all documents that the 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 the
Pledgor, or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the 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 14.2 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 Pledgor.

 

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 the
Pledgor 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 Pledgor and the Administrative Agent in accordance
with Section 14.1 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.

 

(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 the Pledgor and shall inure to the benefit of
the Administrative Agent and the other Secured Parties and their respective
successors and assigns, except that the Pledgor may not 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. THE 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. The Pledgor hereby
irrevocably and unconditionally:

 

(a)           submits itself in any legal action or proceeding relating to this
Pledge Agreement or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the Province
of Ontario, 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 the 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 GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO.

 

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

 

SCHEDULE 1

 

TO THE PLEDGE AGREEMENT

 

Pledged Shares

 

 

 

 

 

 

 

 

 

 

 

Percentage

 

 

 

 

 

 

 

 

 

 

 

of Issued

 

 

 

 

 

 

 

 

 

 

 

and

 

 

 

 

 

Class of

 

Stock Certificate

 

Number

 

Outstanding

 

Pledgor

 

Issuer

 

Stock

 

No(s)

 

of Shares

 

Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT A-3

 

[FORM OF]

 

CANADIAN SECURITY AGREEMENT

 

THIS CANADIAN SECURITY AGREEMENT dated as of July 30, 2004, is made among each
of the Subsidiaries of the US Borrower (as defined below) listed on Annex A
hereto (each such undersigned Subsidiary being a “Grantor” and collectively the
“Grantors”) and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands
Branch, as administrative agent (in such capacity, the “Administrative Agent”)
for the lenders (“Lenders”) from time to time party to the Credit Agreement
dated as of July 30, 2004 (as the same may be amended, supplemented or otherwise
modified or restated from time to time, the “Credit Agreement”), among Rockwood
Specialties Group, Inc., a Delaware corporation (the “US Borrower”), Rockwood
Specialties Limited, a company incorporated under the laws of England and Wales
(the “UK Borrower” and, together with the US Borrower, the “Borrowers”),
Rockwood Specialties International, Inc., a Delaware corporation (“Holdings”),
and UBS Securities LLC and Goldman Sachs Credit Partners L.P., as co-syndication
agents (in such capacity, the “Co-Syndication Agents”).

 

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 UK Borrower and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the UK 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 UK Borrower or any of the Restricted
Subsidiaries of the UK Borrower;

 

WHEREAS, pursuant to the Canadian Guarantee (the “Guarantee”) dated as of the
date hereof, each Grantor party thereto has unconditionally and irrevocably
guaranteed to the Administrative Agent, for the ratable benefit of the Secured
Parties, the prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of the Obligations (as defined
below);

 

WHEREAS, each Grantor is a Subsidiary of the US Borrower and is incorporated
under the laws of Canada or a province or territory thereof;

 

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

 

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

 

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

 

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 UK
Borrower under the Credit Agreement that the Grantors shall have executed and
delivered this Security Agreement to the Administrative Agent for the ratable
benefit of the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Co-Syndication 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
UK Borrower under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the UK Borrower and/or
the Restricted Subsidiaries of the UK Borrower, the Grantors 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 Personal Property Security Act from time to time in
effect in the Province of Ontario (the “Ontario PPSA”) and not defined herein
shall have the meanings specified therein.

 

(b)   The following terms shall have the following meanings:

 

“Administrative Agent” shall have the meaning assigned to such term in the
preamble hereto.

 

“Closing Time” shall mean 24:00 (German time) on the Closing Date.

 

“Collateral” shall have the meaning assigned to such term in Section 2.

 

“Collateral Account” shall mean any collateral account established by the
Administrative Agent as provided in Section 5.1.

 

“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any copyright now or hereafter owned
by any Grantor (including all Copyrights) or that any Grantor otherwise has the
right to license, or granting any right to any Grantor under any copyright now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement, including those listed on Schedule 1.

 

“copyrights” means, with respect to any Person, all of the following now owned
or hereafter acquired by such Person: (i) all copyright rights in any work
subject to the copyright laws of Canada or any other country, whether as author,
assignee, transferee or otherwise, and (ii) all registrations and applications
for registration of any such copyright in Canada or any other country, including
registrations, recordings,

 

2

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

 

supplemental registrations and pending applications for registration in the
Canadian Intellectual Property Office.

 

“Copyrights” means all copyrights now owned or hereafter acquired by any
Grantor, including those listed on Schedule 2.

 

“Equipment” shall mean any “equipment,” as such term is defined in the Ontario
PPSA, now or hereafter owned by any Grantor and, in any event, shall include all
machinery, equipment, furnishings, movable trade fixtures and vehicles now or
hereafter owned by any Grantor and any and all additions, substitutions and
replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto; but excluding Equipment to the extent it is subject to a
Permitted Lien and the terms of the Indebtedness securing such Permitted Lien
prohibit assignment of, or granting of a security interest in, such Grantor’s
rights and interests therein, provided, that immediately upon the repayment of
all Indebtedness secured by such Permitted Lien, such Grantor shall be deemed to
have granted a Security Interest in all the rights and interests with respect to
such Equipment.

 

“Guarantors” shall mean each Grantor other than the US Borrower.

 

“Grantor” shall have the meaning assigned to such term in the preamble hereto.

 

“Intangibles” shall mean all “intangibles” as such term is defined in the
Ontario PPSA and, in any event, including with respect to any Grantor, all
contracts, agreements, instruments and indentures in any form, and portions
thereof, to which such Grantor is a party or under which such Grantor has any
right, title or interest or to which such Grantor or any property of such
Grantor is subject, as the same may from time to time be amended, supplemented
or otherwise modified, including (a) all rights of such Grantor to receive
moneys due and to become due to it thereunder or in connection therewith,
(b) all rights of such Grantor to receive proceeds of any insurance, indemnity,
warranty or guarantee with respect thereto, (c) all claims of such Grantor for
damages arising out of any breach thereof or default thereunder and (d) all
rights of such Grantor to terminate, amend, supplement, modify or exercise
rights or options thereunder, to perform thereunder and to compel performance
and otherwise exercise all remedies thereunder, in each case to the extent the
grant by such Grantor of a Security Interest pursuant to this Security Agreement
in its right, title and interest in any such contract, agreement, instrument or
indenture is not prohibited by such contract, agreement, instrument or indenture
without the consent of any other party thereto, would not give any other party
to any such contract, agreement, instrument or indenture the right to terminate
its obligations thereunder or is permitted with consent if all necessary
consents to such grant of a Security Interest have been obtained from the other
parties thereto (it being understood that the foregoing shall not be deemed to
obligate such Grantor to obtain such consents), provided, that the foregoing
limitation shall not, in any event, affect, limit, restrict or impair the grant
by such Grantor of a Security Interest pursuant to this Security Agreement in
any Account or any money or other amounts due or to become due under any such
contract, agreement, instrument or indenture.

 

3

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

 

“Intellectual Property” shall mean all rights, priorities and privileges of any
Grantor relating to intellectual property, whether arising under Canadian,
multinational or foreign laws or otherwise now owned or hereafter acquired,
including (a) all information used or useful arising from the business of such
Grantor including all goodwill, trade secrets, trade secret rights, know-how,
customer lists, processes of production, ideas, confidential business
information, techniques, processes, formulas and all other proprietary
information, and (b) the Copyrights, the Patents, the Trademarks and the
Licenses and all rights to sue at law or in equity for any infringement or other
impairment thereof, including the right to receive all proceeds and damages
therefrom, in each case to the extent the grant by such Grantor of a Security
Interest pursuant to this Security Agreement in any such rights, priorities and
privileges relating to intellectual property is not prohibited by any contract,
agreement or other instrument governing such rights, priorities and privileges
without the consent of any other party thereto, would not give any other party
to any such contract, agreement or other instrument the right to terminate its
obligations thereunder or is permitted with consent if all necessary consents to
such grant of a Security Interest have been obtained from the relevant parties
(it being understood that the foregoing shall not be deemed to obligate such
Grantor to obtain such consents).

 

“Investment Property” shall mean all Securities (whether certificated or
uncertificated), security entitlements, securities accounts, commodity contracts
and commodity accounts of any Grantor, whether now or hereafter acquired by any
Grantor, in each case to the extent the grant by a Grantor of a Security
Interest therein pursuant to this Security Agreement in its right, title and
interest in any such Investment Property is not prohibited by any contract,
agreement, instrument or indenture governing such Investment Property without
the consent of any other party thereto, would not give any other party to any
such contract, agreement, instrument or indenture the right to terminate its
obligations thereunder or is permitted with consent if all necessary consents to
such grant of a Security Interest have been obtained from the other parties
thereto (it being understood that the foregoing shall not be deemed to obligate
such Grantor to obtain such consents).

 

“License” shall mean any Patent License, Trademark License, CopyrightLicense or
other license or sublicense of personal property to which any Grantor is a
party.

 

“Ontario PPSA” has the meaning assigned to such term in Section 1(a).

 

“Obligations” means the collective reference to (i) the due and punctual payment
of each Grantor’s obligations (including, without limitation, those obligations
arising under the Guarantee) in respect 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 extended to the UK Borrower, 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 UK 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,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,

 

4

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

 

receivership or other similar proceeding, regardless of whether allowed or
allowable in such proceeding), of the UK Borrower or any other Credit Party that
is a Foreign Subsidiary to any of the Secured Parties under the Credit Agreement
and the other Credit Documents, (ii) the due and punctual performance of the
Grantor’s obligations (including, without limitation, those obligations arising
under the Guarantee) in respect of all covenants, agreements, obligations and
liabilities of the UK 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
that is a Foreign Subsidiary under or pursuant to this Security Agreement or the
other Credit Documents, (iv) the due and punctual payment and performance of the
Grantor’s obligations (including, without limitation, those obligations arising
under the Guarantee) in respect of all obligations of the UK Borrower and each
Borrower or Restricted Subsidiary that is a Foreign 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 the Grantor’s obligations
(including, without limitation, those obligations arising under the Guarantee)
in respect of all obligations in respect of overdrafts and related liabilities
owed to the Administrative Agent or its Affiliates by the UK Borrower or any
other Credit Party that is a Foreign Subsidiary arising from or in connection
with treasury, depositary or cash management services or in connection with any
automated clearinghouse transfer of funds.

 

“Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor (including all Patents) or
that any Grantor otherwise has the right to license, is in existence, or
granting to any Grantor any right to make, use or sell any invention on which a
patent, now or hereafter owned by any third party, is in existence, and all
rights of any Grantor under any such agreement, including those listed on
Schedule 3.

 

“patents” means, with respect to any Person, all of the following now owned or
hereafter acquired by such Person: (a) all letters patent of Canada or the
equivalent thereof in any other country, all registrations and recordings
thereof, and all applications for letters patent of Canada or the equivalent
thereof in any other country, including registrations, recordings and pending
applications in the Canadian Intellectual Property Office or any similar offices
in any other country, and (b) all reissues, continuations, divisions,
continuations-in-part, renewals or extensions thereof, and the inventions
disclosed or claimed therein, including the right to make, use and/or sell the
inventions disclosed or claimed therein.

 

“Patents” means all patents now owned or hereafter acquired by any Grantor,
including those listed on Schedule 4.

 

“Proceeds” shall mean all “proceeds” as such term is defined in the Ontario PPSA
and, in any event, shall include with respect to any Grantor, any consideration
received from the sale, exchange, license, lease or other disposition of any
asset or property that constitutes Collateral, any value received as a
consequence of the possession of any Collateral and any payment received from
any insurer or other person or entity as a result of the destruction, loss,
theft, damage or other involuntary conversion of whatever nature of any asset or
property that

 

5

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

 

constitutes Collateral, and shall include (a) all cash and negotiable
instruments received by or held on behalf of the Administrative Agent, (b) any
claim of any Grantor against any third party for (and the right to sue and
recover for and the rights to damages or profits due or accrued arising out of
or in connection with) (i) past, present or future infringement of any Patent or
licensed under a Patent License, (ii) past, present or future infringement or
dilution of any Trademark or licensed under a Trademark License or injury to the
goodwill associated with or symbolized by any Trademark, (iii) past, present or
future breach of any License and (iv) past, present or future infringement of
any Copyright now or hereafter owned by any Grantor or licensed under a
Copyright License and (c) any and all other amounts from time to time paid or
payable under or in connection with any of the Collateral.

 

“Receiver” means a receiver, a manager, a receiver and manager or an interim
receiver.

 

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

 

“Security Agreement” shall mean this Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Security Interest” shall have the meaning assigned to such term in Section 2.

 

“Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any trademark now or hereafter
owned by any Grantor (including any Trademark) or that any Grantor otherwise has
the right to license, or granting to any Grantor any right to use any trademark
now or hereafter owned by any third party, and all rights of any Grantor under
any such agreement, including those listed on Schedule 5.

 

“trademarks” means, with respect to any Person, all of the following now owned
or hereafter acquired by such Person: (i) all trademarks, service marks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof (if any), and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the Canadian Intellectual
Property Office or any similar offices in any other country or any political
subdivision thereof, and all extensions or renewals thereof, (ii) all goodwill
associated therewith or symbolized thereby and (iii) all other assets, rights
and interests that uniquely reflect or embody such goodwill.

 

“Trademarks” means all trademarks now owned or hereafter acquired by any
Grantor, including those listed on Schedule 6 hereto.

 

6

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

 

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

 

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

 

(e)   Where the context requires, terms relating to the Collateral or any part
thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

 

2. Grant of Security Interest.

 

(a) As collateral security for the prompt and complete payment and performance
when due (whether at the stated maturity, by acceleration or otherwise) of the
Obligations, each Grantor hereby bargains, sells, conveys, assigns, sets over,
mortgages, pledges, hypothecates and transfers to the Administrative Agent, 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) (the “Security Interest”) in all of its
personal property, now owned or hereafter acquired by such Grantor or in which
such Grantor now has or at any time in future may acquire any right, title or
interest, including (without limitation) the following (collectively, the
“Collateral”):

 

(i)            all Accounts;

 

(ii)           all Equipment;

 

(iii)          all Intangibles;

 

(iv)          all Intellectual Property;

 

(v)           all Inventory;

 

(vi)          all cash and cash accounts;

 

(vii)         all Investment Property;

 

(viii)        all books and records pertaining to the Collateral; and

 

(ix)                           to the extent not otherwise included, all
Proceeds and products of any and all of the foregoing.

 

(b) Each Grantor hereby irrevocably authorizes the Administrative Agent at any
time and from time to time to file in any relevant jurisdiction any financing
statements with respect to the Collateral or any part thereof and amendments
thereto that contain the information

 

7

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

 

required by the personal property security legislation of Canada. Each Grantor
agrees to provide such information to the Administrative Agent promptly upon
request.

 

Each Grantor also ratifies its authorization for the Administrative Agent to
file in any relevant jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof.

 

The Administrative Agent is further authorized to file with the Canadian
Intellectual Property Office (or any successor office or any similar office in
any other country) such documents as may be necessary or advisable for the
purpose of perfecting, confirming, continuing, enforcing or protecting the
Security Interest granted by each Grantor in Intellectual Property, without the
signature of any Grantor, and naming any Grantor or the Grantors as debtors and
the Administrative Agent as secured party.

 

The Security Interests are granted as security only and shall not subject the
Administrative Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Grantor with respect to or arising
out of the Collateral.

 

3.             Representations and Warranties.

 

Each Grantor hereby represents and warrants to the Administrative Agent and each
Secured Party that:

 

3.1           Title; No Other Liens. Except for the Security Interest granted to
the Administrative Agent for the ratable benefit of the Secured Parties pursuant
to this Security Agreement, the Liens permitted by the Credit Agreement and any
Liens securing Indebtedness which is no longer outstanding or any Liens with
respect to commitments to lend which have been terminated, such Grantor owns
each item of the Collateral free and clear of any and all Liens or claims of
others. No security agreement, financing statement or other public notice with
respect to all or any part of the Collateral that evidences a Lien securing any
material Indebtedness is on file or of record in any public office, except such
as have been filed in favor of the Administrative Agent, for the ratable benefit
of the Secured Parties, pursuant to this Security Agreement or are permitted by
the Credit Agreement.

 

3.2           Perfected First Priority Liens.

 

(a)   Subject to the limitations set forth in clause (b) of this Section 3.2,
the Security Interests granted pursuant to this Security Agreement (i) will
constitute valid perfected Security Interests in the Collateral in favor of the
Administrative Agent, for the ratable benefit of the Secured Parties, as
collateral security for the Obligations, upon (A) completion of all filings,
registrations and recordings of financing statements and other similar
instruments under the Ontario PPSA or any other relevant personal property
security legislation in Canada and (B) completion of the filing, registration
and recording of a fully executed agreement in the form hereof (or a supplement
hereto) and containing a description of all Collateral constituting Intellectual
Property in the Canadian Intellectual Property Office and (ii) are prior to all
other

 

8

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

 

Liens on the Collateral other than Liens permitted pursuant to Section 10.2 of
the Credit Agreement.

 

(b)   Notwithstanding anything to the contrary herein, no Grantor shall be
required to perfect the Security Interests granted by this Security Agreement
(including Security Interests in cash, cash accounts and Investment Property) by
any means other than by (i) filings pursuant to the personal property security
legislation of the relevant jurisdictions, (ii) filings approved by Canadian
government offices with respect to Intellectual Property or (iii) when
applicable, possession by or on behalf of the Administrative Agent in Canada. No
Grantor shall be required to complete any filings or other action with respect
to the perfection of Security Interests in any jurisdiction outside Canada.

 

(c)           It is understood and agreed that the Security Interests in cash,
cash accounts and Permitted Investments created hereunder shall not prevent the
Grantors from using such assets in the ordinary course of their respective
businesses. It is also understood and agreed that the Grantors may sell,
transfer or otherwise dispose of used or surplus Equipment, vehicles, Inventory
and other assets in the ordinary course of business to the extent permitted by
the Credit Agreement.

 

3.3 Schedules. The Schedules attached to this Security Agreement include
accurate and complete lists of the information required by this Security
Agreement to be included therein.

 

4. Covenants.

 

Each Grantor hereby covenants and agrees with the Administrative Agent and the
Secured Parties that, from and after the date of this Security Agreement until
the Obligations under the Credit Documents are paid in full, the Commitments are
terminated and no Letter of Credit remains outstanding:

 

4.1 Maintenance of Perfected Security Interest Further Documentation.

 

(a) Such Grantor shall maintain the Security Interest created by this Security
Agreement as a perfected Security Interest having at least the priority
described in Section 3.2 and shall defend such Security Interest against the
claims and demands of all Persons whomsoever (except for Liens permitted by the
Credit Agreement, which Liens such Grantor shall pay and perform in accordance
with their terms), in each case subject to Section 3.2(b).

 

(b)   Such Grantor will furnish to the Administrative Agent and the Lenders from
time to time statements and schedules further identifying and describing the
assets and property of such Grantor and such other reports in connection
therewith as the Administrative Agent may reasonably request. In addition,
within 30 days after the end of each calendar quarter, such Grantor will deliver
to the Administrative Agent a written supplement hereto substantially in the
form of Annex 2 hereto with respect to any additional Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses acquired
by such Grantor after the date hereof, all in reasonable detail.

 

9

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

 

(c)   Subject to clause (d) below and Section 3.2(b), each Grantor agrees that
at any time and from time to time, at the expense of such Grantor, 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 grant, preserve, protect and perfect the validity and priority of
the Security Interests created or intended to be created hereby or (y) to enable
the Administrative Agent to exercise and enforce its rights and remedies
hereunder with respect to any Collateral, including the filing of any financing
or continuation statements under the personal property security legislation of
Canada in effect in any jurisdiction with respect to the Security Interests
created hereby, all at the expense of such Grantor.

 

(d)   Notwithstanding anything in this Section 4.1 to the contrary, (i) with
respect to any assets acquired by such Grantor after the date hereof that are
required by the Credit Agreement to be subject to the Lien created hereby or
(ii) with respect to any Person that, subsequent to the date hereof, becomes a
Subsidiary of the US Borrower that is required by the Credit Agreement to become
a party hereto, the relevant Grantor after the acquisition or creation thereof
shall promptly take all actions required by the Credit Agreement or this
Section 4.1.

 

4.2 Changes in Locations, Name, etc. Each Grantor will furnish to the
Administrative Agent prompt written notice of any change (i) in its legal name,
(ii) in its jurisdiction of incorporation or organization, (iii) in the location
of its chief executive office, its principal place of business, any office in
which it maintains books or records relating to Collateral owned by it
(including the establishment of any such new office), or (iv) in its identity or
type of organization or corporate structure. Each Grantor agrees promptly to
provide the Administrative Agent with certified organizational documents
reflecting any of the changes described in the first sentence of this paragraph.
Each Grantor agrees not to effect or permit any change referred to in the
preceding sentence unless all filings have been made under applicable personal
property security legislation or otherwise that are required in order for the
Administrative Agent to continue at all times following such change to have a
valid, legal and perfected security interest in all the Collateral having at
least the priority described in Section 3.2. Each Grantor also agrees promptly
to notify the Administrative Agent if any material portion of the Collateral is
damaged or destroyed.

 

4.3 Notices. Each Grantor will advise the Administrative Agent and the Lenders
promptly, in reasonable detail, of any Lien of which it has knowledge (other
than the Security Interests created hereby or Liens permitted under the Credit
Agreement ) on any of the Collateral which would adversely affect, in any
material respect, the ability of the Administrative Agent to exercise any of its
remedies hereunder.

 

4.4 Special Covenants with Respect to Equipment.

 

(a)        Each Grantor shall, promptly after the acquisition by such Grantor of
any item of Equipment, if requested by the Administrative Agent, provide copies
of documentation evidencing such acquisition and a description of such
Equipment.

 

10

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

 

(b)        Upon the occurrence and during the continuation of any Event of
Default, all insurance payments in respect of such Equipment shall be paid to
and applied by Administrative Agent as specified in Section 5.4 hereof.

 

5. Remedial Provisions.

 

5.1 Certain Matters Relating to Accounts.

 

(a)          At any time after the occurrence and during the continuance of an
Event of Default, the Administrative Agent shall have the right to make test
verifications of the Accounts of each Grantor in any manner and through any
medium that it reasonably considers advisable, and each Grantor shall furnish
all such assistance and information as the Administrative Agent may require in
connection with such test verifications. The Administrative Agent shall have the
absolute right to share any information it gains from such inspection or
verification with any Secured Party.

 

(b)         The Administrative Agent hereby confirms each Grantor’s right to
collect such Grantor’s Accounts, but the Administrative Agent may curtail or
terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required in writing by the Administrative
Agent at any time after the occurrence and during the continuance of an Event of
Default, any payments of Accounts, when collected by any Grantor, (i) shall be
forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly endorsed by such Grantor to the
Administrative Agent if requested, in a Collateral Account maintained under the
sole dominion and control of and on terms and conditions reasonably satisfactory
to the Administrative Agent, subject to withdrawal by the Administrative Agent
for the account of the Secured Parties only as provided in Section 5.5, and
(ii) until so turned over, shall be held by such Grantor in trust for the
Administrative Agent and the Secured Parties, segregated from other funds of
such Grantor. Each such deposit of Proceeds of Accounts shall be accompanied by
a report of the applicable Grantor identifying in reasonable detail the nature
and source of the payments included in the deposit.

 

(c)   At the Administrative Agent’s request at any time after the occurrence and
during the continuance of an Event of Default, each Grantor shall deliver to the
Administrative Agent all original and other documents evidencing, and relating
to, the agreements and transactions which gave rise to such Grantor’s Accounts,
including all original orders, invoices and shipping receipts.

 

(d)   Upon the occurrence and during the continuance of an Event of Default, a
Grantor shall not grant any extension of the time of payment of any of its
Accounts, compromise, compound or settle the same for less than the full amount
thereof, release, wholly or partly, any person liable for the payment thereof,
or allow any credit or discount whatsoever thereon if the Administrative Agent
shall have instructed the Grantors not to grant or make any such extension,
credit, discount, compromise, or settlement under any circumstances during the
continuance of such Event of Default.

 

11

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

 

5.2 Communications with Obligors; Grantors Remain Liable.

 

(a)   The Administrative Agent in its own name or in the name of others may at
any time after the occurrence and during the continuance of an Event of Default,
after giving reasonable notice to the relevant Grantor of its intent to do so,
communicate with obligors under such Grantor’s Accounts to verify with them to
the Administrative Agent’s satisfaction the existence, amount and terms of any
of such Grantor’s Accounts. The Administrative Agent shall have the absolute
right to share any information it gains from such inspection or verification
with any Secured Party.

 

(b)   Upon the written request of the Administrative Agent at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
notify obligors on its Accounts that such Accounts have been assigned to the
Administrative Agent for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Administrative Agent.

 

(c)   Anything herein to the contrary notwithstanding, each Grantor shall, to
the maximum extent provided by law, remain liable under each of its Accounts to
observe and perform all the conditions and obligations to be observed and
performed by it thereunder, all in accordance with the terms of any agreement
giving rise thereto. Neither the Administrative Agent nor any Secured Party
shall have any obligation or liability under any Account (or any agreement
giving rise thereto) by reason of or arising out of this Security Agreement or
the receipt by the Administrative Agent or any Secured Party of any payment
relating thereto, nor shall the Administrative Agent or any Secured Party be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Account (or any agreement giving rise thereto), to make any
payment, to make any inquiry as to the nature or the sufficiency of any payment
received by it or as to the sufficiency of any performance by any party
thereunder, to present or file any claim, to take any action to enforce any
performance or to collect the payment of any amounts which may have been
assigned to it or to which it may be entitled at any time or times.

 

5.3 Proceeds to be Turned Over to Administrative Agent. In addition to the
rights of the Administrative Agent and the Secured Parties specified in
Section 5.1 with respect to payments of Accounts, if an Event of Default shall
occur and be continuing and the Administrative Agent so requires by notice in
writing to the relevant Grantor (it being understood that the exercise of
remedies by the Secured Parties in connection with an Event of Default under
Section 11.5 of the Credit Agreement shall be deemed to constitute a request by
the Administrative Agent for the purposes of this sentence and in such
circumstances, no such written notice shall be required), all Proceeds received
by any Grantor consisting of cash, checks and other near-cash items shall be
held by such Grantor in trust for the Administrative Agent and the Secured
Parties, segregated from other funds of such Grantor, and shall, forthwith upon
receipt by such Grantor, be turned over to the Administrative Agent in the exact
form received by such Grantor (duly endorsed by such Grantor to the
Administrative Agent, if requested by the Administrative Agent). All Proceeds
received by the Administrative Agent hereunder shall be held by the
Administrative Agent in a Collateral Account maintained under its sole dominion
and control and on terms and conditions reasonably satisfactory to the
Administrative Agent. All

 

12

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

 

Proceeds while held by the Administrative Agent in a Collateral Account (or by
such Grantor in trust for the Administrative Agent and the Secured Parties)
shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in Section 5.5.

 

5.4 Application of Proceeds. The Administrative Agent shall apply the proceeds
of any collection or sale of the Collateral as well as any Collateral consisting
of cash, 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 Security 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 Grantor 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 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

 

(iii)          third, any surplus then remaining shall be paid to the Grantors
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) permitted
hereunder, the receipt of the Administrative Agent or of the officer of the
Administrative Agent 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.

 

5.5 Other Remedies. If an Event of Default shall occur and be continuing, the
Administrative Agent may exercise in respect of the Collateral, in addition to
all 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 Ontario
PPSA or any other applicable law and also may without notice except as specified
below, personally or by agent, at such time or times as the Administrative Agent
in its discretion may determine, do any one or more of the following:

 

(a)   Rights under Ontario PPSA, etc. Exercise all of the rights and remedies
granted to secured parties under the Ontario PPSA and any other applicable
statute, or otherwise available to the Administrative Agent at law or in equity.

 

13

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

 

(b)   Demand Possession. Demand possession of any or all of the Collateral, in
which event each Grantor will, at the expense of such Grantor, promptly cause
the Collateral designated by the Administrative Agent to be assembled and made
available and/or delivered to the Administrative Agent at any place designated
by the Administrative Agent.

 

(c)   Take Possession. Enter on any premises where any Collateral is located and
take possession of, disable or remove such Collateral.

 

(d)   Deal with Collateral. Hold, store and keep idle, or operate, lease or
otherwise use or permit the use of, any or all of the Collateral for such time
and on such terms as the Administrative Agent may determine, and demand, collect
and retain all earnings and other sums due or to become due from any Person in
respect of any of the Collateral.

 

(e)   Carry on Business. Carry on, or concur in the carrying on of, any or all
of the business or undertaking of the Grantors and enter on, occupy and use
(without charge by the Grantors) any of the premises, buildings, plant and
undertaking of, or occupied or used by, the Grantors.

 

(f)    Enforce Collateral. Seize, collect, receive, enforce or otherwise deal
with any Collateral in such manner, on such terms and conditions and at such
times as the Administrative Agent deems advisable.

 

(g)   Dispose of Collateral. Realize on any or all of the Collateral and sell,
lease, assign, give options to purchase, or otherwise dispose of and deliver any
or all of the Collateral (or contract to do any of the above), in one or more
parcels at any public or private sale, at any exchange, broker’s board or office
of the Administrative Agent or elsewhere, 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, for cash or on credit or for
future delivery.

 

(h)   Court-Approved Disposition of Collateral. Apply to a court of competent
jurisdiction for the sale or foreclosure of any or all of the Collateral.

 

(i)    Purchase by Administrative Agent. At any public sale, and to the extent
permitted by law on any private sale, bid for and purchase any or all of the
Collateral offered for sale and, upon compliance with the terms of such sale,
hold, retain and dispose of such Collateral without any further accountability
to any Grantor or any other Person with respect to such holding, retention or
disposition, except as required by applicable law. In any such sale to the
Administrative Agent, the Administrative Agent may, for the purpose of making
payment for all or any part of the Collateral so purchased, use any claim for
Obligations then due and payable to it as a credit against the purchase price.

 

(j)    Transfer of Securities. Transfer any Investment Property forming part of
the Collateral into the name of the Administrative Agent or its nominee, with or
without disclosing that the Investment Property is subject to the Security
Interests arising under this Agreement.

 

14

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

 

(k) Exercise of Rights. Exercise any and all rights, privileges, entitlements
and options pertaining to any Investment Property forming part of the Collateral
as if the Administrative Agent were the absolute owner of such Investment
Property.

 

(1) Payment of Liabilities. Pay any liability secured by any Lien against any
Collateral. Each Grantor will promptly on demand reimburse the Administrative
Agent for all such payments.

 

(m) Borrow and Grant Security Interests. Borrow money for the maintenance,
preservation or protection of any Collateral or for carrying on any of the
business or undertaking of any Grantor and grant Security Interests on any
Collateral (in priority to the Security Interests created by this Agreement or
otherwise) as security for the money so borrowed. Each Grantor will promptly on
demand reimburse the Administrative Agent for all such borrowings.

 

(n) Appoint Receiver. Appoint by instrument in writing one or more Receivers of
any Grantor or any or all of the Collateral with such rights, powers and
authority (including any or all of the rights, powers and authority of the
Administrative Agent under this Agreement) as may be provided for in the
instrument of appointment or any supplemental instrument, and remove and replace
any such Receiver from time to time. To the extent permitted by applicable law,
any Receiver appointed by the Administrative Agent will (for purposes relating
to responsibility for the Receiver’s acts or omissions) be considered to be the
agent of the Grantors and not of the Administrative Agent or the Secured
Parties.

 

(o) Court-Appointed Receiver. Apply to a court of competent jurisdiction for the
appointment of a Receiver of any Grantor or of any or all of the Collateral.

 

The Administrative Agent may exercise any or all of the foregoing rights and
remedies without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except as required by applicable law) to or
on the Grantors or any other Person, and the Grantors by this Agreement waive
each such demand, presentment, protest, advertisement and notice to the extent
permitted by applicable law. None of the above rights or remedies will be
exclusive of or dependent on or merge in any other right or remedy, and one or
more of such rights and remedies may be exercised independently or in
combination from time to time. Without prejudice to the ability of the
Administrative Agent to dispose of the Collateral 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, each Grantor
acknowledges that, to the extent notice of sale shall be required by law, at
least ten days’ notice to such Grantor 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. Each Grantor further acknowledges that a disposition of
Collateral by the Administrative Agent which takes place substantially in
accordance with the following provisions will be deemed to be commercially
reasonable:

 

(i)            Collateral may be disposed of in whole or in part;

 

15

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

 

(ii)           Collateral may be disposed of by public auction, public tender or
private contract, with or without advertising and without any other formality
except as required by law;

 

(iii)          any purchaser or lessee of Collateral may be a customer of the
Administrative Agent;

 

(iv)          a disposition of Collateral may be on such terms and conditions as
to credit or otherwise as the Administrative Agent, in is sole discretion, may
deem advantageous; and

 

(v)           the Administrative Agent may establish an upset or reserve bid or
price in respect of Collateral.

 

5.6 Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the reasonable fees and disbursements of any attorneys
employed by the Administrative Agent or any Secured Party to collect such
deficiency.

 

5.7 Amendments, etc. with Respect to the Obligations; Waiver of Rights. Each
Grantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Grantor and without notice to or further
assent by any Grantor, (a) 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) 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) 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, and (d) 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 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
Security Agreement or any property subject thereto. When making any demand
hereunder against any Grantor, the Administrative Agent or any other Secured
Party may, but shall be under no obligation to, make a similar demand on the US
Borrower or any Grantor or grantor, and any failure by the Administrative Agent
or any other Secured Party to make any such demand or to collect any payments
from the US Borrower or

 

16

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

 

any Grantor or grantor or any release of the US Borrower or any Grantor or
grantor shall not relieve any Grantor in respect of which a demand or collection
is not made or any Grantor 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 Grantor. For the purposes hereof “demand” shall
include the commencement and continuance of any legal proceedings.

 

6. The Administrative Agent.

 

6.1 Administrative Agent’s Appointment as Attorney-in-Fact, etc

 

(a) Each Grantor hereby appoints, which appointment is irrevocable and coupled
with an interest, effective upon and during the occurrence of an Event of
Default, the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or otherwise, for the purpose of carrying out the terms
of this Security 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 Security Agreement, and, without
limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, either in
the Administrative Agent’s name or in the name of such Grantor or otherwise,
without further assent by such Grantor, to do any or all of the following, in
each case after and during the occurrence of an Event of Default and after
written notice by the Administrative Agent of its intent to do so:

 

(i)            take possession of and endorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due under any
Account or with respect to any other Collateral and file any claim or take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and
all such moneys due under any Account or with respect to any other Collateral
whenever payable;

 

(ii)           in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and papers as
the Administrative Agent reasonably requires to evidence the Administrative
Agent’s and the Secured Parties’ Security Interest in such Intellectual Property
and the goodwill and general intangibles of such Grantor relating thereto or
represented thereby;

 

(iii)          pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral;

 

(iv)          execute, in connection with any sale provided for in Section 5.5,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral;

 

(v)           obtain and adjust insurance required to be maintained by such
Grantor or paid to the Administrative Agent pursuant to Section 4.4; and

 

17

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

 

(vi)          direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Administrative Agent or as the Administrative Agent shall
direct;

 

(vii)         ask for or demand, collect and receive payment of and receipt for,
any and all moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral;

 

(viii)        sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral;

 

(ix)           commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of any Collateral;

 

(x)            defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral (with such Grantor’s consent to the
extent such action or its resolution could materially affect such Grantor or any
of its Affiliates in any manner other than with respect to its continuing rights
in such Collateral);

 

(xi)           settle, compromise or adjust any such suit, action or proceeding
and, in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate (with such Grantor’s consent to the
extent such action or its resolution could materially affect such Grantor or any
of its Affiliates in any manner other than with respect to its continuing rights
in such Collateral);

 

(xii)          assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions, and
in such manner, as the Administrative Agent shall in its sole discretion
determine and

 

(xiii)         generally, sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though the Administrative Agent were the absolute owner thereof for all
purposes, and do, at the Administrative Agent’s option and such Grantor’s
expense, at any time, or from time to time, all acts and things that the
Administrative Agent deems necessary to protect, preserve or realize upon the
Collateral and the Administrative Agent’s and the Secured Parties’ Security
Interests therein and to effect the intent of this Security Agreement, all as
fully and effectively as such Grantor might do.

 

Anything in this Section 6.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 6.1(a) unless an Event of Default shall
have occurred and be continuing.

 

18

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

 

(b)   If any Grantor fails to perform or comply with any of its agreements
contained herein, the Administrative Agent, at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.

 

(c)   The expenses of the Administrative Agent incurred in connection with
actions undertaken as provided in this Section 6.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due ABR Loans under the
Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.

 

(d)   Each Grantor hereby ratifies all that said attorneys shall lawfully do or
cause to be done by virtue hereof. All powers, authorizations and agencies
contained in this Security Agreement are coupled with an interest and are
irrevocable until this Security Agreement is terminated and the Security
Interests created hereby are released.

 

6.2 Duty of Administrative Agent. The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under the Ontario PPSA or otherwise, shall be to deal with it
in the same manner as the Administrative Agent deals with similar property for
its own account and as required by applicable law. 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 and in accordance with applicable law. Neither the Administrative
Agent, any Secured Party nor any of their respective officers, directors,
employees or agents shall be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so or shall be under any
obligation to sell or otherwise dispose of any Collateral upon the request of
any Grantor or any other Person or to take any other action whatsoever with
regard to the Collateral or any part thereof. The powers conferred on the
Administrative Agent and the Secured Parties hereunder are solely to protect the
Administrative Agent’s and the Secured Parties’ interests in the Collateral and
shall not impose any duty upon the Administrative Agent or any Secured Party to
exercise any such powers. The Administrative Agent and the Secured Parties shall
be accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.

 

6.3 Authority of Administrative Agent. Each Grantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Security Agreement
with respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, voting right, request,
judgment or other right or remedy provided for herein or resulting or arising
out of this Security Agreement shall, as between the Administrative Agent and
the Secured Parties, be governed by the Credit Agreement and by such other
agreements with respect thereto as may exist from time to time among them, but,
as between the

 

19

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

 

Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Grantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

 

6.4 Security Interest Absolute. All rights of the Administrative Agent
hereunder, the security interest and all obligations of the Grantors hereunder
shall be absolute and unconditional.

 

6.5 Continuing Security Interest; Assignments Under the Credit Agreement;
Release.

 

(a) This Security Agreement shall remain in full force and effect and be binding
in accordance with and to the extent of its terms upon each Grantor 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 Obligations under the
Credit Documents and the obligations of each Grantor under this Security
Agreement 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 Security
Agreement and the security interest granted hereby shall terminate on the first
date on which all of 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 Grantor shall automatically be released from its obligations hereunder
and the Security Interest in the Collateral of such Grantor shall be
automatically released upon the consummation of any transaction permitted by the
Credit Agreement as a result of which such Grantor ceases to be a Subsidiary of
the US Borrower.

 

(c)   Upon any sale or other transfer by any Grantor 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 14.1 of the Credit Agreement, the Security Interest 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 Grantor,
at such Grantor’s expense, all documents that such Grantor shall reasonably
request to evidence such termination or release. Any execution and delivery of
documents pursuant to this Section 6.5 shall be without recourse to or warranty
by the Administrative Agent.

 

6.6 Reinstatement. This Security 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 the US Borrower or any
other Credit Party, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the US Borrower
or any

 

20

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

 

other Credit Party or any substantial part of its property, or otherwise, all as
though such payments had not been made.

 

7. Administrative Agent As Agent.

 

(a) Credit Suisse First Boston, acting through its Cayman Islands Branch, has
been appointed to act as Administrative Agent hereunder by the Lenders and, by
their acceptance of the benefits hereof, the other Secured Parties. The
Administrative Agent shall be obligated, and shall have the right hereunder, to
make demands, to give notices, to exercise or refrain from exercising any
rights, and to take or refrain from taking any action (including the release or
substitution of Collateral), solely in accordance with this Security Agreement
and the Credit Agreement, provided that the Administrative Agent shall exercise,
or refrain from exercising, any remedies provided for in Section 5 in accordance
with the instructions of (i) Required Lenders or (ii) after the termination of
this Security Agreement. In furtherance of the foregoing provisions of this
Section 7(a), each Secured Party, by its acceptance of the benefits hereof,
agrees that it shall have no right individually to realize upon any of the
Collateral hereunder, it being understood and agreed by such Secured Party that
all rights and remedies hereunder may be exercised solely by the Administrative
Agent for the ratable benefit of the Lenders and Secured Parties in accordance
with the terms of this Section 7(a).

 

(b)   The Administrative Agent shall at all times be the same Person that is the
Administrative Agent under the Credit Agreement. Written notice of resignation
by the Administrative Agent pursuant to Section 12.9 of the Credit Agreement
shall also constitute notice of resignation as Administrative Agent under this
Security Agreement; removal of the Administrative Agent shall also constitute
removal as Administrative Agent under this Security Agreement; and appointment
of a successor Administrative Agent pursuant to Section 12.9 of the Credit
Agreement shall also constitute appointment of a successor Administrative Agent
under this Security Agreement. Upon the acceptance of any appointment as
Administrative Agent under Section 12.9 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent under this Security Agreement,
and the retiring or removed Administrative Agent under this Security Agreement
shall promptly (i) transfer to such successor Administrative Agent all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Administrative Agent under this
Security Agreement, and (ii) execute and deliver to such successor
Administrative Agent such amendments to financing statements and take such other
actions, as may be necessary or appropriate in connection with the assignment to
such successor Administrative Agent of the Security Interests created hereunder,
whereupon such retiring or removed Administrative Agent shall be discharged from
its duties and obligations under this Security Agreement. After any retiring or
removed Administrative Agent’s resignation or removal hereunder as
Administrative Agent, the provisions of this Security Agreement shall inure to
its benefit as to any actions taken or omitted to be taken by it under this
Security Agreement while it was Administrative Agent hereunder.

 

(c)   The Administrative Agent shall not be deemed to have any duty whatsoever
with respect to any Secured Party that is a counterparty to a Hedge Agreement
the obligations under

 

21

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

 

which constitute Obligations, until it shall have received written notice in
form and substance satisfactory to the Administrative Agent from a Grantor or
any such Secured Party as to the existence and terms of the applicable Hedge
Agreement.

 

8. Miscellaneous.

 

8.1 Amendments in Writing. None of the terms or provisions of this Security
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by the affected Grantor and the Administrative Agent
in accordance with Section 14.1 of the Credit Agreement.

 

8.2 Notices. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 14.2 of the Credit Agreement. All communications and
notices hereunder to any Grantor shall be given to it in care of the UK Borrower
at the UK Borrower’s address set forth in Section 14.2 of the Credit Agreement.

 

8.3 No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Secured Party shall by any act (except by a written
instrument pursuant to Section 8.1 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. 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.

 

8.4 Enforcement Expenses; Indemnification.

 

(a)   Each Grantor agrees to pay any and all expenses (including all reasonable
fees and disbursements of counsel) that may be paid or incurred by any Secured
Party in enforcing, or obtaining advice of counsel in respect of, any rights
with respect to, or collecting, any or all of the Obligations and/or enforcing
any rights with respect to, or collecting against, such Grantor under this
Security Agreement.

 

(b)   Each Grantor agrees to pay, and to save the Administrative Agent and the
Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes (excluding taxes imposed on the net income or capital of the
Administrative Agent and Secured Parties) which may be payable or determined to
be payable with respect to any of the Collateral or in connection with any of
the transactions contemplated by this Security Agreement.

 

22

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

 

(c)   Each Grantor agrees to pay, and to save the Administrative Agent and the
Secured Parties harmless from, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind or nature whatsoever with respect to the execution, delivery,
enforcement, performance and administration of this Security Agreement to the
extent either of the Borrowers would be required to do so pursuant to
Section 12.7 of the Credit Agreement.

 

(d)   The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Credit Documents.

 

8.5 Successors and Assigns. The provisions of this Security Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Grantor may assign,
transfer or delegate any of its rights or obligations under this Security
Agreement without the prior written consent of the Administrative Agent except
pursuant to a transaction permitted by the Credit Agreement.

 

8.6 Counterparts. This Security Agreement may be executed by one or more of the
parties to this Security 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 Security Agreement signed by all the
parties shall be lodged with the Administrative Agent and the US Borrower.

 

8.7 Severability. Any provision of this Security 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.

 

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

 

8.9 Integration. This Security Agreement represents the agreement of each of the
Grantors 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.

 

8.10 GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO.

 

23

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

 

8.11 Submission To Jurisdiction Waivers. Each Grantor hereby irrevocably and
unconditionally:

 

(a)   submits itself in any legal action or proceeding relating to this Security
Agreement, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the Province
of Ontario, 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 Grantor at its
address referred to in Section 8.2 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 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 8.11 any special, exemplary, punitive or consequential damages.

 

8.12 Acknowledgments. Each Grantor hereby acknowledges that:

 

(a)   it has been advised by counsel in the negotiation, execution and delivery
of this Security Agreement and the other Credit Documents to which it is a
party;

 

(b)   neither the Administrative Agent nor any other Secured Party has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Security Agreement or any of the other Credit Documents,
and the relationship between the Grantors, on the one hand, and the
Administrative Agent and the other Secured Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

 

(c)   no joint venture is created hereby or by the other Credit Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders and any other Secured Party or among the Grantors and the Lenders and
any other Secured Party.

 

8.13 Additional Grantors. Each Subsidiary of the US Borrower that is required to
become a party to this Security Agreement pursuant to Section 9.11 of the Credit
Agreement shall become a Grantor, with the same force and effect as if
originally named as a Grantor herein, for all purposes of this Agreement upon
execution and delivery by such Subsidiary of a Supplement

 

24

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

 

substantially in the form of Annex 1 hereto. The execution and delivery of any
instrument adding an additional Grantor as a party to this Security Agreement
shall not require the consent of any other Grantor hereunder. The rights and
obligations of each Grantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Grantor as a party to this Security
Agreement.

 

[Remainder of this page intentionally left blank; signature pages follow]

 

25

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

 

ANNEX I TO THE
SECURITY AGREEMENT

 

SUPPLEMENT NO. [ ] dated as of [ ], tothe Canadian Security Agreement dated as
of July 30, 2004 (the “Security Agreement”), among each Canadian subsidiary of
ROCKWOOD SPECIALTIES GROUP, INC., a Delaware corporation (the “US Borrower”),
listed on Annex A thereto (each such subsidiary individually a “Grantor” and,
collectively, the “Grantors”) in favor of CREDIT SUISSE FIRST BOSTON, acting
through its Cayman Islands Branch as administrative 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 July 30,
2004 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among the US Borrower, Rockwood Specialties Limited, a
company incorporated under the laws of England and Wales (the “UK Borrower” and,
together with the US Borrower, the “Borrowers”), Rockwood Specialties
International Inc., a Delaware Corporation, the Lenders, Credit Suisse First
Boston, as Administrative Agent for the Lenders, UBS Securities LLC and Goldman
Sachs Credit Partners L.P., as co-syndication agents (in such capacity, the
“Co-Syndication Agents”), and (b) the Canadian Guarantee dated as of July 30,
2004 (as amended, supplemented or otherwise modified or restated from time to
time, the “Guarantee”), among the Grantors 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 Security Agreement.

 

C.           The Grantors have entered into the Security Agreement in order to
induce Administrative Agent, the Co-Syndication 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 UK Borrower under the Credit Agreement and to induce one or more
Lenders or Affiliates of Lenders to enter into Hedge Agreements with the UK
Borrower and/or the Restricted Subsidiaries of the UK Borrower.

 

D.          Section 9.11 of the Credit Agreement and subsection 8.13 of the
Security Agreement provide that each Subsidiary of the US Borrower that is
required to become a party to the Security Agreement pursuant to Section 9.11 of
the Credit Agreement shall become a Grantor, with the same force and effect as
if originally named as a Grantor therein, for all purposes of the Security
Agreement upon execution and delivery by such Subsidiary of an instrument in the
form of this Supplement. Each undersigned Subsidiary (each a “New Grantor”) is
executing this Supplement in accordance with the requirements of the Security
Agreement to become a Grantor under the Security 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 the New Grantors agree as follows:

 

SECTION 1. In accordance with subsection 8.13 of the Security Agreement, each
New Grantor by its signature below becomes a Grantor under the Security
Agreement, from and after the date hereof, with the same force and effect as if
originally named therein as a Grantor and each New Grantor hereby (a) agrees to
all the terms and provisions of the Security Agreement applicable to it as a
Grantor thereunder and (b) represents and warrants that the representations and
warranties made by it as a Grantor thereunder are true and correct on and as of
the date hereof. In furtherance of the foregoing, each New Grantor, as security
for the payment and performance in full of the Obligations, does hereby bargain,
sell, convey, assign, set over, mortgage, pledge, hypothecate and transfer to
the Administrative Agent, and liereby grants to the Administrative Agent, for
the ratable benefit of the Secured Parties, a Security Interest in all of the
Collateral of such New Grantor. Each reference to a “Grantor” in the Security
Agreement shall be deemed to include each New Grantor. The Security Agreement is
hereby incorporated herein by reference.

 

SECTION 2. Each New Grantor represents and warrants to the Administrative Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms, subject to
limitations which might result from bankruptcy, insolvency, moratorium and other
similar laws affecting creditors’ rights generally and subject to limitations on
the availability of equitable remedies.

 

SECTION 3. 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 UK Borrower. This Supplement shall become effective
as to each New Grantor when the Administrative Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of such New Grantor and the Administrative Agent.

 

SECTION 4. Each New Grantor hereby represents and warrants that (a) set forth on
Schedule I attached hereto is a true and correct schedule of the location of any
and all Collateral of such New Grantor, (b) set forth under its signature hereto
is (i) the legal name of such New Grantor, (ii) the jurisdiction of
incorporation or organization of such New Grantor, (iii) the true and correct
location of the chief executive office and principal place of business and any
office in which it maintains books or records relating to Collateral owned by
it, and (iv) the identity or type of organization or corporate structure of such
New Grantor and (c) as of the date hereof (i) Schedule II hereto sets forth all
of each New Grantor’s Copyright Licenses, (ii) Schedule III hereto sets forth,
in proper form for filing with the Canadian Intellectual Property Office, all of
each New Grantor’s Copyrights (and all applications therefor), (iii) Schedule N
hereto sets forth all of each New Grantor’s Patent Licenses, (iv) Schedule V
hereto sets forth, in proper form for filing with the Canadian Intellectual
Property

 

2

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

 

Office, all of each New Grantor’s Patents (and all applications therefor),
(v) Schedule VI hereto sets forth all of each New Grantor’s Trademark Licenses,
(vi) Schedule VII hereto sets forth, in proper form for filing with the Canadian
Intellectual Property Office, all of each New Grantor’s Trademarks (and all
applications therefor).

 

SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall
remain in full force and effect.

 

SECTION 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 PROVINCE OF ONTARIO.

 

SECTION 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 Security 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 8. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 14.2 of the Credit Agreement. All communications and
notices hereunder to each New Grantor shall be given to it in care of the UK
Borrower at the UK Borrower’s address set forth in Section 14.2 of the Credit
Agreement.

 

SECTION 9. Each New Grantor 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.

 

3

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

 

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

 

 

[NAME OF NEW GRANTOR]

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

Title:

 

 

 

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
Administrative Agent

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

Title:

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

Title:

 

4

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

 

SCHEDULE I
TO THE SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

COLLATERAL

 

Legal Name

 

Jurisdiction of
Incorporation or
Organization

 

Location of Chief
Executive Office
and Principal
Place of Business

 

Type of
Organization or
Corporate
Structure

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SCHEDULE II
TO THE SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

COPYRIGHT LICENSES

 

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

 

SCHEDULE III
TO THE SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

COPYRIGHTS

 

Registered Owner/Grantor

 

Title

 

Registration
Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SCHEDULE IV
TO THE SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

PATENT LICENSES

 

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

 

SCHEDULE V
TO THE SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

PATENTS

 

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

 

SCHEDULE VI
TO THE SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

TRADEMARK LICENSES

 

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

 

SCHEDULE VII
TO THE SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

TRADEMARKS

 

Canadian Trademarks

 

Registered
Owner/Grantor

 

Trademark

 

Registration
No.

 

Application
No.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Trademarks

 

Registered
Owner/Grantor

 

Trademark

 

Registration
No.

 

Application Country
No.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

ANNEX 2 TO THE
SECURITY AGREEMENT

 

SUPPLEMENT NO. [ ] dated as of [               ], to the Canadian Security
Agreement dated as of July 30, 2004 (the “Security Agreement”), among each
Canadian subsidiary of ROCKWOOD SPECIALTIES GROUP, INC., a Delaware corporation
(the “US Borrower”) listed on Schedule 1 thereto (each such subsidiary
individually a “Grantor” and, collectively, the “Grantors”) in favor CREDIT
SUISSE FIRST BOSTON, acting through its Cayman Islands Brach, as administrative
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 July 30, 2004
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the US Borrower, Rockwood Specialties Limited, a company
incorporated under the laws of England and Wales (the “UK Borrower” and,
together with the US Borrower, the “Borrowers”), Rockwood Specialties
International, Inc., a Delaware corporation, the Lenders, Credit Suisse First
Boston, as Administrative Agent for the Lenders, and UBS Securities LLC and
Goldman Sachs Credit Partners L.P., as co-syndication agents (in such capacity,
the “Co-Syndication Agents”), and (b) the Canadian Guarantee dated as of
July 30, 2004 (as amended, supplemented or otherwise modified or restated from
time to time, the “Guarantee”), among the Grantors 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 Security Agreement.

 

C.       The Grantors have entered into the Security Agreement in order to
induce Administrative Agent, the Co-Syndication 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 UK Borrower under the Credit Agreement and to induce one or more
Lenders or Affiliates of Lenders to enter into Hedge Agreements with the UK
Borrower. Pursuant to Section 4.1(b) of the Security Agreement, within 30 days
after the end of each calendar quarter, each Grantor has agreed to deliver to
the Administrative Agent a written supplement substantially in the form of Annex
2 thereto with respect to any additional Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks and Trademark Licenses acquired by such
Grantor after the date of the Credit Agreement. The Grantors have identified the
additional Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks
and Trademark Licenses acquired by such Grantors after the date of the Credit
Agreement set forth on Schedule I, II, III, IV, V and VI hereto. The undersigned
Grantors are executing this Supplement in order to facilitate supplemental
filings to be made by the Collateral Agent with the Canadian Intellectual
Property Office.

 

Accordingly, the Administrative Agent and the Grantors agree as follows:

 

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

 

SECTION 1. (a) Schedule 1 of the Security Agreement is hereby supplemented, as
applicable, by the information set forth in the Schedule I hereto, (b) Schedule
2 of the Security Agreement is hereby supplemented, as applicable, by the
information set forth in the Schedule II hereto, (c) Schedule 3 of the Security
Agreement is hereby supplemented, as applicable, by the information set forth in
the Schedule III hereto, (d) Schedule 4 of the Security Agreement is hereby
supplemented, as applicable, by the information set forth in the Schedule IV
hereto, (e) Schedule 5 of the Security Agreement is hereby supplemented, as
applicable, by the information set forth in the Schedule V hereto, and
(f) Schedule 6 of the Security Agreement is hereby supplemented, as applicable,
by the information set forth in the Schedule VI hereto.

 

SECTION 2. Each Grantor hereby represents and warrants that the information set
forth on Schedules I, II, III, IV, V and VI hereto is true and correct.

 

SECTION 3. 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 UK Borrower. This Supplement shall become effective
as to each Grantor when the Administrative Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of such Grantor and the Administrative Agent.

 

SECTION 4. Except as expressly supplemented hereby, the Security Agreement shall
remain in full force and effect.

 

SECTION 5. 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 PROVINCE OF ONTARIO.

 

SECTION 6. 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 Security 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. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 14.2 of the Credit Agreement. All communications and
notices hereunder to each Grantor shall be given to it in care of the UK
Borrower at the UK Borrower’s address set forth in Section 14.2 of the Credit
Agreement.

 

2

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

 

SECTION 8. Each Grantor 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.

 

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

 

 

[GRANTOR]

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
Administrative Agent

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

 

 

 

Title:

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

Title:

 

3

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

 

SCHEDULE I
TO SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

COPYRIGHT LICENSES

 

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

 

SCHEDULE II
TO SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

COPYRIGHTS

 

Registered Owner/Grantor

 

Title

 

Registration
Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SCHEDULE III
TO SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

PATENT LICENSES

 

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

 

SCHEDULE IV
TO THE SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

PATENTS

 

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

 

SCHEDULE V
TO SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

TRADEMARK LICENSES

 

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

 

SCHEDULE VI
TO THE SUPPLEMENT NO.      TO THE
SECURITY AGREEMENT

 

TRADEMARKS

 

Canadian Trademarks

 

Registered

 

 

 

Registration

 

Application

 

Owner/Grantor

 

Trademark

 

No.

 

No.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Trademarks

 

Registered

 

 

 

Registration

 

Application Country

 

Owner/Grantor

 

Trademark

 

No.

 

No.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT B

 

FORMS OF FRENCH PLEDGE AGREEMENTS

 

US FRENCH PLEDGE AGREEMENT dated as of July 30, 2004, among ROCKWOOD SPECIALTIES
GROUP, INC., a Delaware corporation (the “Pledgor”), and CREDIT SUISSE FIRST
BOSTON, acting through its Cayman Islands Branch, as Administrative Agent and as
Collateral Agent (in both capacities, the “Administrative Agent”) for the
lenders (each, a “Lender” and, collectively, the “Lenders”) from time to time
parties to the Credit Agreement dated as of July 30, 2004 (as the same may be
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among, inter alia, the Pledgor (as “US Borrower”), ROCKWOOD
SPECIALTIES LIMITED, a company incorporated under the laws of England and Wales
(the “UK Borrower” and, together with the Pledgor, the “Borrowers”), ROCKWOOD
SPECIALTIES INTERNATIONAL, INC., a Delaware corporation, UBS SECURITIES LLC and
GOLDMAN SACHS CREDIT PARTNERS L.P. as Co-Syndication Agents (in such capacity,
the “Syndication Agents”), the Lenders and the other Secured Parties.

 

WITNESSETH:

 

WHEREAS, (a) pursuant to the Credit Agreement, the Lenders have severally agreed
to make Loans to the Borrowers and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the Borrowers (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 Borrowers;

 

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

 

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
Borrowers under the Credit Agreement that the Pledgor shall have executed and
delivered this Pledge Agreement; and

 

WHEREAS, the Pledgor is the owner of the shares described under Schedule 1
hereto and issued by Rockwood Electronic Materials S.A., a French societe
anonyme, with a share capital of € 40,308,576, whose registered office is at
Saint-Fromond — 50620 Saint-Jean de Daye, registered with the trade registry of
Coutances under the number 323 346 973 (the “Company”) (the pledged shares
described above are, together with any shares of the Company obtained in the
future arising out of or in connection with such pledged shares (the
“After-acquired Shares”), provided that such After-acquired Shares are not
pledged under the pledge agreement dated as of July 30, 2004, among the Pledgor
and the Administrative Agent with respect to 35% of the Equity Interests in the
Company (the “UK French Pledge Agreement”), referred to collectively herein as
the “Pledged Shares”).

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Syndication 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 Borrowers under the Credit
Agreement and to induce one or more Lenders or affiliates of Lenders to enter
into Hedge Agreements with the Borrowers, the Pledgor hereby agrees with the
Administrative Agent, as agent for the Lenders and for the ratable benefit of
the Secured Parties, as follows:

 

1.                             Defined Terms.

 

a)      Unless otherwise defined herein (including in the above recitals), terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.

 

b)     As used herein, the term “Equity Interests” means shares of capital stock
of the Company as well as any shares which may be substituted for, or added to,
the Pledged Shares by way of exchange, consolidation, division, free
distribution, or otherwise and any warrants, options or other rights entitling
the holder thereof to purchase or acquire any of the foregoing and any of the
foregoing class of securities being a “Class of Equity Interest”.

 

c)       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 Borrowers 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, 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 Borrowers 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
Borrowers 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 other 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
Credit Party 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 a affiliate of a Lender at the time such Hedge Agreement is
entered into and such counterparty has acceded to this Pledge Agreement pursuant
to an accession agreement in the form of Schedule 2 attached hereto 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 a

 

2

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

 

connection with treasury, depositary or cash managment services or in connection
with any automated clearinghouse transfer of funds.

 

d)      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 Agents, (vi) each counterparty to a
Hedge Agreement the obligations under which constitute Obligations (and, if such
Hedge Agreement has been entered into after the Closing Date, which has acceded
to this Pledge Agreement pursuant to an accession agreement in the form of
Schedule 2 attached hereto), (vii) the beneficiaries of each indemnification
obligation undertaken by any Credit Party under any Credit Document and
(viii) any successors, indorsees, transferees and assigns of each of the
foregoing.

 

e) 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 the Borrowers as hedging counterparties, provided that such affiliates have
acceded to this Plegde Agreement pursuant to an accession agreement in the form
of Schedule 2 attached hereto.

 

f) 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”.

 

g) 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. The Pledgor hereby undertakes in
accordance with Section 4 to pledge to the Secured Parties, for their ratable
benefit, represented by the Administrative Agent, all of the Pledgor’s right,
title and interest in the following, now owned or existing, and hereby
undertakes to pledge to the Secured Parties represented by the Administrative
Agent all of the Pledgor’s right, title and interest in any of the following
hereafter acquired or existing (collectively, the “Collateral”):

 

a)      the Pledged Shares registered in the Pledgor’s name in an account held
by the Company (the “Pledged Account”) and, subject to Section 7 hereof, 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 Pledged Shares, provided that the Pledged
Shares under this Pledge Agreement shall not include more than 65 percent of
each issued and outstanding Class of Equity Interests in the Company. If at any
time more than 65 percent of an issued and outstanding Class of Equity Interest
in the Company is registered in the Plegde Account (the Class of Equity Interest
registered in the Pledged Account in excess of 65% of such Class of Equity
Interest being for the purposes of this Section 2, the “Excess Class of Equity
Interest”), the Pledgor shall immediately notify the Administrative Agent and
the Administrative shall be entitled to request the Company as holder of the
Pledge Account, to register said

 

3

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

 

Excess Class of Equity Interest on the pledged account created pursuant to the
UK French Pledge Agreement; and

 

b)      to the extent not covered by clause (a) above, and subject to Section 7
hereof, all proceeds of any or all of the foregoing Collateral. For purposes of
this Pledge Agreement, the term “proceeds” includes whatever is receivable or
received when Collateral or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes
proceeds of any indemnity or guarantee payable to the 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 owed by the Borrowers and/or each other Credit Party
to the Administrative Agent or the Secured Parties for their ratable benefit.
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 the Borrowers to the Administrative Agent or the Secured Parties 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 the Borrowers and/or each other Credit Party.

 

4.                  Perfection of Security. Subject to the prior Lien registered
on the Pledged Shares being released, which release shall occur no later than
July 31, 2004, the pledge of the Pledged Shares shall be constituted pursuant to
article L 431-4 of the French Monetary and Financial Code by the execution of a
declaration of pledge of the Pledged Account (déclaration de gage de compte
d’instruments financiers, hereinafter the “Déclaration de Gage”) in the form set
forth in Annex 1 hereto, which shall occur at the latest on August 2, 2004. The
Pledgor hereby undertakes to cause the Company to issue at the latest on
August 2, 2004 a certificate of confirmation of pledge relating to the Pledged
Account (attestation de gage) in the form of Annex 2 hereto, and promptly to
transmit such confirmation of pledge to the Administrative Agent.

 

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

 

a)                  Schedule 1 hereto (i) correctly represents as of the date
hereof the issuer, the Pledgor, the number, the Class of Equity Interest and the
percentage of the issued and outstanding Class of Equity Interests of such
Class of Equity Interests of all Pledged Shares and (ii) includes all Equity
Interests required to be pledged hereunder. Except as set forth on Schedule 1,
the Pledged Shares represent 65 percent of such issued and outstanding Class of
Equity Interests and no other Class of Equity Interests in the Company has been
issued on the date hereof.

 

b)                  On the date hereof, the Pledgor is the owner of the Pledged
Shares and, as from the execution of the Déclaration de Gage referred to in
Section 4 above, the Pledgor shall be the owner of the Collateral pledged by the
Pledgor hereunder free and clear of any Lien, except for the Lien created by
this Pledge Agreement and the Déclaration de Gage referred to in Section 4
above.

 

4

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

 

c)                   As of the date of this Pledge Agreement, the Pledged Shares
pledged by the Pledgor hereunder have been duly authorized by a meeting of the
shareholders of the Company and are validly issued and are fully paid up.

 

d)                  The execution and delivery by the Pledgor of the Déclaration
de Gage pursuant to this Pledge Agreement and the pledge of the Collateral by
the Pledgor thereunder shall immediately create a valid and perfected
first-priority security interest in the Collateral, securing the payment of the
Obligations, in favor of the Secured Parties.

 

e)                   The Pledgor has full power, authority and legal right to
pledge all the Collateral in accordance with this Pledge Agreement and this
Pledge Agreement constitutes a legal, valid and binding obligation of the
Pledgor, enforceable in accordance with its terms, except as enforceability
thereof may be limited by bankruptcy, insolvency or other similar laws affecting
creditor’s rights generally.

 

f)                    With the exception of the authorization procedure provide
for in Article 7 of the Company’s by-laws (statuts), there is no provision in
the by-laws of the Company or any other instrument which would restrict the
exercise by the Administrative Agent of its rights under this Pledge Agreement
or the Declaration de Gage.

 

6.                  Further Assurances. The Pledgor agrees that at any time and
from time to time, at the expense of the Pledgor, it will execute any and all
further documents, agreements and instruments and take all such further actions,
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 the rights and remedies hereunder
with respect to any Collateral.

 

7.                  Voting Rights; Dividends and Distributions; Etc.

 

a)                 Subject to paragraph (b) below, the Pledgor shall be entitled
to receive and retain and use, free and clear of the Lien of this Pledge
Agreement, any and all dividends and distributions made or paid in respect of
the Collateral to the extent permitted by the Credit Agreeement; provided,
however, that any and all noncash dividends or other distributions that would
constitute Pledged Shares, 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 any par 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 deposited in the Pledged Account and shall be held as Collateral and
shall, if received by the Pledgor, be held for the benefit of the Administrative
Agent, be segregated from the other property or funds of the Pledgor and be
forthwith deposited in the Pledged Account as Collateral in the same form as so
received.

 

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

 

5

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

 

(i)        all rights of the Pledgor to receive the dividends and distributions
that the Pledgor would otherwise be authorized to receive and retain pursuant to
Section 7 (a) shall cease, and all such rights shall thereupon become vested in
the Administrative Agent as agent for the Secured Parties, which shall thereupon
have the sole right to receive and hold as Collateral such dividends and
distributions during the continuance of such Event of Default. The
Administrative Agent shall retain those amounts as a “gage espèce”. After all
Events of Default have been cured or waived and the Pledgor has delivered to the
Administrative Agent a certificate to that effect, the Administrative Agent
shall repay to the Pledgor (without interest) all such dividends and
distributions that the Pledgor would otherwise be permitted to receive, retain
and use pursuant to the terms of Section 7 (a);

 

(ii)       all dividends and distributions that are received by the Pledgor
contrary to the provisions of Section 7 (a) and 7 (b)(i) shall be held for the
benefit of the Administrative Agent, shall be segregated from other property or
funds of the Pledgor and shall forthwith be deposited in the Pledged Account or,
in the case of cash dividends, distributions of cash or any other distributions
which may not by its nature be registered on the Pledged Account, shall be
transferred to the Administrative Agent which shall retain the same as
“gage-espèce” or as a “gage”;

 

c) The Pledgor agrees as of the date hereof and as long as the Pledge Agreement
remains in force:

 

(i)        to refrain from using any voting rights in respect of the Pledged
Shares and any other financial instruments subsequently registered on the
Pledged Account in a way which would be contrary to the provisions of this
Pledge Agreement or of any other Credit Document to which the Pledgor is a
party;

 

(ii)       (x) if the Company proceeds with a reduction of share capital which
is not motived by losses, not to offer the shares of the Company that it owns to
the Company for repurchase and (y) if the Company proceeds with a share capital
reduction which is motivated by losses, to inform the Administrative Agent of
the proposed reduction before its adoption by the shareholders’ meeting and to
cause any new shares issued and attributed to the Pledgor as a result of the
reduction in capital to be included in the Collateral; and

 

(iii)      with the exception of the authorization procedure provided for in
Article 7 of the Company’s by-laws, not to permit the Company’s by-laws or any
other instrument to contain any provision (including preemption rights, rights
of replacement or similar rights) which would limit in any way the execution or
the performance of this Pledge Agreement or the enforcement by the
Administrative Agent of the security interest herein created.

 

8.                  Transfers and Other Liens. The 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 contractual Lien upon or with
respect to any of the Collateral, except for the

 

6

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

 

Lien under this Pledge Agreement and the related Déclaration de Gage, provided
that in the event the 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 the Pledgor free and clear
of the Lien under this Pledge Agreement and the related Déclaration de Gage
concurrently with the consummation of such sale;

 

b)      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.

 

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

 

a) The Administrative Agent and any nominee of the Administrative Agent may on
behalf of the Secured Parties exercise in respect of all or any of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies conferred on a secured
creditor (créancier gagiste) pursuant to French law and regulations, and may,
subject to the prior authorization of the Company’s Board of Directors pursuant
to Section 7 of the Company’s by-laws and to the prior information and
consultation of the Company’s Workers Council (Comité d’entreprise) as required
by article L.432-1 of the French Code du travail, (x) proceed to a public sale
of the Collateral in accordance with the provisions of Article L.521-3 of the
French Commercial Code, or (y) petition a French court to attribute ownership of
the Collateral to the Secured Parties.

 

In the event ownership of the Collateral is attributed to the Secured Parties
pursuant to clause (y) above, subject to mandatory provisions of French law and
except as specified below, the Administrative Agent acting in such capacity:

 

(i)   shall be entitled to sell the Collateral or any part thereof in one or
more parcels 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;

 

(ii)   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,
subject to the aforementioned restrictions, 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 the Pledgor, and the 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; and

 

7

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

 

(iii) The Administrative Agent or any Secured Party shall have the right, to the
extent permitted by law, upon any such sale, to purchase the whole or any part
of the Collateral so sold.

 

The Pledgor agrees that, to the extent notice of sale shall be required by law,
at least ten days’ notice to the Pledgor shall constitute sufficient
notification. Subject to applicable law, 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 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, the 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 (except, for the avoidance of doubt, in the case of a sale
following the attribution of ownership of the same as referred to in
Section 9(a)(y)) 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 Agreeement, 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 the 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

 

(iii) third, any surplus then remaining shall be paid to the Pledgor or its
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 following
attribution of ownership of the Collateral to the Secured Parties by a French
court pursuant to Section 9(a)(y) above, 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)        All payments received by the Pledgor after the occurrence and during
the continuance of an Event of Default in respect of the Collateral shall be
held for the

 

8

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

 

benefit of the Administrative Agent, shall be segregated from other property or
funds of the Pledgor and shall be forthwith delivered to the Administrative
Agent as Collateral (“ gage-espèce”) in the same form as so received.

 

d)        The Pledgor hereby waives its rights under Articles 2032 and 2039 of
the French Civil Code.

 

10.   Amendments, etc. with Respect to the Obligations; Waiver of Rights. The
Pledgor shall remain obligated hereunder, and the charges created hereby shall
not be adversely affected nor shall this Agreement be novated unless expressly
agreed in writing by the parties hereto, notwithstanding that, without any
reservation of rights against the Pledgor and without notice to or further
assent by the Pledgor, (a) 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) the Obligations, or the
liability of any other party upon of 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) 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 document
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, and (d) 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 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 the Pledgor, the Administrative Agent or any other Secured Party may,
but shall be under no obligation to, make a similar demand on the Borrowers or
any pledgor and any failure by the Administrative Agent or any other such
Secured Party to make any such demand or to collect any payments from the
Borrowers or any pledgor or any release of the Borrowers or any pledgor shall
not relieve the Pledgor in respect of which a demand or collection is not made
or the 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 the Pledgor. For the purposes hereof “demand” shall include the
commencement and continuance of any legal proceedings.

 

9

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

 

11.  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 the 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.

 

b)       Upon any sale or other transfer by the Pledgor of any Collateral that
is permitted under the Credit Agreement to any Person, or upon the effectiveness
of any written consent to the release of the security interest granted hereby in
any Collateral pursuant to Section 14.1 of the Credit Agreement, the obligations
of such Pledgor with respect to such Collateral shall be automatically released
and such Collateral sold free and clear of the Lien created hereby.

 

c)        In connection with any termination or release pursuant to paragraph
(a) or (b), the Administrative Agent shall execute and deliver to the Pledgor,
at the Pledgor’s expense, all documents that the Pledgor shall reasonably
request to evidence such termination or release. Any execution and delivery of
documents pursuant to this Section 11 shall be without recourse to or warranty
by the Administrative Agent.

 

12.           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, administration, liquidation or
reorganization of the Pledgor, or upon or as a result of the appointment of a
receiver, intervenor or conservator of, or trustee or similar officer for, the
Pledgor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

 

13.           Notices. All notices, requests and demands pursuant hereto shall
be made in accordance with Section 14.2 of the Credit Agreement.

 

14.           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 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.

 

15.           Integration. This pledge Agreement and the Schedule and Annexes
hereto represent the agreement of the Pledgor with respect to the subject matter
hereof and there are no promises, undertakings, representations or warranties by
the Administrative Agent or

 

10

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

 

any other Secured Party relative to the subject matter hereof not expressly set
forth or referred to herein or in the other Credit Documents.

 

16.           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 14.1 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 16(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 or 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
hereof. 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 otherwise have on any future occasion.

 

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

 

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

 

18.   Successors and Assigns. This Pledge Agreement shall be binding upon the
successors and assigns of the Pledgor and shall insure to the benefit of the
Administrative Agent and the other Secured Parties and their respective
successors and assigns, except that the Pledgor may not assign, transfer or
delegate any of its rights or obligations under this Pledge Agreement without
the prior written consent of the Administrative Agent.

 

11

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

 

SCHEDULE 2

 

Form of Accession Agreement

 

(on letterhead of acceding hedging counterparty)

 

To :

-

ROCKWOOD SPECIALITIES GROUP, INC., as “Pledgor”

 

-

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands

 

 

Branch, as “Administrative Agent”

 

-

ROCKWOOD ELECTRONIC MATERIAL S.A, as the “Company”

 

On [[specify date]]

 

We refer to the pledge agreement entered into on July 30, 2004 between, inter
alia, the Pledgor and the Administrative Agent relating to the pledge of 64.997
percent of the shares held by the Pledgor in the Company (the “US French Pledge
Agreement”).

 

Pursuant to Section 1.(d) of the US French Pledge Agreement, [[specify name of
acceding hedging counterparty]] (the “Acceding Lender”) hereby accedes to the US
French Pledge Agreement as Secured Party and therefore hereby agrees to be bound
by its provisions as though it were a Secured Party named therein.

 

The Acceding Lender hereby appoints the Administrative Agent as its agent under
and in accordance with the provisions of the US French Pledge Agreement and of
the Credit Agreement.

 

All notices, requests and demands to the Acceding Lender pursuant to the US
French Pledge Agreement shall be made in accordance with Section 14.2 of the
Credit Agreement and:

 

To: [[specify address of acceding hedging counterparty]]

 

For the attention of: [[ ]]

fax number: [[ ]]

 

telephone number: [[ ]]

 

Unless otherwise defined herein, capitalized terms in this accession agreement
will have the meanings assigned to them in the US French Pledge Agreement.

 

By

 

 

 

 

 

 

 

 

 

Name:

 

 

Title:

 

 

12

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

 

ANNEX 1

 

DECLARATION DE GAGE DE

 

COMPTE D’INSTRUMENTS FINANCIERS

 

La présente déclaration est soumise aux dispositions de l’article L 431-4 du
Code Monétaire et Financier.

 

LE SOUSSIGNE :

 

ROCKWOOD SPECIALTIES GROUP, INC., une société de droit américain (Delaware),
ayant son siège social situé à 100 Overlook Center Princeton, NJ 08542 — U.S.A.,
représentée par (represented by)                               , dûment habilité
aux fins des présentes,

 

(ci-après désigné le “Constituant”)

 

CONSTITUE EN GAGE LE COMPTE SPECIAL D’INSTRUMENTS FINANCIERS :

 

n° 22 quinquies

 

(ci-après désigné le “Compte Nanti”).

 

OUVERT AU NOM DU CONSTITUANT DANS LES LIVRES DE :

 

ROCKWOOD ELECTRONIC MATERIALS SA, une société anonyme au capital de €
40.308.576, dont le siège social est situé a Saint-Fromond — 50620 Saint-Jean de
Daye, immatriculée au registre du commerce et des sociétés de Coutances sous le
numéro unique d’identification 323 346 973,

 

(ci-après désigné, en cette qualité, le “Teneur de Compte”).

 

DANS LEQUEL SONT INSCRITS INITIALEMENT LES INSTRUMENTS FINANCIERS CI-APRES :

 

Nature :

 

Actions nominatives d’une valetur nominale de 146,30 euros chacune (les
“Actions”).

 

 

 

Emetteur :

 

ROCKWOOD ELECTRONIC MATERIALS SA, une société anonyme au capital de €
40.308.576, dont le siège social est situé à Saint-Fromond — 50620 Saint-Jean de
Daye, immatriculée au registre du commerce et des sociétés de

 

 

13

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

 

 

 

Coutances sous le numéro unique d’identification 323 346 973, (ci-après, la
“Société”).

 

 

 

Nombre :

 

179.082 Actions.

 

AU BENEFICE

 

des banques ou autres entités listées en annexe à la présente déclaration de
gage et de toute autre entité qui deviendrait partie en tant que “Secured Party”
à la convention de nantissement de compte d’instruments financiers de langue
anglaise intitulée “US French Pledge Agreement” en date du 30 juillet 2004 (le
“US French Pledge Agreement”), conclue dans le cadre d’un contrat de crédit
intitulé “Credit Agreement” en date du 30 juillet 2004 entre notamment le
Constituant en tant que “US Borrower”, UBS SECURITIES LLC and GOLDMAN SACHS
CREDIT PARTNERS L.P.en tant que “Co-Syndication Agents” et CREDIT SUISSE FIRST
BOSTON (agissant par l’intermédiaire de sa succursale des Iles Cayman) en tant
que “Administrative and Collateral Agent” et dont un exemplaire est remis à la
Société avec la présente déclaration de gage

 

(ci-après désignées individuellement ou collectivement le “Bénéficiaire”)

 

représentées par CREDIT SUISSE FIRST BOSTON (agissant par l’intermédiaire de sa
succursale des Iles Cayman), dont l’adresse est Eleven Madison Avenue, New York,
NY 10010, United States of America, agissant en qualité de mandataire en tant
que “Administrative and Collateral Agent” au nom et pour le compte du
Bénéficiaire, ou tout autre successeur de CREDIT SUISSE FIRST BOSTON en cette
qualité,

 

EN GARANTIE DU PAIEMENT DES SOMMES DUES AU TITRE DES OBLIGATIONS CI-APRES
DEFINIES :

 

le paiement de toutes les sommes en principal, intérêts ou autres accessoires
dues ou venant à être dues au Bénéficiaire, y compris en cas de déchéance du
terme, au titre des Obligations telles que définies à la section 1(c) du US
French Pledge Agreement (les “Obligations Garanties”) ;

 

DANS LES CONDITIONS SUIVANTES :

 

Conformément aux dispositions de l’article L 431-4 du Code Monétaire et
Financier et aux stipulations du US French Pledge Agreement.

 

Fait à             , le [[ ]] 2004.

 

LE CONSTITUANT

 

 

 

ROCKWOOD SPECIALTIES GROUP, INC.

 

Représentée par (represented by)

 

 

14

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

 

Annexe

 

Credit Suisse First Boston, acting through its Cayman Islands branch
Uetilbergstrasse, CH 8070
Zurich, Switzerland

 

UBS Securities LLC
677 Washington Boulevard
Stamford, Connecticut 06901

 

UBS Loan Finance LLC
677 Washington Boulevard
Stamford, Connecticut 06901

 

Goldman Sachs Credit Partners L.P.
Church Street, Hamilton HM CX
Bermuda

 

15

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

 

ANNEX 2

 

CERTIFICATE OF PLEDGE OF FINANCIAL INSTRUMENTS ACCOUNT

 

(L 431-4 of the French Monetary and Financial Code)

 

After examination of the déclaration de gage of the financial instruments
account,

 

dated : [[ ]] 2004

 

signed by :            ROCKWOOD SPECIALTIES GROUP, INC., a company organised and
existing under the laws of Delaware (USA), having its registered office at 100
Overlook Center Princeton, NJ 08542 — USA, represented by
                                   ( the “Pledgor”)

 

for the benefit of:

 

·                  the banks or other entities listed in Annex attached to said
declaration de gage and such other entity from time to time party as “Secured
Party” to the pledge of financial instruments account entitled “US French Pledge
Agreement” dated July 30, 2004;

 

(hereafter jointly or severally referred to as the “Beneficiary”)

 

represented by CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands
Branch, whose address is Eleven Madison Avenue, New York, NY 10010, United
States of America, acting as Administrative and Collateral Agent, or any
successor, endorsee, transferee and assign of CREDIT SUISSE FIRST BOSTON in such
capacity.

 

We, acting in our capacity as Account Holder (“Teneur de Compte”),

 

1/                                      hereby certify that as from the date
hereof the pledge over the financial instruments account, the references of
which appear in said declaration de gage (the “Pledged Account”), is duly
registered in our securities registers (“registre des mouvements de titres”) for
the benefit of the Beneficiary;

 

2/                                      hereby certify that as from the date
hereof all the financial instruments identified in said déclaration de gage are
duly registered in the Pledged Account; and

 

3/                                      acknowledge and accept to refrain from
any act or action that would be in contradiction with the prohibition of the
Pledgor from disposing of the financial instruments in the Pledged Account and
their income and proceeds in any currency, subject to and in accordance with the
conditions provided for by the US French Pledge Agreement, a copy of which we
were given with the above-mentioned déclaration de gage.

 

16

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

 

Made in                                     ,
on [[  ]] 2004

 

The Account Holder:

 

 

 

 

Rockwood Electronic Materials SA

 

By: [[Reg Stephenson]]

 

Title: [[Président Directeur Général]]

 

 

17

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

 

EXHIBIT C-1

 

FORMS OF GERMAN ABSTRACT ACKNOWLEDGEMENTS OF INDEBTEDNESS

 

Dated July 30, 2004

 

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

 

ROCKWOOD SPECIALTIES GROUP, INC. (1)

 

CREDIT SUISSE FIRST BOSTON (2)

 

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

 

ABSTRACT ACKNOWLEDGEMENT OF
INDEBTEDNESS II
(Abstraktes Schuldanerkenntnis)

 

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

 

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

 

THIS AGREEMENT is made BETWEEN:

 

(1)         Rockwood Specialties Group, Inc., a Delaware corporation having its
business address at 100 Overlook Center, Princeton, NJ 08542, USA,

 

- hereinafter referred to as the “Debtor” -

 

and

 

(2)         Credit Suisse First Boston, a New York banking corporation having
its business address at Eleven Madison Avenue, New York, NY 10010, USA, acting
through its Cayman Islands Branch,

 

- hereinafter referred to as the “Creditor” -

 

Preamble

 

(A)         Rockwood Specialties Group, Inc. (the “US Borrower”) and Rockwood
Specialties Limited, a company incorporated under the laws of England and Wales
(the “UK Borrower”), as borrowers, the lenders, JPMorgan Chase Bank as
administrative agent for the lenders, and others have entered into a Credit
Agreement dated as of July 23, 2003 (the “Original Credit Agreement”), as
amended, pursuant to which the borrowers have been made available loans and
letters of credit for the account of the borrowers by the lenders.

 

(B)         The US Borrower, the UK Borrower, Rockwood Specialties
International, Inc., the Lenders (as defined in the Credit Agreement (as defined
below)) from time to time party thereto, Credit Suisse First Boston acting
through its Cayman Islands Branch as administrative agent (the “Administrative
Agent”) and collateral agent, and UBS Securities LLC and Goldman Sachs Credit
Partners L.P., as co-syndication agents, entered into a credit agreement dated
as of July 30, 2004 (the “Credit Agreement”), as amended pursuant to which the
Lenders have severally agreed to make loans to the US Borrower and the UK
Borrower (the US Borrower and the UK Borrower together also the “Borrowers”) and
the Letter of Credit Issuer (as defined in the Credit Agreement) has agreed to
issue letters of credit for the account of the Borrowers (collectively, the
“Extension of Credit”), upon the terms and subject to the conditions set forth
therein and one or more Lenders or affiliates of Lenders may from time to time
enter into Hedge Agreements (as defined below) with the US Borrower or any of
the Restricted Subsidiaries (as defined in the Credit Agreement).

 

(C)         It is a condition precedent to the obligation of the Lenders, the
Letter of Credit Issuer and the Creditor to make their respective Extensions of
Credit to the US Borrower under the Credit Agreement that the Debtor shall have
executed and delivered this Abstract Acknowledgement of Indebtedness H
(Abstraktes Schuldanerkenntnis) (this “Agreement”) to the Creditor.

 

NOW IT IS HEREBY AGREED as follows:

 

2

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

 

1                                         Headings, capitalized terms,
references and language

 

1.1           Headings are for ease of reference only and shall not affect the
construction of this Agreement.

 

1.2           Unless otherwise defined herein or unless the context otherwise
requires, capitalized terms defined in the Credit Agreement, shall have the same
meaning when used in this Agreement.

 

1.3           As used herein, the term “Closing Time” means 24:00 (German time)
on July 31, 2004, being the “Closing Date”.

 

1.4           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 granted to the US
Borrower, 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 US 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, secondary, direct, contingent, future, 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 US 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 US Borrower under or
pursuant to the Credit Agreement and the other Credit Documents (provided always
that such covenants, agreements, obligations and liabilities are capable of
being transformed into financial obligations), (iii) the due and punctual
payment and performance of all the covenants, agreements, obligations and
liabilities of each other Credit Party under or pursuant to this Agreement or
the other Credit Documents (provided always that such covenants, agreements,
obligations and liabilities are capable of being transformed into financial
obligations), (iv) the due and punctual payment and performance of all
obligations of each Credit Party 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 (provided always that the performance of
obligations is capable of being transformed into financial obligations), and (v)
the due and punctual payment and performance of all obligations in respect of
overdrafts and related liabilities owed to the Creditor 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
(provided always that the performance of obligations is capable of being
transformed into financial obligations).

 

3

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

 

1.5           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 Co-Syndication Agents, (vi) the Documentation
Agent, (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.

 

1.6           References to “Lenders” in this Agreement shall be deemed to
include Affiliates of Lenders that may from time to time enter into Hedge
Agreements with the US Borrower.

 

1.7           The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular prevision of this Agreement, and clause references are to
clauses of this Agreement unless otherwise specified. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without
limitation”.

 

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

 

1.9           This Agreement is made in the English language. For the avoidance
of doubt, the English language version of this Agreement shall prevail over any
translation of this Agreement. However, where a German translation of a word or
phrase appears in the text of this Agreement, the German translation of such
word or phrase shall prevail.

 

2                                         Abstract Acknowledgement of
Indebtedness

 

The Debtor hereby acknowledges with effect immediately upon the Closing Time by
way of an abstract acknowledgement of indebtedness (in Form eines abstrakten
Schuldanerkenntnisses) that it owes US $ 470,000,000 (in words: four hundred and
seventy million US dollars) to the Creditor (hereinafter referred to as the
“Abstract Acknowledgement of Indebtedness II”). The Abstract Acknowledgement of
Indebtedness II (which constitutes the independent obligation to pay the
above-mentioned amount) is subject to interest in the amount of twelve (12)
percent per year from the date of execution of this Agreement, and the Abstract
Acknowledgement of Indebtedness II shall extent to such interest payment.

 

3                                         Maturity and Realization of the
Abstract Acknowledgement of Indebtedness II and Security Purpose

 

3.1           If any Event of Default under the Credit Agreement with respect to
the Underlying Obligations (as defined below) shall have occurred and be
continuing, the Abstract Acknowledgement of Indebtedness II becomes due and
payable and the Creditor shall be entitled to demand full or partial payment
under the Acknowledgment of Indebtedness II in any legally permissible manner to
the extent necessary to satisfy the outstanding Underlying Obligations from time
to time.  However, for the avoidance of doubt, the Creditor shall not be
required to obtain any prior court ruling or to present any other executory
title or document justifying payment request.

 

4

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

 

When requesting payment under this Abstract Acknowledgement of Indebtedness II,
the Creditor shall inform the Pledgor in writing about the amount requested and
give further information as to which of the Underlying Obligations to the
payment request relates.

 

3.2           Irrespective of clause 3.1 and the Underlying Obligations (as
defined in clause 4.1), this Abstract Acknowledgement of Indebtedness II
constitutes an independent obligation of the Debtor.

 

3.3           The purpose of this Abstract Acknowledgement of Indebtedness II is
to secure the Underlying Obligations.

 

4              Underlying Obligations

 

4.1           The Abstract Acknowledgement of Indebtedness II is made with
regard to the payment of all Obligations under the Credit Documents of the US
Borrower. Without limiting the generality of the foregoing, this Agreement is
made with regard to the payment of all amounts that constitute part of the
Obligations under the Credit Documents and would be owed by the US Borrower to
the Secured Parties but for the fact that they are unenforceable or not
allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the US Borrower and/or each other Credit Party (hereinafter
collectively referred to as the “Underlying Obligations”).

 

4.2           The Debtor’s obligations under this Agreement shall not affect any
of the Debtor’s obligations, promises and other liabilities under the other
Credit Documents and any Hedge Agreement.

 

5                                         Declaration of trust

 

Each of the Debtor and the Creditor acknowledges that all rights and claims
constituted by this Agreement and all rights, claims, and moneys paid to the
Creditor or held by the Creditor pursuant to or in connection with this
Agreement are held by the Creditor with effect from the date of this Agreement
on trust (treuhanderisch) for the Secured Parties and administered in accordance
with the Credit Agreement.

 

6                                         Application of proceeds

 

6.1           The Creditor shall apply, vis-à-vis the Secured Parties, the
proceeds of any payment of the Debtor under this Agreement or from the
enforcement of any security interest securing the claim hereunder after receipt
as follows:

 

6.1.1        first, to the payment of all reasonable and documented costs and
expenses incurred by the Creditor in connection with such payment or otherwise
in connection with this Agreement, the other Credit Documents or any of the
Underlying Obligations owed by the US Borrower, including all court costs and
the reasonable fees and expenses of its agents and legal counsel, the repayment
of all advances made by the Creditor hereunder or under any other Credit
Document on behalf of the Debtor 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;

 

5

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

 

6.1.2        second, to the Secured Parties, an amount equal to all Underlying
Obligations owed by the US Borrower 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;

 

6.1.3        third, any surplus then remaining shall be paid to the US Borrower
or its successors or assigns or to whomsoever may be lawfully entitled to
receive the same or as a court of competent jurisdiction may direct.

 

7                                         Further assurance

 

The Debtor 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, mortgages, deeds of trust and
other documents), which may be required under any applicable law, or which the
Creditor or the Required Lenders may reasonably request, in order to effectuate
the transactions contemplated by this Agreement and in order (x) to grant,
preserve, protect and perfect the validity and priority of the security
interests created or intended to be created hereby or (y) to enable the Creditor
to exercise and enforce its rights and remedies hereunder with respect to any
Collateral, all at the expense of such Debtor.

 

8                                         Assignment and transfer

 

8.1           The Creditor shall, at any time, have the right to assign, to
transfer or to dispose of all or any part of its rights or obligations or both
under this Agreement to any of the Secured Parties or any Person becoming a
Secured Party and the Debtor shall execute all such documents and do all such
acts and things which the Creditor may reasonably require in connection with
such transfer, assignment or disposal.

 

8.2           The Debtor shall not be entitled to assign, to transfer, or to
dispose of all or any part of its rights or obligations or both hereunder.

 

8.3           The Debtor hereby agrees to any accession of a new party and any
change to the parties to the Credit Documents. The Debtor further agrees that
notwithstanding any such accession of a party or change to the parties to the
Credit Documents or any assignment, transfer or disposal as contemplated in
clause 8.1 above, this Agreement shall remain in full force and effect.

 

9                                         Costs and expenses

 

All reasonable costs and expenses arising from the execution of this Agreement,
from amendments or prolongation thereof or any costs arising from the
enforcement or preservation of the Creditor’s rights hereunder shall be borne by
the Debtor, whereby the Creditor is entitled to mandate a third party to perform
such actions in its own name but for the Debtor’s account.

 

6

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

 

10                                  Indemnity

 

10.1         The Creditor shall not be liable for any loss or damage which is
suffered by the Debtor save in respect of such loss or damage which is suffered
as a result of willful misconduct (Varsatz) or gross negligence (grobe
Fahrlassigkeit) of the Creditor.

 

10.2         The Debtor shall indemnify the Creditor and keep the Creditor
indemnified against any losses, actions, claims, expenses, demands and
liabilities which may be made against or incurred by the Creditor for anything
done or omitted in the exercise or purported exercise of the powers and rights
under this Agreement or occasioned by any breach of the Debtor of any of its
obligations or undertakings contained herein, provided always that there will be
no such indemnification, to the extent that such losses, actions, claims,
expenses, demands and liabilities are incurred by or made against the Creditor
as a result of willful misconduct or gross negligence of the Creditor.

 

11                                  Duration, period of limitation and partial
invalidity

 

11.1         This Agreement shall remain in full force and effect until the
Underlying Obligations of the US Borrower, in the sole opinion of the Creditor,
have been completely satisfied and all facilities which might give rise to such
obligations, promises and/or liabilities have terminated.

 

11.2         The parties hereby agree that the period of limitation
(Verjiihrungsfrist) for the Creditor’s rights and claims under the Abstract
Acknowledgement of Indebtedness II shall be twelve (12) years from the Abstract
Acknowledgement of Indebtedness II coming into existence (Entstehung).

 

11.3         Any provision of this 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.

 

11.4         In case of a-prohibited, invalid or unenforceable provision        
the parties hereby agree to replace such provision by a valid one which reflects
the economic purpose of the invalid provision as closely as possible.

 

11.5         This Agreement shall create continuing and independent obligations
of the Debtor under the Abstract Acknowledgement of Indebtedness II and no
change or amendment to the Credit Documents shall affect the validity and the
scope of this Agreement nor the obligations which are imposed on the Debtor
pursuant to it.

 

11.6         This Agreement shall inure to the benefit of the Creditor, its
successors and assigns.

 

12                                  Notices and other matters

 

12.1         Notices

 

Every notice, request demand or other communication under this Agreement shall:

 

7

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

 

12.1.1      be in writing delivered personally or by prepaid letter (airmail if
available) or fax;

 

12.1.2      be deemed to have been received, subject as otherwise provided in
this Agreement, in the case of a letter, when delivered personally or ten (10)
days after it has been put into the post and, in the case of a fax, when a
complete and legible copy is received by the addressee (unless the time of
dispatch of any fax is after close of business in which case it shall be deemed
to have been received at the opening of business on the next business day); and

 

12.1.3      be sent

 

(a)           to the Debtor at:

 

Rockwood Specialties Group, Inc.
100 Overlook Center
Princeton, NJ 08542
USA
Attention:
Fax:

 

with a copy to:

 

Kohlberg Kravis Roberts & Co., L.P.
9 West 57th Street
Suite 4200
New York, NY 10019
USA

 

Attention:
Fax:

 

(b)           to the Creditor at:

 

Credit Suisse First Boston
Eleven Madison Avenue
New York
NY 10010

 

Attention:
Fax:

 

or to such other address or fax number as is notified by the relevant party to
the other parties to this Agreement.

 

12.2         No implied waiver, remedies cumulative

 

No failure or delay on the part of the Creditor to exercise any power, right or
remedy under this Agreement shall operate as a waiver thereof, nor shall any
single or partial

 

8

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

 

exercise by the Creditor of any power, right or remedy preclude any other or
further exercise thereof or the exercise of any power, right or remedy. The
remedies provided in this Agreement are cumulative and are not exclusive of any
remedies provided by law.

 

12.3         English translations

 

All documents to be delivered under or supplied in connection with this
Agreement shall be in the English language or shall be accompanied by a
certified translation into English upon which the recipient shall be entitled to
rely.

 

12.4         Counterparts

 

This Agreement may be executed in any number of counterparts (whether by
facsimile or otherwise, but, if by facsimile, with the original signed pages
being promptly sent to the Creditor by prepaid letter (and the Creditor is
hereby authorized to incorporate such pages into bound originals)) and by the
different parties on separate counterparts, each of which when so executed and
delivered shall be an original, but all counterparts shall together constitute
one and the same agreement.

 

13                                  Changes and amendments

 

Changes to and amendments of this Agreement including this subsection must be
made in writing , signed by all of the parties hereto.

 

14                                  Choice of law and venue

 

14.1         THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE FEDERAL REPUBLIC OF GERMANY.

 

14.2         The Debtor hereby irrevocably and unconditionally:

 

14.2.1      submits itself in any legal action or proceeding relating to this
Agreement, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of Frankfurt am
Main, Germany, 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;

 

14.2.2      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; and

 

14.2.3.     agrees that nothing herein shall limit the right of the Creditor to
take legal actions before any other court of competent jurisdiction.

 

9

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

 

15                                  Process agent

 

15.1         For the purpose of any suit, action, proceeding or settlement of
dispute in the German courts, the Debtor hereby appoints (bestellt) and
authorizes (bevollmiichtigt) a process agent (Zustellungsbevollmeichtigten) to
accept service of process in respect of any such suit, action, proceeding or
settlement of dispute in connection with this Agreement, the identity of which
is as follows:

 

Rockwood Specialties GmbH
Mühlstr. 118
65396 Walluf
Germany

 

Fax No.
Tel. No.
attn.

 

15.2         If for any reason, such process agent no longer serves as agent to
receive process in the Federal Republic of Germany, the Debtor shall promptly
notify the Creditor and within 30 days appoint a substitute process agent
acceptable to the Creditor.

 

Signature Page follows

 

10

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

 

EXHIBIT C-2

 

FORM OF GERMAN ASSIGNMENT OF CLAIMS

 

Dated July 30, 2004

 

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

 

ROCKWOOD SPECIALTIES GMBH41)

 

ROCKWOOD PIGMENTE HOLDING GMBH (2)

 

SILO PIGMENTE GMBH (3)

 

CREDIT SUISSE FIRST BOSTON (4)

 

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

 

ASSIGNMENT OF CLAIMS
(Forderungsabtretung)

 

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

 

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

 

THIS AGREEMENT is made BETWEEN:

 

(1)                                  Rockwood Specialties GmbH, a corporation
(Gesellschaft mit beschränkter Haftung) incorporated under the laws of the
Federal Republic of Germany, having its business address at Whist. 118, 65396
Walluf, Germany, registered with the commercial register of the local court of
Wiesbaden under HR B 17839;

 

(2)                                  Rockwood Pigmente Holding GmbH, a
corporation (Gesellschaft mit beschränlder Haftung) incorporated under the laws
of the Federal Republic of Germany having its business address at Mühlstr. 118,
65396 Walluf, Germany, registered with the commercial register of the local
court of Wiesbaden under HR B 17837, Germany;

 

(3)                                  Silo Pigmente GmbH, a corporation
(Gesellschaft mit beschränkter Haftung) incorporated under the laws of the
Federal Republic of Germany having its business address at Mühlstr. 118, 65396
Walluf, Germany, registered with the commercial register of the local court of
Wiesbaden under HR B 17832, Germany,

 

- hereinafter collectively referred to as the “Security Providers” -

 

(4)                                  Credit Suisse First Boston, a New York
banking corporation having its business address at Eleven Madison Avenue, New
York, NY 10010, USA, acting through its Cayman Islands Branch,

 

- hereinafter referred to as the “Security Recipient” -

 

Preamble

 

(A)                              Rockwood Specialties Group, Inc. (the “US
Borrower”) and Rockwood Specialties Limited, a company incorporated under the
laws of England and Wales (the “UK Borrower”), as borrowers, the lenders,
JPMorgan Chase Bank as administrative agent for the lenders, and others have
entered into a Credit Agreement dated as of July 23, 2003 (the “Original Credit
Agreement”), as amended pursuant to which the borrowers have been made available
loans and letters of credit for the account of the borrowers by the lenders.

 

(B)                                The US Borrower, the UK Borrower, Rockwood
Specialties International, Inc., the Lenders (as defined in the Credit Agreement
(as defined below)) from time to time party thereto, Credit Suisse First Boston
acting through its Cayman Islands Branch as administrative agent (the
“Administrative Agent”) and collateral agent, and UBS Securities LLC and Goldman
Sachs Credit Partners L.P., as co-syndication agents, entered into a credit
agreement dated as of July 30, 2004 (the “Credit Agreement”), as amended
pursuant to which the Lenders have severally agreed to make loans to the US
Borrower and the UK Borrower (the US Borrower and the UK Borrower together also
the “Borrowers”) and the Letter of Credit Issuer (as defined in the Credit
Agreement) has agreed to issue letters of credit for the account of the
Borrowers (collectively, the “Extension of Credit”), upon the terms and subject
to the conditions set forth therein and one or more Lenders or affiliates of
Lenders may from time to time enter into Hedge

 

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

 

Agreements (as defined below) with the US Borrower or any of the Restricted
Subsidiaries (as defined in the Credit Agreement).

 

(C)                                The proceeds of the Extensions of Credit will
be used in part to enable the UK Borrower to make valuable transfers to the
Security Providers in connection with the operation of their respective
business.

 

(D)                               Each Security Providers acknowledges that it
will derive substantial direct and indirect benefit from the Extensions of
Credit.

 

(E)                                 It is a condition precedent to the
obligation of the Lenders and the Letter of Credit Issuer to make their
respective the Extensions of Credit to the UK Borrower under the Credit
Agreement that each of the Security Providers shall have executed and delivered
this Global Assignment Agreement to the Security Recipient for the ratable
benefit of the Secured Parties.

 

NOW, THEREFORE, in consideration of the premises and to induce the Security
Recipient, the Co-Syndication Agents, the Documentation Agent, 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 UK Borrower under the Credit Agreement and to induce one or more
Lenders or affiliates of Lenders to enter into Hedge Agreements with the UK
Borrower, the Security Providers hereby agree with the Security Recipient, for
the ratable benefit of the Secured Parties, as follows:

 

1                                         Headings, capitalized terms and
references

 

1.1                                 Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.

 

1.2                                 As used herein, the term “Closing Time”
means 24:00 (German time) on July 31, 2004, being the “Closing Date”.

 

1.3                                 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 extended to the UK
Borrower, 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 UK 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, 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 UK Borrower or any other Credit
Party that is a Foreign Subsidiary to any of the Secured Parties under the
Credit Agreement and the other Credit Documents, (ii) the due and punctual
performance

 

2

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

 

of all covenants, agreements, obligations and liabilities of the UK 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 other Credit Party that is a Foreign
Subsidiary under or pursuant to this Agreement or the other Credit Documents,
(iv) the due and punctual payment and performance of all obligations of the UK
Borrower and each Credit Party that is a Foreign 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 Security Recipient or its
affiliates by the UK Borrower or any Credit Party that is a Foreign Subsidiary
arising from or in connection with treasury, depositary or cash management
services or in connection with any automated clearinghouse transfer of funds.

 

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

 

1.5                                 References to “Lenders” in this Agreement
shall be deemed to include Affiliates of Lenders that may from time to time
enter into Hedge Agreements with the UK Borrower.

 

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

 

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

 

1.8                                 Headings are for ease of reference only and
shall not affect the construction of this Agreement.

 

1.9                                 This Agreement is made in the English
language. For the avoidance of doubt, the English language version of this
Agreement shall prevail over any translation of this Agreement. However, where a
German translation of a word or phrase appears in the text of this Agreement,
the German translation of such word or phrase shall prevail.

 

2                                         Assignment

 

                                                Each of the Security Providers
(each Security Provider to the extent it has title to the relevant claims)
hereby assigns (tritt ab) to the Security Recipient all of its present and

 

3

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

 

future accounts receivable (Forderungen) against all enterprises related to such
Security Provider within the meaning of Sections 15 et seq. of the German Stock
Corporation Act (AktG), including but not limited to, in case of Silo Pigmente
GmbH, any claims under the business lease agreement (Betriebspachtvertrag)
between Brockhues GmbH & Co. KG (formerly known as Chemische Werke Brockhues AG)
and Silo Pigmente GmbH dated 5 January 1998 (hereinafter collectively referred
to as the “Assigned Claims”). The Security Recipient hereby accepts. such
assignments. Such assignments of the Assigned Claims shall become effective
immediately upon the Closing Time.

 

3                                         Time of assignment

 

                                                The present Assigned Claims
shall pass over to the Security Recipient upon the execution of this Agreement,
and all future Assigned Claims shall pass over to the Security Recipient at the
time at which they come into being.

 

4                                         Assignment and transfer of ancillary
rights

 

4.1                                 Together with all claims and rights assigned
in accordance with this Agreement to the Security Recipient, all security
interests and all ancillary rights pertaining to the Assigned Claims (including
insurance claims) as well as all rights resulting from the underlying agreements
are hereby assigned and transferred (übertragen) to the Security Recipient. To
the extent the Security Recipient has received tangible assets as security for
the Assigned Claims, the parties agree that title in these assets is hereby
transferred to the Security Recipient. If a Security Provider is in direct
possession of the assets, the transfer of possession is substituted by such
Security Provider holding the same, with the diligence of a prudent businessman,
in custody for the Security Recipient free of charge. To the extent the assets
are in the direct possession of third parties, all Security Provider’s claims to
demand delivery (Herausgabeanspruch) against the direct possessor are hereby
assigned to the Security Recipient. The Security Recipient accepts such transfer
and assignment.

 

4.2                                 If deemed necessary by the Security
Recipient, upon request, each Security Provider shall take any action necessary,
particularly make any necessary statements, to transfer and assign such security
interests, claims, assets, and ancillary rights to the Security Recipient.

 

4.3                                 Any security interest transferred under this
clause 4 shall be for the-purpose of securing   the Secured Claims (as defined
below).

 

4.4                                 The Assigned Claims and all other claims,
rights, and security interests assigned and transferred under this Agreement to
the Security Recipient are hereinafter collectively also referred to as the
“Collateral”.

 

5                                         Secured Claims

 

                                                The Collateral shall serve as
security for the prompt and complete payment and performance of all Obligations
(always provided that such obligations are capable of

 

4

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

 

being transformed into financial obligations) towards the Secured Parties or any
of them (hereinafter collectively referred to as the “Secured Claims”).

 

6                                         Declaration of trust

 

                                                Each of the Security Providers
and the Security Recipient acknowledges that all Collateral constituted by this
Agreement and all moneys, property, claims, rights and assets paid to the
Security Recipient or held by the Security Recipient pursuant to or in
connection with this Agreement are held and administered by the Security
Recipient with effect from the date of this Agreement on trust (treuhänderisch)
for the Secured Parties and administered in accordance with the Credit
Agreement.

 

7                                         Representations and warranties,
Covenants

 

                                                Each of the Security Providers
represents and warrants to the Security Recipient that:

 

7.1                                 each of the Security Providers has the
requisite power and authority to enter into this Agreement and all necessary
corporate action has been taken and all necessary approvals and consents for the
execution and performance of this Agreement have been obtained;

 

7.2                                 it is the sole owner of the Collateral, has
full title thereto and is entitled to assign and/or transfer the Collateral to
the Security Recipient;

 

7.3                                 this Agreement constitutes a first priority
right in the Collateral and the Collateral is not subject to any prior or pari
passu rights, including but not limited to rights of pledge, rights of usufruct
or attachment; and

 

7.4                                 the representations and warranties set forth
in Section 8 of the Credit Agreement as they relate to each Security Provider or
in the other Credit Documents to which such Security Provider is a party, each
of which is hereby incorporated herein by reference, are true and correct, and
the Security Recipient and each other Secured Party shall be entitled to rely on
each of them as if they were fully set forth herein.

 

7.5                                 Each Security Provider hereby covenants and
agrees with the Security Recipient and each other Secured Party that, from and
after the date of this Agreement until the Obligations under the Credit
Documents are paid in full, the Commitments are terminated and no Letter of
Credit drawn by the UK Borrower remains outstanding, each Security Provider
shall take, or shall refrain from taking, as the case may be, all actions that
are necessary to be taken or not taken so that no violation of any provision,
covenant or agreement contained in Section 9 or 10 of the Credit Agreement, and
so that no Default or Event of Default, is caused by any act or failure to act
of any Security Provider or any of its Subsidiaries.

 

8                                         Transfer of legal title of cheques and
bills of exchange

 

8.1                                 If payments in relation to the Collateral
are made by cheque or bills of exchange, legal title to such securities as well
as the vested rights thereto are (in advance) assigned and transferred to the
Security Recipient, who accepts such assignment and transfer. The

 

5

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

 

transfer of the cheques or bills of exchange is hereby substituted by each
Security Provider holding the same, with the diligence of a prudent business
man, in custody for the Security Recipient free of charge. If the cheques or
bills of exchange are in the physical possession of third parties, each Security
Provider hereby assigns to the Security Recipient its present and future claims
against these third parties, especially its rights to demand the surrender of
the products. The Security Recipient hereby accepts such assignment

 

8.2                                 Until the occurrence of an Enforcement Event
(as defined below), the Security Recipient shall have the right to collect the
cheques and bills of exchange for payment. Upon the Security Recipient’s request
or after notice of the assignments created hereunder in accordance with clause
10 below, the relevant Security Provider shall immediately endorse the cheques
and bills of exchange and deliver them to the Security Recipient.

 

9                                         Collection of Assigned Claims by
Security Provider

 

                                                Until the occurrence of an
Enforcement Event (as defined below), each Security Provider is entitled to
collect and receive payments made by the relevant third party debtor with
respect to the Assigned Claims.

 

10                                  Collection of Assigned Claims by the
Security Recipient

 

10.1                           Upon the occurrence and continuance of an Event
of Default as defined in Section 11 of the Credit Agreement and the Secured
Claims (or any parts thereof) have become due and payable (fällig) (an
“Enforcement Event”) the Security Recipient is entitled to revoke or otherwise
limit the Security Providers’ power of collection and to notify the relevant
third party debtor accordingly in its own name and also on behalf of the
Security Providers. Upon notification of the relevant third party debtor, the
Security Recipient may collect the Assigned Claims in its own name or in the
name of the Security Providers. The Security Recipient, however, is not obliged
to collect the Assigned Claims by itself. Upon request of the Security
Recipient, the Security Providers shall collect the Assigned Claims and deliver
all proceeds thereunder promptly to the Security Recipient.

 

10.2                           The Security Recipient will notify the revocation
or limitation of the power of collection and/or the notification of the third
party debtors to the Security Providers in writing ten (10) days in advance. The
Security Recipient can refrain from giving previous notification, if the
Security Providers (or any of them) suspend their payments or if the Security
Providers (or any of them) or a third party has applied for insolvency
proceedings concerning the assets of the Security Providers (or any of them) or
if the Security Provider has notified the Security Recipient of any such
application.

 

10.3                           If the Security Providers’ authority to collect
the Assigned Claims is revoked or otherwise limited by the Security Recipient,
the Security Recipient can demand the prompt delivery by the Security Provider
of all documents concerning the Assigned Claims.

 

10.4                           If the Security Recipient collects the Assigned
Claims itself, it may take all commercially reasonable action and reach all
agreements with third-party debtors which it considers

 

6

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

 

necessary to collect the Assigned Claims, and in particular, grant additional
time and discounts and conclude settlement agreements. Any action taken by the
Security Recipient shall not invalidate the terms of this Agreement.

 

10.5                           The Security Recipient is authorized to make use
of the Security Providers’ electronic data processing equipment including
peripheral equipment and the data stored with the Security Providers for the
purposes of disclosing the assignments and transfers to a third party debtor
provided that the data stored concerns accounting procedures in connection with
the assignment and transfer. The Security Providers shall provide the Security
Recipient with all necessary materials and the operating staff free of charge.

 

10.6                           The Security Recipient shall apply the proceeds
of any collection or sale of the Assigned Claims and the proceeds of the
enforcement of any other Collateral as well as any Collateral consisting of
cash, at any time after receipt as follows:

 

10.6.1                  first, to the payment of all reasonable and documented
costs and expenses incurred by the Security Recipient in connection with such
collection or sale or otherwise in connection with this 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 Security Recipient hereunder or under any other Credit
Document on behalf of any Grantor 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;

 

10.6.2                  second, to the Secured Parties, an amount equal to all
Obligations owing to them on the date of any 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

 

10.6.3                  third, any surplus then remaining shall be paid to the
Security Provider or its successors or assigns or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct.

 

10.7                           Upon any collection or sale of Assigned Claims or
the enforcement or sale of any of the Collateral by the Security Recipient
(including pursuant to a power of sale granted by statute or under a judicial
proceeding), the receipt of the Security Recipient or of the officer making the
collection or 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 Security Recipient or such officer or be answerable in any way for
the misapplication thereof.

 

10.8                           The Security Recipient agrees to release proceeds
from the enforcement of any of the Collateral if and to the extent that:

 

10.8.1                  the Collateral secures claims against shareholders of
any Security Provider or persons deemed to be equivalent to shareholders for
purposes of Sections 30 and 31 of the

 

7

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

 

German Limited Liability Companies Act (GmbHG) (Gesellschaft nahestehende
Personen),

 

10.8.2      in relation to each Security Provider, the Security Provide
demonstrates to the satisfaction of the Security Recipient that the application
of proceeds towards such claims would lead to a situation that such Security
Provider would not have sufficient assets to maintain its nominal capital
(Stammkapital), and

 

10.8.3      the Security Provider demonstrates to the satisfaction of the
Security Recipient that the application of the proceeds therefore would lead to
a violation of Section 30 of the German Limited Liability Companies Act (GmbHG),
provided that for the purposes of the calculation of the amount to be released
(if any) the following balance sheet items shall be adjusted as follows:

 

10.8.4      the amount of any increase of nominal capital (Stammkapital) after
the date hereof that has been effected without prior written consent of the
Security Recipient shall be deducted from the nominal capital (Stammkapital),
and

 

10.8.5      loans and other contractual liabilities incurred in violation of the
provisions of the Credit Agreement shall be disregarded.

 

For the avoidance of doubt, each Security Provider shall have a right to the
proceeds to the extent such proceeds have to be released. However, no release
under this clause will prejudice the rights of the Security Recipient to enforce
the Collateral again.

 

10.9         In addition, if any Security Provider does not (or would not if the
Collateral is enforced) have sufficient assets to maintain its nominal capital,
such Security Provider shall to the extent legally permitted in respect of its
business realise any and all of its assets that are shown in its balance sheet
with a book value (Buchwert) that is significantly lower than the market value
of the asset(s) if such asset(s) is/are not necessary for such Security
Provider’s business (betriebsnotwendig).

 

11                                  Information obligation in the event of
impairments of the Collateral

 

11.1         Each Security Provider undertakes to inform the Security Recipient
without undue delay of any impairments of the Collateral (or any part thereof),
in particular but not limited to set-off, price discounts, third party debtor
complaints or any other event having an adverse effect on the actual value of
the Collateral. The same shall apply to changes of the maturity of the Assigned
Claims or if a Security Provider becomes aware of any circumstances that may
affect the solvency of any third party debtor. If any of Assigned Claims are
attached (gepfändet), the Security Providers shall without undue delay inform
the Security Recipient accordingly and send to the Security Recipient a copy of
the order of attachment and transfer. The Security Providers shall further
inform the attaching creditor in writing of the Security Recipient’s security
interest in the Assigned Claims.

 

11.2         In each of the events described in clause 11.1 above, the Security
Providers shall act according to the Security Recipient’s instructions.

 

8

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

 

12                                  Right of survey and inspection

 

12.1         Each Security Provider shall give the Security Recipient, upon
request, all information, evidence, and documents which in the Security
Recipient’s reasonable opinion are necessary for the evaluation and/or assertion
of the Assigned Claims. If electronic data processing facilities are used, each
Security Provider must print the necessary documents; if no printout is made,
the data carriers and the software necessary for this shall be delivered to the
Security Recipient to enable it to make the printout itself.

 

12.2         The Security Recipient shall have the right to inspect either by
itself or through its nominated and duly authorized agent each Security
Provider’s documents for purposes of inspecting and realizing the Collateral.

 

12.3         The Security Recipient shall have the absolute right to share any
information it gains from such inspection or verification or otherwise in
connection with this Agreement with any Secured Party.

 

13                                  Security value and release of Collateral

 

13.1         After the Obligations under the Credit Documents are paid in full,
the Commitments are terminated and no Letters of Credit drawn by the UK Borrower
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 (the “Discharge Date”), the Security Recipient shall retransfer
to each Security Provider all Collateral assigned and transferred to it
hereunder by each Security Provider and surrender any excess proceeds to the
Security Providers, at the Security Providers’ expense. However, the Security
Recipient will transfer such Collateral to a third party if it is obliged to do
so; that is the case, for example, if a Security Provider is at the same time a
debtor, and a surety has made payment to the Security Recipient.

 

13.2         The Security Recipient is obliged, already prior to the full
discharge of the Secured Claims and the termination of any facilities which may
give rise to the Secured Claims, to entirely or partially release the
Collateral, if so requested, to a Security Provider, provided and to the extent
that the realisable value of all security provided to secure the Secured Claims
not only temporarily exceeds 110 percent of the Secured Claims. To the extent
the Security Recipient is obliged to pay any taxes in connection with the
realisation of the Collateral, in particular, but not limited to VAT
(Umsatzsteuer), the aforementioned percentage shall be increased by the
applicable tax rate(s).

 

13.3         The Security Recipient shall be free to select the security items
to be released under clause 13.1 above and, to the extent an obligation of the
Security Recipient to release any security provided for the Secured Claims (or
any part thereof) also exists under or in connection with any other security
agreement, under any other security document. In selecting security items to be
released under clause 13.2 above, the Security Recipient shall duly consider the
Security Providers’ legitimate interests and the legitimate interests of parties
having provided additional security.

 

9

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

 

13.4         A Security Provider shall automatically be released from its
obligations hereunder and the assignment of such Security Provider shall be
automatically released upon the consummation of any transaction permitted by the
Credit Agreement as a result of which such Security Provider ceases to be a
Subsidiary of the US Borrower. In connection with any such release, the Security
Recipient shall execute and deliver to the relevant Security Provider, at such
Security Provider’s expense, all documents that such Security Provider shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to the preceding sentence of this clause 13.4
shall be without recourse to or warranty by the Security Recipient.

 

14                                  Authority of Agent

 

The Security Providers acknowledge that the rights and responsibilities of the
Security Recipient under this Agreement with respect to any action taken by the
Security Recipient or the exercise or non-exercise by the Security Recipient of
any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Agreement shall, as between the
Security Recipient and the other Secured Parties, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Security Recipient and the Security
Providers, the Security Recipient shall be conclusively presumed to be acting as
agent for the Secured Parties with full and valid authority so to act or refrain
from acting, and the Security Providers shall not have the obligation, or
entitlement, to make any inquiry respecting such authority.

 

15                                  Further assurance

 

Each Security Provider 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, mortgages, deeds of
trust and other documents), which may be required under any applicable law, or
which the Security Recipient or the Required Lenders may reasonably request, in
order to effectuate the transactions contemplated by this Agreement and in order
(x) to grant, preserve, protect and perfect the validity and priority of the
security interests created or intended to be created hereby or (y) to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral, all at the expense of such Security Provider.

 

16                                  Assignment and transfer

 

16.1         The Security Recipient shall, at any time, have the right to
assign, to transfer, or to dispose of all or any part of its rights or
obligations or both under this Agreement to any of the Secured Parties or any
person becoming a Secured Party and each Security Provider shall execute all
such documents and do all such acts and things which the Security Recipient may
reasonably require in connection with such transfer, assignment, or disposal.

 

16.2         No Security Provider shall be entitled to assign, to transfer or to
dispose of all or any part of its rights or obligations or both hereunder.

 

10

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

 

16.3         Each Security Provider hereby agrees to any accession of a new
party and any change to the parties to the Credit Documents and the Hedge
Agreements. Each Security Provider further agrees to that, notwithstanding any
such accession of a party or change to the parties, to the Credit Documents or
any assignment, transfer or disposal as contemplated in clause 16.1 above, this
Agreement shall remain in full force and effect.

 

17                                  Costs and expenses

 

All reasonable costs and expenses arising from the execution of this Agreement,
from amendments or prolongation thereof or any costs arising from the
enforcement or preservation of the Security Recipient’s rights hereunder shall
be borne jointly and severally by the Security Providers, whereby the Security
Recipient is entitled to mandate a third party to perform such actions in its
own name but for each Security Provider’s account.

 

18                                  Indemnity

 

18.1         The Security Recipient shall not be liable for any loss or damage
which is suffered by a Security Provider save in respect of such loss or damage
which is suffered as a result of the Security Recipient’s willful misconduct
(Vorsatz) or gross negligence (grobe Fahrlässigkeit).

 

18.2         The Security Providers shall jointly and severally indemnify the
Security Recipient and keep the Security Recipient indemnified against any
losses, actions claims, expenses, demands and liabilities which may be made
against or incurred by the Security Recipient for anything done or omitted in
the exercise or purported exercise of the powers and rights under this Agreement
or occasioned by any breach of a Security Provider of any of its obligations or
undertakings under-contained herein, provided always that there will be no such
indemnification, to the extent that such losses, actions, claims, expenses,
demands and liabilities are incurred by or made against the Security Recipient
as a result of willful misconduct or gross negligence of the Security Recipient.

 

19                                  Duration and partial invalidity

 

19.1         This Agreement shall remain in full force and effect until the
Discharge Date. As long as the Obligations under the Credit Documents remain
outstanding no Security Provider shall assert any claims against the UK Borrower
or any Credit Party that is a Foreign Subsidiary (or any of them) which might
arise from the fulfillment of its obligations according to this Agreement,
either contractual or statutory. The monies which are transferred to or debited
by a Security Provider from the UK Borrower or any Credit Party that is a
Foreign Subsidiary (or any of them) shall be received by such Security Provider
on trust (treuhänderisch) and transferred by it on trust to the Security
Recipient. When payments are made to the Security Recipient by a Security
Provider, such Security Provider shall not assert any rights or claims against
the debtors arising by virtue of such payment until the Secured Claims have been
paid and discharged in full and any facilities which may give rise to the
Secured Claims have been terminated.

 

11

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

 

19.2         Any provision of this 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.

 

19.3         In case of a prohibited, invalid or unenforceable provision 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..

 

19.4         This Agreement shall create a continuing security and no change or
amendment to the Credit Documents shall affect the validity and the scope of
this Agreement nor the obligations which are imposed on the Security Providers
pursuant to it.

 

19.5         Subject to anything expressed to the contrary in this Agreement,
this Agreement is independent from any other security or guarantee which may
have been given to the Secured Parties with respect to any of the Secured
Claims. None of such other security interests shall prejudice, or shall be
prejudiced by, or shall be merged in any way with, this Agreement.

 

19.6         This Agreement shall inure to the benefit of the Security
Recipient, its successors and assigns.

 

20                                  Notices and other matters

 

20.1         Notices

 

Every notice, request, demand or other communication under this Agreement shall:

 

20.1.1      be in writing delivered personally or by prepaid letter (airmail if
available) or fax;

 

20.1.2      be deemed to have been received, subject as otherwise provided in
this Agreement, in the case of a letter, when delivered personally or 10 days
after it has been put into the post and, in the case of a fax, when a complete
and legible copy is received by the addressee (unless the time of dispatch of
any fax is after close of business in which case it shall be deemed to have been
received at the opening of business on the next business day); and

 

20.1.3      be sent

 

(a)                                  For each of the Security Providers at:

 

Rockwood Specialties Group, Inc.
100 Overlook Center
Princeton, NJ 08542
USA

 

12

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

 

Attention:             
Fax:

 

with a copy to:

 

Kohlberg Kravis Roberts & Co., L.P.
9 West 57th Street
Suite 4200
New York, NY 10019
USA

 

Attention:             
Fax:

 

(b)                                 to the Security Recipient at:

 

Credit Suisse First Boston
Eleven Madison Avenue
New York
NY 10010

 

Attention:             
Fax:

 

or to such other address or fax number as is notified by the relevant party to
the other parties to this Agreement.

 

For the purpose of this Agreement each of the Security Providers hereby appoints
and authorizes Rockwood Specialties Group, Inc., to receive any notice, request
demand or other communication under this Agreement (Empfangsvollmacht)

 

20.2         No implied waiver, remedies cumulative

 

No failure or delay on the part of the Security Recipient to exercise any power,
right or remedy under this Agreement shall operate as a waiver thereof, nor
shall any single or partial exercise by the Security Recipient of any power,
right or remedy preclude any other or further exercise thereof or the exercise
of any power, right or remedy. The remedies provided in this Agreement are
cumulative and are not exclusive of any remedies provided by law.

 

20.3         English translations

 

All documents to be delivered under or supplied in connection with this
Agreement shall be in the English language or shall be accompanied by a
certified translation into English upon which the recipient shall be entitled to
rely.

 

13

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

 

21                                  Counterparts

 

This Agreement may be executed in any number of counterparts (whether by
facsimile or otherwise, but, if by facsimile, with the original signed
pages being promptly sent to the Security Recipient by prepaid letter (and the
Security Recipient is hereby authorized to incorporate such pages into bound
originals)) and by the different parties on separate counterparts, each of which
when so executed and delivered shall be an original, but all counterparts shall
together constitute one and the same agreement.

 

22                                  Changes and amendments

 

Changes to and amendments of this Agreement including this subsection must be
made in writing, signed by all of the parties hereto.

 

23                                  Choice of law and venue

 

23.1         THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE FEDERAL REPUBLIC OF GERMANY.

 

23.2         Each Security Provider hereby irrevocably and unconditionally:

 

23.2.1      submits itself in any Legal action or proceeding relating to this
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 Frankfurt am Main, Germany,
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;

 

23.2.2      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, and

 

23.2.3      agrees that nothing herein shall limit the right of the
Administrative Agent to take legal actions before any other court of competent
jurisdiction.

 

Signature Page follows

 

14

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

 

EXHIBIT C-3

 

FORM OF GERMAN GUARANTEE

 

 

Dated July 30, 2004

 

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

 

 

ROCKWOOD SPECIALTIES-GMBH (1)

 

ROCKWOOD PIGMENTE HOLDING GMBH (2)

 

SILO PIGMENTE GMBH (3)

 

CREDIT SUISSE FIRST BOSTON (4)

 

 

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

 

GUARANTEE
(Garantie)

 

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

 

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

 

THIS GUARANTEE AGREEMENT is made BETWEEN:

 

(1)         Rockwood Specialties GmbH, a corporation (Gesellschaft mit
beschriinkter Haftung) incorporated under the laws of the Federal Republic of
Germany, having its business address at MiihIstr. 118, 65396 Walluf, Germany,
registered with the commercial register of the local court of Wiesbaden under HR
B 17839;

 

(2)         Rockwood Pigmente Holding GmbH, a corporation (Gesellschaft mit
beschrdnkter Haftung) incorporated under the laws of the Federal Republic of
Germany having its business address at Miihlstr. 118, 65396 Walluf, Germany,
registered with the commercial register of the local court of Wiesbaden under HR
B 17837, Germany;

 

(3)         Silo Pigmente GmbH, a corporation (Gesellschaft mit beschrankter
Haftung) incorporated under the laws of the Federal Republic of Germany having
its business address at Whist. 118, 65396 Walluf, Germany, registered with the
commercial register of the local court of Wiesbaden under HR B 17832, Germany,

 

- hereinafter collectively referred to as the “Guarantors” -

 

(4)         Credit Suisse First Boston, a New York banking corporation having
its business address at Eleven Madison Avenue, New York, NY 10010, USA, acting
through its Cayman Islands Branch,

 

- hereinafter referred to as the “Administrative Agent” -

 

Preamble

 

(A)                               Rockwood Specialties Group, Inc. (the “US
Borrower”) and Rockwood Specialties Limited, a company incorporated under the
laws of England and Wales (the “UK Borrower”), as borrowers, the lenders,
JPMorgan Chase Bank as administrative agent for the lenders, and others have
entered into a Credit Agreement dated as of July 23, 2003 (the “Original Credit
Agreement”), as amended pursuant to which the borrowers have been made available
loans and letters of credit for the account of the borrowers by the lenders.

 

(B)                               The US Borrower, the UK Borrower, Rockwood
Specialties International, Inc., the Lenders (as defined in the Credit Agreement
(as defined below)) from time to time party thereto, Credit Suisse First Boston
acting through its Cayman Islands Branch as administrative agent (the
“Administrative Agent”) and collateral agent, and UBS Securities LLC and Goldman
Sachs Credit Partners L.P., as co-syndication agents, entered into a credit
agreement dated as of July 30, 2004 (the “Credit Agreement”), as amended
pursuant to which the Lenders have severally agreed to make loans to the US
Borrower and the UK Borrower (the US Borrower and the UK Borrower together also
the “Borrowers”) and the Letter of Credit Issuer (as defined in the Credit
Agreement) has agreed to issue letters of credit for the account of the
Borrowers (collectively, the “Extension of Credit”), upon the terms and subject
to the conditions set forth therein and one or more Lenders or affiliates of
Lenders may from time to time enter into Hedge

 

2

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

 

Agreements (as defined below) with the US Borrower or any of the Restricted
Subsidiaries (as defined in the Credit Agreement).

 

(C)                               The proceeds of the Extensions of Credit will
be used in part to enable the UK Borrower to make valuable transfers to the
Guarantors in connection with the operation of their respective business.

 

(D)                               Each Guarantor acknowledges that it will
derive substantial direct and indirect benefit from the making of the Extensions
of Credit.

 

(E)                                It is a condition precedent to the
obligations of the Lenders and the Letter of Credit Issuer to make their
respective Extensions of Credit to the UK Borrower under the Credit Agreement
that the Guarantors shall have executed and delivered this Guarantee to the
Administrative Agent for the ratable benefit of the Secured Parties.

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Co-Syndication Agents, the Documentation Agent, 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 UK Borrower under the Credit Agreement and to induce
one or more Lenders or Affiliates of Lenders to enter into Hedge Agreements with
the UK Borrower, the Guarantors hereby agree with the Administrative Agent, for
the ratable benefit of the Secured Parties, as follows:

 

1                                         Headings, capitalized terms and
references

 

1.1                               Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.

 

1.2                               As used herein, the term “Closing Time” means
24:00 (German time) on July 31, 2004, being the “Closing Date”.

 

1.3                               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 extended to the UK
Borrower, 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 UK 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, secondary, direct, contingent, fixed, future 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 UK Borrower or any
other Credit Party that is a Foreign Subsidiary 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 UK Borrower under or

 

3

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

 

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 other Credit Party that is a Foreign
Subsidiary under or pursuant to this Guarantee or the other Credit Documents,
(iv) the due and punctual payment and performance of all obligations of the UK
Borrower and each Credit Party that is a Foreign 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 by the UK Borrower or any other Credit Party that is a Foreign
Subsidiary arising from or in connection with treasury, depositary or cash
management services or in connection with any automated clearinghouse transfer
of funds.

 

1.4                               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 Co-Syndication Agents, (vi) the
Documentation Agent, (vii) each counterparty to a Hedge Agreement the
obligations under which constitute Obligations, (viii) the beneficiaries of each
indemnification obligation undertaken by the UK Borrower or any Credit Party
that is a Foreign Subsidiary under any Credit Document, and (ix) any successors,
indorsees, transferees and assigns of each of the foregoing.

 

1.5                               References to “Lenders” in this Guarantee
shall be deemed to include Affiliates of Lenders that may from time to time
enter into Hedge Agreements with the UK Borrower.

 

1.6                               The words “hereof’, “herein” and “hereunder”
and words of similar import when used in this Guarantee shall refer to this
Guarantee as a whole and not to any particular provision of this Guarantee, and
clause references are to clauses of this Guarantee unless otherwise specified.
The words “include”, “includes” and “including” shall be deemed to be followed
by the phrase “without limitation”.

 

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

 

1.8                               Headings are for ease of reference only and
shall not affect the construction of this Guarantee.

 

1.9                               This Guarantee is made in the English
language. For the avoidance of doubt, the English language version of this
Guarantee shall prevail over any translation of this Guarantee. However, where a
German translation of a word or phrase appears in the text of this Guarantee,
the German translation of such word or phrase shall prevail.

 

2                                         Guarantee

 

2.1                               Each Guarantor hereby guarantees (garantiert),
as primary obligor (selbständig Verpflichteter) and not merely as surety (Burge)
absolutely, unconditionally and irrevocably (unbedingt and unwiderruflich) to
the Administrative Agent for the ratable

 

4

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

 

benefit of the Secured Parties their respective successors, indorsees,
transferees and assigns, as each Guarantor’s independent obligation
(selbständige Verpflichtung) the prompt and complete payment and performance of
all Obligations (provided always that such Obligations are capable of being
transformed into financial obligations (Zahlungsverpflichtungen)) (the
“Guarantee”).

 

2.2                               Each Guarantor further agrees to pay any and
all expenses (including all reasonable fees and disbursements of counsel) that
may be paid or incurred by the Administrative Agent or any other Secured Party
in enforcing, or obtaining advice of counsel in respect of, any rights with
respect to, or collecting, any or all of the Obligations and/or enforcing any
rights with respect to, or collecting against, such Guarantor under this
Guarantee. Any taxes, fees or reasonable costs owed for the signing or execution
of this Guarantee shall be borne by the Guarantors. All payments to be made by a
Guarantor under this Guarantee shall be made in full and, subject as provided
below, free and clear of any deductions or withholdings on the due date to such
account as the Administrative Agent may from time to time specify. If a
Guarantor is required to make any deduction or withholding in respect of taxes
from any payment due under this Guarantee to the Administrative Agent, or if the
Administrative Agent is required to make any such deduction or withholding from
a payment to another Secured Party, the sum due from such Guarantor in respect
of such payment shall be increased to the extent necessary to ensure that, after
the making of such deduction or withholding by such Guarantor or the
Administrative Agent (as the case may be) and the payment to the Secured Parties
by the Administrative Agent, each Secured Party receives on the due date for
such payment (and retains, free from any liability in respect of such deduction
or withholding) a net sum equal to the sum which it would have received had no
such deduction or withholding been required to be made; the relevant Guarantor
shall indemnify the Administrative Agent and each other Secured Party against
any losses or costs incurred by any of them by reason of any failure of such
Guarantor to make any such deduction or withholding or by reason of any
increased payment not being made on the due date for such payment. Each
Guarantor shall promptly deliver to the Administrative Agent any receipts,
certificates or other proof (if any) evidencing the amount paid or payable in
respect of any deduction or withholding as aforesaid.

 

2.3                               No payment or payments made by the UK
Borrower, any of the Guarantors, any other guarantor or any other Person or
received or collected by the Administrative Agent or any other Secured Party
from the UK Borrower, any of the Guarantors, any other guarantor or any other
Person by virtue of any action or proceeding or any set-off or appropriation or
application at any time or from time to time in reduction of, or in payment of,
the Obligations shall be deemed to modify, reduce, release or otherwise affect
the liability of any Guarantor hereunder, which shall, notwithstanding any such
payment or payments other than payments made by such Guarantor in respect of the
Obligations or payments received or collected from such Guarantor in respect of
the Obligations, remain liable for the Obligations up to the maximum liability
of such Guarantor hereunder until the Obligations are paid in full, the
Commitments are terminated and no Letters of Credit drawn by the UK Borrower
shall be outstanding.

 

5

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

 

2.4                               Each Guarantor agrees that whenever, at any
time, or from time to time, it shall make any payment to the Administrative
Agent or any other Secured Party on account of its liability hereunder, it will
notify the Administrative Agent in writing that such payment is made under this
Guarantee for such purpose.

 

3                                         Acceptance of the Guarantee and
shareholders’ approval / Effectiveness of Guarantee

 

3.1                               The Administrative Agent hereby accepts the
Guarantee as described in clause 2 above.

 

3.2                               The respective shareholders of the Guarantors
have approved the granting of the Guarantee as described in clause 2 above. Such
approvals have been given by shareholders’ resolutions; copies of which are
attached to this agreement as Schedule 1.

 

3.3                               The security interest created by the Guarantee
shall attach immediately upon the Closing Time.

 

4                                         Amendments

 

This Guarantee shall create continuing security and no change or amendment
whatsoever to the Credit Agreement or any other Credit Document shall affect the
validity and scope of this Guarantee nor the obligations which are imposed on
the Guarantors pursuant to it,  unless express reference is made to this
Guarantee and this clause.

 

5                                         No set-off or counterclaim,
contribution

 

5.1                               All payments to be made by a Guarantor under
this Guarantee shall be made without any set-off or rights of retention of any
nature whatsoever unless the respective counterclaim or right of retention is
undisputed (unbestritten) or determined by final court ruling (rechtskräflig
festgestellt).

 

5.2                               Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment. Each Guarantor’s right of contribution
shall be subject to the terms and conditions of clause 14 hereof. The provisions
of this clause 5 shall in no respect limit the obligations and liabilities of
any Guarantor to the Administrative Agent and the other Secured Parties, and
each Guarantor shall remain liable to the Administrative Agent and the other
Secured Parties for the full amount guaranteed by such Guarantor hereunder.

 

5.3                               In addition to any rights and remedies of the
Secured Parties provided by law, each Guarantor hereby irrevocably authorizes
each Secured Party at any time and from time to time following the occurrence
and during the continuance of an Event of Default without notice to such
Guarantor or any other Guarantor, any such notice being expressly waived by each
Guarantor, upon any amount becoming due and payable by such Guarantor hereunder
(whether at stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all deposits (general or
special, time

 

6

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

 

or demand, provisional or final), and any other credits, indebtedness or claims,
in each case whether direct or indirect, absolute or contingent, at any time
held or owing by such Secured Party to or for the credit or the account of such
Guarantor. Each Secured Party shall notify such Guarantor promptly of any such
set-off and the appropriation and application made by such Secured Party,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.

 

6                                         Limitation of Guarantee

 

6.1                               The Administrative Agent agrees to release
proceeds from the enforcement of any collateral established by this Guarantee if
and to the extent that:

 

6.1.1                     the collateral secures claims against shareholders of
any Guarantor or Persons deemed to be equivalent to shareholders for purposes of
Sections 30 and 31 of the German Limited Liability Companies Act (GmbHG)
(Gesellschaft nahestehende Personen),

 

6.1.2                     in relation to each Guarantor, the application of
proceeds towards such claims would lead to a situation that such Guarantor would
not have sufficient assets to maintain its nominal capital (Stammkapital), and

 

6.1.3                     the relevant Guarantor demonstrates to the
satisfaction of the Administrative Agent that the application of the proceeds
therefore would lead to a violation of Section 30 of the German Limited
Liability Companies Act (GmbHG),

 

provided that for the purposes of the calculation of the amount to be released
(if any) the following balance sheet items shall be adjusted as follows:

 

6.1.4                     the amount of any increase of nominal capital
(Stammkapital) after the date hereof that has been effected without prior
written consent of the recipient of the Guarantee shall be deducted from the
nominal capital (Stammkapital), and

 

6.1.5                     loans and other contractual liabilities incurred in
violation of the provisions of the Credit Agreement shall be disregarded.

 

For the avoidance of doubt, each Guarantor shall have a right to the proceeds to
the extent such proceeds have to be released. No release under this clause will
prejudice the rights of the Administrative Agent to claim again under this
Guarantee for any unpaid amount.

 

6.2                               In addition, if any Guarantor does not (or
would not if the Guarantee is enforced) have sufficient assets to maintain its
nominal capital, such Guarantor shall to the extent legally permitted in respect
of its business realize any and all of its assets that are shown in its balance
sheet with a book value (Buchwert) that is significantly lower than the market
value of the asset(s) if such asset(s) is/are not necessary for such Guarantor’s
business (betriebsnotwendig).

 

7

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

 

7                                         Payments, Currency and currency
indemnity

 

All payments to be made by a Guarantor under this Guarantee shall be made to the
Administrative Agent in United States Dollars (hereinafter referred to as
“Contractual Currency”) at the Administrative Agent’s Office. In the event of
the Administrative Agent recovering any amount hereunder in a currency other
than the Contractual Currency and if the said amount so recovered is
insufficient when converted into Contractual Currency at the date of receipt by
the Administrative Agent to satisfy in full the amount due to the Administrative
Agent hereunder, each Guarantor shall upon the Administrative Agents written
demand pay to the Administrative Agent such further amount(s) in the Contractual
Currency as will be sufficient to satisfy in full the amount so due to the
Administrative Agent hereunder and such further amount(s) shall be due as a
separate debt hereunder.

 

8                                         Several Guarantors

 

The obligations and liabilities of the Guarantors under this Guarantee are joint
and several and shall be construed accordingly.

 

9                                         Declaration of trust

 

Each of the Guarantors and the Administrative Agent acknowledges that all rights
and claims constituted by this Guarantee and all rights, claims, and moneys paid
to the Administrative Agent or held by the Administrative Agent pursuant to or
in connection with this Guarantee are held and administered by the
Administrative Agent with effect from the date of this Guarantee on trust
(treuhänderisch) for the Secured Parties and administered in accordance with the
Credit Agreement.

 

10                                  Application of proceeds

 

The Administrative Agent shall apply, vis-à-vis the Secured Parties, the
proceeds of any payment of the Guarantors after receipt as follows:

 

first, to the payment of all reasonable and documented costs and expenses
incurred by the Administrative Agent in connection with such payment or
otherwise in connection with this 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 the Guarantors 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;

 

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;

 

8

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

 

third, any surplus then remaining shall be paid to the relevant Guarantors or
its successors or assigns or to whomsoever may be lawfully entitled to receive
the same or as a court of competent jurisdiction may direct.

 

11                                  Representations and warranties, Covenants

 

Each Guarantor hereby represents and warrants to the Administrative Agent:

 

11.1                        that each Guarantor is a company duly incorporated
and validly existing under German law and is neither insolvent nor subject to
any insolvency proceedings;

 

11.2                        that each of the Guarantors has the requisite power
and authority to enter into this Guarantee Agreement and to grant the Guarantee
and that all necessary corporate action have been taken and all necessary
approvals and consents for the execution and performance of this Guarantee have
been obtained;

 

11.3                        that the execution and performance of this Guarantee
will not violate any applicable provision of the Guarantor’s articles of
association or result in the breach of any agreement or contract to which any of
the Guarantors is a party;

 

11.4                        that it has not received any security in respect of
any of its obligations under this Guarantee or any other Credit Document from
any other Guarantor or any of the Credit Parties;

 

11.5                        that the representations and warranties set forth in
Section 8 of the Credit Agreement as they relate to such Guarantor or in the
other Credit Documents to which such Guarantor is a party, each of which is
hereby incorporated herein by reference, are true and correct, and the
Administrative Agent and each other Secured Party shall be entitled to rely on
each of them as if they were fully set forth herein.

 

11.6                        Each Guarantor hereby covenants and agrees with the
Administrative Agent and each other Secured Party that, from and after the date
of this Guarantee until the Obligations under the Credit Documents are paid in
full, the Commitments are terminated and no Letter of Credit drawn by the UK
Borrower remains outstanding, such Guarantor shall take, or shall refrain from
taking, as the case may be, all actions that are necessary to be taken or not
taken so that no violation of any provision, covenant or agreement contained in
Section 9 or 10 of the Credit Agreement, and so that no Default or Event of
Default, is caused by any act or failure to act of such Guarantor or any of its
Subsidiaries.

 

12                                  Authority of Agent

 

Each Guarantor acknowledges that the rights and responsibilities of the
Administrative Agent under this Guarantee with respect to any action taken by
the Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Guarantee shall, as between the
Administrative Agent and the other Secured Parties, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Administrative Agent and

 

9

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

 

such Guarantor, the Administrative Agent shall be conclusively presumed to be
acting as agent for the Secured Parties with full and valid authority so to act
or refrain from acting, and no Guarantor shall be under obligation, or
entitlement, to make any inquiry respecting such authority.

 

13                                  No security taken by Guarantor

 

Each Guarantor hereby agrees that any security received by a Guarantor in
violation of clause 11.4 shall, unless otherwise agreed upon with the
Administrative Agent, be held on trust (treuhänderisch) for the Administrative
Agent and as additional security for the Obligations of such Guarantor and/or
the UK Borrower under any of the Credit Documents.

 

14                                  Negative undertakings

 

14.1                        Until all guaranteed Obligations under the Credit
Documents have been satisfied by payment in full, the Commitments have been
terminated and no Letters of Credit have been drawn by the UK Borrower,
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,
each Guarantor agrees that, without the prior written consent of the
Administrative Agent, it will not:

 

14.1.1              exercise any rights of subrogation, contribution or
indemnity against any other Guarantor or the UK Borrower or any other Person
liable;

 

14.1.2              demand or accept repayment in whole or in part of any
obligations or liabilities now or hereafter due to such Guarantor by reason of
performance of its obligations under any of the Credit Documents from any other
Guarantor or the UK Borrower;

 

14.1.3              demand or accept any security interest in respect of any of
its obligations under this Guarantee or any other Credit Document from any other
Guarantor or the UK Borrower; and

 

14.1.4              take any step to enforce any right against any other
Guarantor or the UK Borrower in respect of any guaranteed Obligation.

 

14.2                        In case of violation of clauses 14.1.1 to 14.1.4
(inclusive), any monies or other property received by a Guarantor shall be
received by such Guarantor on trust (treuhänderisch) for and transferred by it
on trust (treuhänderisch) to the Administrative Agent.

 

14.3                        A Guarantor shall automatically be released from its
obligations hereunder and the guarantee of such Guarantor shall be automatically
released upon the consummation of any transaction permitted by the Credit
Agreement as a result of which such Guarantor ceases to be a Subsidiary of the
US Borrower. In connection with any such release, the Administrative Agent shall
execute and deliver to any Guarantor, at such Guarantor’s expense, all documents
that such Guarantor shall reasonably request to evidence such termination or
release. Any execution and delivery of documents pursuant to the

 

10

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

 

preceding sentence of this clause 14.3 shall be without recourse to or warranty
by the Administrative Agent.

 

15                                  Positive undertakings

 

15.1                        Each Guarantor hereby undertakes with the
Administrative Agent that during the continuance of this Guarantee it will take
any step and execute any amendment agreement and other documents which the
Administrative Agent may deem necessary to ensure continuance of this Guarantee
in accordance with its provisions, in particular when any supplemental agreement
to this Guarantee is signed and new Secured Parties accede.

 

16                                  Independent guarantee

 

16.1                        This Guarantee shall be in addition to any other
guarantee or other security given by or on behalf of the UK Borrower, any other
Guarantor or otherwise which the Secured Parties and/or the Administrative Agent
may now or hereafter hold and shall be binding on each Guarantor notwithstanding
that any other Person who has also been requested by the Secured Parties and/or
the Administrative Agent to guarantee or give security for the guaranteed
Obligations shall fail to give such guarantee or security or shall be released
from any guarantee or security given by it or them.

 

16.2                        The liability of each Guarantor shall not be
affected nor shall any guarantee under this Guarantee be discharged or reduced
by reason of:

 

16.2.1              any modification of the articles of association, the legal
structure or the shareholder structure of the other Guarantors or the UK
Borrower, in particular those resulting from any merger, change in corporate
form or corporate purpose of the other Guarantors or the UK Borrower, even if
such merger, change or modification results in the creation of a new legal
entity, or if the corporate form of the respective Guarantor or the UK Borrower
is modified;

 

16.2.2              the insolvency, bankruptcy, liquidation, dissolution,
winding-up, administration, receivership, amalgamation, reconstruction of any
other Guarantor or the UK Borrower or any analogous proceeding occurring in
relation to the respective Guarantor or the UK Borrower;

 

16.2.3              the Administrative Agent or any of the other Secured Parties
granting any time, indulgence or concession to, or compounding with,
discharging, releasing or varying the liability of any Guarantor or the UK
Borrower or renewing, determining, varying or increasing any accommodation,
facility or transaction or otherwise dealing with the same in any manner
whatsoever or concurring in, accepting or varying any compromise, arrangement or
settlement or omitting to claim or enforce payment from any other Guarantor or
the UK Borrower;

 

16.2.4              any amendment, variation or waiver of any of the Credit
Documents or any Hedge Agreement; or

 

11

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

 

16.2.5              any act or omission which would not have discharged or
affected the liability of such Guarantor had it been a principal debtor instead
of a guarantor or anything done or omitted which but for this provision might
operate to exonerate such Guarantor.

 

16.3                        Each Guarantor agrees to be bound by this Guarantee
notwithstanding that any Person intended to execute or to be bound by this
Guarantee may not do so or may not be effectually bound and notwithstanding that
any guarantees contained in this Guarantee may be terminated or released or may
be or become invalid or unenforceable against any other Guarantor whether or not
the deficiency is known to the Administrative Agent or any of the Secured
Parties.

 

16.4                        Neither the Administrative Agent nor any of the
other Secured Parties shall be obliged to make any claim or demand on any
Guarantor or the UK Borrower or any other Person liable or to resort to any
security which is granted for the guaranteed Obligations before enforcing this
Guarantee and no action taken or omitted in connection with any such claim or
security shall discharge, reduce, prejudice or affect the liability of any
Guarantor under this Guarantee.

 

17                                  Settlements conditional

 

Any release, discharge or settlement between a Guarantor and the Administrative
Agent shall be conditional upon no security, disposition or payment to the
Administrative Agent or any of the other Secured Parties by any of the
Guarantors or any other Person being void, set aside or ordered to be refunded
pursuant to any enactment or law relating to liquidation, administration or
insolvency or for any other reason whatsoever and if such condition is not
fulfilled the Administrative Agent shall be entitled to enforce this Guarantee
as if such release, discharge or settlement had not occurred and any such
payment had not been made.

 

18                                  Additional actions and declarations

 

The Guarantor 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, 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 to
effectuate the transactions contemplated by this Guarantee and in order (x) to
grant, preserve, protect and perfect the validity and priority of the security
interests created or intended to be created hereby or (y) to enable the
Administrative Agent to exercise and enforce its rights and remedies hereunder
with respect to any Collateral, all at the expense of such Guarantor.

 

19                                  Costs and expenses

 

All costs and expenses arising from the execution of this Guarantee, from
amendments or prolongation thereof or any costs arising from the enforcement or
preservation of Administrative Agent’s rights hereunder if reasonably incurred
shall be borne by the Guarantors jointly and severally, whereby the
Administrative Agent is entitled to

 

12

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

 

mandate a third party to perform such actions in its own name but for each
Guarantor’s account.

 

20                                  Indemnity

 

20.1                        The Administrative Agent shall not be liable for any
loss or damage which is suffered by the Guarantor save in respect of such loss
or damage which is suffered as a result of willful misconduct (Vorsatz) or gross
negligence (grobe Fahrlässigkeit).

 

20.2                        The Guarantors shall, jointly and severally,
indemnify the Administrative Agent and keep the Administrative Agent indemnified
against any losses, actions, claims, expenses, demands and liabilities which may
be made against or incurred by the Administrative Agent for anything done or
omitted in the exercise or purported exercise of the powers and rights under
this Guarantee or occasioned by any breach of a Guarantor of any of its
obligations or undertakings contained herein, provided always that there will be
no such indemnification, to the extent that such losses, actions, claims,
expenses, demands and liabilities are incurred by or made against the
Administrative Agent as a result of willful misconduct (Vorsatz) or gross
negligence (grobe Fahrlässigkeit) of the Administrative Agent.

 

21                                  Assignment and transfer

 

21.1                        The Administrative Agent shall, at any time, have
the right to assign, to transfer or to dispose of all or any part of its rights
or obligations or both under this Guarantee to any of the Secured Parties or any
Person becoming a Secured Party and each Guarantor shall execute all such
documents and do all such acts and things which the Administrative Agent may
reasonably require in connection with such assignment, transfer or disposal.

 

21.2                        No Guarantor shall be entitled to assign, to
transfer or to dispose of all or any part of its rights or obligations or both
hereunder.

 

21.3                        Each Guarantor hereby agrees to any accession of a
new party and any change to the parties to the Credit Documents. Each Guarantor
further agrees that notwithstanding any such accession of a party or change to
the parties to the Credit Documents or any assignment, transfer or disposal as
contemplated in clause 21.1 above, this Guarantee shall remain in full force and
effect.

 

22                                  Duration, partial invalidity and other
matters

 

22.1                        This Guarantee shall be a continuing security and
shall remain in full force and effect until the Obligations under the Credit
Documents are paid in full, the Commitments are terminated and no Letters of
Credit drawn by the UK Borrower 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 (the “Discharge Date”).

 

13

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

 

22.2                        When payments are made to the Administrative Agent
by a Guarantor, the rights of the Secured Parties towards the UK Borrower and
the Guarantors (or any of them) shall only be transferred to the respective
Guarantor after the occurrence of the Discharge Date.

 

22.3                        Any provision of this Guarantee 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.

 

22.4                        This Guarantee represents the agreement of each
Guarantor and the Administrative Agent 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.

 

22.5                        In case of a prohibited, invalid or unenforceable
provision 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.

 

22.6                        This Guarantee shall inure to the benefit of the
Administrative Agent, its successors and assigns.

 

23                                  Notices and other Matters

 

23.1                        Notices

 

Every notice, request demand or other communication under this Guarantee shall:

 

23.1.1              be in writing delivered personally or by prepaid letter
(airmail if available) or fax;

 

23.1.2              be deemed to have been received, subject as otherwise
provided in this Guarantee, in the case of a letter, when delivered personally
or ten (10) days after it has been put into the post and, in the case of a fax,
when a complete and legible copy is received by the addressee (unless the time
of dispatch of any fax is after close of business in which case it shall be
deemed to have been received at the opening of business on the next business
day); and

 

23.1.3              be sent

 

(a)           to the Guarantors at:

Rockwood Specialties Group, Inc.
100 Overlook Center
Princeton, NJ 08542
USA

 

14

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

 

Attention:
Fax:

 

with a copy to:

 

Kohlberg Kravis Roberts & Co., L.P.
9 West 57th Street
Suite 4200
New York, NY 10019
USA

 

Attention:
Fax:

 

(b)          to the Administrative Agent at:

 

Credit Suisse First Boston
Eleven Madison Avenue
New York
NY 10010

 

Attention:
Fax:

 

or to such other address or fax number as is notified by the relevant party to
the other parties to this Guarantee.

 

For the purpose of this Guarantee each Guarantor hereby appoints and authorizes
Rockwood Specialties Group, Inc., to receive any notice, request demand or other
communication under this Guarantee (Empfangsvollmacht).

 

24                                  No implied waiver, remedies cumulative

 

No failure or delay on the part of the Administrative Agent to exercise any
power, right or remedy under this Guarantee shall operate as a waiver thereof,
nor shall any single or partial exercise by the Administrative Agent of any
power, right or remedy preclude any other or further exercise thereof or the
exercise of any power, right or remedy. The remedies provided in this Guarantee
are cumulative and are not exclusive of any remedies provided by law.

 

24.1                        English translations

 

All documents to be delivered under or supplied in connection with this
Guarantee shall be in the English language or shall be accompanied by a
certified translation into English upon which the recipient shall be entitled to
rely.

 

15

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

 

24.2                        Counterparts

 

This Guarantee may be executed in any number of counterparts (whether by
facsimile or otherwise, but, if by facsimile, with the original signed
pages being promptly sent to the Administrative Agent by first-class prepaid
letter (and the Administrative Agent is hereby authorized to incorporate such
pages into bound originals)) and by the different parties on separate
counterparts, each of which when so executed and delivered shall be an original,
but all counterparts shall together constitute one and the same instrument.

 

25                                  Additional Guarantors

 

Except as provided in Section 9.11 of the Credit Agreement, each Guarantor
undertakes to cause each of its subsidiaries organized under the laws of Germany
formed, purchased or acquired after the date hereof to execute a supplement to
this Guarantee in order to become Guarantor hereunder with the same force and
effect as if originally named as a Guarantor herein. The execution and delivery
of any instrument adding an additional Guarantor as a party to this Guarantee
shall not require the consent of any other Guarantor hereunder. The rights and
obligations of each Guarantor hereunder shall remain in full force and effect
notwithstanding the addition of any new Guarantor as a party to this Guarantee.

 

26                                  Changes and amendments

 

Changes to and amendments of this Guarantee including this subsection must be
made in writing, signed by all of the parties hereto.

 

27                                  Choice of law and venue

 

27.1                        THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE
PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERTFEETED IN
ACCORDANCE WITH, THE LAWS OF THE FEDERAL REPUBLIC OF GERMANY.

 

27.2                        Each Guarantor hereby irrevocably and
unconditionally:

 

27.2.1              submits itself in any legal action or proceeding relating to
this Guarantee 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 Frankfurt am Main, Germany,
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;

 

27.2.2              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; and

 

27.2.3              agrees that nothing herein shall limit the right of the
Administrative Agent to take legal actions before any other court of competent
jurisdiction.

 

16

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

 

Signature Page Follows

 

17

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

 

EXHIBIT C-4

 

FORM OF GERMAN NEGATIVE PLEDGE AGREEMENT

 

NEGATIVE PLEDGE AGREEMENT (the “Agreement”) dated as of July 30, 2004, between
Rockwood Pigmente Holding GmbH (“Rockwood Pigmente”) and Silo Pigmente GmbH
(“Silo Pigmente” and, together with Rockwood Pigmente, the “Rockwood Parties”)
both incorporated under the laws of the Federal Republic of Germany, and Credit
Suisse First Boston, acting through its Cayman Islands Branch, as administrative
agent (in such capacity, the “Administrative Agent”) to the Lenders (as defined
below) under the Credit Agreement (as defined below).

 

A.            Reference is made to the Credit Agreement dated as of July 30,
2004 (the “Credit Agreement”), among Rockwood Specialties Group, Inc, a Delaware
corporation, Rockwood Specialties Limited, a company incorporated under the laws
of England and Wales, Rockwood Specialties International, Inc., a Delaware
corporation, the lenders from time to time parties thereto (the “Lenders”), the
Administrative Agent, and UBS Securities LLC and Goldman Sachs Credit Partners
L.P., as co-syndication agents. Capitalized terms used herein but not otherwise
defined herein, shall have the meanings ascribed to such terms in the Credit
Agreement.

 

B.            Rockwood Pigmente and Silo Pigmente own 89.93% and 10%,
respectively, of the partnership interests of Brockues GmbH & Co. KG (the
“Partnership”).

 

C.            In accordance with Section 6.1(m) of the Credit Agreement, the
parties hereto have entered into this Agreement.

 

Accordingly, the parties hereto hereby agree with effect as of July 31, 2004,
24:00 (German time) as follows:

 

SECTION 1. Covenants. The Rockwood Parties hereby covenant to the Administrative
Agent on behalf of the Lenders that such Rockwood Parties shall:

 

(a)           until the Obligations (as defined in the German Guarantee) under
the Credit Documents are paid in full, the Commitments are terminated and no
Letters of Credit drawn by the UK Borrower or the US Borrower 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, undertake to exercise their voting rights in the Partnership to
prevent the Partnership from creating, incurring, assuming or suffering to exist
any Lien upon any property or assets of any kind, save for Liens created,
incurred, assumed or suffered to exist to meet the regular working capital
requirements of the Partnership or which are created, incurred, assumed or
suffered to exist in the ordinary course of business of the Partnership, in each
case, to the extent permitted by any of Sections 10.2(a) through (e) (inclusive)
of the Credit Agreement or Section 10.2(h) of the Credit Agreement; provided,
that the aggregate principal

 

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

 

amount of the obligations so secured pursuant to such Section 10.2(h) shall not
exceed US$ 5,000,000 at any one time outstanding,

 

(b)           undertake to exercise their voting rights in the Partnership to
the effect that a partners’ resolution shall be passed to resolve that the
Rockwood Parties may pledge all of the partners’ interests in the Partnership
owned by such Rockwood Parties in favor of Credit Suisse First Boston, as
Administrative Agent to the Lenders,

 

(c)           undertake to enter into a pledge agreement in the form
substantially set out in Exhibit A-1 hereto to pledge all of the partners’
interests in the Partnership owned by the Rockwood Parties following the
partners’ resolution described in paragraph (b) above, and

 

(d)           undertake to exercise their voting rights in the Partnership to
change the legal status of the Partnership into a stock corporation
(Aktiengesellschaft). Following such change, the Rockwood Parties agree to
“squeeze-out” or take similar steps which would result in the acquisition or
other elimination of the partners’ interests in the Partnership not held by the
Rockwood Parties to the extent, under the legislation and circumstances at such
time, the Rockwood Parties reasonably determine, in consultation with the
Administrative Agent, that such exercise is commercially reasonable and would
not require the Rockwood Parties to take material legal risks under German law
or other unduly burdensome actions.

 

SECTION 2. Further Assurances. Each party agrees, upon the reasonable request of
any other party, at any time and from time to time, to execute and deliver all
such further documents and take such action as may be reasonably necessary or
appropriate in order to effectively confirm or carry out the provisions of this
Agreement. Any execution and delivery of documents by the Administrative Agent
contemplated by the immediately preceding sentence shall be without recourse to
or warranty by the Administrative Agent.

 

SECTION 3. Amendment. This Agreement may not be amended, modified or waived
except in writing signed by each party hereto.

 

SECTION 4. Successors and Assigns Beneficiaries. This Agreement shall be binding
on and inure to the benefit of the parties hereto and their respective
successors and assigns.

 

SECTION 5. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY AND INTERPRETED UNDER THE LAWS OF THE FEDERAL REPUBLIC OF
GERMANY.

 

SECTION 6. Execution of Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page to this
Agreement by facsimile or other electronic transmission shall be effective as
delivery of a manually executed counterpart hereof.

 

(Signature page follows)

 

2

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

 

EXHIBIT D

 

FORM OF GUARANTEE

 

GUARANTEE

 

GUARANTEE dated as of July 30, 2004, made among ROCKWOOD SPECIALTIES
INTERNATIONAL, INC., a Delaware corporation (“Holdings”), each of the
subsidiaries of ROCKWOOD SPECIALTIES GROUP, INC., a Delaware corporation (the
“US Borrower”), listed on Annex A hereto (each such subsidiary individually, a
“Subsidiary Guarantor” and, collectively, the “Subsidiary Guarantors”; the
Subsidiary Guarantors and Holdings are referred to collectively as the
“Guarantors”) and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands
Branch, as administrative agent (in such capacity, the “Administrative Agent”)
for the lenders (the “Lenders”) from time to time parties to the Credit
Agreement dated as of July 30, 2004 (as the same may be amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the US
Borrower, Rockwood Specialties Limited, a company incorporated under the laws of
England and Wales (the “UK Borrower” and, together with the US Borrower, the
“Borrowers”), Holdings, the Lenders, the Administrative Agent and UBS Securities
LLC and Goldman Sachs Credit Partners L.P., as co-syndication agents (in such
capacities, the “Co-Syndication 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 Borrowers and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the Borrowers (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 Borrowers or any of the Restricted
Subsidiaries;

 

WHEREAS, each Subsidiary Guarantor is a Domestic Subsidiary of the US Borrower;

 

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

 

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

 

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
Borrowers under the

 

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

 

Credit Agreement that the Guarantors shall have executed and delivered this
Guarantee to the Administrative Agent for the ratable benefit of the Secured
Parties;

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Co-Syndication 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
Borrowers under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the Borrowers and/or
the Restricted Subsidiaries, the Guarantors 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.

 

(b)           As used herein, the term “Closing Time” means 24:00 (German time)
on the Closing Date.

 

(c)           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 Borrowers 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, 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 Borrowers 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
Borrowers 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 other Credit Party
under or pursuant to this Guarantee 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.

 

2

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

 

(d)           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 Co-Syndication Agents, (vi) 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.

 

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

 

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

 

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

 

2.             Guarantee.

 

(a)           Subject to the provisions of Section 2(b) and effective
immediately upon the Closing Time, each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees, 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.

 

(b)           Anything herein or in any other Credit Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Credit Documents shall in no event exceed the amount that can be
guaranteed by such Guarantor under applicable laws relating to the insolvency of
debtors.

 

(c)           Each Guarantor further agrees to pay any and all expenses
(including all fees and disbursements of counsel) that may be paid or incurred
by the Administrative Agent or any other Secured Party in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, such Guarantor under this Guarantee.

 

(d)           Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing this Guarantee or affecting the rights and remedies of the
Administrative Agent or any other Secured Party hereunder.

 

(e)           No payment or payments made by the Borrowers, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the Administrative Agent or any other Secured Party from the Borrowers, any of
the Guarantors, any other guarantor or any

 

3

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

 

other Person by virtue of any action or proceeding or any set-off or
appropriation or application at any time or from time to time in reduction of or
in payment of the Obligations shall be deemed to modify, reduce, release or
otherwise affect the liability of any Guarantor hereunder, which shall,
notwithstanding any such payment or payments other than payments made by such
Guarantor in respect of the Obligations or payments received or collected from
such Guarantor in respect of the Obligations, remain liable for the Obligations
up to the maximum liability of such Guarantor hereunder until the Obligations
under the Credit Documents are paid in full, the Commitments are terminated and
no Letters of Credit shall be outstanding.

 

(f)            Each Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent or any other Secured
Party on account of its liability hereunder, it will notify the Administrative
Agent in writing that such payment is made under this Guarantee for such
purpose.

 

3.             Right of Contribution.  Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment.  Each Guarantor’s right of contribution
shall be subject to the terms and conditions of Section 5 hereof.  The
provisions of this Section 3 shall in no respect limit the obligations and
liabilities of any Guarantor to the Administrative Agent and the other Secured
Parties, and each Guarantor shall remain liable to the Administrative Agent and
the other Secured Parties for the full amount guaranteed by such Guarantor
hereunder.

 

4.             Right of Set-off.  In addition to any rights and remedies of the
Secured Parties provided by law, each Guarantor hereby irrevocably authorizes
each Secured Party at any time and from time to time following the occurrence
and during the continuance of an Event of Default without notice to such
Guarantor or any other Guarantor, any such notice being expressly waived by each
Guarantor, upon any amount becoming due and payable by such Guarantor hereunder
(whether at stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Secured Party to or for the credit or the account of such
Guarantor.  Each Secured Party shall notify such Guarantor promptly of any such
set-off and the appropriation and application made by such Secured Party,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.

 

5.             No Subrogation.  Notwithstanding any payment or payments made by
any of the Guarantors hereunder or any set-off or appropriation and application
of funds of any of the Guarantors by the Administrative Agent or any other
Secured Party, no Guarantor shall be entitled to be subrogated to any of the
rights of the Administrative Agent or any other Secured Party against the
Borrowers or any other Guarantor or any collateral security or guarantee or
right of offset held by the Administrative Agent or any other Secured Party for
the payment of the Obligations, nor shall any Guarantor seek or be entitled to
seek any contribution or reimbursement from the Borrowers or any other Guarantor
in respect of payments made by such Guarantor hereunder, until all amounts owing
to the Administrative Agent and the other Secured

 

4

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

 

Parties by the Credit Parties on account of the Obligations under the Credit
Documents are paid in full, the Commitments are terminated and no Letters of
Credit shall be outstanding.  If any amount shall be paid to any Guarantor on
account of such subrogation rights at any time when all the Obligations shall
not have been paid in full, such amount shall be held by such Guarantor in trust
for the Administrative Agent and the other Secured Parties, segregated from
other funds of such Guarantor, and shall, forthwith upon receipt by such
Guarantor, be turned over to the Administrative Agent in the exact form received
by such Guarantor (duly indorsed by such Guarantor to the Administrative Agent,
if required), to be applied against the Obligations, whether due or to become
due, in such order as the Administrative Agent may determine.

 

6.             Amendments, etc. with Respect to the Obligations; Waiver of
Rights.  Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, (a) 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) 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) 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, and (d) 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 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
Guarantee or any property subject thereto.  When making any demand hereunder
against any Guarantor, the Administrative Agent or any other Secured Party may,
but shall be under no obligation to, make a similar demand on the Borrowers or
any Guarantor or guarantor, and any failure by the Administrative Agent or any
other Secured Party to make any such demand or to collect any payments from the
Borrowers or any Guarantor or guarantor or any release of the Borrowers or any
Guarantor or guarantor shall not relieve any Guarantor in respect of which a
demand or collection is not made or any Guarantor 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 Guarantor.  For the purposes
hereof, “demand” shall include the commencement and continuance of any legal
proceedings.

 

7.             Guarantee Absolute and Unconditional.  Each Guarantor waives any
and all notice of the creation, contraction, incurrence, renewal, extension,
amendment, waiver or

 

5

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

 

accrual of any of the Obligations, and notice of or proof of reliance by the
Administrative Agent or any other Secured Party upon this Guarantee or
acceptance of this Guarantee, the Obligations or any of them, shall conclusively
be deemed to have been created, contracted or incurred, or renewed, extended,
amended, waived or accrued, in reliance upon this Guarantee; and all dealings
between the Borrowers and any of the Guarantors, on the one hand, and the
Administrative Agent and the other Secured Parties, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
this Guarantee.  Each Guarantor waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon the Borrowers or any
of the Guarantors with respect to the Obligations.  Each Guarantor understands
and agrees that this Guarantee shall be construed as a continuing, absolute and
unconditional guarantee of payment without regard to (a) the validity,
regularity or enforceability of the Credit Agreement, any other Credit Document,
any Letter of Credit or any Hedge Agreement, any of the Obligations or any other
collateral security therefor or guarantee or right of offset with respect
thereto at any time or from time to time held by the Administrative Agent or any
other Secured Party, (b) any defense, set-off or counterclaim (other than a
defense of payment or performance) that may at any time be available to or be
asserted by the Borrowers against the Administrative Agent or any other Secured
Party or (c) any other circumstance whatsoever (with or without notice to or
knowledge of the Borrowers or such Guarantor) that constitutes, or might be
construed to constitute, an equitable or legal discharge of the Borrowers for
the Obligations, or of such Guarantor under this Guarantee, in bankruptcy or in
any other instance.  When pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent and any other Secured Party may, but shall
be under no obligation to, pursue such rights and remedies as it may have
against the Borrowers or any other Person or against any collateral security or
guarantee for the Obligations or any right of offset with respect thereto, and
any failure by the Administrative Agent or any other Secured Party to pursue
such other rights or remedies or to collect any payments from the Borrowers or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrowers or any such other Person or any such collateral security, guarantee or
right of offset, shall not relieve such Guarantor of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Administrative Agent and the other
Secured Parties against such Guarantor.  This Guarantee shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon each Guarantor 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.  A Guarantor shall automatically be released from its obligations
hereunder and the Guarantee of such Guarantor shall be automatically released
upon the consummation of any transaction permitted by the Credit Agreement as a
result of which such Guarantor ceases to be a Domestic Subsidiary of the
Borrower.  In connection with any such release, the Administrative Agent shall
execute and deliver to any Guarantor, at such Guarantor’s expense, all documents
that such Guarantor shall reasonably request to evidence such termination or
release.  Any execution and delivery of documents pursuant to the preceding
sentence of this Section 7 shall be without recourse to or warranty by the
Administrative Agent.

 

6

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

 

8.             Reinstatement.  This Guarantee 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 the Borrowers or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrowers or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

 

9.             Payments.  Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the Administrative Agent’s Office.

 

10.          Representations and Warranties; Covenants.

 

(a)           Each Guarantor hereby represents and warrants that the
representations and warranties set forth in Section 8 of the Credit Agreement as
they relate to such Guarantor or in the other Credit Documents to which such
Guarantor is a party, each of which is hereby incorporated herein by reference,
are true and correct, and the Administrative Agent and each other Secured Party
shall be entitled to rely on each of them as if they were fully set forth
herein.

 

(b)           Each Guarantor hereby covenants and agrees with the Administrative
Agent and each other Secured Party that, from and after the date of this
Guarantee until the Obligations under the Credit Documents are paid in full, the
Commitments are terminated and no Letter of Credit remains outstanding, such
Guarantor shall take, or shall refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so that no violation of any
provision, covenant or agreement contained in Section 9 or 10 of the Credit
Agreement, and so that no Default or Event of Default, is caused by any act or
failure to act of such Guarantor or any of its Subsidiaries.

 

11.          Authority of Agent.  Each Guarantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Guarantee with
respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
Guarantee shall, as between the Administrative Agent and the other Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and such Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Guarantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

 

12.          Notices.  All notices, requests and demands pursuant hereto shall
be made in accordance with Section 14.2 of the Credit Agreement.  All
communications and notices hereunder to each Guarantor shall be given to it in
care of the US Borrower at the US Borrower’s address set forth in Section 14.2
of the Credit Agreement.

 

7

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

 

13.          Counterparts.  This Guarantee may be executed by one or more of the
parties to this Guarantee 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 Guarantee signed by all the parties shall be lodged with the
Administrative Agent and the US Borrower.

 

14.          Severability.  Any provision of this Guarantee 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.

 

15.          Integration.  This Guarantee represents the agreement of each
Guarantor and the Administrative Agent 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.

 

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

 

(a)           None of the terms or provisions of this Guarantee may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the affected Guarantor(s) and the Administrative Agent in accordance
with Section 14.1 of the Credit Agreement.

 

(b)           Neither the Administrative Agent nor any other Secured Party shall
by any act (except by a written instrument pursuant to Section 16(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 any Secured Party would otherwise have on any future occasion.

 

(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.

 

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

 

8

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

 

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

 

19.          Additional Guarantors.  Each Subsidiary of the US Borrower that is
required to become a party to this Guarantee pursuant to Section 9.11 of the
Credit Agreement shall become a Guarantor, with the same force and effect as if
originally named as a Guarantor herein, for all purposes of this Guarantee upon
execution and delivery by such Subsidiary of a Supplement in the form of Annex B
hereto.  The execution and delivery of any instrument adding an additional
Guarantor as a party to this Guarantee shall not require the consent of any
other Guarantor hereunder.  The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Guarantee.

 

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

 

21.          Submission to Jurisdiction; Waivers.  Each Guarantor hereby
irrevocably and unconditionally:

 

(a)           submits for itself and its property in any legal action or
proceeding relating to this Guarantee 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 Guarantor at
its address referred to in Section 12 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 21 any special, exemplary, punitive or consequential damages.

 

9

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

 

22.          GOVERNING LAW.  THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

10

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

 

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

 

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

 

ANNEX A

TO THE GUARANTEE

 

SUBSIDIARY GUARANTORS

 

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

 

ANNEX A

TO THE GUARANTEE

 

SUPPLEMENT NO. [  ] dated as of [            ], to the Guarantee dated as of
July 30, 2004, among ROCKWOOD SPECIALTIES INTERNATIONAL, INC., a Delaware
corporation (“Holdings”), each of the subsidiaries of ROCKWOOD SPECIALTIES
GROUP, INC., a Delaware corporation (the “US Borrower”) listed on Annex A
thereto (each such subsidiary individually, a “Subsidiary Guarantor”, and,
collectively, the “Subsidiary Guarantors”; the Subsidiary Guarantors and
Holdings are referred to collectively as the “Guarantors”) and CREDIT SUISSE
FIRST BOSTON, acting through its Cayman Islands Branch, as administrative agent
(in such capacity, the “Administrative Agent”) for the lenders to the Borrowers
(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 July 30, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Holdings, the US Borrower, Rockwood Specialties Limited, a
company incorporated under the laws of England and Wales, the Lenders from time
to time party thereto, the Administrative Agent and UBS Securities LLC and
Goldman Sachs Credit Partners L.P., as co-syndication agents (in such
capacities, the “Co-Syndication Agents”).

 

B.  Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Guarantee (or, if not defined
therein, in the Credit Agreement).

 

C.  The Guarantors have entered into the Guarantee in order to induce the
Administrative Agent, the Co-Syndication 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 Borrowers under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the Borrowers. 
Section 9.11 of the Credit Agreement and Section 19 of the Guarantee provide
that additional Subsidiaries may become Guarantors under the Guarantee by
execution and delivery of an instrument in the form of this Supplement.  Each
undersigned Subsidiary (each a “New Guarantor”) is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Guarantor
under the Guarantee 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 New Guarantor agrees as follows:

 

SECTION 1.  In accordance with Section 19 of the Guarantee, each New Guarantor
by its signature below becomes a Guarantor under the Guarantee with the same
force and effect as if originally named therein as a Guarantor and each New
Guarantor hereby (a) agrees to all the terms and provisions of the Guarantee
applicable to it as a Guarantor thereunder and (b) represents and warrants that
the representations and warranties made by it as a Guarantor thereunder are true
and correct on and as of the date hereof. Each reference to a Guarantor in the
Guarantee shall be deemed to include each New Guarantor.  The Guarantee is
hereby incorporated herein by reference.

 

SECTION 2.  Each New Guarantor represents and warrants to the Administrative
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.

 

SECTION 3.  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 US
Borrower and the Administrative Agent.  This Supplement shall become effective
as to each New Guarantor when the Administrative Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of such New Guarantor and the Administrative Agent.

 

SECTION 4.  Except as expressly supplemented hereby, the Guarantee shall remain
in full force and effect.

 

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

 

SECTION 6.  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 Guarantee, 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.  All notices, requests and demands pursuant hereto shall be made in
accordance with Section 14.2 of the Credit Agreement.  All communications and
notices hereunder to each New Guarantor shall be given to it in care of the
US Borrower at the US Borrower’s address set forth in Section 14.2 of the Credit
Agreement.

 

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

 

SECTION 8.  Each New Guarantor agrees to reimburse the Administrative Agent for
its out-of-pocket expenses in connection with this Supplement, including the
fees, disbursements and other charges of counsel for the Administrative Agent.

 

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

 

IN WITNESS WHEREOF, each New Guarantor and the Administrative Agent have duly
executed this Supplement to the Guarantee as of the day and year first above
written.

 

 

[NAME OF NEW GUARANTOR],

 

 

 

 

by

 

 

 

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

CREDIT SUISSE FIRST BOSTON,
acting through its Cayman Islands Branch, as Administrative Agent

 

 

 

 

 

 

by

 

 

 

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

 

 

 

 

 

by

 

 

 

 

 

 

 

 

Name:

 

 

 

 

Title:

 

 

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

 

EXHIBIT E-1

 

FORM OF ITALIAN GUARANTEE

 

 

Private & Confidential

 

Dated 30 July 2004

 

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

 

 

Rockwood Italia S.p.A.    (1)

 

 

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

 

GUARANTEE

 

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

 

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

 

Working translation into English

 

ContentsClausePage

 

1

Defined Terms

3

 

 

 

2

Guarantee

4

 

 

 

3

Right of Set-off

5

 

 

 

4

Effectiveness and Discharge of the Guarantee

6

 

 

 

5

Payments

6

 

 

 

6

Representations and Warranties; Covenants

6

 

 

 

7

Authority of the Administrative Agent

7

 

 

 

8

Notices

7

 

 

 

9

Severability

7

 

 

 

10

Amendments in Writing; No Waiver; Cumulative Remedies

8

 

 

 

11

Section Headings

8

 

 

 

12

Successors and Assigns

8

 

 

 

13

Jurisdiction

9

 

 

 

14

Governing Law

9

 

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

 

[LETTERHEAD OF ROCKWOOD ITALIA S.P.A.]

Milan 30 July 2004

 

Credit Suisse First Boston
Cayman Islands Branch
Eleven Madison Avenue
New York
New York 10010, USA

 

UBS Loan Finance LLC
677 Washington Boulevard
Stamford, Connecticut 06901, USA

 

Goldman Sachs Credit Partners L.P.
Clarendon House
2 Church Street
Hamilton
HM CX Bermuda

 

Dear Sirs,

 

Following our recent discussions, we hereby propose the constitution of a
guarantee in the terms and conditions set out in the following agreement (the
“Agreement”) dated [·1 made between:

 

(1)                                 Rockwood Italia S.p.A.”, a company
incorporated and existing under the laws of Italy, having its registered office
in Turin, Via Reiss Romoli no. 44/12, Italy, share capital of Euro 3,819,930,
fiscal code and number of registration in the Companies Register of Turin
02146370263, (the “Guarantor”), represented by the undersigned Mr. Gabriele
Ceracchi born in Spoleto (Italy), on 5 April 1952, and domiciled for the purpose
of this document in Turin, Via Reiss Romoli n. 44/12, in his capacity as
Chairman of the Board of Directors of the Guarantor authorised to execute the
present deed by virtue of the powers conferred to him by a resolution of the
Board of Directors meeting held on 30 July 2004 which is attached hereto sub
Annex A;

 

(2)                                 Credit Suisse First Boston, acting through
its Cayman Islands Branch, Eleven Madison Avenue, New York, New York 10010, USA
(hereafter the “Administrative Agent”) acting for the purposes of this Agreement
as Administrative Agent for the Secured Parties, as secured creditors and
beneficiaries of the pledge constituted by virtue of this Agreement, represented
by its agent Enrica Pagani, born in Codogno (LO), on 30 August 1974, domiciled
for the purposes of this Agreement in Piazza Diaz 1, Milan 20123 (Italy), duly
authorised to act in the capacity referred to below by virtue of a special power
of attorney, duly certified and apostilled, which is attached hereto Annex B;

 

(3)                                 UBS Loan Finance LLC, 677 Washington
Boulevard, Stanford, Connecticut 06901, USA (“UBS”), represented by its agent
Enrica Pagani, born in Codogno (LO), on 30 August 1974, domiciled for the
purposes of this Agreement in Piazza Diaz 1, Milan 20123 (Italy), duly
authorised to act in the capacity referred to below by virtue of a special power
of attorney, duly certified and apostilled, which is attached hereto Annex B;

 

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

 

(4)                                 Goldman Sachs Credit Partners L.P.,
Clarendon House, 2 Church Street, Hamilton, HM CX Bermuda (the “GS
Co-Syndication Agent”), represented by its agent Enrica Pagani, born in Codogno
(LO), on 30 August 1974, domiciled for the purposes of this Agreement in Piazza
Diaz 1, Milan 20123 (Italy), duly authorised to act in the capacity referred to
below by virtue of a special power of attorney, duly certified and apostilled,
which is attached hereto Annex B;

 

the Administrative Agent, UBS and the GS Co-Syndication Agent together the
“Beneficiaries”.

 

WHEREAS

 

(A)                               On 30 July 2004 a credit agreement (as the
same may be amended, supplemented, otherwise modified from time to time, the
“Credit Agreement”) has been entered into among (1) Rockwood Specialties Group
Inc., a Delaware corporation, (2) Rockwood Specialties Limited, as UK Borrower
(“UK Borrower”), (3) Rockwood Specialties International, Inc., a Delaware
corporation, (4) the lending institutions from time to time parties thereto
(collectively the “Lenders”), (5) Credit Suisse First Boston, acting through its
Cayman Islands branch as administrative agent and (6) the Co-Syndication Agents;

 

(B)                               Pursuant to the Credit Agreement, (a) the
Lenders have, inter alia, severally agreed to make Loans to, inter alia, the UK
Borrower and the Letter of Credit Issuer has agreed to issue Letters of Credit
for the account of the UK Borrower (collectively, the “Extensions of Credit”)
upon the terms and subject to the conditions set out in the Credit Agreement and
subject to the interest rate provided in Section 2.8 of the Credit Agreement and
repayable on the terms and conditions provided in Section 2.5 of the Credit
Agreement (b) one or more Lenders or Affiliates of Lenders may from time to time
enter into Hedge Agreements with the UK Borrower;

 

(C)                               The Guarantor is a Subsidiary of the US
Borrower;

 

(D)                               The proceeds of the Extensions of Credit will
be used in part to enable the UK Borrower to make valuable transfers to the
Guarantor in connection with the operation of their respective businesses;

 

(E)                                The Guarantor acknowledges that it will
derive substantial direct and indirect benefit from the making of the Extensions
of Credit; and

 

(F)                                 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 UK Borrower under the Credit Agreement
that the Guarantor shall have executed and delivered this guarantee to the
Administrative Agent, for itself and the rateable benefit of the Secured
Parties, UBS and the GS Co-Syndication Agent;

 

NOW, THEREFORE, in consideration of the recitals (which constitute an integral
and substantial part of this agreement, the “Agreement”) and to induce the
Administrative Agent, the Co-Syndication 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 UK Borrower under the Credit Agreement and to induce
one or more Lenders or Affiliates of Lenders to enter into Hedge Agreements with
the UK Borrower, the Guarantor hereby agrees guarantee the Secured Parties as
follows:

 

1                                         Defined Terms

 

1.1                               Unless otherwise defined herein, terms defined
in the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.

 

1.2                               As used herein, the term “Secured Obligations”
means the collective reference to:

 

(a)                                 the due and punctual payment of (i) 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) on the Loans,
extended to the UK Borrower, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by the UK Borrower under the Credit Agreement in
respect of any Letter of Credit, when and as due, and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding), of the UK Borrower or any other
Credit Party that is a Foreign Subsidiary of any of the Secured Parties under
the Credit Agreement and the other Credit Documents;

 

(b)                                 the due and punctual performance of all
covenants, agreements, obligations and liabilities of the UK Borrower under or
pursuant to the Credit Agreement and the other Credit Documents;

 

(c)                                  the due and punctual payment and
performance of all the covenants, agreements, obligations and liabilities of
each other Credit Party that is a Foreign Subsidiary under or pursuant to this
Agreement or the other Credit Documents;

 

(d)                                 the due and punctual payment and performance
of all obligations of the UK Borrower and each Credit Party that is a Foreign
Subsidiary under each Hedge Agreement that (i) 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 (ii) 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

 

(e)                                  the due and punctual payment and
performance of all obligations in respect of overdrafts and related liabilities
owed to the Secured Parties or their Affiliates by the UK Borrower or any other
Credit Party that is a Foreign Subsidiary, arising from or in connection with
treasury, depositary or cash management services or in connection with any
automated clearinghouse transfer of funds.

 

1.3                               “Secured Parties” means (i) the Lenders
(including UBS), (ii) the Letter of Credit Issuer, (iii) the Swingline Lender,
(iv) the Administrative Agent, (v) the Co-Syndication Agents

 

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

 

(including the GS Co-Syndication Agent), (vi) each counterparty to a Hedge
Agreement the obligations under which constitute Obligations, (vii) the
beneficiaries of each indemnification obligation undertaken by any Credit Party
under any Credit Document and (viii) any successors, indorsees, transferees and
assigns of each of the foregoing.

 

1.4                               References to “Lenders” in this Guarantee
shall be deemed to include Affiliates of Lenders that may from time to time
enter into Hedge Agreements with the UK Borrower.

 

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

 

2                                         Guarantee

 

2.1                               Subject to the provisions of Section 2.2, the
Guarantor hereby, unconditionally and irrevocably, guarantees, as primary
obligor and not merely as surety, to the Administrative Agent, for itself and
the rateable benefit of the Secured Parties, the GS Co-Syndication Agent and UBS
and their respective successors, indorsees, transferees and assigns, the prompt
and complete payment and performance of the Secured Obligations.

 

2.2                               The Guarantee is offered up to a maximum of
Euro 6,713,940.00 (six million seven hundred thirteen thousand nine hundred and
forty). Under no circumstances shall the Guarantor be required to make any
payment pursuant to the Guarantee if, with such payment the aforementioned
limits and amounts are exceeded.

 

2.3                               The Guarantor further agrees to pay any and
all expenses (including all fees and disbursements of counsel) that may be paid
or incurred by the Beneficiaries in enforcing, or obtaining advice of counsel in
respect of, any rights with respect to, or collecting, any or all of the Secured
Obligations and/or enforcing any rights with respect to, or collecting against,
the Guarantor under this Guarantee. Any taxes, fees or costs owed for the
signing or execution of this Guarantee shall be borne by the Guarantor.

 

2.4                               No payment or payments made by the UK
Borrower, the Guarantor, any other guarantor or any other Person or received or
collected by the Beneficiaries or any other Secured Party from the UK Borrower,
the Guarantor, any other guarantor or any other Person by virtue of any action
or proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Secured Obligations shall be
deemed to modify, reduce, release or otherwise affect the liability of the
Guarantor hereunder, which shall, notwithstanding any such payment or payments
other than payments made by the Guarantor in respect of the Secured Obligations
or payments received or collected from the Guarantor in respect of the Secured
Obligations, remain liable for the Secured Obligations up to the maximum
liability of the Guarantor hereunder until the Secured Obligations are paid in
full, the Commitments are terminated and no Letters of Credit drawn by the UK
Borrower shall be outstanding.

 

2.5                               The Guarantor agrees that whenever, at any
time, or from time to time, it shall make any payment to the Beneficiaries or
any other Secured Party on account of its liability

 

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

 

hereunder, it will notify the Beneficiaries in writing that such payment is made
under this Guarantee for such purpose.

 

2.6                               The Guarantor offers and creates such
Guarantee with formal waiver of any rights under article 1944 of the Italian
Civil Code, and shall remain jointly and severally bound with the UK Borrower
and the other obligors of the Secured Obligations.

 

3                                         Right of Set-off

 

In addition to any rights and remedies of the Beneficiaries provided by law, the
Guarantor hereby irrevocably authorizes the Beneficiaries at any time and from
time to time following the occurrence and during the continuance of an Event of
Default without notice to the Guarantor, any such notice being expressly waived
by the Guarantor, upon any amount becoming due and payable by the Guarantor
hereunder (whether at stated maturity, by acceleration or otherwise) to set-off
and appropriate and apply against such amount any and all deposits, in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the Beneficiaries to or for the credit
or the account of the Guarantor. The Beneficiaries shall notify the Guarantor
promptly of any such set-off and the appropriation and application made,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.

 

4                                         Effectiveness and Discharge of the
Guarantee

 

4.1                               This Guarantee shall remain in full force and
effect and be binding in accordance with and to the extent of its terms upon the
Guarantor and the successors and assigns thereof, and shall inure to the benefit
of the Beneficiaries and the other Secured Parties, and their respective
successors, indorsees, transferees and assigns, until all the Secured
Obligations and the Secured Obligations of the Guarantor under this Guarantee
shall have been satisfied by payment in full, the Commitments shall be
terminated and no Letters of Credit drawn by the UK Borrower 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
Secured Obligations.

 

4.2                               The Guarantor shall automatically be released
from its obligations hereunder and the Guarantee of the Guarantor shall be
automatically released upon the consummation of any transaction permitted by the
Credit Agreement as a result of which the Guarantor ceases to be a Subsidiary of
the US Borrower.

 

4.3                               In connection with any such release, the
Beneficiaries shall execute and deliver to the Guarantor, at the Guarantor’s
expense, all documents that the Guarantor shall reasonably request to evidence
such termination or release. Any execution and delivery of documents pursuant to
this Section 4.3 shall be without recourse to or warranty by the Beneficiaries.

 

4.4                               The Guarantor waives the benefits, rights and
exceptions pursuant to articles 1945, 1955 and 1957 of the Italian Civil Code.

 

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

 

5                                         Payments

 

The Guarantor hereby guarantees that payments hereunder will be paid to the
Administrative Agent without set-off or counterclaim in Dollars at the
Administrative Agent’s Office.

 

6                                         Representations and Warranties;
Covenants.

 

6.1                               The Guarantor is a company duly incorporated
and validly existing under Italian law. The Guarantor is not insolvent.

 

6.2                               The Guarantor’s balance sheets comply with the
laws in force and, in particular, represent, truthfully and accurately, the
assets and liabilities, financial position and the economic results for the
relevant period.

 

6.3                               The Guarantor hereby represents and warrants
that the representations and warranties set forth in Section 8 of the Credit
Agreement as they relate to the Guarantor or in the other Credit Documents to
which such Guarantor is a party are true and correct, and the Beneficiaries
shall be entitled to rely on each of them as if they were fully set forth
herein.

 

6.4                               The Guarantor hereby covenants and agrees with
the Beneficiaries that, from and after the date of this Guarantee until the
Obligations are paid in full, the Commitments are terminated and no Letter of
Credit drawn by the UK Borrower remains outstanding, the Guarantor shall take,
or shall refrain from taking, as the case may be, all actions that are necessary
to be taken or not taken so that no violation of any provision, covenant or
agreement contained in Section 9 or 10 of the Credit Agreement, and so that no
Default or Event of Default, is caused by any act or failure to act of the
Guarantor or any of its Subsidiaries.

 

7                                         Authority of the Administrative Agent

 

The Guarantor acknowledges that the rights and responsibilities of the
Administrative Agent under this Guarantee with respect to any action taken by
the Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Guarantee shall, as between the
Administrative Agent and the other Secured Parties, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Administrative Agent and the
Guarantor, the Administrative Agent shall be conclusively presumed to be acting
as agent for the Secured Parties with full and valid authority so to act or
refrain from acting, and Guarantor shall be under no obligation, or entitlement,
to make any inquiry respecting such authority.

 

8                                         Notices

 

All notices, requests and demands pursuant hereto shall be made in accordance
with Section 14.2 of the Credit Agreement. All communications and notices
hereunder to the

 

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

 

Guarantor shall be given to it in care of the UK Borrower at the UK Borrower’s
address set forth in Section 14.2 of the Credit Agreement. For the purposes of
this Agreement, the Beneficiaries elect domicile at the registered office of the
Administrative Agent.

 

9                                         Severability

 

9.1                               Any provision of this Guarantee 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.

 

9.2                               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.

 

10                                  Amendments in Writing; No Waiver; Cumulative
Remedies.

 

10.1                        None of the terms or provisions of this Guarantee
may be waived, amended, supplemented or otherwise modified except by a written
instrument executed by the Guarantor, the Beneficiaries in accordance with
Section 14.1 of the Credit Agreement.

 

10.2                        None of the Beneficiaries shall by any act (except
by a written instrument pursuant to Section 10.1 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 Beneficiaries, 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 Beneficiaries of any right or remedy hereunder on any one occasion
shall not be construed as a bar to any right or remedy that the Beneficiaries
would otherwise have on any future occasion.

 

10.3                        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.

 

11                                  Section Headings

 

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

 

12                                  Successors and Assigns

 

This Guarantee shall be binding upon the successors and assigns of the Guarantor
and shall inure to the benefit of the Beneficiaries and the other Secured
Parties and their respective successors and assigns except that the Guarantor
may not assign, transfer or

 

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

 

delegate any of its rights or obligations under this Guarantee without the prior
written consent of the Beneficiaries.

 

13                                  Jurisdiction

 

Unless otherwise established by law, the courts of Milan shall have exclusive
jurisdiction to settle any dispute between the parties which may arise out of or
in connection with this Guarantee. Nevertheless, nothing shall limit the right
of the Beneficiaries to initiate proceedings in any other competent court
pursuant to the current laws in force.

 

14                                  Governing Law

 

This guarantee and the rights and obligations of the parties hereunder shall be
governed by, and construed and interpreted in accordance with, the law of the
Republic of Italy.

 

 

Should you agree with the above, you are kindly requested to return a signed
copy of the text above as express acceptance of the terms and conditions therein
contained.

 

Yours faithfully,

 

 

Rockwood Specialties Group Inc.

 

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

 

EXHIBIT E-2

 

FORMS OF ITALIAN SHARE PLEDGE AGREEMENTS

 

Private & Confidential

 

 

Dated 30 July 2004

 

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

 

 

Rockwood Specialties Group, Inc. (1)

 

and

 

Credit Suisse First Boston, acting through its Cayman Islands Branch (2)

 

 

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

 

Share Pledge Agreement

 

(US OBLIGATIONS)

 

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

 

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

 

Contents

 

Clause

 

 

Page

 

 

 

 

1

Definitions

 

3

 

 

 

 

2

Pledge of the Shares

 

5

 

 

 

 

3

Secured Obligations

 

5

 

 

 

 

4

Registration of the Pledge

 

5

 

 

 

 

5

Representations and Warranties

 

5

 

 

 

 

6

Covenants by the Pledgor

 

6

 

 

 

 

7

Voting Rights and Dividends

 

7

 

 

 

 

8

Increased Share Capital

 

8

 

 

 

 

9

Enforcement

 

8

 

 

 

 

10

Proceeds

 

10

 

 

 

 

11

Effectiveness and Discharge of the Pledge

 

11

 

 

 

 

12

Authority of Administrative Agent

 

12

 

 

 

 

13

Miscellaneous

 

12

 

 

 

 

14

Notices

 

13

 

 

 

 

15

Governing Law and Jurisdiction

 

13

 

 

 

 

16

Power of Attorney

 

13

 

 

 

 

Schedule 1 Text of the registration of the pledge in the shareholder’s book of
the Company

 

14

 

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

 

[LETTERHEAD OF ROCKWOOD SPECIALTIES GROUP INC

 

Milan 30 July 2004

 

Credit Suisse First Boston
Cayman Islands Branch
Eleven Madison Avenue
New York
New York 10010, USA

 

UBS Loan Finance LLC
677 Washington Boulevard
Stamford, Connecticut 06901, USA

 

Goldman Sachs Credit Partners L.P.
Clarendon House
2 Church Street
Hamilton
HM CX Bermuda

 

Dear Sirs,

 

Following our recent discussions, we hereby propose the constitution of a pledge
in the terms and conditions set out in the following agreement (the “Agreement”)
dated 30 July 2004 made between:

 

(1)                                 Rockwood Specialties Group, Inc. (hereafter
the “Pledgor” or “US Borrower”), a Delaware corporation having its registered
office at Corporation Trust Centre, 1209 Orange Street, Newcastle County,
Delaware, USA with fully paid up share capital equal to US$343,988,000
registered in the State of Delaware, USA under no.3304314, represented by its
agent Adriana Lamberto Floristan, born in Pamplona (Spain), on 11
September 1973, domiciled for the purposes of this document in via Principe
Amadeo 3, 20121 Milan (Italy), duly authorised to act on behalf of Rockwood
Specialties Group, Inc. by virtue of special power of attorney, a certified
extract of which is reproduced under Annex A below;

 

(2)                                 Credit Suisse First Boston, acting through
Its Cayman Islands Branch, Eleven Madison Avenue, New York, New York 10010, USA
(hereafter the “Administrative Agent”), acting for the purposes of this
Agreement as Administrative Agent for the Secured Parties, as secured creditors
and beneficiaries of the pledge constituted by virtue of this Agreement,
represented by its agent Enrica Pagani, born in Codogno (LO), on 30 August 1974,
domiciled for the purposes of this Agreement in Piazza Diaz 1, Milan 20123
(Italy), duly authorised to act in the capacity referred to below by virtue of a
special power of attorney, duly certified and apostilled, which is attached
hereto Annex B;

 

(3)                                 UBS Loan Finance LLC, 677 Washington
Boulevard, Stamford, Connecticut 06901, USA (“UBS”), represented by its agent
Enrica Pagani, born in Codogno (LO), on 30 August 1974, domiciled for the
purposes of this Agreement in Piazza Diaz 1, Milan 20123 (Italy), duly

 

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

 

authorised to act in the capacity referred to below by virtue of a special power
of attorney, duly certified and apostilled, which is attached hereto Annex B;
and

 

(4)                                 Goldman Sachs Credit Partners L.P.,
Clarendon House, 2 Church Street, Hamilton, HM CX Bermuda (the “GS
Co-Syndication Agent”), represented by its agent Enrica Pagani, born in Codogno
(LO), on 30 August 1974, domiciled for the purposes of this Agreement in Piazza
Diaz 1, Milan 20123 (Italy), duly authorised to act in the capacity referred to
below by virtue of a special power of attorney, duly certified and apostilled,
which is attached hereto Annex B;

 

the Administrative Agent, UBS and the GS Co-Syndication Agent together the
“Beneficiaries”.

 

WHEREAS:

 

(A)                               On 30 July 2004 a credit agreement (as the
same may be amended, supplemented, otherwise modified from time to time, the
“Credit Agreement”) has been entered into among (1) the Pledgor, (2) Rockwood
Specialties Limited, as UK Borrower (“UK Borrower”), (3) Rockwood Specialties
International, Inc., a Delaware corporation, (4) the lending institutions from
time to time parties thereto (collectively the “Lenders”), (5) the
Administrative Agent and (6) the Co-Syndication Agents;

 

(B)                               Pursuant to the Credit Agreement, (a) the
Lenders have severally agreed to make Loans to, inter alia, the US Borrower, and
the Letter of Credit Issuer has agreed to issue Letters of Credit for the
account of the US 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 Borrowers;

 

(C)                               The Pledgor acknowledges that it will derive
substantial direct and indirect benefit from the making of the Extensions of
Credit;

 

(D)                               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 Borrowers under the Credit Agreement that the
Pledgor shall have executed and delivered this Agreement in favour of the
Administrative Agent, for itself and for the rateable benefit of the Secured
Parties, UBS and the GS Co-Syndication Agent;

 

(E)                                The Pledgor is the owner of 381,993 shares
(the “Shares”) of Euro 10 each, representing 100% of the paid up share capital
of Rockwood Italia S.p.A. (the “Company”) having its registered office at Via G.
Reiss Romoli, 44/12, Turin, Italy, Tax Code 02146370263 and registered at the
Company Registry of Turin as No. 286520/1997, with issued and paid up share
capital in the amount of Euro 3,819,930; and

 

(F)                                 The Pledgor, under the terms of this
Agreement, intends to secure all of the Secured Obligations (as defined below)
granting a pledge over part of its Shares (the Collateral, as defined below) in
the Company.

 

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

 

Now, therefore, having acknowledged that the above recitals and the attachments
hereto constitute an integral and substantial part of this Agreement, it is
hereby agreed and stipulated as follows:

 

1                                         Definitions

 

1.1                               Definitions

 

The following terms in this Agreement shall have the meanings set forth below,
unless the context otherwise requires:

 

“Collateral” means 248,295 shares of Euro 10 each for a total of Euro 2,482,950,
equal to 65% of the Shares and registered in the Company’s shareholders’ book in
the name of the Pledgor. The word Collateral also includes all relevant rights
deriving therefrom and, in particular:

 

(i)                                     dividends, cash, stocks and shares and
any benefit arising either in connection with or in exchange for the shares
constituting Collateral;

 

(ii)                                  option or first refusal rights and any
other rights of whatever nature exercised or to be exercised in connection with
or in exchange for the Collateral;

 

(iii)                               any amount accruing on the Collateral in
favour of the Pledgor and any other option rights, dividends, cash received or
to be received, or distributed or to be distributed, in connection with or in
exchange for the Collateral;

 

For the avoidance of doubt, unless the context otherwise requires “Collateral”
should include any additional shares in the Company (and the relevant rights
deriving therefrom) required to be pledged hereunder pursuant to Section 8
hereof.

 

“Secured Obligations” means the collective reference to:

 

(i)                                     the due and punctual payment of (i) 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) on the Loans,
when and as due, whether at maturity, by acceleration, upon one or more dates
set for prepayment or otherwise, (ii) each payment required to be made by the
Borrowers under the Credit Agreement in respect of any Letter of Credit, when
and as due, and (iii) all other monetary obligations, including fees, costs,
expenses and indemnities, whether primary, secondary, direct, contingent, fixed
or otherwise (including monetary obligations incurred during the pendency of any
bankruptcy, insolvency, receivership or other similar proceeding), of the
Borrowers or any other Credit Party under the Credit Agreement and the other
Credit Documents;

 

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

 

(ii)                                  the due and punctual performance of all
covenants, agreements, obligations and liabilities of the Borrowers 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 other
Credit Party under or pursuant to this Agreement or the other Credit Documents;

 

(iv)                              the due and punctual payment and performance
of all obligations of each Credit Party under each Hedge Agreement that (i) 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 (ii) 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
Secured Parties or their Affiliates arising from or in connection with treasury,
depositary or cash management services or in connection with any automated
clearinghouse transfer of funds.

 

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

 

1.2                               Successors and assignees

 

References to each of the parties to this Agreement and to the Secured Parties,
includes references to his successors, transferees or assignees.

 

1.3                               Headings

 

Clause headings and the table of contents are inserted for convenience of
reference only and shall be ignored in the interpretation of this Agreement.

 

1.4                               Construction of certain terms

 

In this Agreement, including the premises, unless the context otherwise
requires:

 

(a)                                 references to the time of day are to Italian
time; and

 

(b)                                 References to “Lenders” in this Agreement
shall be deemed to include Affiliates of Lenders that may from time to time
enter into Hedge Agreements with the Borrowers;

 

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

 

1.5                               Credit Agreement definitions

 

Unless the context otherwise requires or unless otherwise defined in this
Agreement, words and expressions defined in the Credit Agreement shall have the
same meaning when used in this Agreement.

 

2                                         Pledge of the Shares

 

The Pledgor, with full title and as full owner of the Collateral, hereby pledges
to the Administrative Agent, for itself and for the rateable benefit of the
Secured Parties, UBS and the GS Co-Syndication Agent, the Collateral (numbering
248,295 shares of Euro 10 each for the aggregate amount of Euro 2,482,950
representing 65% of the paid up share capital of the Company) represented by
share certificate no. 7 (the “Certificate”). The Beneficiaries accept such
pledge.

 

3                                         Secured Obligations

 

3.1                               The pledge rights hereby created secure the
payment of all the Secured Obligations of each Credit Party.

 

4                                         Registration of the Pledge

 

4.1                               The Pledgor agrees and undertakes to:

 

(a)                                 no later than Monday, 2 August 2004, endorse
the Certificate, authenticated by a notary or other qualified individual, in
favour of the Administrative Agent, for itself and for the rateable benefit of
the Secured Parties, UBS and the GS Co-Syndication Agent and to deliver such
Certificate to the Administrative Agent for the purposes of article 2786,
paragraph 2 of the Italian Civil Code.

 

(b)                                 within 5 (five) days of the execution of
this Agreement, register the pledge in the shareholders’ book of the Company in
the form as provided in Schedule 1 of this Agreement and to deliver to the
Administrative Agent a copy of the pages of the shareholders’ book of the
Company evidencing such registration, certified as a conformed copy of the
original by a public notary.

 

5                                         Representations and Warranties

 

5.1                               Representations and warranties

 

The Pledgor hereby represents and warrants to the Beneficiaries that:

 

(a)                                 Title to Collateral

 

The Pledgor is the sole registered and beneficial owner of, and has full title
to the Collateral. Such Collateral are free from any encumbrance (other than the
pledge created herein) and are not, nor shall they be, subject to any third
party rights;

 

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

 

(b)                                 Release of the Shares

 

The Collateral have been duly subscribed and paid up.

 

(c)                                  Security

 

The execution and delivery by the Pledgor of this Agreement and the charge of
the Collateral by the Pledgor hereunder create a valid and perfected
first-priority charge over the Collateral, securing the payment of the Secured
Obligations, in favour of the Administrative Agent, for itself and for the
rateable benefit of the Secured Parties, UBS and the GS Co-Syndication Agent.

 

(d)                                 Authority

 

The Pledgor has full power, authority and legal right to charge all the
Collateral pursuant to this Agreement.

 

(e)                                  Binding obligations

 

This Agreement creates valid and legally binding obligations for the Pledgor and
does not violate any law of Italy, Delaware or any other State of the United
States of America, nor any judgement, order, legal or administrative measure or
any obligation assumed by the Company or by the Pledgor.

 

6                                         Covenants by the Pledgor

 

6.1                               Continuing covenants

 

6.1.1                     The Pledgor 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 and other documents), which may be required under any
applicable law, or which the Beneficiaries or the Required Lenders may
reasonably request, in order to (v) perfect and protect any pledge, assignment
or security interest granted or purported to be granted hereby (including the
priority thereof) or (y) enable the Beneficiaries to exercise and enforce their
rights and remedies hereunder with respect to any Collateral, all at the expense
of the Pledgor.

 

6.1.2                     The 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 Agreement, provided that in the event the Pledgor sells or
otherwise disposes of assets as permitted by the Credit Agreement and such
assets are or include any of the Collateral, the Beneficiaries shall release
such Collateral free and clear of the Lien under this Agreement concurrently
with the consummation of such sale; and

 

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

 

(b)                                 defend its and the Beneficiaries 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 Agreement), however arising, and any
and all Persons whomsoever.

 

6.1.3                     The Pledgor shall, on request of the Beneficiaries,
execute one or more additional pledge agreements, further to this Agreement,
should the Company transform itself into a società a responsabilità limitata
(company limited by quotas) or into any other type of company, with continuation
of the pledge on the share capital represented by quotas or shares, different
from the Collateral pledged herein, without novation of this Agreement, in whole
or in part, and with express consent of the Pledgor, hereby granted, so as to
have such additional share pledge agreements effective, to the extend possible
under the law, as of the date of this Agreement.

 

7                                         Voting Rights and Dividends

 

7.1                               The Beneficiaries agree with the Pledgor that
so long as no Event of Default shall have occurred and be continuing:

 

(a)                                 The 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 the terms of this Agreement
or the other Credit Documents.

 

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

 

(c)                                  The Pledgor shall receive from the
Administrative Agent, also in the name of an on behalf of the other
Beneficiaries, the admission ticket in order to participate in the ordinary and
extraordinary shareholders’ meetings pursuant to article 2370 of the Italian
Civil Code.

 

7.2                               Subject to Section 9.1 below, the Pledgor
shall be entitled to receive and retain and use, free and clear of the lien of
this Agreement, any and all dividends and distributions made or paid in respect
of the Collateral to the extent permitted by the Credit Agreement.

 

8                                         Increased Share Capital

 

8.1                               In the case of an increase in share capital of
the Company, both free and paid, the pledge created hereby shall extend to the
shares of the Pledgor issued and subscribed in connection with such increase in
share capital, provided that the percentage of the shares subject to the pledge
does not exceed 65% of the capital of the new issue.

 

8.2                               In such case, the Pledgor hereby undertakes
to:

 

(a)                                 note the existence of the pledge in favour
of the Administrative Agent, for itself and for the rateable benefit of the
Secured Parties, UBS and the GS Co-

 

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

 

Syndication Agent on the share certificates of the shares covered by the pledge,
upon their issuance, by means of a guaranteed endorsement authenticated by a
notary in favour of the Administrative Agent, for itself and for the rateable
benefit of the Secured Parties, UBS and the GS Co-Syndication Agent and to
deliver such certificates to the Administrative Agent, or to one of its Italian
subsidiaries, for the purposes pursuant to article 2786, paragraph 2 of the
Italian Civil Code.

 

(b)                                 register in the Company’s shareholders’
book, in the form provided in Attachment 1 of this Agreement, the pledge over
the shares of the Pledgor issued following the increase in share capital; and

 

(c)                                  deliver to the Administrative Agent a copy
of the pages of the Company’s shareholders’ book evidencing such registration,
certified as a conformed copy of the original by a notary public.

 

8.3                               The pledge rights over the shares of the
Pledgor following any increase in share capital of the Company, as provided for
in this Section, are understood to be the same pledge rights as created pursuant
to this Agreement and shall be subject to the same terms as contained herein.

 

9                                         Enforcement

 

9.1                               Upon the occurrence and during the continuance
of an Event of Default:

 

(a)                                 all rights of the Pledgor to exercise or
refrain from exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 7.1(a) shall cease, and
all such rights shall thereupon become vested in the Beneficiaries, who 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
Beneficiaries shall have the right from time to time following the occurrence
and during the continuance of an Event of Default to permit the Pledgor to
exercise such rights. After all Events of Default have been cured or waived and
the Pledgor has delivered to the Administrative Agent a certificate to that
effect, the Pledgor will have the right to exercise the voting and consensual
rights that the Pledgor would otherwise be entitled to exercise pursuant to the
terms of Section 7.1(a);

 

(b)                                 all rights of the Pledgor to receive the
dividends and distributions that the Pledgor would otherwise be authorized to
receive and retain pursuant to Section 7.2 shall cease, and all such rights
shall thereupon become vested in the Beneficiaries, who shall thereupon have the
sole rights to receive and hold as collateral security for the Secured
Obligations such dividends and distributions during the continuance of such
Event of Default. After all Events of Default have been cured or waived and the
Pledgor has delivered to the Administrative Agent a certificate to that effect,
the Beneficiaries shall repay to the Pledgor (without interest) all dividends

 

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

 

and distributions that the Pledgor would otherwise be permitted to receive,
retain and use pursuant to the terms of Section 7.2;

 

(c)                                  all dividends and distributions that are
received by the Pledgor contrary to the provisions of Section 7.2 of this
Agreement shall be segregated from other property or funds of the Pledgor and
shall forthwith be delivered to the Beneficiaries as collateral security for the
Secured Obligations in the same form as so received (with any necessary
indorsements); and

 

(d)                                 in order to permit the Beneficiaries to
receive all dividends and distributions to which they may be entitled under
Section 7.2 of this Agreement, to exercise the voting and other consensual
rights that they may be entitled to exercise pursuant to Section 9.1(a) above,
and to receive all dividends, distributions and principal that they may be
entitled to under Sections 9.1(b) and (c) above, the Pledgor shall, if
necessary, upon written notice from the Administrative Agent, from time to time
execute and deliver to the Beneficiaries, appropriate proxies, dividend payment
orders and other instruments as the Administrative Agent may reasonably request.

 

(e)                                  The Beneficiaries and any nominee of the
Beneficiaries may exercise in respect of all or any of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of the registered holder of the Collateral
and may sell the Collateral or any part thereof at public or private sale, at
any exchange broker’s board or at any of the Beneficiaries’ 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 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. The Beneficiaries 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.

 

(f)                                   The Beneficiaries may exercise any and all
rights and remedies of the Pledgor in respect of the Collateral.

 

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

 

9.2                               The Administrative Agent shall not be entitled
to sell, transfer or request the transfer of the Collateral to itself until the
Pledgor has received at least five days’ notice of the decision to sell,
together with the demand to the UK Borrower and the US Borrower to pay the sums
owed pursuant to the Credit Agreement. In derogation from the provisions of
article 2797, paragraph one of the Italian Civil Code, the Pledgor agrees that
the

 

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

 

demand for payment to the UK Borrower shall conform to that provided for in
Section 14.2 of the Credit Agreement for notification of legal documents.

 

9.3                               Unless otherwise provided in this Section 9,
the provisions of Article 2797 of the Civil Code shall apply.

 

10                                  Proceeds

 

10.1                        Use of proceeds

 

Any sum resulting from the sale of the Collateral shall be applied by the
Beneficiaries:

 

(a)                                 first, to the payment of all reasonable and
documented costs and expenses incurred by the Beneficiaries in connection with
such collection or sale or otherwise in connection with this Agreement, the
other Credit Documents or any of the Secured 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 Beneficiaries 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;

 

(b)                                 second, to the Secured Parties, an amount
equal to all Secured 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

 

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

 

11                                  Effectiveness and Discharge of the Pledge

 

11.1                        This Agreement and the obligations of the Pledgor
under this Agreement shall:

 

(a)                                 be effective only from 31 July 2004 at 24:00
hours;

 

(b)                                 be in addition to, and without prejudice to
or in conflict with any other additional guarantees or security, obligation,
right or remedy, present or future, existing or available to the Beneficiaries;

 

(c)                                  not be superseded or in any way prejudiced
or affected by the existence of any such additional guarantee or security,
obligation, right or remedy, nor are they, wholly or in part, in any way null,
void or unenforceable by the Beneficiaries in the event that the Beneficiaries
negotiate, transfer, abandon, modify or fail to perfect or to execute any of the
aforementioned additional guarantees or security,

 

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

 

obligations, rights, remedies or agrees terms for fulfilment, extension or
compromises with any other party.

 

11.2                        Subject to clause 11.3, this Agreement and the
obligations of the Pledgor under this Agreement shall remain in full force and
effect and be binding in accordance with its terms upon the Pledgor, and shall
inure to the benefit of the Administrative Agent, for itself and for the
rateable benefit of the Secured Parties, UBS and the GS Co-Syndication Agent
until all the Secured Obligations under the Credit Documents shall have been
satisfied by payment in full, the Commitments shall be terminated and no Letters
of Credit drawn by the UK Borrower and the US Borrower 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 Secured
Obligations

 

11.3                        Upon any sale or other transfer by the Pledgor of
any Collateral that is permitted under the Credit Agreement, or upon the
effectiveness of any written consent to the release of pledge hereby created
over any Collateral pursuant to Section 14.1 of the Credit Agreement, the
Beneficiaries shall (a) release the pledge created hereby over such Collateral
and (b) at the Pledgor’s expenses, perform all the acts and formalities that are
necessary for the purpose of such release. Any execution and delivery of
documents by the Beneficiaries pursuant to Clause 11 shall be without recourse
or warranty by the Beneficiaries.

 

12                                  Authority of Administrative Agent

 

The Pledgor acknowledges that the rights and responsibilities of the
Administrative Agent under this Agreement with respect to any action taken by
the Administrative Agent or the exercise or non-exercise by the Administrative
Agent of any option, right, request, judgment or other right or remedy provided
for herein or resulting or arising out of this Agreement shall, as between the
Administrative Agent and the other Secured Parties, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Administrative Agent and the
Pledgor, the Administrative Agent shall be conclusively presumed to be acting as
agent for the Secured Parties with full and valid authority so to act or refrain
from acting, and Pledgor shall be under no obligation, or entitlement, to make
any inquiry respecting such authority.

 

13                                  Miscellaneous

 

13.1                        Amendment and Modification

 

No modification of any type made to this Agreement shall be effective among the
parties unless undertaken in writing by the parties in accordance with
Section 14.1 of the Credit Agreement, and no waiver of any provision of this
Agreement and no consent to any departure by the Pledgor therefrom, shall be
effective unless made in writing and signed by the Beneficiaries and, in any
event, such waiver or consent shall be effective only in the specific instance
and for the specific purpose for which it was given.

 

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

 

13.2                        Cumulative Remedies

 

No omission or delay on the part of the Beneficiaries to exercise any power,
right or remedy under this Agreement, shall operate as a waiver thereof nor
shall any single or any partial exercise or waiver of any power, right or remedy
preclude its further exercise or the exercise of any other power, right or
remedy.

 

13.3                        Severability

 

Each of the provisions of this Agreement is severable and distinct from the
others and, as such, if at any time one or more of such provisions is or becomes
invalid, illegal or unenforceable the validity, legality and enforceability of
the remaining provisions of this Agreement shall not in any way be affected or
impaired thereby. 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.

 

13.4                        Applicable Costs

 

Any tax, fee or cost owed for the signing or execution of this Agreement,
including any expenditure for formalities related to the pledge as well as for
all necessary notarised or otherwise authenticated copies, shall be borne by the
Pledgor.

 

14                                  Notices

 

All notices, requests and demands pursuant hereto shall be made in accordance
with Section 14.2 of the Credit Agreement. For the purposes of this Agreement,
the Beneficiaries elect domicile at the registered office of the Administrative
Agent.

 

15                                  Governing Law and Jurisdiction

 

15.1                        Law

 

This Agreement shall be governed by the laws of the Republic of Italy.

 

15.2                        Jurisdiction

 

Any dispute which may arise in connection with this Agreement is subject to the
exclusive jurisdiction of the Milan courts. Nothing in this clause shall limit
the right of the Beneficiaries to take any legal action or proceedings in any
other competent Court.

 

16                                  Power of Attorney

 

The Pledgor hereby appoints, which appointment is irrevocable and coupled with
an interest, the Administrative Agent as the Pledgor’s attorney, with full
authority in the place and stead of the Pledgor and in the name of the Pledgor
or otherwise to take any action and to execute any instrument, 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 Agreement, including to receive, indorse and collect all
instruments made payable to the Pledgor representing any

 

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

 

dividend or distribution payment in respect of the Collateral or any part
thereof and to give full discharge for the same.

 

 

Rockwood Specialities Group, Inc.

 

 

 

 

 

 

 

 

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

 

Schedule 1
Text of the registration of the pledge in the shareholder’s book of the Company

 

It is hereby acknowledged that Rockwood Specialities Group, Inc. (the “Pledgor”)
whose registered office is at Corporation Trust Centre, 1209 Orange Street,
Newcastle County, Delaware, USA, owner of 248,295, shares (the “Shares”) in
Rockwood Italia S.p.A. (the “Company”) with registered office in Turin, Via
Reiss Romoli, 44/12, with a par value of Euro 10 each, representing 65% of the
paid up share capital of the Company, by virtue of a pledge agreement executed
on [·] (the “Agreement”), with endorsement dated [·1 certified under the hand
and seal of the notary [·] in Milan, has pledged in favour of Credit Suisse
First Boston, acting through its Cayman Islands Branch (the “Administrative
Agent”) for itself and for the benefit of the Secured Parties (as defined in the
Agreement), UBS Loan Finance LLC and Goldman Sachs Credit Partners L.P. its
Shares in the Company, to secure the performance of the Secured Obligations (as
defined in the Agreement) arising from the Credit Agreement (as defined in the
Agreement) executed on 30 July 2004.

 

The pledge constituted by the Agreement will be extended to the shares owned by
the Pledgor or its beneficiaries as a result of any increased share capital of
the Company, free or paid.

 

The voting rights connected to the Shares shall be exercised pursuant to
Section 7 of the Agreement.

 

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

 

ATTO DI COSTITUZIONE DI PEGNO SU MARCHIO

 

II presente contratto (di seguito I “Atto”) a datato 30 luglio 2004 e viene
stipulato tra:

 

(1) Rockwood Italia S.p.A. (qui di seguito identificata come it “Costituente
Pegno”), con sede legale in Torino, via Guglielmo Reiss Romoli n. 44/12,
capitale sociale di euro 3.819.930,00.= interamente versato, codice fiscale e
numero di iscrizione presso it registro delle imprese di Torino 02146370263, in
persona del signor Gabriele Ceracchi, nato a Spoleto (Perugia) it 5 aprile 1952,
domiciliato per gli effetti del presente Atto a Torino, via Guglielmo Reiss
Romoli n. 44/12, nella sua qualita di presidente del consiglio di
amministrazione del Garante, al presente atto autorizzato in virtu dei poteri a
lui conferiti con delibera del consiglio di amministrazione del 30 luglio 2004;
e

 

(2) Credit Suisse First Boston, con sede legale in Uetlibergstrasse, CH 8070
Zurich, Svizzera che agisce per it tramite della sua sede secondaria delle (sole
Cayman, Eleven Madison Avenue, New York, New York 10010, elettivamente
domiciliata ai fini del presente Atto in Italia a Milano, piazza Diaz n. 1,
codice fiscale 97382310155, che agisce ai fini del presente Atto in qualita di
admistrative agent delle Parti Garantite, in qualita di creditori garantiti e
beneficiari del pegno costituito in forza del presente Atto (qui di seguito
identificata come l’”Administrative Agent”), in persona del suo procuratore
speciale signora Enrica Padani, nata a Codogno (Lodi) it 30 agosto 1974,
domiciliata per gli effetti del presente Atto in Milano, piazza Diaz 1,
debitamente autorizzata ad agire per quanto infra in forza di procura speciale
autenticata in data 27 luglio 2004 dal Notaio Marjorie E. Bull dello Stato di
New York (Stati Uniti d’America), depositata con atto in data 30 luglio 2004 a
rogito Notaio Renato Giacosa al numero 42.047/6.383 di repertorio;

 

(3) UBS Loan Finance LLC, 677 Washington Boulevard, Stamford, Connecticut 06901,
USA, elettivamente domiciliata ai fini del presente Atto in Italia a Milano,
piazza Diaz n. 1, codice fiscale 97382320154 (d’ora in poi “UBS”), societa che
agisce ai fini del presente atto in qualità di Finanziatore, in persona del suo
procuratore speciale signora Enrica Pagani, sullodata, debitamente autorizzata
ad agire per quanto infra in forza di procura speciale autenticata in data 27
luglio 2004 dal Notaio Denise Conzo di Stamford — Connecticut (Stati Uniti
d’America), depositata con atto in data 30 luglio 2004 a rogito Notaio Renato
Giacosa al numero 42.047/6.383 di repertorio;

 

(4) Goldman Sachs Credit Partners L.P., Clarendon House, 2 Church Street,
Hamilton, HM CX_ Bermuda, elettivamente domiciliata ai fini del presente Atto in
Italia a Milano, piazza Diaz n.1, codice fiscale 97382330153 (il “GS
Co-Syndication Agent”), in persona del suo pro uratore special signora Enrica
Pagani, sullodata, debitamente autorizzata ad agire per quanto infra in forza di
procura speciale autenticata in data 27 luglio 2004 dal Notaio Catherina Kim
dello Stato di New York (Stati Uniti d’America), depositata con atto in data 30
luglio 2004 a rogito Notaio Renato Giacosa al numero 42.047/6.383 di repertorio;

 

(l’Administrative Agent, UBS e il GS Co-Syndication Agent d’ora in poi
collettivamente i “Beneficiari”)

 

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

 

PREMESSO CHE

 

(A)  In data 30 luglio 2004 é stato sottoscritto un contratto di finanziamento
per un ammontare fino ad euro 931.762.400,00.=
(novecentotrentunomilionisettecentosessantaduemilaquattro-cento virgola zero
zero) e per un ammontare fino a USDollari 1.585.000.000,00.=
(unmilardocinquecentoottantacinquemilioni) (come lo stesso potrebbe essere
integrato o comunque modificato di volta in volta, il “Credit Agreement”) tra:
(1) Rockwood Specialities Group, Inc., societa costituita secondo it diritto
dello Stato del Delaware; (2) Rockwood Specialties Limited, societa costituita
secondo it diritto inglese (“UK Borrower”); (3) Rockwood Specialties
International, Inc., societa costituita secondo tl diritto dello Stato del
Delaware; (4) gli istituti di credito che di volta in volta saranno parti del
Credit Agreement in qualita di finanziatori (compreso UBS) (i “Finanziatori”);
(5) Credit Suisse First Boston, per it tramite della sua sede secondaria delle
Isole Cayman, in qualita di administrative agent (l “Administrative Agent”) e
(6) i Co-Syndication Agents (compreso il GS Co-Syndication Agent);

 

(B)  Ai sensi del Credit Agreement, (a) i Finanziatori hanno disgiuntamente
concordato di concedere alcuni Finanziamenti in favore, tra l’altro, di UK
Borrower, e I’Emittente di Lettere di Credito ha concordato di emettere Lettere
di Credito a favore di UK Borrower (il Finanziamento e le Lettere di Credito
d’ora in poi collettivamente indicati come “Estensioni del Credito”), nei
termini ed alle condizioni previste dal Credit Agreement e (b) uno o pit) dei
Finanziatori o Societa Collegata ai Finanziatori stessi, potranno di volta in
volta stipulare dei Contratti di Hedge con il UK Borrower;

 

(C)  Le Estensioni del Credito saranno usate in parte per consentire a UK
Borrower di effettuare trasferimenti di valore a favore del Costituente Pegno in
connessione alle esigenze derivanti dalla sua rispettiva attivita commerciale,
ragion per cui it Costituente Pegno beneficera direttamente ed indirettamente
dall’erogazione dell’Estensioni del Credito;

 

(D)  II Costituente Pegno a proprietario del seguente marchio italiano n. 380597
denominato SILO S (di seguito it “Marchio” o la “Garanzia”);

 

(E)  Gli obblighi dei Finanziatori e dell’Emittente delle Lettere di Credito di
concedere le proprie rispettive Estensioni del Credito in favore dell’ UK
Borrower ai sensi del Credit Agreement sono subordinati alla stipula ed alla
consegna, da parte del Costituente Pegno, del presente Atto in favore
dell’Administrative Agent, nell’interesse proprio e nell’interesse pro quota
delle Parti Garantite, e in favore di UBS e del GS Co-Syndication Agent;

 

TUTTO CIO PREMESSO e dato atto che le suesposte premesse costituiscono parte
integrante e sostanziale del presente Atto, si stipula quanto segue:

 

1              Definizioni

 

1.1                                 Salvo ove diversamente definito dal presente
Atto, parole ed espressioni definite nel Credit Agreement hanno tl medesimo
significato quando usate nel presente Atto.

 

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

 

1.2                                 Quando usato nel presente atto,
“Obbligazioni Garantite” indica, collettivamente:

 

(a)                                  tl puntuale rimborso (i) del capitale e
dell’eventuale premio, ove esistente, e it pagamento degli interessi al tasso
applicabile ai sensi del Credit Agreement (compresi gli interessi maturati in
pendenza di procedure fallimentari, concorsuali, di amministrazione controllata
o altra procedura analoga) su tutti i Finanziamenti concessi al UK Borrower
quando e secondo le modalita in cui sono dovuti, o a scadenza, o a seguito di
rimborso anticipato, alla data o alle date nelle quali a prevista la possibility
di effettuare tl rimborso anticipato o diversamente, (ii) it pagamento di tutto
quanto dovuto dal UK Borrower ai sensi del Credit Agreement in relazione alle
Lettere di Credito quando e secondo le modalita dovute, e (iii) tutte le altre
obbligazioni di tipo monetario, ivi compresi gli onorari, i costi, le spese e le
indennita, di tipo primario, secondario, diretto, contingente, fisse o altro
(ivi comprese le obbligazioni monetarie sostenute durante Ia pendenza di ogni
procedura fallimentare, concorsuale, di amministrazione controllata, o altra
procedure analoga), del UK Borrower o di ogni altra Credit Party the a una
Foreign Subsidiary di una delle Parti Garantite ai sensi del Credit Agreement e
degli altri Documenti di Credito;

 

(b)                                 it puntuale adempimento di tutte le
pattuizioni, accordi, obbligazioni ed impegni del UK Borrower ai sensi di o in
form del Credit Agreement e degli altri Documenti di Credito;

 

(c)                                  tl puntuale pagamento ed adempimento di
tutte le pattuizioni, accordi, obbligazioni ed impegni di ogni altra Credit
Party the a una Foreign Subsidiary, ai sensi di o in forza del presente Atto o
degli altri Documenti di Credito;

 

(d)                                 tl puntuale pagamento e adempimento di tutti
gli obblighi del UK Borrower e di ciascuna Credit Party che sia una Foreign
Subsidiary secondo Ia definizione contenuta in ciascun Contratto di Hedge che
(i) siano in essere ally Data del Closing nei confronti di una controparte che e
un Finanziatore o una Societe Collegate a un Finanziator del Closing, o
(ii) siano stipulate dopo la Data del Closing con una un controparte che e un
Finanziatore o una Societe Collegata a un Finanziatore nel momen in cur detto
Contratto di Hedge viene stipulato; e

 

(e)                                  it puntuale pagamento e adempimento di
tutte le obbligazioni relative a concessioni di scoperto e a relative
responsabilita del UK Borrower, o di ogni altra Credit Party che sia Foreign
Subsidiary, nei confronti delle Parti Garantite e delle Societe Collegate alle
Parti Garantite, derivanti da, o in relazione a, servizi di tesoreria, servizi
di deposito o di gestione di cassa o in relazione ad ogni trasferimento di fondi
e ettuato in modo automatico in una stanza di compensazione.

 

1.3                                 Quando usato nel presente Atto, “Parti
Garantite” significa i) i Finanziatori (compreso UBS), (ii) l’Emittente delle
Lettere di Credito (iii) it Swingline Lender, (iv) (‘Administrative Agent, (v) i
Co-Syndacation Agents (compreso it GS Co-Syndication Agent), (vi) ogni
controparte nei Contratti di Hedge, le cui obbligazioni costituiscono

 

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

 

Obbligazioni, (vii) i beneficiari di ogni obbligazione di indennizzo assunta da
ciascuna Credit Party ai sensi dei Documenti di Credito e (viii) ogni successore
o avente causa dei sovramenzionati.

 

1.4                                 I riferimenti a “Finanziatori” nel presente
Atto comprende le society collegate di questi ultimo che possono stipulare di
volta in volta Hedge Agreements con it UK Borrower.

 

2              Oggetto della Garanzia

 

II Costituente Pegno con la presente costituisce un diritto reale di garanzia ai
sensi degli articoli 49 e seguenti del Regio Decreto 21 giugno 1942, n. 929,
come modificato dal Decreto Legislativo 4 dicembre 1992, n. 480 (d’ora innanzi
Ia “Legge Marchi”) sul Marchio fino a concorrenza di euro 133.762,00.=
(centotrentatremilasettecentosessantadue virgola zero zero) a favore
dell’Administrative Agent, nell’interesse proprio e nell’interesse pro quota
delle Parti Garantite, e a favore di UBS e del GS Co-Syndication Agent a
garanzia delle Obbligazioni Garantite (cosi come definite al successivo articolo
3). I Beneficiari accettano detto pegno.

 

3              Obbligazioni Garantite

 

3.1                                 II pegno costituito in forza della presente
scrittura a favore dell’Administrative Agent, nell’interesse proprio e
nell’interesse pro quota delle Parti Garantite, e a favore di UBS e del GS
Co-Syndication Agent, garantisce le Obbligazioni Garantite.

 

4              Dichiarazioni e Garanzie

 

II Costituente Pegno con it presente Atto dichiara e garantisce di avere la
piena propriety e Ia libera disponibilita del Marchio e garantisce altresi:

 

(a)                                  di essere I’unico legittimo titolare del
Marchio e di avere pieno titolo sullo stesso, che risulta libero da qualsiasi
vincolo, garanzia reale, onere, gravame, pignoramento, diritto di prelazione,
sequestro o altro diritto di terzi, ivi compresi quelli derivanti da licenza
d’uso;

 

(b)                                 che non sono in corso ne si temono azioni
legali, procedimenti giudiziari, arbitrali o simili aventi ad oggetto it Marchio
davanti ad autorita giudiziarie, collegi arbitrali o commissioni od altre
pubbliche autorita italiane o straniere;

 

(c)                                  che it Marchio a valido, none nullo ne
annullabile, non decaduto e non viola alcun diritto di terzi;

 

(d)                                 che, per quanto a sua conoscenza, iI Marchio
non 6 violato o contraffatto da terzi;

 

(e)                                  che gli obblighi assunti in forza del
presente Atto sono validi e legalmente vincolanti per il Costituente Pegno e non
violano alcuna norma dell’ordinamento della Repubblica Italiana;

 

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

 

(f)                                    che le dichiarazioni e garanzie
riguardanti it Costituente Pegno indicate nell’Articolo 8 del Credit Agreement,
o negli altri Documenti di Credito di cui it Costituente Pegno 6 parte, e le
quali devono essere considerate parte integrante anche del presente Atto, sono
veritiere e corrette, e i Beneficiari potranno fare affidamento su ognuna di
esse come se fossero integralmente previste net presente Atto; e

 

(g)                                 iI presente Atto costituisce un pegno ed un
gravame di primo grado sul Marchio e non 6 soggetto ad ulteriori gravami.

 

5              Obblighi del Costituente Pegno

 

5.1                                 II Costituente Pegno con it presente Atto si
obbliga nei confronti dei Beneficiari, dalla data del presente Atto e fino al
completo soddisfacimento delle Obbligazioni Garantite ai sensi dei Documenti di
Credito, e alla scadenza del termine relativo ai Commitments e fino a quando vi
siano Lettere di Credito emesse a favore del UK Borrower in essere, a fare, o, a
seconda del caso, ad astenersi dal fare, tutto cio che sara necessario at fine
di non violare alcuna disposizione, accordo o obbligazione di cui agli articoli
9 e 10 del Credit Agreement, e affinche qualsiasi comportamento od omissione da
parte del Costituente Pegno non causino alcun Default o Evento di Default.

 

5.2                                 II Costituente Pegno si impegna a stipulare,
in ogni momento, di volta in volta ed a proprie spese, t utti gli eventuali ed
ulteriori accordi, documenti e dichiarazioni a contenuto finanziario, ed
intraprendera tutti gli ulteriori atti che possano essere richiesti ai sensi di
qualsiasi legge applicabile, o che i Beneficiari o i Required Lenders possano
ragionevolmente richieder- al fine di (a) tutelare e conservare validi i pegni,
le garanzie ed i vincoli costituiti o da cosh za del presente Atto, incluso it
diritto di prelazione, e (b) permettere ai Beneficiari eseguire i loro diritti e
rimedi ai sensi del presente Atto, in relazione al Marchio.

 

6              Registrazione del Pegno

 

6.1                                 II Costituente Pegno acconsente a che, su
istanza di chiunque, venga effettuata la pubblicita del presente atto di pegno
presso l’Ufficio Italiano dei Brevetti e Marchi con eson ro per gli ste da ogni
responsabilita at riguardo.

 

7              Esecutivita del Pegno

 

7.1                                 Al verificarsi di un Evento di Default, i
Beneficiari e ogni delegato di questi ultimi, potranno altrimenti disponibili ai
Beneficiari stessi, tutti i diritti e rimedi del titolare registrato del Marchio
ed avranno diritto di vendere it Marchio, in tutto o in parte, attraverso una
vendita private o un’asta pubblica, presso uno qualsiasi degli uffici dei
Beneficiari o altrove, per contanti, a credito, o per consegna futura, al prezzo
o prezzi ed secondo condizioni commercialmente ragionevoli, e senza riguardo per
l’effetto the tale vendita potra avere sul prezzo di mercato del Marchio. II
Costituente Pegno con it presente Atto rinuncia (nei limiti di legge) a tutti i
diritti di riscatto, riacquisto e/o stima, di cui egli al presente goda o di cui
possa godere in futuro, in forza di norme di legge. I

 

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

 

Beneficiari avranno diritto, in caso di vendita pubblica, e, nei limiti di
Iegge, di vendita privata, di acquistare it Marchio in tutto o in parte.

 

7.2                                 Se non diversamente previsto in questo
articolo, si applicheranno le disposizioni di cui all’art.2797 del Codice
Civile.

 

7.3                                 Qualsiasi somma risultante dalla vendita del
Marchio sara imputata dai Beneficiari:

 

7.3.1                        in primo luogo, al rimborso di tutti i ragionevoli
e documentati costi e spese, sopportati da o per conto dei Beneficiari in
relazione a tale recupero del credito o vendita o altrimenti dipendenti dal
presente Atto, dagli altri Documenti di Credito o dalle Obbligazioni Garantite,
ivi inclusi i costi giudiziali e i ragionevoli onorari e spese dei propri
procuratori e legali, it rimborso di tutte le anticipazioni fatte dai
Beneficiari ai sensi del presente Atto e ogni ulteriore ragionevole e
documentato costo e spesa sopportati in relazione all’esercizio di qualsivoglia
diritto o mezzo di soddisfacimento ai sensi del presente Atto;

 

7.3.2                        in secondo luogo, alle Parti Garantite, per una
somma pad al totale delle Obbligazioni Garantite ai sensi dei Documenti di
Credito alle stesse spettanti alla data dell’incasso ovvero, qualora it ricavato
non dovesse essere sufficiente a coprire tale somma per intero, allora pro rata
a ciascuna Parte Garantita (senza prevalenza di una parte sull’altra),
proporzionalmente alla quota di credito dovuta; e

 

7.3.3                        in terzo luogo, qualsiasi somma residua sara pagata
al Costituente Pegno e ai suoi successori o aventi causa o a chiunque ne abbia
legalmente diritto o come stabilito da una corte competente.

 

8              Efficacia ed Estinzione del Pegno

 

8.1                                 II presente Atto e tutte le obbligazioni del
Costituente Pegno ai sensi dello stesso:

 

(a)                                  saranno efficaci soltanto a partire dalle
ore 24:00 (ora tedesca) del 31 luglio 2004;

 

(b)                                 si aggiungono a e non pregiudicano ne
contrastano qualsiasi altra presente o futura garanzia accessoria, vincolo,
diritto o rimedio presente o futuro esistente o disponibile a favore dei
Beneficiari;

 

(c)                                  non sono assorbiti ne sono in alcun modo
pregiudicati o affetti dall’esistenza di qualsiasi di dette garanzie accessorie,
vincoli, diritti o rimedi, ne saranno, in tutto od in parte, nulli, annullabili,
incoercibili in alcun modo ad opera dei Beneficiari qualora questi ultimi
trattino, permutino, rinuncino, modifichino od omettano di perfezionare o
eseguire alcuna delle predette garanzie accessorie, vincoli, diritti, rimedi o
concedano termini per adempiere o proroghe o transigano con terzi.

 

8.2                                 Nel momento in cui (x) venga posta in essere
qualunque vendita o altro trasferimento del Marchio da parte del Costituente
Pegno che sia ammessa ai sensi del Credit Agreement oppure (y) it Costituente
Pegno cessi di essere una Society Co!legate del US Borrower a seguito di
un’operazione permessa ai sensi del Credit Agreement, oppure (z) net

 

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

 

momento in cui sia stato rilasciato consenso scritto all’estinzione del pegno di
cui at presente Atto sul Marchio ai sensi dell’art. 14.1 del Credit Agreement, i
Beneficiari si impegnano a (a) estinguere it pegno costituito con it presente
Atto sul Marchio e (b), a spese del Costituente Pegno, porre in essere tutte le
azioni ed effettuare tutte le formality necessarie a tat fine.

 

9              Poteri dell’Administrative Agent

 

II Costituente Pegno riconosce che i diritti e le responsabilita
dell’Administrative Agent ai sensi del presente Atto con riferimento a
qualsivoglia azione intrapresa dall’Administrative Agent o all’esercizio o
mancato esercizio da parte dell’Administrative Agent di qualsiasi opzione,
diritto di voto, richiesta, procedimento giudiziario, o altro diritto o rimedio
previsto, risultante o derivante dal presente Atto, saranno regolati, per quanto
riguarda i rapporti tra (‘Administrative Agent e le altre Parti Garantite, dal
Credit Agreement e da qualunque altro accordo in relazione alto stesso che potra
esistere di volta in volta tra dette parti, tuttavia, per quanto riguarda i
rapporti tra (‘Administrative Agent e it Costituente Pegno, (‘Administrative
Agent verra definitivamente considerato come parte che agisce per le Parti
Garantite con pien valido potere di agire o astenersi dall’agire, e it
Costituente Pegno non avra alcun obblig richiedere alcunche in merito a tale
potere.

 

10           Elezione di domicilio e comunicazioni

 

10.1                           Ai fini del presente Atto e dei diritti di
garanzia in esso aventi causa, it Costituent Pegno clegge domicilio presso la
propria sede legate.

 

10.2                           Qualsiasi avviso, richiesta o altra comunicazione
in forza del presente Atto ara effettuat ai sensi dell’articolo 14.2 del Credit
Agreement. Qualsiasi avviso o richiesta al ostituente Pe no ai sensi del
presente Atto sara inviato allo stesso presso il UK Borrower all’indirizzo del
UK Borrower di cui all’Articolo 14.2 del Credit Agreement.

 

11           Costi

 

11.1                           Costituente Pegno si impegna a tenere indenne i
Beneficiari da ogni eventuale ragionevole costo o spesa (ivi compresi tutti gii
onorari e le spese generali degli avvocati) che potra essere da questi sostenuta
per applicare od ottenere it parere di un avvocato con riferimento a qualunque
dei diritti relativamente a qualunque delle Obbligazioni Garantite e
l’adempimento di qualunque diritto relativo alle Obbligazioni Garantite, o la
riscossione di tutte le Obbligazione Garantite, e/o per esercitare i propri
diritti contro it Costituente Pegno ai sensi del presente Atto. Qualsiasi
imposta, tassa, onorario o costo dovuto per la stipulazione o l’esecuzione del
presente Atto, delle conseguenti formality e delle future cancellazioni sono a
carico del Costitutente Pegno.

 

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

 

12           Modifiche

 

12.1                           I termini o le previsione della presente Atto
potranno essere rinunciati, modificati, integrati o altrimenti modificati
solamente se concordate per iscritto e sottoscritte dal Costituente Pegno e dai
Beneficiari, in conformity all’articolo 14.1 del Credit Agreement.

 

12.2                           I Beneficiari non potranno in alcun modo (salvo
che con atto scritto ai sensi del precedente articolo 11.1) ritardare, concedere
dilazioni, omettere, o in altro rinunciare a qualsiasi diritto o rimedio ai
sensi del presente Atto o accettare un Default o Evento di Default o un
qualsiasi inadempimento dei termini e delle condizioni del presente Atto. Nessun
mancato esercizio, ne ritardo nell’esercizio di un qualsiasi diritto, potere o
privilegio da parte dei Beneficiari sara considerato come una rinuncia allo
stesso. L’esercizio anche parziale di un qualsiasi diritto, potere o privilegio
ai sensi del presente Atto non precludera l’ulteriore o altro esercizio dello
stesso, o l’esercizio di qualsiasi altro diritto, potere o privilegio. Una
rinuncia da parte dei Beneficiari a qualsiasi diritto o rimedio ai sensi del
presente Atto, in una qualsiasi occasione, non sara interpretato come un
impedimento o divieto a esercitare qualsiasi diritto o rimedio che i Beneficiari
potrebbero altrimenti avere in occasioni future.

 

12.3                           I diritti, i poteri, e i privilegi previsti nel
presente Atto sono cumulativi, possono essere esercitati singolarmente o
congiuntamente, e non escludono altri diritti previsti della legge.

 

13           Giurisdizione

 

13.1                           Fatti salvi i casi di competenza inderogabile
stabiliti della legge, qualsivoglia controversia inerente it presente Atto ed i
diritti di garanzia derivanti dello stesso a devoluta alla competenza esclusiva
del Foro di Milano. Resta comunque impregiudicata la facolta dei Beneficiari di
adire ogni altro giudice e foro competente ai sensi di legge.

 

14           Legge Applicabile

 

II presente Atto ed i diritti e le obbligazioni parti ai sensi dello stesso
saranno regolati e interpretati ai sensi della legge Italiana.

 

F.ti Gabriele Ceracchi — Enrica Pagani.

 

N. 42.058 di Repertorio

 

Milano, via Alberto da Giussano n. 18, trenta (30) luglio (7) duemilaquattro
(2004).

 

Previa espressa e concorde rinunzia doe parti ai testi con ii mio consenso,
certifico io sottoscritto dottor Renato Giacosa Notaio alla residenza di Milano,
iscritto presso it Collegio Notarile di Milano, essere vere e autentiche le
premesse firme dei signori:

 

·  CERACCHI GABRIELE nato a Spoleto (Perugia) it 5 aprile 1952, domiciliato a
Torino, via Guglielmo Reiss Romoli n. 44/12, dirigente;

 

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

 

·   PAGANI ENRICA nata a Codogno (Lodi) il 30 agosto 1974, domiciliata a Milano,
piazza Diaz n. 1, avvocato;

 

Persone della cui identity personale, qualifica e poteri io Notaio sono certo,
che hanno firmato in mia vista e presenza l’atto che precede in calce e sui
fogli intermedi, entrambi firmando nella quality indicata in atto.

 

Le parti hanno richiesto espressamente la restituzione del presente originale.

 

F.to Renato Giacosa Notaio.

 

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

 

* * *

 

Registrato presso l’Agenzia delle Entrate — Ufficio di Milano 2 - in data 5
agosto 2004.

 

* * *

 

Copia conforme all’originale in carta libera
per gli usi consentiti.
Milano, 6 agosto 2004.

 

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

 

 

 

Working translaton into English                 

 

EXHIBIT E-3

 

FORM OF ITALIAN TRADEMARK PLEDGE AGREEMENT

 

Private & Confidential

 

 

 

Dated

30 July 2004

 

 

 

Rockwood Italia S.p.A.                             (1)

 

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

 

Trademark Pledge Agreement

 

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

 

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

 

Contents

 

Clause

 

 

Page

 

 

 

 

1

Defined Terms

 

5

 

 

 

 

2

Trademark Pledge

 

6

 

 

 

 

3

Secured Obligations

 

6

 

 

 

 

4

Representations and Warranties

 

6

 

 

 

 

5

Covenants by the Pledgor

 

7

 

 

 

 

6

Registration of the Pledge

 

7

 

 

 

 

7

Enforcement of the Pledge

 

7

 

 

 

 

8

Effectiveness and Discharge of the Pledge

 

8

 

 

 

 

9

Authority of Administrative Agent

 

8

 

 

 

 

10

Domicile and Notices

 

9

 

 

 

 

11

Applicable Costs

 

9

 

 

 

 

12

Amendments

 

9

 

 

 

 

13

Jurisdiction

 

10

 

 

 

 

14

Goveming Law

 

10

 

2

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

 

[LETTERHEAD OF ROCKWOOD ITALIA S.P.A.J

 

Milan, 30 July 2004

 

Credit Suisse First Boston

Cayman Islands Branch

Eleven Madison Avenue

New York New York 10010, USA

 

UBS Loan Finance LLC

677 Washington Boulevard

Stamford, Connecticut 06901, USA,

 

Goldman Sachs Credit Partners L.P.

Clarendon House

2 Church Street

Hamilton

HM CX Bermuda

 

Dear Sirs,

 

Following our recent discussions, we hereby propose the constitution of a pledge
in the terms and conditions set out in the following agreement (the “Agreement”)
dated [·] made between:

 

(1)        Rockwood Italia S.p.A. (hereafter the “Pledgor”), a company
incorporated and existing under the laws of Italy, having its registered office
in Turin, Via Reiss Romoli no. 44/12, Italy, share capital of Euro 3,819,930,
fiscal code and number of registration in the Companies Register of Turin
02146370263, represented by he undersigned Mr. Gabriele Ceracchi, in his
capacity as Chairman of the Board of Directors of the Guarantor authorised to
execute the present deed by virtue of the powers conferred to him by a
resolution of the Board of Directors meeting held on 30 July 2004 which is
attached hereto sub Annex A;

 

(2)        Credit Suisse First Boston, acting through its Cayman Islands Branch
( Eleven Madison Avenue, New York, New York 10010 USA (hereafter the
“Administrative Agent”) acting for the purposes of this Agreement as
Administrative Agent for the Secured Parties, as secured creditors and
beneficiaries of the pledge constituted by virtue of this Agreement, represented
by its agent Enrica Pagani, born in Codogno (LO), on 30 August 1974, domiciled
for the purposes of this Agreement in Piazza Diaz 1, Milan 20123 (Italy), duly
authorised to act in the capacity referred to below by virtue of a special power
of attorney, duly certified and apostilled, which is attached hereto Annex B

 

(3)        UBS Loan Finance LLC, 677 Washington Boulevard, Stamford, Connecticut
06901, USA, acting for the purposes of this Agreement as Lender (“UBS”),
represented by its agent Enrica Pagani, born in Codogno (LO), on 30 August 1974,
domiciled for the purposes of this

 

3

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

 

Agreement in Piazza Diaz 1, Milan 20123 (Italy), duly authorised to act in the
capacity referred to below by virtue of a special power of attorney, duly
certified and apostilled, which is attached hereto Annex B; and

 

(4) Goldman Sachs Credit Partners L.P., Clarendon House, 2 Church Street,
Hamilton, HM CX Bermuda (the “GS Co-Syndication Agent”) acting for the purposes
of this Agreement as Co-Syndication Agent, represented by its agent Enrica
Pagani, born in Codogno (LO), on 30 August 1974, domiciled for the purposes of
this Agreement in Piazza Diaz 1, Milan 20123 (Italy), duly authorised to act in
the capacity referred to below by virtue of a special power of attorney, duly
certified and apostilled, which is attached hereto Annex B;

 

the Administrative Agent, UBS and the GS Co-Syndication Agent together the
“Beneficiaries”.

 

WHEREAS

 

(A)                    On 30 July 2004 a credit agreement (as the same may be
amended, supplemented, otherwise modified from time to time, the “Credit
Agreement”) has been entered into among (1) Rockwood Specialties Group Inc. a
Delaware corporation (2) Rockwood Specialties Limited, as UK Borrower (“UK
Borrower”), (3) Rockwood Specialties International, Inc., a Delaware
corporation, (4) the lending institutions from time to time parties thereto
(collectively the “Lenders”), (5) Credit Suisse First Boston, acting through its
Cayman Islands Branch as administrative agent and (6) the Co-Syndication Agents;

 

(B)                      Pursuant to the Credit Agreement, (a) the Lenders have
severally agreed to make Loans to, inter alia, the UK Borrower and the Letter of
Credit Issuer has agreed to issue Letters of Credit for the account of UK
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 UK Borrower;

 

(C)                      The proceeds of the Extensions of Credit will be used
in part to enable the UK Borrower to make valueabte transfers to the Pledgor in
connection with the operation of their respective businesses. The Pledgor
therefore will derive substantial direct and indirect benefit from the making of
the Extensions of Credit;

 

(D)                     The Pledgor is the owner of the following Italian
trademark no. 380597 filed under the name SILO S (hereinafter the “Trademark” or
the “Collateral”);

 

(E)                       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 UK Borrower under the Credit Agreement that the Pledgor shall have
executed and delivered this Agreement to the Administrative Agent, for itself
and for the ratable benefit of the Secured Parties, UBS and the GS
Co-Syndication Agent.

 

NOW, THEREFORE, having acknowledged that the recitals hereof and the attachments
hereto constitute an integral and substantial part of this Agreement, it is
hereby agreed and stipulated as follows:

 

4

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

 

1              Defined Terms

 

1.1                                 Unless otherwise defined herein, terms
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.

 

1.2                                 As used herein, the term “Secured
Obligations” means the collective reference to:

 

(a)                                  the due and punctual payment of (i) 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) on the Loans,
extended to the UK Borrower, when and as due, whether at maturity, by
acceleration, upon one or more dates set for prepayment or otherwise, (ii) each
payment required to be made by the UK Borrower under the Credit Agreement in
respect of any Letter of Credit, when and as due, and (iii) all other monetary
obligations, including fees, costs, expenses and indemnities, whether primary,
secondary, direct, contingent, fixed or otherwise (including monetary
obligations incurred during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding), of the UK Borrower or any other
Credit Party that is a Foreign Subsidiary of any of the Secured Parties under
the Credit Agreement and the other Credit Documents;

 

(b)                                 the due and punctual performance of all
covenants, agreements, obligations and liabilities of the UK Borrower under or
pursuant to the Credit Agreement and the other Credit Documents;

 

(c)                                  the due and punctual payment and
performance of all the covenants, agreements, obligations and liabilities of
each other Credit Party that is a Foreign Subsidiary under or pursuant to this
Agreement or the other Credit Documents;

 

(d)                                 the due and punctual payment and performance
of all obligations of the UK Borrower and each Credit Party that is a Foreign
Subsidiary under each Hedge Agreement that (i) 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 (ii) 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

 

(e)                                  the due and punctual payment and
performance of all obligations in respect of overdrafts and related liabilities
owed to the Secured Parties or their Affiliates by the UK Borrower or any other
Credit Party that is a Foreign Subsidiary, arising from or in connection with
treasury, depositary or cash management services or in connection with any
automated clearinghouse transfer of funds.

 

1.3                                 As used herein, the term “Secured Parties”
means (i) the Lenders (including UBS), (ii) the Letter of Credit Issuer, (iii)
the Swingline Lender, (iv) the Administrative Agent, (v) the Co-Syndication
Agents (including the GS Co-Syndication Agent), (vi) each counterparty to a
Hedge Agreement the obligations under which constitute Obligations, (vii) the
beneficiaries of each indemnification obligation undertaken by any Credit Party

 

5

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

 

under any Credit Document and (viii) any successors, indorsees, transferees and
assigns of each of the foregoing.

 

1.4                                 References to “Lenders” in this Agreement
shall be deemed to include Affiliates of Lenders that may from time to time
enter into Hedge Agreements with the UK Borrower.

 

2              Trademark Pledge

 

The Pledgor hereby creates security, pursuant to article 49 of seq. of Royal
Decree no. 929 of 21 June 1942, as amended by Legislative Decree no. 480 of 4
December 1992 (hereinafter the “Trademark Law”), over the Trademark up to Euro
133,762.00 (one hundred thirty three thousand seven hundred sixty two) in favour
of the Administrative Agent, for itself and the rateable benefit of the Secured
Parties, UBS and the GS Co-Syndication Agent, as security for the Secured
Obligations (as defined in Article 3 below). The Beneficiaries accept such a
pledge.

 

3              Secured Obligations

 

The pledge rights hereby created in favour of the Administrative Agent, for
itself and the rateable benefit of the Secured Parties, UBS and the GS
Co-Syndication Agent, secure the Secured Obligations.

 

4              Representations and Warranties

 

The Pledgor hereby represents and warrants that it has good title and is able to
freely transfer the Trademark and further represents and warrants that:

 

(a)                                  the Pledgor is the sole legal owner of, and
has full and legal title to, the Trademark, which is free from any and all
restriction, security, claims, charges, pre-emption rights, seizure or other
third party rights, including those resulting from a licence;

 

(b)                                 there are no actions, lawsuits or
arbitrations or other proceedings pending or threatened against or affecting the
Trademark before any court, arbitration panel, commission or other governmental
agency, whether in Italy or abroad;

 

(c)                                  the Trademark is valid, neither void,
voidable, nor expired and does not infringe any third party rights;

 

(d)                                 to its knowledge, the Trademark has not been
infringed or counterfeited by third parties;

 

(e)                                  the obligations assumed under this
Agreement are valid and legally binding for the Pledgor and do not infringe any
law of the Republic of Italy; and

 

(f)                                    the representations and warranties set
forth in Section 8 of the Credit Agreement as they relate to the Pledgor or in
the other Credit Documents to which such Pledgor is a party, each of which is
hereby incorporated herein by reference, are

 

6

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

 

true and correct, and the Beneficiaries shall be entitled to rely on each of
them as if they were fully set forth herein;

 

(g)                                 this Agreement shall constitute a first
pledge and lien on the Trademark, subject to no prior liens.

 

5              Covenants by the Pledgor

 

5.1                                 The Pledgor hereby covenants and agrees with
the Beneficiaries that, from and after the date of this Agreement until the
Secured Obligations under the Credit Documents are paid in full, the Commitments
are terminated and no Letter of Credit drawn by the UK Borrower remains
outstanding, the Pledgor shall take, or shall refrain from taking, as the case
may be, all actions that are necessary to be taken or not taken so that no
violation of any provision, covenant or agreement contained in Section 9 or 10
of the Credit Agreement, and so that no Default or Event of Default, is caused
by any act or failure to act of such Pledgor.

 

5.2                                 The Pledgor agrees that at any time and from
time to time, at the expense of the Pledgor, it will execute any and all further
documents, financing statements, agreements and instruments, and take all such
further actions which may be required under any applicable law, or which the
Beneficiaries 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 hereof, (y) to enable the
Beneficiaries to exercise and enforce their rights and remedies hereunder with
respect to the Collateral.

 

6                                          Registration of the Pledge

 

6.1                                 The Pledgor consents to the publication of
the present agreement, by whatever interested party requests it, with the
Italian Office of Trademarks and Copyrights, exonerating the competent office
from any liability in connection therewith.

 

7                                          Enforcement of the Pledge

 

7.1                                 Upon the occurrence of an Event of Default,
the Beneficiaries and any nominee of the Beneficiaries may exercise in respect
of all or any of the Collateral, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies of
the registered holder of the Collateral and may sell the Collateral or any part
thereof at public or private sale, at any of the Beneficiaries’ 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 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. The Beneficiaries 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.

 

7.2                                 Unless otherwise provided in this article 7,
the provisions of Article 2797 of the Civil Code shall apply.

 

7

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

 

7.3                                 Any sum resulting from the sale of the
Collateral shall be applied by Beneficiaries:

 

7.3.1                        first, to the payment of all reasonable and
documented costs and expenses incurred by or on behalf of the Beneficiaries in
connection with such collection or sale or otherwise in connection with this
Agreement, including all court costs and the reasonable fees and expenses of its
agents and legal counsel, the repayment of all advances made by the
Beneficiaries hereunder and any other reasonable and documented costs or
expenses incurred in connection with the exercise of any right or remedy
hereunder;

 

7.3.2                        second, to the Secured Parties, an amount equal to
all the Secured Obligations under the Credit Documents 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

 

7.3.3                        third, any surplus then remaining shall be paid to
the Pledgor or its successors or assigns or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct.

 

8              Effectiveness and Discharge of the Pledge

 

8.1           This Agreement and the obligations of the Pledgor under this
Agreement shall:

 

(a)                                  only be effective from 31 July 2004 at
24:00 hours;

 

(b)                                 be in addition to, and without prejudice to
or in conflict with any other additional guarantees or security, obligation,
right or remedy, present or future, existing or available to the Beneficiaries;

 

(c)                                  not be superseded or in any way prejudiced
or affected by the existence of any such additional guarantee or security,
obligation, right or remedy, nor are they, wholly or in part, in any way null,
void or unenforceable by the Beneficiaries in the event that the Beneficiaries
negotiate, transfer, abandon, modify or fail to perfect or to execute any of

 

(d)                                 the aforementioned additional guarantees or
security, obligations, rights, remedies or agrees terms for fulfilment,
extension or compromises with any other party.

 

8.2                                 Upon (x) any sale or other transfer by the
Pledgor of any collateral that is permitted under the Credit Agreement, or (y)
upon the Pledgor ceasing to be a Subsidiary of the US Borrower pursuant to a
transaction permitted by the Credit Agreement, or (z) upon the effectiveness of
any written consent to the release of pledge hereby created over any Collateral
pursuant to Section 14.1 of the Credit Agreement, the Beneficiaries shall (a)
release the pledge created hereby over such Collateral and (b) at the Pledgor’s
expenses, perform all the acts and formalities that are necessary for the
purpose of such release.

 

9                                          Authority of Administrative Agent

 

8

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

 

The Pledgor acknowledges that the rights and responsibilities of the
Administrative Agent under this Pledge with respect to any action taken by the
Administrative Agent or the exercise or non-exercise by the Administrative Agent
of any option, right, request, judgment or other right or remedy provided for
herein or resulting or arising out of this Pledge shall, as between the
Administrative Agent and the other Secured Parties, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Administrative Agent and the
Pledgor, the Administrative Agent shall be conclusively presumed to be acting as
agent for the Secured Parties with full and valid authority so to act or refrain
from acting, and Pledgor shall be under no obligation, or entitlement, to make
any inquiry respecting such authority.

 

10                                    Domicile and Notices

 

10.1                           For the purposes of this Agreement and the
security rights arising herein, the Pledgor elects to be domiciled at its own
registered office and the Beneficiaries elect domicile at the Administrative
Agent’s registered office.

 

10.2                           All notices, requests and demands pursuant hereto
shall be made in accordance with Section 14.2 of the Credit Agreement. All
communications and notices hereunder to the Pledgor shall be given to it in care
of the UK Borrower at the UK Borrower’s address set forth in Section 14.2 of the
Credit Agreement.

 

11                                    Applicable Costs

 

11.1                           The Pledgor agrees to pay any and all expenses
(including all fees and disbursements of counsel) that may be paid or incurred
by the Beneficiaries in enforcing, or obtaining advice of counsel in respect of,
any rights with respect to, or collecting, any or all of the Secured Obligations
and/or enforcing any rights with respect to, or collecting against, the Pledgor
under this Agreement. Any tax, fee or cost owed for the creation or execution of
this agreement and any further formalities and eventual discharge, shall be
borne by the Pledgor.

 

12                                    Amendments

 

12.1                           None of the terms or provisions of this Agreement
may be waived, amended, supplemented or otherwise modified except by a written
instrument executed by the Pledgor and the Beneficiaries in accordance with
Section 14.1 of the Credit Agreement.

 

12.2                           None of the Beneficiaries shall by any act
(except by a written instrument pursuant to Section 12.1 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 Beneficiaries, 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 Beneficiaries of any right

 

9

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

 

or remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy that the Beneficiaries would otherwise have on any future
occasion.

 

12.3                           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.

 

13                                    Jurisdiction

 

Unless otherwise established by law, the courts of Milan shall have exclusive
jurisdiction to settle any dispute between the parties which may arise out of or
in connection with this Agreement and the security rights created herein.
Nevertheless, nothing shall limit the right of the Beneficiaries to initiate
proceedings in any other competent court pursuant to the current laws in force.

 

14                                    Governing Law

 

This Agreement and the rights and obligations of the parties hereunder shall be
governed by, and construed and interpreted in accordance with, the law of the
Republic of Italy.

 

10

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

 

EXHIBIT F

 

[FORM OF]

 

MORTGAGE, ASSIGNMENT OF LEASES AND RENTS,

SECURITY AGREEMENT AND FINANCING STATEMENT

 

 

From

 

 

ROCKWOOD SUBSIDIARY

 

 

To

 

 

CREDIT SUISSE FIRST BOSTON,

ACTING THROUGH ITS CAYMAN ISLANDS BRANCH,

AS ADMINISTRATIVE AGENT

 

 

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

 

Dated: July 30, 2004

 

Premises:

 

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

 

 

This document prepared by and
after recording return to:

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

Latham & Watkins LLP
885 Third Avenue
New York, NY 10022

 

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

 

TABLE OF CONTENTS

 

 

 

 

 

Page

ARTICLE I

 

 

 

 

 

 

 

 

 

Representations, Warranties and Covenants of Mortgagor

 

 

SECTION 1.01.

 

Title

 

5

SECTION 1.02.

 

Credit Agreement; Certain Amounts

 

6

SECTION 1.03.

 

Compliance with Legal Requirements

 

7

SECTION 1.04.

 

Payment of Taxes, Liens and Charges

 

7

SECTION 1.05.

 

Plans, Alterations and Waste; Repairs

 

7

SECTION 1.06.

 

Insurance

 

8

SECTION 1.07.

 

Casualty Condemnation/Eminent Domain

 

8

SECTION 1.08.

 

Assignment of Leases and Rents

 

8

SECTION 1.09.

 

Restrictions on Transfers and Encumbrances

 

10

SECTION 1.10.

 

Security Agreement

 

10

SECTION 1.11.

 

Filing and Recording

 

11

SECTION 1.12.

 

Further Assurances

 

11

SECTION 1.13.

 

Additions to Mortgaged Property

 

11

SECTION 1.14.

 

No Claims Against Mortgagee

 

11

SECTION 1.15.

 

Fixture Filing

 

12

 

 

 

 

 

ARTICLE II

 

 

 

 

 

 

 

 

 

Defaults and Remedies

 

 

SECTION 2.01.

 

Events of Default

 

12

SECTION 2.02.

 

Demand for Payment

 

12

SECTION 2.03.

 

Rights To Take Possession, Operate and Apply Revenues

 

12

SECTION 2.04.

 

Right To Cure Mortgagor’s Failure to Perform

 

13

SECTION 2.05.

 

Right to a Receiver

 

14

SECTION 2.06.

 

Foreclosure and Sale

 

14

SECTION 2.07.

 

Other Remedies

 

14

SECTION 2.08.

 

Application of Sale Proceeds and Rents

 

15

SECTION 2.09.

 

Mortgagor as Tenant Holding Over

 

15

SECTION 2.10.

 

Waiver of Appraisement, Valuation, Stay, Extension and Redemption Laws

 

16

SECTION 2.11.

 

Discontinuance of Proceedings

 

16

SECTION 2.12.

 

Suits To Protect the Mortgaged Property

 

16

SECTION 2.13.

 

Filing Proofs of Claim

 

16

SECTION 2.14.

 

Possession by Mortgagee

 

17

SECTION 2.15.

 

Waiver

 

17

SECTION 2.16.

 

Remedies Cumulative

 

17

 

i

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

 

ARTICLE III

 

 

 

 

 

Miscellaneous

 

SECTION 3.01.

Partial Invalidity

18

SECTION 3.02.

Application of Payments

18

SECTION 3.03.

Amendments; Etc

18

SECTION 3.04.

Renewal; Etc

18

SECTION 3.05.

Future Advances

18

SECTION 3.06.

Compliance With Usury Law

18

SECTION 3.07.

Notices

19

SECTION 3.08.

Successors and Assigns

19

SECTION 3.09.

Satisfaction and Cancellation

19

SECTION 3.10.

Definitions

20

SECTION 3.11.

Headings Descriptive

20

SECTION 3.12.

Entire Agreement

20

SECTION 3.13.

Counterparts

21

SECTION 3.14.

Governing Law

21

SECTION 3.15.

Waiver of Jury Trial

21

SECTION 3.16.

Multisite Real Estate Transaction

21

 

 

 

ARTICLE IV

 

 

 

 

 

Particular Provisions

 

SECTION 4.01.

Applicable Law; Certain Particular Provisions

22

 

 

 

Exhibit A             Description of Land

 

 

ii

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

 

THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTURE
FILING/FINANCING STATEMENT dated as of July 30, 2004 (this “Mortgage”), by
[                            ] a [                            ] corporation,
having an office at [                            ] (the “Mortgagor”), to CREDIT
SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, having an office
at Eleven Madison Avenue, New York, NY 10010 (the “Mortgagee”) as Administrative
Agent for the benefit of the Secured Parties (as defined below);

 

WITNESSETH THAT:

 

WHEREAS, pursuant to the Credit Agreement dated as of July 30, 2004, by and
among Rockwood Specialties Group, Inc., a Delaware corporation (the “US
Borrower”), Rockwood Specialties Limited, a company incorporated under the laws
of England and Wales (the “UK Borrower” and, together with the US Borrower, the
“Borrowers”), Rockwood Specialties International, Inc., a Delaware corporation
(“Holdings”), the Lenders party thereto (the “Lenders”), the Mortgagee, UBS Loan
Finance LLC and Goldman Sachs Credit Partners L.P., as Co-Syndication Agent, and
[                    ], as Documentation Agent (such Credit Agreement, and as it
may hereafter be amended, restated, supplemented or otherwise modified from time
to time, the “Credit Agreement”), the Lenders made certain Commitments, subject
to the terms and conditions set forth in the Credit Agreement, to extend certain
credit facilities (as described in the following paragraph) to the Borrowers. 
Capitalized terms used herein and not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.

 

WHEREAS (i) the Lenders have agreed to make (a) Term Loans to the Borrowers in
an aggregate principal amount not in excess of [$1,050,000,000] plus
€[460,983,991] and (b) Revolving Credit Loans to the Borrowers, at any time and
from time to time in an aggregate principal amount at any time outstanding not
in excess of [$250,000,000], (ii) Mortgagee has agreed to make Swingline Loans
to the US Borrower at any time and from time to time in an aggregate principal
amount at any time outstanding not in excess of [$75,000,000] and (iii) the
Letter of Credit Issuer has issued or agreed to issue from time to time Letters
of Credit for the account of the Borrowers in an aggregate face amount at any
time outstanding not in excess of [$100,000,000], in each case pursuant to, and
upon the terms, and subject to the conditions specified in, the Credit
Agreement.  Subject to the terms of the Credit Agreement, the Borrowers may
borrow, prepay and reborrow Revolving Credit Loans.  Amounts paid in respect of
Term Loans may not be reborrowed.

 

WHEREAS, the Borrowers or any of their Restricted Subsidiaries may from time to
time enter, or may from time to time have entered, into one or more Hedge
Agreements (collectively, the “Lender Hedge Agreements”) with one or more
Persons that are Lenders or Affiliates of Lenders at the time such Hedge
Agreements are entered into (in such capacity, collectively, the “Interest Rate
Exchangers”), and it is desired that the obligations of the Borrowers or any of
their Restricted Subsidiaries under the Hedge Agreements, including without
limitation the obligations of the Borrowers or any of their Restricted
Subsidiaries to make payments thereunder in the event of early termination
thereof, together with all obligations of the Borrowers under the Credit
Agreement and the other Credit Documents, be secured hereunder;

 

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

 

WHEREAS, pursuant to the Guarantee, dated as of July 30, 2004 (the “Guarantee”),
in favor of the Administrative Agent, for the ratable benefit of the Lenders,
Holdings and each US Subsidiary Guarantor have guaranteed the prompt payment and
performance when due of the Obligations (as defined below); and

 

WHEREAS, as used in this Mortgage, the term (a) “Obligations” shall mean
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 Borrowers 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, 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 Borrowers 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
Borrowers 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 other Credit Party
under or pursuant to this Mortgage or the other Credit Documents, (iv) the due
and punctual payment and performance of all obligations of each Credit Party
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; and (b) “Secured Parties” shall mean (i) the Lenders,
(ii) the Letter of Credit Issuer, (iii) the Swingline Lender, (iv) the
Administrative Agent, (v) the Co-Syndication Agents, (vi) the Documentation
Agent, (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.

 

WHEREAS, pursuant to the requirements of the Credit Agreement, the Mortgagor is
entering into this Mortgage to create a lien on and a mortgage and security
interest in the Mortgaged Property (as defined herein) to secure the performance
and payment by the Mortgagor of the Obligations (including the obligations of
the Mortgagor under the Guarantee).  The Credit Agreement also requires the
granting by other Credit Parties of mortgages, deeds of trust and deeds to
secure debt (the “Other Mortgages”) that create liens on and security interests
in certain Mortgaged Properties other than the Mortgaged Property to secure the
performance of the Obligations.

 

2

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

 

GRANTING CLAUSES

 

NOW, THEREFORE, IN CONSIDERATION OF the foregoing and in order to secure the due
and punctual payment and performance of any and all present and future
indebtedness of the Mortgagor to the Mortgagee, including but not limited to the
payment of the Obligations for the benefit of the Secured Parties and the
payment of any and all amounts due and owing under the Guarantee, Mortgagor
hereby grants, conveys, mortgages, assigns and pledges to the Mortgagee, a
mortgage and/or a security interest in, all Mortgagor’s right title and interest
in and to the following described property (the “Mortgaged Property”) whether
now owned or held or hereafter acquired; provided however, that the maximum
principal debt or obligation which is, or under any contingency may be secured
at the date of execution hereof or any time thereafter by this Mortgage
(exclusive of interest and protective payments) is $[                        ]:

 

(1) the land more particularly described on Exhibit A hereto (the “Land”),
together with all rights appurtenant thereto, including the easements over
certain other adjoining land granted by any easement agreements, covenant or
restrictive agreements and all air rights, mineral rights, water rights, oil and
gas rights and development rights, if any, relating thereto, and also together
with all of the other easements, rights, privileges, interests, hereditaments
and appurtenances thereunto belonging or in any way appertaining and all of the
estate, right, title, interest, claim or demand whatsoever of Mortgagor therein
and in the streets and ways adjacent thereto, either in law or in equity, in
possession or expectancy, now or hereafter acquired (the “Premises”);

 

(2) all buildings, improvements, structures, paving, parking areas, walkways and
landscaping now or hereafter erected or located upon the Land, and all fixtures
of every kind and type affixed to the Premises or attached to or forming part of
any structures, buildings or improvements and replacements thereof now or
hereafter erected or located upon the Land (the “Improvements”);

 

(3) all apparatus, movable appliances, building materials, equipment, fittings,
furnishings, furniture, machinery and other articles of tangible personal
property of every kind and nature, and replacements thereof, now or at any time
hereafter placed upon or used in any way in connection with the use, enjoyment,
occupancy or operation of the Improvements or the Premises, including all of
Mortgagor’s books and records relating thereto and including all pumps, tanks,
goods, machinery, tools, equipment, lifts (including fire sprinklers and alarm
systems, fire prevention or control systems, cleaning rigs, air conditioning,
heating, boilers, refrigerating, electronic monitoring, water, loading,
unloading, lighting, power, sanitation, waste removal, entertainment,
communications, computers, recreational, window or structural, maintenance,
truck or car repair and all other equipment of every kind), restaurant, bar and
all other indoor or outdoor furniture (including tables, chairs, booths, serving
stands, planters, desks, sofas, racks, shelves, lockers and cabinets), bar
equipment, glasses, cutlery, uniforms, linens, memorabilia and other decorative
items, furnishings, appliances, supplies, inventory, rugs, carpets and other
floor coverings, draperies, drapery rods and brackets, awnings, venetian blinds,
partitions, chandeliers and other lighting fixtures, freezers, refrigerators,
walk-in coolers, signs (indoor and outdoor), computer systems, cash registers
and inventory control systems, and all other apparatus, equipment, furniture,
furnishings, and articles used in connection with the use or operation of the
Improvements or the Premises, it being understood that the enumeration of any

 

3

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

 

specific articles of property shall in no way result in or be held to exclude
any items of property not specifically mentioned (the property referred to in
this subparagraph (3), the “Personal Property”);

 

(4) all general intangibles owned by Mortgagor and relating to design,
development, operation, management and use of the Premises or the Improvements,
all certificates of occupancy, zoning variances, building, use or other permits,
approvals, authorizations and consents obtained from and all materials prepared
for filing or filed with any governmental agency in connection with the
development, use, operation or management of the Premises and Improvements, all
construction, service, engineering, consulting, leasing, architectural and other
similar contracts concerning the design, construction, management, operation,
occupancy and/or use of the Premises and Improvements, all architectural
drawings, plans, specifications, soil tests, feasibility studies, appraisals,
environmental studies, engineering reports and similar materials relating to any
portion of or all of the Premises and Improvements, and all payment and
performance bonds or warranties or guarantees relating to the Premises or the
Improvements, all to the extent assignable (the “Permits, Plans and
Warranties”);

 

(5) all now or hereafter existing leases or licenses (under which Mortgagor is
landlord or licensor) and subleases (under which Mortgagor is sublandlord),
concession, management, mineral or other agreements of a similar kind that
permit the use or occupancy of the Premises or the Improvements for any purpose
in return for any payment, or the extraction or taking of any gas, oil, water or
other minerals from the Premises in return for payment of any fee, rent or
royalty (all amendments, extensions, renewals, guarantees thereof, and all
security therefor, collectively, “Leases”), and all agreements or contracts for
the sale or other disposition of all or any part of the Premises or the
Improvements, now or hereafter entered into by Mortgagor, together with all
charges, fees, income, issues, profits, receipts, rents, revenues or royalties
payable thereunder (“Rents”);

 

(6) all real estate tax refunds and all proceeds of the conversion, voluntary or
involuntary, of any of the Mortgaged Property into cash or liquidated claims
(“Proceeds”), including Proceeds of insurance maintained by the Mortgagor and
condemnation awards, any awards that may become due by reason of the taking by
eminent domain or any transfer in lieu thereof of the whole or any part of the
Premises or Improvements or any rights appurtenant thereto, and any awards for
change of grade of streets, together with any and all moneys now or hereafter on
deposit for the payment of real estate taxes, assessments or common area charges
levied against the Mortgaged Property, unearned premiums on policies of fire and
other insurance maintained by the Mortgagor covering any interest in the
Mortgaged Property or required by the Credit Agreement; and

 

(7) all extensions, improvements, betterments, renewals, substitutes and
replacements of and all additions and appurtenances to, the Land, the Premises,
the Improvements, the Personal Property, the Permits, Plans and Warranties and
the Leases, hereinafter acquired by or released to the Mortgagor or constructed,
assembled or placed by the Mortgagor on the Land, the Premises or the
Improvements, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case, without any further
mortgage, deed of trust, conveyance, assignment or other act by the Mortgagor,
all of which shall

 

4

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

 

become subject to the lien of this Mortgage as fully and completely, and with
the same effect, as though now owned by the Mortgagor and specifically described
herein.

 

TO HAVE AND TO HOLD the Mortgaged Property unto the Mortgagee, its successors
and assigns, for the ratable benefit of the Secured Parties, forever, subject
only to the Permitted Liens and any Liens permitted pursuant to Section 10.2 of
the Credit Agreement (together, the “Permitted Encumbrances”) and to
satisfaction and cancellation as provided in Section 3.09.

 

SECTION 20.

 

Representations, Warranties and Covenants of Mortgagor

 

Mortgagor agrees, covenants, represents and/or warrants as follows:

 

 

20.1.

Title(a) . (a) Mortgagor has good and marketable title to:

 

 

 

 

 

(i) an indefeasible fee estate in the Land and Improvements; and

 

 

 

 

 

(ii) all of the Personal Property;

 

subject only to the Permitted Encumbrances.

 

(b)  To the best of Mortgagor’s knowledge, there are no Leases affecting the
Land or the Improvements except for (i) Leases which (x) in the aggregate do not
affect more than 10% of the total area of the Land or 10% of the gross building
area of the Improvements and (y) are subordinate to the lien of this Mortgage or
(ii) Leases which cannot reasonably be expected to have a Material Adverse
Effect.

 

(c)  To the best of Mortgagor’s knowledge, except as permitted or created by the
Credit Documents and except for any Permitted Encumbrances, Mortgagor is not
obligated under, and the Mortgaged Property is not bound by or subject to, any
right, of first refusal, option or other contractual right to sell, assign or
otherwise dispose of any Mortgaged Property or any interest therein.

 

(d)  The granting of this Mortgage is within Mortgagor’s corporate powers and
has been duly authorized by all necessary corporate, and, if required,
stockholder action.  This Mortgage has been duly executed and delivered by
Mortgagor and constitutes a legal, valid and binding obligation of Mortgagor,
enforceable in accordance with its terms, subject to applicable bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the creditors’
rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

 

(e)  To the best of Mortgagor’s knowledge, adequate ingress and egress is
available to and from the Land and the Improvements for any reasonable purpose.

 

(f)  This Mortgage and the Uniform Commercial Code Financing Statements
described in Section 1.09 of this Mortgage, when duly recorded in the public
records identified in the Perfection Certificate will create a valid, perfected
and enforceable lien upon and

 

5

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

 

mortgage and security interest in all of the Mortgaged Property subject only to
the Permitted Liens.  Mortgagor will forever warrant and defend its title to the
Mortgaged Property, the rights of Mortgagee therein under this Mortgage and the
validity and priority of the lien of this Mortgage thereon against the claims of
all persons and parties except those having rights under Permitted Encumbrances
to the extent of those rights.

 

20.2.        Credit Agreement; Certain Amounts(a)  .  (a) This Mortgage is given
pursuant to the Guarantee and the Credit Agreement.  The Mortgagor acknowledges
that the rights and responsibilities of the Mortgagee under this Mortgage with
respect to any action taken by the Mortgagee or the exercise or non-exercise by
the Mortgagee of any option, right, request, judgment or other right or remedy
provided for herein or resulting or arising out of this Mortgage shall, as
between the Mortgagee and the Lenders, be governed by the Credit Agreement and
by such other agreements with respect thereto as may exist from time to time
among them, but, as between the Mortgagee and the Mortgagor, the Mortgagee shall
be conclusively presumed to be acting as agent for the Lenders with full and
valid authority so to act or refrain from acting, and the Mortgagor shall not be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

 

(b)  Without limiting any of the relevant provisions of the Credit Agreement, if
Mortgagee exercises any of its rights or remedies under this Mortgage, or if any
actions or proceedings (including any bankruptcy, insolvency, receivership,
reorganization or similar proceedings) are commenced in which Mortgagee is made
a party and is obliged to defend or uphold or enforce this Mortgage or the
rights of Mortgagee hereunder or the terms of any Lease, or if a condemnation
proceeding is instituted affecting the Mortgaged Property, Mortgagor will pay
all reasonable sums, including reasonable attorneys’ fees and disbursements,
incurred by Mortgagee related to the exercise of any remedy or right of
Mortgagee pursuant hereto and the reasonable expenses of any such action or
proceeding together with all statutory or other costs, disbursements and
allowances, interest thereon from the date of demand for payment thereof at the
rate per annum then applicable under Section 2.8(a) of the Credit Agreement plus
2% (the “Default Interest Rate”), and such sums and the interest thereon shall,
to the extent permissible by law, be a lien on the Mortgaged Property prior to
any right, title to, interest in or claim upon the Mortgaged Property attaching
or accruing subsequent to the recording of this Mortgage and shall be secured by
this Mortgage to the extent permitted by law.  Any payment of amounts due under
this Mortgage not made on or before the due date for such payments shall accrue
interest daily without notice from the due date until paid at the Default
Interest Rate, and such interest at the Default Interest Rate shall be
immediately due upon demand by Mortgagee.

 

(c)  The Mortgagor hereby represents and warrants that the representations and
warranties set forth in Section 8 of the Credit Agreement as they relate to the
Mortgagor or the Credit Documents to which the Mortgagor is a party, each of
which is hereby incorporated herein by reference, are true and correct, and the
Mortgagee and each Lender shall be entitled to rely on each of them as if they
were fully set forth herein.

 

(d)  The Mortgagor hereby covenants and agrees with the Administrative Agent and
each Lender that, from and after the date of this Mortgage until the Obligations
under the Credit Documents are paid or satisfied in full, the Commitments are
terminated and no Letter of Credit drawn by either of the Borrowers remains
outstanding, the Mortgagor shall take, or shall

 

6

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

 

refrain from taking, as the case may be, all actions that are necessary to be
taken or not taken so that no violation of any provision, covenant or agreement
contained in Section 9 or 10 of the Credit Agreement, and so that no Default or
Event of Default, is caused by any act or failure to act of the Mortgagor or any
of its Subsidiaries.

 

20.3.        Compliance with Legal Requirements.  Mortgagor shall promptly,
fully, and faithfully comply in all material respects with all applicable laws
and legal requirements relating to its ownership, use and occupancy of the Land
and the Improvements, except to the extent the failure to do so could not
reasonably be expected to have a Material Adverse Effect.

 

20.4.        Payment of Taxes, Liens and Charges(a)  .  (a) Except as may be
permitted by the Credit Agreement, Mortgagor will pay and discharge from time to
time prior to the date on which material penalties attach thereto, all taxes of
every kind and nature, all general and special assessments, levies, permits,
inspection and license fees, all water and sewer rents, all vault charges, and
all other public charges, and all service charges, common area charges, private
maintenance charges, utility charges and all other private charges, whether
created or evidenced by recorded or unrecorded documents or of a like or
different nature, imposed upon or assessed against the Mortgaged Property or any
part thereof or upon the Rents from the Mortgaged Property or arising in respect
of the occupancy, use or possession thereof.

 

(b)  In the event of the passage of any state, Federal, municipal or other
governmental law, order, rule or regulation subsequent to the date hereof (i) in
any manner changing or modifying the laws now in force governing the taxation of
this Mortgage (other than laws governing income, franchise and similar taxes
generally) or the manner of collecting taxes thereon and (ii) imposing a tax to
be paid by Mortgagee, either directly or indirectly, on this Mortgage or
requiring an amount of taxes to be withheld or deducted therefrom, Mortgagor
will promptly notify Mortgagee of such event.  In such event Mortgagor shall
(i) agree to enter into such further instruments as may be reasonably necessary
or desirable to obligate Mortgagor to make any applicable additional payments
and (ii) Mortgagor shall make such additional payments.

 

20.5.        Plans, Alterations and Waste; Repairs(a)  .  (a) To the extent the
same exist on the date hereof or are obtained in connection with future
permitted alterations, Mortgagor shall, at the request of the Administrative
Agent, use reasonable commercial efforts to obtain, and shall thereafter
maintain, a complete set of final plans, specifications, blueprints and drawings
for the Mortgaged Property either at the Mortgaged Property or in a particular
office at the headquarters of Mortgagor to which Mortgagee shall have access
upon reasonable advance notice and at reasonable times.

 

(b)  Mortgagor shall not:

 

(i)  demolish or remove all or any material portion of the Improvements, except
as may be required by law, if such demolition or removal could reasonably be
expected to have a Material Adverse Effect;

 

(ii)  erect any additions to the Improvements or any other structures on the
Premises, if such erection could reasonably be expected to have a Material
Adverse Effect;

 

7

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

 

(iii)  commit any waste on the Mortgaged Property or make any alterations to the
Mortgaged Property if such waste or alterations could reasonably be expected to
have a Material Adverse Effect;

 

(iv)  change the use of the Mortgaged Property or take any other action with
respect to the Mortgaged Property if it would (A) materially increase the risk
of fire or any other hazard (unless Mortgagor obtains additional insurance
customarily attained in connection with such increased risk),(B) violate the
terms of any insurance policy required by Section 1.05 hereof or (C) reasonably
be expected to have a Material Adverse Effect;

 

in each case without the consent of the Mortgagee in each instance, which
consent shall not be unreasonably withheld or delayed.

 

(c)  Mortgagor will keep and maintain the Improvements and the Personal Property
in good repair, working order and condition, reasonable wear and tear excepted,
and will schedule and perform preventive maintenance thereon in accordance with
the standards observed by reasonably prudent owners of properties in the same or
similar businesses as the Mortgagor.

 

20.6.        Insurance.  Mortgagor will keep or cause to be kept the
Improvements and Personal Property insured against such risks and shall purchase
such additional insurance to the extent that is required from time to time
pursuant to Section 9.3 of the Credit Agreement.  Mortgagor shall pay promptly
when due any premiums on such insurance policies and on any renewals thereof. 
In the event of the foreclosure of this Mortgage or any other transfer of the
Premises or Improvements in extinguishment of the indebtedness and other sums
secured hereby, all right, title and interest of Mortgagor in and to all
casualty insurance policies, and renewals thereof then in force, to the extent
assignable shall pass to the purchaser or grantee in connection therewith;
provided that Mortgagor’s obligations shall be reduced accordingly.

 

20.7.        Casualty Condemnation/Eminent Domain.  Mortgagor shall give
Mortgagee prompt written notice of any casualty or other damage to the Mortgaged
Property or any proceeding for the taking of the Mortgaged Property or any
portion thereof or interest therein under power of eminent domain or by
condemnation or any similar proceeding, in each case that could reasonably be
expected to have a Material Adverse Effect.

 

20.8.        Assignment of Leases and Rents(a)  .  (a) Mortgagor hereby
irrevocably and absolutely grants, transfers and assigns all of its right title
and interest in all Leases, together with any and all extensions and renewals
thereof for purposes of securing and discharging the performance by Mortgagor of
the Obligations.  Mortgagor has not assigned or executed any assignment of, and
will not assign or execute any assignment of, any other Lease or their
respective Rents to anyone other than Mortgagee.

 

(b)  If an Event of Default shall occur and be continuing, Mortgagee shall have
the right, power and authority to notify any person that the Leases have been
assigned to Mortgagee and that all rents and other obligations are to be paid
directly to Mortgagee, whether or not Mortgagee has commenced or completed
foreclosure or taken possession of the Premises or the Improvements.

 

8

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

 

(c)  Without Mortgagee’s prior written consent, which consent shall not be
unreasonably withheld or delayed, Mortgagor will not enter into, modify, amend,
terminate or consent to the cancellation or surrender of any Lease if (i) such
Lease, as entered into, modified or amended will not be subordinate to the lien
of this Mortgage or (ii) such Lease and all other Leases affecting the Land or
the Improvements demise in the aggregate more than 10% of the gross building
area of the Improvements or 10% of the total area of the Land.

 

(d)  Subject to Section 1.08(e), Mortgagor has assigned and transferred to
Mortgagee all of Mortgagor’s right, title and interest in and to the Rents now
or hereafter arising from each Lease heretofore or hereafter made or agreed to
by Mortgagor, it being intended that this assignment establish, subject to
Section 1.08(e), an absolute transfer and assignment of all Rents and all Leases
to Mortgagee and not merely to grant a security interest therein.  Subject to
Section 1.08(e), Mortgagee may in Mortgagor’s name and stead (with or without
first taking possession of any of the Mortgaged Property personally or by
receiver as provided herein) operate the Mortgaged Property and rent, lease or
let all or any portion of any of the Mortgaged Property to any party or parties
at such rental and upon such terms as Mortgagee shall, in its sole discretion,
determine, and may collect and have the benefit of all of said Rents arising
from or accruing at any time thereafter or that may thereafter become due under
any Lease.

 

(e)  So long as an Event of Default shall not have occurred and be continuing,
Mortgagee will not exercise any of its rights under Section 1.08(c), and
Mortgagor shall have a license to receive and collect, and shall receive and
collect, the Rents accruing under any Lease, to enforce the obligations of
tenants under the Leases and to exercise all rights and remedies of Landlord
under the Leases, and to operate and maintain the Mortgaged Property, subject in
each case to compliance with the terms of this Mortgage; but after the happening
and during the continuance of any Event of Default, Mortgagee may, at its
option, receive and collect all Rents and enter upon the Land, the Premises and
Improvements through its officers, agents, employees or attorneys for such
purpose and for the operation and maintenance thereof.  Mortgagor hereby
irrevocably authorizes and directs each tenant, if any, and each successor, if
any, to the interest of any tenant under any Lease, respectively, to rely upon
any notice of a claimed Event of Default sent by Mortgagee to any such tenant or
any of such tenant’s successors in interest, and thereafter to pay Rents to
Mortgagee without any obligation or right to inquire as to whether an Event of
Default actually exists and even if some notice to the contrary is received from
the Mortgagor, who shall have no right or claim against any such tenant or
successor in interest for any such Rents so paid to Mortgagee.  Each tenant or
any of such tenant’s successors in interest from whom Mortgagee or any officer,
agent, attorney or employee of Mortgagee shall have collected any Rents, shall
be authorized to pay Rents to Mortgagor only after such tenant or any of their
successors in interest shall have received written notice from Mortgagee that
the Event of Default is no longer continuing (such notice to be given by the
Mortgagee promptly after the Event of Default is no longer continuing), unless
and until a further notice of an Event of Default is given by Mortgagee to such
tenant or any of its successors in interest.

 

(f)  Mortgagee will not become a mortgagee in possession so long as it does not
enter or take actual possession of the Mortgaged Property.  In addition,
Mortgagee, except where Mortgagee or Mortgagee’s agents have acted in bad faith,
have been grossly negligent or have committed wilful misconduct in relation to
any of the following, shall not be responsible or liable for performing any of
the obligations of the landlord under any Lease, for any waste by any

 

9

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

 

tenant, or others, for any dangerous or defective conditions of any of the
Mortgaged Property, for negligence in the management, upkeep, repair or control
of any of the Mortgaged Property or any other act or omission by any other
person.

 

(g)  Mortgagor shall furnish to Mortgagee, within 30 days after a request by
Mortgagee to do so, a written statement containing the names of all tenants,
subtenants and concessionaires of the Land, the Premises or Improvements, the
terms of any Lease, the space occupied and the rentals or license fees payable
thereunder.

 

20.9.        Restrictions on Transfers and Encumbrances.  Except as permitted by
the Credit Agreement (including, without limitation, pursuant to Sections 10.2,
10.3 and 10.4 thereof), Mortgagor shall not directly or indirectly sell, convey,
alienate, assign, lease, sublease, license, mortgage, pledge, encumber or
otherwise transfer, create, consent to or suffer the creation of any lien,
charges or any form of encumbrance upon any interest in or any part of the
Mortgaged Property, or be divested of its title to the Mortgaged Property or any
interest therein in any manner or way, whether voluntarily or involuntarily
(other than resulting from a condemnation), or engage in any common,
cooperative, joint, time-sharing or other congregate ownership of all or part
thereof, provided, that Mortgagor may in the ordinary course of business within
reasonable commercial standards, enter into easement or covenant agreements that
relate to and/or benefit the operation of the Mortgaged Property and that do not
materially or adversely affect the use and operation of the same.

 

20.10.      Security Agreement.  This Mortgage is both a mortgage of real
property and a grant of a security interest in personal property, and shall
constitute and serve as a “Security Agreement” within the meaning of the uniform
commercial code as adopted in the state wherein the Premises are located
(“UCC”).  Mortgagor has hereby granted unto Mortgagee a security interest in and
to all the Mortgaged Property described in this Mortgage that is not real
property.  Mortgagor hereby appoints Mortgagee as its true and lawful
attorney-in-fact and agent, for Mortgagor and in its name, place and stead, in
any and all capacities, to execute any document and to file the same in the
appropriate offices (to the extent it may lawfully do so), and to perform each
and every act and thing reasonably requisite and necessary to be done to perfect
the security interest contemplated by the preceding sentence.  Mortgagee shall
have all rights with respect to the part of the Mortgaged Property that is the
subject of a security interest afforded by the UCC in addition to, but not in
limitation of, the other rights afforded Mortgagee hereunder and under the
Security Agreement.

 

20.11.      Filing and Recording.  Mortgagor will cause this Mortgage, any other
security instrument creating a mortgage or security interest in or evidencing
the lien hereof upon the Mortgaged Property and each instrument of further
assurance to be filed, registered or recorded in such manner and in such places
as may be required by any present or future law in order to publish notice of
and fully to protect the lien hereof upon, and the mortgage and security
interest of Mortgagee in, the Mortgaged Property.  Mortgagor will pay all
filing, registration and recording fees, all Federal, state, county and
municipal recording, documentary or intangible taxes and other taxes, duties,
imposts, assessments and charges, and all reasonable expenses incidental to or
arising out of or in connection with the execution, delivery and recording of
this Mortgage, any mortgage supplemental hereto, any security instrument with
respect to the Personal Property or any instrument of further assurance.

 

10

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

 

20.12.      Further Assurances.  Upon demand by Mortgagee, Mortgagor will, at
the cost of Mortgagor and without expense to Mortgagee, do, execute, acknowledge
and deliver all such further acts, deeds, conveyances, mortgages, assignments,
notices of assignment, transfers and assurances as Mortgagee shall from time to
time reasonably require for the better assuring, conveying, assigning,
transferring and confirming unto Mortgagee the property and rights hereby
conveyed or assigned or intended now or hereafter so to be, or which Mortgagor
may be or may hereafter become bound to convey or assign to Mortgagee, or for
carrying out the intention or facilitating the performance of the terms of this
Mortgage, or for filing, registering or recording this Mortgage, and on demand,
Mortgagor will also execute and deliver and hereby appoints Mortgagee as its
true and lawful attorney-in-fact and agent, for Mortgagor and in its name, place
and stead, in any and all capacities, to execute and file to the extent it may
lawfully do so, one or more financing statements, chattel mortgages or
comparable security instruments reasonably requested by Mortgagee to evidence
more effectively the lien hereof upon the Personal Property and to perform each
and every act and thing requisite and necessary to be done to accomplish the
same.

 

20.13.      Additions to Mortgaged Property.  All right, title and interest of
Mortgagor in and to all extensions, improvements, betterments, renewals,
substitutes and replacements of, and all additions and appurtenances to, the
Mortgaged Property hereafter acquired by or released to Mortgagor or
constructed, assembled or placed by Mortgagor upon the Premises or the
Improvements, and all conversions of the security constituted thereby,
immediately upon such acquisition, release, construction, assembling, placement
or conversion, as the case may be, and in each such case without any further
mortgage, conveyance, assignment or other act by Mortgagor, shall become subject
to the lien and mortgage and security interest of this Mortgage as fully and
completely and with the same effect as though now owned by Mortgagor and
specifically described in the grant of the Mortgaged Property above, but at any
and all times Mortgagor will execute and deliver to Mortgagee any and all such
further assurances, mortgages, conveyances or assignments thereof as Mortgagee
may reasonably require for the purpose of expressly and specifically subjecting
the same to the lien and mortgage and security interest of this Mortgage.

 

20.14.      No Claims Against Mortgagee.  Nothing contained in this Mortgage
shall constitute any consent or request by Mortgagee, express or implied, for
the performance of any labor or services or the furnishing of any materials or
other property in respect of the Mortgaged Property or any part thereof, nor as
giving Mortgagor any right, power or authority to contract for or permit the
performance of any labor or services or the furnishing of any materials or other
property in such fashion as would permit the making of any claim against
Mortgagee in respect thereof.

 

20.15.      Fixture Filing.  Certain portions of the Mortgaged Property are or
will become “fixtures” (as that term is defined in the UCC) on the Land, and
this Mortgage, upon being filed for record in the real estate records of the
city or town wherein such fixtures are situated, shall operate also as a
financing statement filed as a fixture filing in accordance with the applicable
provisions of said UCC upon such portions of the Mortgaged Property that are or
become fixtures.

 

11

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

 

SECTION 21.

 

Defaults and Remedies

 

21.1.        Events of Default.  Any Event of Default under the Credit Agreement
(as such term is defined therein) shall constitute an Event of Default under
this Mortgage.

 

21.2.        Demand for Payment.  If an Event of Default shall occur and be
continuing, then, upon written demand of Mortgagee, Mortgagor will pay to
Mortgagee all amounts due hereunder and under the Guarantee or, if the Mortgagor
is the US Borrower, under the Credit Agreement, as applicable, and such further
amount as shall be sufficient to cover the costs and expenses of collection,
including attorneys’ fees, disbursements and expenses incurred by Mortgagee, and
Mortgagee shall be entitled and empowered to institute an action or proceedings
at law or in equity for the collection of the sums so due and unpaid, to
prosecute any such action or proceedings to judgment or final decree, to enforce
any such judgment or final decree against Mortgagor and to collect, in any
manner provided by law, all moneys adjudged or decreed to be payable.

 

21.3.        Rights To Take Possession, Operate and Apply Revenues(a)  .  (a) If
an Event of Default shall occur and be continuing, Mortgagor shall, upon demand
of Mortgagee, forthwith surrender to Mortgagee actual possession of the
Mortgaged Property and, if and to the extent not prohibited by applicable law,
Mortgagee itself, or by such officers or agents as it may appoint, may then
enter and take possession of all the Mortgaged Property without the appointment
of a receiver or an application therefor, exclude Mortgagor and its agents and
employees wholly therefrom, and have access to the books, papers and accounts of
Mortgagor.

 

(b)  If Mortgagor shall for any reason fail to surrender or deliver the
Mortgaged Property or any part thereof after such demand by Mortgagee, Mortgagee
may, to the extent not prohibited by applicable law, obtain a judgment or decree
conferring upon Mortgagee the right to immediate possession or requiring
Mortgagor to deliver immediate possession of the Mortgaged Property to
Mortgagee, to the entry of which judgment or decree Mortgagor hereby
specifically consents.  Mortgagor will pay to Mortgagee, upon demand, all
reasonable expenses of obtaining such judgment or decree, including reasonable
compensation to Mortgagee’s attorneys and agents with interest thereon at the
Default Interest Rate; and all such expenses and compensation shall, until paid,
be secured by this Mortgage.

 

(c)  Upon every such entry or taking of possession, Mortgagee may, to the extent
not prohibited by applicable law, hold, store, use, operate, manage and control
the Mortgaged Property, conduct the business thereof and, from time to time,
(i) make all necessary and proper maintenance, repairs, renewals, replacements,
additions, betterments and improvements thereto and thereon, (ii) purchase or
otherwise acquire additional fixtures, personalty and other property,
(iii) insure or keep the Mortgaged Property insured, (iv) manage and operate the
Mortgaged Property and exercise all the rights and powers of Mortgagor to the
same extent as Mortgagor could in its own name or otherwise with respect to the
same, or (v) enter into any and all agreements with respect to the exercise by
others of any of the powers herein granted Mortgagee, all as may from time to
time be directed or determined by Mortgagee to be in its best interest and
Mortgagor hereby appoints Mortgagee as its true and lawful attorney-in-fact and
agent, for

 

12

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

 

Mortgagor and in its name, place and stead, in any and all capacities, to
perform any of the foregoing acts.  Mortgagee may collect and receive all the
Rents, issues, profits and revenues from the Mortgaged Property, including those
past due as well as those accruing thereafter, and, after deducting (i) all
expenses of taking, holding, managing and operating the Mortgaged Property
(including compensation for the services of all persons employed for such
purposes), (ii) the costs of all such maintenance, repairs, renewals,
replacements, additions, betterments, improvements, purchases and acquisitions,
(iii) the costs of insurance, (iv) such taxes, assessments and other similar
charges as Mortgagee may at its option pay, (v) other proper charges upon the
Mortgaged Property or any part thereof and (vi) the compensation, expenses and
disbursements of the attorneys and agents of Mortgagee, Mortgagee shall apply
the remainder of the moneys and proceeds so received first to the payment of the
Mortgagee for the satisfaction of the Obligations in accordance with Section
2.08, and second, if there is any surplus, to Mortgagor, subject to the
entitlement of others thereto under applicable law.

 

(d)  Whenever, before any sale of the Mortgaged Property under Section 2.06, all
Obligations that are then due shall have been paid and all Events of Default
fully cured, Mortgagee will surrender possession of the Mortgaged Property back
to Mortgagor, its successors or assigns.  The same right of taking possession
shall, however, arise again if any subsequent Event of Default shall occur and
be continuing.

 

21.4.        Right To Cure Mortgagor’s Failure to Perform.  Should Mortgagor
fail in the payment, performance or observance of any term, covenant or
condition required by this Mortgage or the Security Agreement (with respect to
the Mortgaged Property), Mortgagee may pay, perform or observe the same. 
Pursuant to the exercise of its rights under this Section 2.04, Mortgagee is
hereby empowered to enter and to authorize others to enter upon the Premises or
the Improvements or any part thereof for the purpose of performing or observing
any such defaulted term, covenant or condition without having any obligation to
so perform or observe and without thereby becoming liable to Mortgagor, to any
person in possession holding under Mortgagor or to any other person.  The
expenses of the Administrative Agent incurred in connection with actions
undertaken as provided in this Section, together with interest thereon at a rate
per annum equal to the highest rate per annum at which interest would then be
payable on any category of past due ABR Loans under the Credit Agreement, from
the date of payment by the Administrative Agent to the date reimbursed by the
Mortgagor, shall be payable by such Mortgagor to the Administrative Agent on
demand.

 

21.5.        Right to a Receiver.  If an Event of Default shall occur and be
continuing, Mortgagee, upon application to a court of competent jurisdiction,
shall be entitled as a matter of right to the appointment of a receiver to take
possession of and to operate the Mortgaged Property and to collect and apply the
Rents.  The receiver shall have all of the rights and powers permitted under the
laws of the state wherein the Mortgaged Property is located.  Mortgagor shall
pay to Mortgagee upon demand all reasonable expenses, including receiver’s fees,
reasonable attorney’s fees and disbursements, costs and agent’s compensation
incurred pursuant to the provisions of this Section 2.05; and all such expenses
shall be secured by this Mortgage and shall be, without demand, immediately
repaid by Mortgagor to Mortgagee with interest thereon at the Default Interest
Rate.

 

21.6.        Foreclosure and Sale(a)  .  (a) If an Event of Default shall occur
and be

 

13

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

 

continuing, Mortgagee shall have the STATUTORY POWER OF SALE.

 

(b)  The Mortgaged Property may be sold subject to unpaid taxes, leases and
Permitted Encumbrances, and, after deducting all costs, fees and expenses of
Mortgagee (including costs of evidence of title in connection with the sale),
Mortgagee or an officer that makes any sale shall apply the proceeds of sale in
the manner set forth in Section 2.08.

 

(c)  Any foreclosure or other sale of less than the whole of the Mortgaged
Property or any defective or irregular sale made hereunder shall not exhaust the
power of foreclosure or of sale provided for herein; and subsequent sales may be
made hereunder until the Obligations have been satisfied, or the entirety of the
Mortgaged Property has been sold.

 

(d)  If an Event of Default shall occur and be continuing, Mortgagee may instead
of, or in addition to, exercising the rights described in Section 2.06(a) above
and either with or without entry or taking possession as herein permitted,
proceed by a suit or suits in law or in equity or by any other appropriate
proceeding or remedy (i) to specifically enforce payment of some or all of the
Obligations, or the performance of any term, covenant, condition or agreement of
this Mortgage or any other Credit Document or any other right, or (ii) to pursue
any other remedy available to Mortgagee, all as Mortgagee shall determine most
effectual for such purposes, subject to any applicable terms of the Guarantee,
the Credit Agreement and the other Credit Documents.

 

21.7.        Other Remedies(a)  .  (a) In case an Event of Default shall occur
and be continuing, Mortgagee may also exercise, to the extent not prohibited by
law, any or all of the remedies available to a secured party under the UCC.

 

(b)  In connection with a sale of the Mortgaged Property or any Personal
Property and the application of the proceeds of sale as provided in Section
2.08, Mortgagee shall be entitled to enforce payment of and to receive up to the
principal amount of the Obligations, plus all other charges, payments and costs
due under this Mortgage.

 

(c)  Subject to the provisions of the Credit Agreement, to the extent permitted
by law, if after foreclosure of this Mortgage or Mortgagee’s sale hereunder,
there shall remain any deficiency with respect to any amounts payable under the
Credit Documents, including hereunder, or any amounts secured hereby, Mortgagee
shall be entitled to recover a deficiency judgment for any portion of the
aggregate principal amount of the Obligations remaining unpaid, with interest. 
If Mortgagee shall institute any proceedings to recover such deficiency or
deficiencies, all such amounts shall continue to bear interest at the Default
Rate.  Subject to the provisions of the Credit Agreement, to the extent
permitted by law, Mortgagor waives any defense to Mortgagee’s recovery against
Mortgagor of any deficiency after any foreclosure sale of the Mortgaged
Property.  Subject to the provisions of the Credit Agreement, to the extent
permitted by law, Mortgagor expressly waives any defense or benefits that may be
derived from any statute granting Mortgagor any defense to any such recovery by
Mortgagee. Subject to the provisions of the Credit Agreement, in addition,
Mortgagee shall be entitled to recovery of all of their reasonable costs and
expenditures (including any court imposed costs) in connection with such
proceedings, including their reasonable attorneys’ fees, appraisal fees and any
other costs,

 

14

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

 

fees and expenditures.  This provision shall survive any foreclosure or sale of
the Mortgaged Property, any portion thereof and/or the extinguishment of the
lien hereof.

 

21.8.        Application of Sale Proceeds and Rents.  After any foreclosure sale
of all or any of the Mortgaged Property, Mortgagee shall receive and at any time
thereafter apply the proceeds of the sale together with any Rents that may have
been collected and any other sums that then may be held by Mortgagee under this
Mortgage as follows:

 

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 Mortgage, 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 Mortgagor 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;

 

SECOND, to the Secured Parties, an amount equal to all Obligations owing to them
on the date of any 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

 

THIRD, any surplus then remaining shall be paid to Mortgagor or its successor or
assign or to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct.

 

Borrower shall remain liable for any deficiency in the proceeds.  Upon any sale
of the Mortgaged Property by the Mortgagee (including pursuant to a power of
sale granted by statute or under a judicial proceeding), the receipt of the
Mortgagee or of the officer making the sale shall be a sufficient discharge to
the purchaser or purchasers of the Mortgaged Property 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 Mortgagee or such officer or be answerable
in any way for the misapplication thereof.

 

21.9.        Mortgagor as Tenant Holding Over.  Mortgagor agrees for itself and
all Persons claiming by, through or under it, that, to the extent allowed by
applicable law, subsequent to foreclosure hereunder in accordance with this
Mortgage and applicable law, if Mortgagor shall hold possession of the Mortgaged
Property or any part thereof, Mortgagor or the Persons so holding possession
shall be guilty of trespass and shall be deemed a tenant holding over and any
such tenant failing or refusing to surrender possession upon demand shall be
guilty of forcible detainer and shall be liable to such purchasers for
reasonable rental on said premises, and shall be summarily dispossessed or
evicted according to provisions of law applicable to tenants holding over.

 

21.10.      Waiver of Appraisement, Valuation, Stay, Extension and Redemption
Laws.  Mortgagor waives, to the extent not prohibited by law, (i) the benefit of
all laws now existing or that hereafter may be enacted (x) providing for any
appraisement or valuation of any

 

15

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

 

portion of the Mortgaged Property and/or (y) in any way extending the time for
the enforcement or the collection of amounts due under any of the Obligations or
creating or extending a period of redemption from any sale made in collecting
said debt or any other amounts due Mortgagee, (ii) any right to at any time
insist upon, plead, claim or take the benefit or advantage of any law now or
hereafter in force providing for any homestead exemption, stay, statute of
limitations, extension or redemption, or sale of the Mortgaged Property as
separate tracts, units or estates or as a single parcel in the event of
foreclosure or notice of deficiency, and (iii) all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of or each of the Obligations and marshaling in the event
of foreclosure of this Mortgage.

 

21.11.      Discontinuance of Proceedings.  In case Mortgagee shall proceed to
enforce any right, power or remedy under this Mortgage by foreclosure, entry or
otherwise, and such proceedings shall be discontinued or abandoned for any
reason, or shall be determined adversely to Mortgagee, then and in every such
case Mortgagor and Mortgagee shall be restored to their former positions and
rights hereunder, and all rights, powers and remedies of Mortgagee shall
continue as if no such proceeding had been taken.

 

21.12.      Suits To Protect the Mortgaged Property.  Mortgagee shall have power
(a) upon the occurrence and during the continuance of an Event of Default, to
institute and maintain suits and proceedings to prevent any impairment of the
Mortgaged Property by any acts that may be unlawful or in violation of this
Mortgage, (b) to preserve or protect its interest in the Mortgaged Property and
in the Rents arising therefrom and (c) to restrain the enforcement of or
compliance with any legislation or other governmental enactment, rule or order
that may be unconstitutional or otherwise invalid if the enforcement of or
compliance with such enactment, rule or order would impair the security or be
prejudicial to the interest of Mortgagee hereunder.

 

21.13.      Filing Proofs of Claim.  In case of any receivership, insolvency,
bankruptcy, reorganization, arrangement, adjustment, composition or other
proceedings affecting Mortgagor, Mortgagee shall, to the extent permitted by
law, be entitled to file such proofs of claim and other documents as may be
necessary or advisable in order to have the claims of Mortgagee allowed in such
proceedings for the Obligations secured by this Mortgage at the date of the
institution of such proceedings and for any interest accrued, late charges and
additional interest or other amounts due or that may become due and payable
hereunder after such date.

 

21.14.      Possession by Mortgagee.  After the occurrence and during the
continuance of an Event of Default, notwithstanding the appointment of any
receiver, liquidator or trustee of Mortgagor, any of its property or the
Mortgaged Property, Mortgagee shall be entitled, to the extent not prohibited by
law, to remain in possession and control of all parts of the Mortgaged Property
now or hereafter granted under this Mortgage to Mortgagee in accordance with the
terms hereof and applicable law.

 

21.15.      Waiver.  (a) No delay or failure by Mortgagee to exercise any right,
power or remedy accruing upon any breach or Event of Default shall exhaust or
impair any such right, power or remedy or be construed to be a waiver of any
such breach or Event of Default or acquiescence therein; and every right, power
and remedy given by this Mortgage to Mortgagee may be exercised from time to
time and as often as may be deemed expedient by Mortgagee.  No

 

16

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

 

consent or waiver by Mortgagee to or of any breach or Event of Default by
Mortgagor in the performance of the Obligations shall be deemed or construed to
be a consent or waiver to or of any other breach or Event of Default in the
performance of the same or of any other Obligations by Mortgagor hereunder.  No
failure on the part of Mortgagee to complain of any act or failure to act or to
declare an Event of Default, irrespective of how long such failure continues,
shall constitute a waiver by Mortgagee of its rights hereunder or impair any
rights, powers or remedies consequent on any future Event of Default by
Mortgagor.

 

(b)  Even if Mortgagee (i) grants some forbearance or an extension of time for
the payment of any sums secured hereby, (ii) takes other or additional security
for the payment of any sums secured hereby, (iii) waives or does not exercise
some right granted herein or under the Credit Documents, (iv) releases a part of
the Mortgaged Property from this Mortgage, (v) agrees to change some of the
terms, covenants, conditions or agreements of any of the Credit Documents,
(vi) consents to the filing of a map, plat or replat affecting the Premises,
(vii) consents to the granting of an easement or other right affecting the
Premises or (viii) makes or consents to an agreement subordinating Mortgagee’s
lien on the Mortgaged Property hereunder; no such act or omission shall preclude
Mortgagee from exercising any other right, power or privilege herein granted or
intended to be granted in the event of any breach or Event of Default then made
or of any subsequent default; nor, except as otherwise expressly provided in an
instrument executed by Mortgagee, shall this Mortgage be altered thereby.  In
the event of the sale or transfer by operation of law or otherwise of all or
part of the Mortgaged Property, Mortgagee is hereby authorized and empowered to
deal with any vendee or transferee with reference to the Mortgaged Property
secured hereby, or with reference to any of the terms, covenants, conditions or
agreements hereof, as fully and to the same extent as it might deal with the
original parties hereto and without in any way releasing or discharging any
liabilities, obligations or undertakings.

 

21.16.      Remedies Cumulative.  No right, power or remedy conferred upon or
reserved to Mortgagee by this Mortgage is intended to be exclusive of any other
right, power or remedy, and each and every such right, power and remedy shall be
cumulative and concurrent and in addition to any other right, power and remedy
given hereunder or now or hereafter existing at law or in equity or by statute.

 

SECTION 22.

 

Miscellaneous

 

22.1.        Partial Invalidity.  In the event any one or more of the provisions
contained in this Mortgage shall for any reason be held to be invalid, illegal
or unenforceable in any respect, such validity, illegality or unenforceability
shall, at the option of Mortgagee, not affect any other provision of this
Mortgage, and this Mortgage shall be construed as if such invalid, illegal or
unenforceable provision had never been contained herein or therein.

 

22.2.        Application of Payments.  In the event that any part of the
Obligations cannot lawfully be secured hereby, or in the event that the mortgage
and security interest hereof cannot be lawfully enforced to pay any part of the
Obligations, or in the event that the mortgage or security interest created by
this Mortgage shall be invalid or unenforceable as to any part of

 

17

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

 

the Obligations, then all payments on the Obligations shall be deemed to have
been first applied to the complete payment and liquidation of that part of the
Obligations which is not secured by this Mortgage and the unsecured portion of
the Obligations shall be completely paid and liquidated prior to the payment and
liquidation of the remaining secured portion of the Obligations.

 

22.3.        Amendments; Etc.  This Mortgage may not be amended, modified or
supplemented, except in a writing signed by each of the parties hereto and
otherwise in accordance with the provisions of the Credit Agreement.

 

22.4.        Renewal; Etc.  Mortgagee may at any time and from time to time
renew or extend this Mortgage, or alter or modify the same in any way, or waive
any of the terms, covenants or conditions hereof in whole or in part and may
release any portion of the Mortgaged Property or any other security, and grant
such extensions and indulgences in relation to the Obligations as Mortgagee may
determine, without the consent of any junior lienor or encumbrancer and without
any obligation to give notice of any kind thereto and without in any manner
affecting the priority of the mortgage and security interest hereof on any part
of the Mortgaged Property; provided that nothing in this Section 3.04 shall
grant Mortgagee the right to alter or modify the Mortgage without the written
consent of the Mortgagor.

 

22.5.        Future Advances.  This Mortgage is executed and delivered to
secure, among other things, Mortgagor’s guaranty of future advances under the
Credit Agreement.  It is understood and agreed that this Mortgage secures
Mortgagor’s guaranty of present and future advances made pursuant to the Credit
Agreement and that the lien of such future advances shall relate to the date of
this Mortgage.

 

22.6.        Compliance With Usury Law.  The Credit Documents are intended to be
performed in accordance with, and only to the extent permitted by, all
applicable governmental rules and legal requirements.  It is expressly
stipulated and agreed to be the intent of Mortgagor and Mortgagee at all times
to comply with the applicable [STATE] law governing the maximum rate or amount
of interest payable on or in connection with the Obligations (or applicable
United States federal law to the extent that it permits Mortgagee to contract
for, charge, take, reserve or receive a greater amount of interest than under
[STATE] law).  If the applicable law is ever judicially interpreted so as to
render usurious any amount called for under the Credit Documents, or contracted
for, charged, taken, reserved or received with respect to the extension of
credit evidenced by the Credit Documents or if acceleration of the maturity of
the Obligations or if any prepayment by Mortgagor results in Mortgagor having
paid any interest in excess of that permitted by law, then it is Mortgagor’s and
Mortgagee’s express intent that all excess amounts theretofore collected by
Mortgagee be credited on the principal balance due under the Credit Documents
(or, if the Credit Documents have been or would thereby be paid in full,
refunded to Mortgagor), and the provisions of the Credit Documents immediately
be deemed reformed and the amounts thereafter collectible thereunder reduced,
without the necessity of the execution of any new document, so as to comply with
the applicable law, but so as to permit the recovery of the fullest amount
otherwise called for hereunder and thereunder.  The right to accelerate maturity
of Obligations does not include the right to accelerate any interest that has
not otherwise accrued on the date of such acceleration, and Mortgagee does not
intend to collect any unearned interest in the event of acceleration.  All sums
paid or agreed to be paid to Mortgagee for the use,

 

18

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

 

forbearance or detention of the Obligations shall, to the extent permitted by
applicable law, be amortized, prorated, allocated and spread throughout the full
term of the Obligations until payment in full so that the rate or amount of
interest on account of the Obligations does not exceed the applicable usury
ceiling.

 

22.7.        Notices.  All notices (including any notice to the Mortgagee
pursuant to Sections 34-25-10(b) and 34-25-11 of the [STATE] General Laws, as
amended), requests and demands to or upon the respective parties hereto to be
effective shall be in writing (including by facsimile transmission), and, unless
otherwise expressly provided herein, shall be deemed to have been duly given or
made when delivered, or three days after being deposited in the mail, postage
prepaid, or, in the case of telecopy notice, when received, addressed to the
Mortgagor and/or the Mortgagee at the addresses set forth on the first page of
this Mortgage.

 

22.8.        Successors and Assigns.  All of the grants, covenants, terms,
provisions and conditions herein shall run with the Premises and the
Improvements and shall apply to, bind and inure to, the benefit of the permitted
successors and assigns of Mortgagor and the successors and assigns of Mortgagee.

 

22.9.        Satisfaction and Cancellation(a)  .  (a) The conveyance to
Mortgagee of the Mortgaged Property as security created and consummated by this
Mortgage shall be null and void when all the Obligations under the Credit
Documents have been indefeasibly paid in full in accordance with the terms of
the Credit Documents and the Lenders have no further commitment to make Loans
under the Credit Agreement, no Letters of Credit are outstanding and the Letter
of Credit Issuer has no further obligation to issue Letters of Credit under the
Credit Agreement.

 

(b)  Upon a sale, conveyance, lease, assignment, transfer, pledge or financing
permitted pursuant to the provisions of Sections 10.3 or 10.4 of the Credit
Agreement, including, without limitation, a sale by Mortgagor of all or any
portion of the Mortgaged Property that is permitted by the Credit Agreement and
the application of the net proceeds of such sale or financing in accordance with
the Credit Agreement, the lien of this Mortgage shall be released from the
applicable portion of the Mortgaged Property.

 

(c)  Mortgagor shall automatically be released from its obligations hereunder
and the Lien on the Mortgaged Property shall be automatically released upon the
consummation of any transaction permitted by the Credit Agreement as a result of
which such Mortgagor ceases to be a Domestic Subsidiary of the US Borrower.

 

(d)  In connection with any termination or release pursuant to paragraph (a) or
(b) or (c), the Mortgage shall be marked “SATISFIED” by the Mortgagee, this
Mortgage shall be canceled of record at the request and at the expense of the
Mortgagor, and the lien of this Mortgage shall be released from the applicable
portion of the Mortgaged Property.  Mortgagee shall execute any documents
reasonably requested by Mortgagor to accomplish the foregoing or to accomplish
any release contemplated by this Section 3.09 and Mortgagor will pay all costs
and expenses, including reasonable attorneys’ fees, disbursements and other
charges, incurred by Mortgagee in connection with the preparation and execution
of such documents.

 

19

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

 

(e)  In connection with any termination or release pursuant to paragraph (a),
(b) or (c), the Administrative Agent shall execute and deliver to Mortgagor, at
Mortgagor’s expense, all documents that Mortgagor shall reasonably request to
evidence such termination or release.  Any execution and delivery of documents
pursuant to this subsection 3.09 shall be without recourse to or warranty by the
Administrative Agent.

 

22.10.      Definitions.  As used in this Mortgage, the singular shall include
the plural as the context requires and the following words and phrases shall
have the following meanings: (a) “including” shall mean “including but not
limited to”; (b) “provisions” shall mean “provisions, terms, covenants and/or
conditions”; (c) “lien” shall mean “lien, charge, encumbrance, security
interest, mortgage or deed of trust, as the case may be”; (d) “obligation” shall
mean “obligation, duty, covenant and/or condition”; and (e) “any of the
Mortgaged Property” shall mean “the Mortgaged Property or any part thereof or
interest therein”.  Any act that Mortgagee is permitted to perform hereunder may
be performed at any time and from time to time by Mortgagee or any person or
entity designated by Mortgagee.  Any act that is prohibited to Mortgagor
hereunder is also prohibited to all lessees of any of the Mortgaged Property. 
Each appointment of Mortgagee as attorney-in-fact for Mortgagor under the
Mortgage is irrevocable, with power of substitution and coupled with an
interest.  Subject to the applicable provisions hereof, Mortgagee has the right
to refuse to grant its consent, approval or acceptance or to indicate its
satisfaction, in its sole discretion, whenever such consent, approval,
acceptance or satisfaction is required hereunder.

 

22.11.      Headings Descriptive.  Article and Section headings have been
inserted in this Mortgage as a matter of convenience for reference only and it
is agreed that such article and section headings are not a part of this
Agreement and shall not be used in the interpretation of any provision of this
Mortgage.

 

22.12.      Entire Agreement.  This Mortgage, together with any other agreement
executed in connection herewith, is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof.

 

22.13.      Counterparts.  This Mortgage and any amendments, waivers, consents
or supplements hereto or in connection herewith may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed and delivered shall be deemed an original, but all such
counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.

 

22.14.      Governing Law.  THIS MORTGAGE SHALL BE GOVERNED BY THE INTERNAL LAWS
(AND NOT THE LAWS RELATING TO CONFLICT OF LAWS) OF THE STATE OF NEW YORK, EXCEPT
AS SUPERSEDED BY FEDERAL LAW; PROVIDED, HOWEVER, THAT THE CREATION, PERFECTION,
PRIORITY OR ENFORCEMENT OF LIENS ON THE MORTGAGED PROPERTY (OTHER THAN ANY UCC
COLLATERAL) SHALL BE GOVERNED BY THE LAWS OF THE STATE IN WHICH THE LAND IS
LOCATED AND PROVIDED FURTHER THAT FOR ANY UCC

 

20

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

 

COLLATERAL THE PERFECTION, EFFECT OF PERFECTION OR NON-PERFECTION AND PRIORITY
OF THE SECURITY INTEREST SHALL BE SUBJECT TO ANY MANDATORY CHOICE OF LAW RULES
IN THE UCC.

 

22.15.      Waiver of Jury Trial.  MORTGAGOR AND MORTGAGEE HEREBY KNOWINGLY,
VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY
IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN
CONNECTION WITH, THIS MORTGAGE OR ANY OTHER CREDIT DOCUMENT, OR ANY COURSE OR
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN), OR ACTIONS
OF MORTGAGOR OR MORTGAGEE.  THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH
PARTY TO ENTER INTO THIS MORTGAGE.

 

22.16.      Multisite Real Estate Transaction.  Mortgagor acknowledges that this
Mortgage is one of a number of Other Mortgages and Credit Documents that secure
the Obligations.  Mortgagor agrees that this Mortgage shall be absolute and
unconditional and shall not in any manner be affected or impaired by any acts or
omissions whatsoever of Mortgagee (except Mortgagee and Mortgagee’s agents’
willful misconduct, bad faith and gross negligence), and without limiting the
generality of the foregoing, it shall not be impaired by any acceptance by the
Mortgagee of any security for or guarantees of any of the Obligations hereby
secured, or by any failure, neglect or omission on the part of Mortgagee to
realize upon or protect any Obligation or indebtedness hereby secured or any
collateral security therefor including the Other Mortgages and other Credit
Documents.  This mortgage shall not in any manner be impaired or affected by any
release (except as to the property released), sale, pledge, surrender,
compromise, settlement, renewal, extension, indulgence, alteration, changing,
modification or disposition of any of the Obligations secured or of any of the
collateral security therefor, including the Other Mortgages and other Credit
Documents or of any guarantee thereof, and Mortgagee may at its discretion
foreclose, exercise any power of sale, or exercise any other remedy available to
it under any or all of the Other Mortgages and other Credit Documents without
first exercising or enforcing any of its rights and remedies hereunder.  Such
exercise of Mortgagee’s rights and remedies under any or all of the Other
Mortgages and other Credit Documents shall not in any manner impair the
indebtedness hereby secured and any exercise of the rights or remedies of
Mortgagee hereunder shall not impair the lien of any of the Other Mortgages and
other Credit Documents or any of Mortgagee’s rights and remedies thereunder. 
Mortgagor specifically consents and agrees that Mortgagee may exercise its
rights and remedies hereunder and under the Other Mortgages and other Credit
Documents separately or concurrently and in any order that it may deem
appropriate and waives any rights of subrogation.

 

SECTION 23.

 

Particular Provisions

 

This Mortgage is subject to the following provisions relating to the particular
laws of the state wherein the Premises are located:

 

23.1.        Applicable Law; Certain Particular Provisions.  Mortgagor and
Mortgagee agree to submit to jurisdiction and the laying of venue for any suit
on this Mortgage in such state.

 

21

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

 

IN WITNESS WHEREOF, this Mortgage has been duly executed and delivered to
Mortgagee by Mortgagor on the date first written above.

 

 

[NAME OF MORTGAGOR], a                    corporation

 

 

 

 

By:

 

 

 

Name:

 

 

Title:

 

22

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

 

Appendix A
to Mortgage

 

DESCRIPTION OF THE LAND

 

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

 

EXHIBIT G

 

FORM OF PERFECTION CERTIFICATE

 

PERFECTION CERTIFICATE

 

Reference is made to (a) the Credit Agreement dated as of July 30, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Rockwood Specialties Group, Inc. (the “US Borrower”),
Rockwood Specialties Limited (the “UK Borrower”), Rockwood Specialties
International, Inc. (“Holdings”) , the lending institutions from time to time
parties thereto, Credit Suisse First Boston, acting through its Cayman Islands
Branch, as Administrative Agent and as Collateral Agent, UBS Securities LLC and
Goldman Sachs Credit Partners L.P., as Co-Syndication Agents, and the other
parties thereto, (b) the Security Agreement dated as of July 30, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Security
Agreement”), among Holdings, the US Borrower, the Subsidiary Grantors and the
Administrative Agent and (c) the Pledge Agreement dated as of July 30, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Pledge
Agreement”), among Holdings, the US Borrower, the Subsidiary Pledgors and the
Administrative Agent. Capitalized terms used but not defined herein have the
meanings assigned in the Credit Agreement, the Security Agreement or the Pledge
Agreement, as applicable.

 

The undersigned, an Authorized Officer and the chief legal officer of the US
Borrower and an authorized officer of each Grantor, hereby certify to the
Administrative Agent and each other Secured Party as follows:

 

1. Names. (a) The exact legal name of each Grantor, as such name appears in its
respective certificate of incorporation or formation, is as follows:

 

(b) Set forth below is each other legal name each Grantor has had in the past
five years, together with the date of the relevant change:

 

Grantor’s Legal Name

 

Former Name

 

Date of Name
Change

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(c)           Except as set forth in Schedule 1 hereto, no Grantor has changed
its identity or corporate structure in any way within the past five years.
Changes in identity or corporate structure would include mergers, consolidations
and acquisitions, as well as any change in the form, nature or jurisdiction of
organization. If any such change has occurred, include in Schedule 1 the

 

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

 

information required by Sections 1(a), 1(b), 1(d) and 2(c) of this certificate
as to each acquiree or constituent party to a merger or consolidation.

 

(d)           The following is a list of all other names (including trade names
or similar appellations) used by each Grantor or any of its divisions or other
business units in connection with the conduct of its business or the ownership
of its properties at any time during the past five years:

 

 

 

Grantor’s Legal Name

 

Other Name(s)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(e) Set forth below is the Organizational Identification Number, if any, issued
by the jurisdiction of organization or formation of each Grantor that is a
registered organization:

 

Grantor

 

Organizational Identification Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(f) Set forth below is the Federal Taxpayer Identification Number of each
Grantor:

 

 

 

Grantor

 

Federal Taxpayer Identification Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2. Current Locations. (a) The chief executive office of each Grantor is located
at the address set forth opposite its name below:

 

Grantor

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(b) Set forth below opposite the name of each Grantor are all locations where
such Grantor maintains any books or records relating to any Accounts and/or
General Intangibles (with each location at which chattel paper, if any, is kept
being indicated by an “*”):

 

Grantor

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

(c) The sole jurisdiction of organization or formation of each Grantor that is a
registered organization is set forth opposite its name below:

 

Grantor

 

Jurisdiction of Organization or Formation

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(d) Set forth below opposite the name of each Grantor are all the locations
where such Grantor maintains any Inventory or Equipment or other Collateral not
identified above:

 

Grantor

 

Address

 

County

 

State’

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1              Or country, if location is outside of the United States.

 

Grantor

 

Address

 

County

 

State’

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(e) Set forth below opposite the name of each Grantor are all the places of
business of such Grantor not identified in paragraph (a), (b), (c) or (d) above:

 

Grantor

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grantor

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(f) Set forth below is a list of all real property held by each Grantor, whether
owned or leased,

 

the name of the Grantor that owns or leases said property and the fair market
value apportioned to each site:

 

Address

 

Owned/Leased

 

Entity

 

Fair Market
Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Address

 

Owned/Leased

 

Entity

 

Fair Market
Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address

 

Owned/Leased

 

Entity

 

Fair Market
Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address

 

Owned/Leased

 

Entity

 

Fair Market
Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address

 

Owned/Leased

 

Entity

 

Fair Market
Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Address

 

Owned/Leased

 

Entity

 

Fair Market
Value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Copies of any policy or policies of title insurance relating to the real
property listed in this

 

Section 2(f) have been delivered to the Administrative Agent.

 

(g) Set forth below opposite the name of each Grantor are the names and
addresses of all Persons other than such Grantor that have possession of any of
the Collateral of such Grantor (with each such Person that holds such Collateral
subject to a Lien (including, but not limited to, warehousemen’s, mechanics’ and
other statutory liens) indicated by an “*”):

 

Grantor

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grantor

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grantor

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Grantor

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

Grantor

 

Address

 

County

 

State

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.        Unusual Transactions. All Accounts have been originated by the
Grantors and all Inventory has been acquired by the Grantors in the ordinary
course of business.

 

4.        File Search Reports. File search reports have been obtained from each
Uniform Commercial Code filing office identified with respect to such Grantor in
Section 2 hereof, and such search reports reflect no Liens against any of the
Collateral other than those permitted under the Credit Documents or Liens which
shall have been released on or prior to the Closing Date in a manner in form and
substance reasonably satisfactory to the Administrative Agent.

 

5.        UCC Filings. Financing statements in substantially the form of
Schedule 5 hereto have been prepared for filing in the proper Uniform Commercial
Code filing office in the jurisdiction in which each Grantor is located and, to
the extent any of the collateral is comprised of fixtures, timber to be cut or
as extracted collateral from the wellhead or minehead, in the proper local
jurisdiction, in each case as set forth with respect to such Grantor in
Section 6 hereof. All filing fees and taxes payable in connection with the
filings described in this Section 5 have been paid or will be paid promptly
after the Closing Date.

 

6.        Schedule of Personal Property Filings. Attached hereto as Schedule 6
is a schedule setting forth, with respect to the personal property filings
described in Section 5 above (other than fixture filings), each filing and the
filing office in which such filing is to be made. The filing and applicable
county recorder’s office in which each fixture filing is to be made is listed on
Schedule 10 hereto.

 

7.        Stock Ownership. Attached hereto as Schedule 7 is a true and correct
list of all the stock, partnership interests, membership interests or other
equity interests owned or held by Holdings, the US Borrower and each Subsidiary
Pledgor and the record and beneficial owners of such stock, partnership
interests, membership interests or other equity interests, including each equity
investment of Holdings, the US Borrower and any Subsidiary Pledgor that
represents 50% or less of the equity of the entity in which such investment was
made. Schedule 7 indicates by footnote which entities are not required to be
pledged pursuant to the Pledge Agreement.

 

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

 

8.        Debt Instruments. Attached hereto as Schedule 8 is a true and correct
list of all instruments, including any promissory notes and other evidence of
indebtedness held by Holdings, the US Borrower and each Subsidiary Pledgor that
are required to be pledged under the Pledge Agreement, including all
intercompany notes between Holdings and each Subsidiary of Holdings and each
Subsidiary of Holdings and each other such Subsidiary.

 

9.        Advances. Attached hereto as Schedule 9 is (a) a true and correct list
of all advances made by Holdings to any Subsidiary of Holdings or made by any
Subsidiary of Holdings to Holdings or to any other Subsidiary of Holdings (other
than those identified on Schedule 8), which advances will be on and after the
date hereof evidenced by one or more intercompany notes pledged to the
Administrative Agent under the Pledge Agreement and (b) a true and correct list
of all unpaid intercompany transfers of goods sold and delivered by or to
Holdings or any Subsidiary of Holdings.

 

10.      Mortgage Filings. Attached hereto as Schedule 10 is a schedule setting
forth, with respect to each property set forth in Section 2(f) hereof, (a) the
exact name of the Person that owns such property as such name appears in its
certificate of incorporation or other organizational document, (b) if different
from the name identified pursuant to clause (a), the exact name of the current
record owner of such property reflected in the records of the filing office for
such property identified pursuant to the following clause and (c) the filing
office in which a Mortgage and a fixture filing as described in Section 3 above
with respect to such property must be filed or recorded in order for the
Administrative Agent to obtain a perfected security interest therein.

 

11.      Intellectual Property. Attached hereto as Schedule 11(A) in proper form
for filing with the United States Patent and Trademark Office is a schedule
setting forth all of each Grantor’s Patents (and all applications therefor),
Patent Licenses, Trademarks (and all applications therefor) and Trademark
Licenses, including the name of the registered owner and the registration number
of each Patent and Trademark owned by such Grantor and the licensor and Patent
or Trademark the subject of each such Patent License and Trademark License.
Attached hereto as Schedule 11(B) in proper form for filing with the United
States Copyright Office is a schedule setting forth all of each Grantor’s
Copyrights (and all applications therefor) and Copyright Licenses, including the
name of the registered owner and the registration number of each Copyright owned
by such Grantor and the licensor and Copyright the subject of such Copyright
License. Each of Schedule 11(A) and Schedule 11(B) contain all the requested
information for Patents, Trademarks and Copyrights arising under the laws of the
United States, any other country or any political subdivision thereof.

 

IN WITNESS WHEREOF, the undersigned have duly executed this certificate on this
30th day of July, 2004.

 

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

 

SCHEDULE 1

 

IDENTITY AND CORPORATE STRUCTURE OF GRANTOR

 

Name

 

Change in Corporate Structure

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

Change in Corporate Structure

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Name

 

Change in Corporate Structure

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(6)                                  The chief executive office of Southern
Color Company, Inc. was 7 Swisher Drive, Cartersville, Georgia 30120. The chief
executive office of Southern Color of Florida, LLC was 333 Cypress Road, Ocala,
Florida 34478. The chief executive office of Southern Color Company was 333
Cypress Road, Ocala, Florida 34478.

 

Name

 

Change in Corporate Structure

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

SCHEDULE 5

 

UCC FILINGS
SEE ATTACHED

 

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

 

SCHEDULE 6

 

SCHEDULE OF FILINGS

 

Debtor

 

Type of Filing

 

Jurisdictions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SCHEDULE 7

 

STOCK OWNERSHIP

 

Legal Name

 

Shareholder(s)

 

Percent of Stock
Owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

*              Not required to be pledged pursuant to the Pledge Agreement.

 

Legal Name

 

Shareholder(s)

 

Percent of Stock
Owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Legal Name

 

Shareholder(s)

 

Percent of Stock
Owned

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SCHEDULE 8

 

DEBT INSTRUMENTS

 

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

 

ANNEX A

 

HOLDER

 

ISSUER

 

FORM

 

INITIAL PRINCIPAL
AMOUNT

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SCHEDULE 9

 

ADVANCES
NONE

 

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

 

SCHEDULE 10

 

MORTGAGE FILINGS

 

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

 

SCHEDULE 11(A)

 

INTELLECTUAL PROPERTY

 

PATENTS — OWNED

 

Registered Owner/Grantor

 

Patent No.

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

PATENT APPLICATIONS

 

Owner

 

Date

 

Application No.

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

PATENTS - LICENSES

 

 

 

 

 

Date of

 

Patent No. or

 

 

 

 

 

Licensor Name and

 

License/

 

Descri , tion of

 

 

 

Grantor

 

Address

 

Sublicense

 

Patent

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

TRADEMARKS/TRADENAMES - OWNED

 

Registered Owner

 

Mark

 

Reg. No.

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Registered Owner

 

Mark

 

Reg. No.

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

·         The exact legal name of this entity is now AlphaGary (Canada) Limited.

 

Registered Owner

 

Mark

 

Rea. No.

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Registered Owner

 

Mark

 

Reg. No.

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reeistered Owner

 

Mark

 

Rea. No.

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Registered Owner

 

Mark

 

Reg. No.

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Registered Owner

 

Mark

 

Rea. No.

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Registered Owner

 

Mark

 

Re .. No.

 

Count

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Registered Owner

 

Mark

 

Reg. No.

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

TRADEMARKS/TRADENAMES - APPLICATIONS

 

Owner

 

Mark

 

Application No.

 

Country

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

TRADEMARKS/TRADENAMES — LICENSES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Licensor Name 

 

Date of

 

 

 

 

 

 

 

Company

 

and Address

 

License/Sublice

 

Mark

 

Country

 

Reg. No.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

OTHERS — LICENSES

 

 

 

 

 

 

 

 

 

 

Licensor Name 

 

Date of

 

 

 

Company

 

and Address

 

License/Sublice

 

Subject Matter

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

SCHEDULE 11(B)

 

COPYRIGHT LICENSES

 

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

 

COPYRIGHTS/COPYRIGHT APPLICATIONS

 

Registration No.

 

Registration Date

 

Title

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT H

 

FORM OF PLEDGE AGREEMENT

 

PLEDGE AGREEMENT dated as of July 30, 2004, among ROCKWOOD SPECIALTIES
INTERNATIONAL, INC., a Delaware corporation (“Holdings”), ROCKWOOD SPECIALTIES
GROUP, INC., a Delaware corporation (the “US Borrower”), the undersigned
Subsidiaries of the US Borrower listed on Schedule 1 hereto (each a “Subsidiary
Pledgor” and, collectively, the “Subsidiary Pledgors”; the US Borrower, Holdings
and the Subsidiary Pledgors are referred to collectively herein as the
“Pledgors”) and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands
Branch, as administrative agent (in such capacity, the “Administrative Agent”)
for the lenders (the “Lenders”) from time to time parties to the Credit
Agreement dated as of July 30, 2004 (as the same may be amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the US
Borrower, Rockwood Specialties Limited, a company incorporated under the laws of
England and Wales (the “UK Borrower” and, together with the US Borrower, the
“Borrowers”), Holdings, the Lenders, the Administrative Agent and UBS Securities
LLC and Goldman Sachs Credit Partners L.P., as co-syndication agents (in such
capacity, the “Co-Syndication 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 Borrowers and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the Borrowers (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 Borrowers 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 US Borrower;

 

WHEREAS, the proceeds of the Extensions of Credit will be used in part to enable
the Borrowers 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;

 

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

 

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
Borrowers under the Credit Agreement that the US 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 US Borrower, (b) the US 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 Co-Syndication 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 Borrowers under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the Borrowers 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 24:00 (German time)
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 Borrowers 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,

 

2

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

 

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 Borrowers 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 Borrowers 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 Co-Syndication Agents, (vi) each counterparty to a
Hedge Agreement the obligations under which constitute Obligations, (vii) the
beneficiaries of each indemnification obligation undertaken by any Credit Party
under any Credit Document and (viii) 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

 

3

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

 

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 1 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.

 

4

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

 

(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.

 

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.”

 

(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

 

5

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

 

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 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 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 US
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

 

6

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

 

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 US 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;

 

(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

 

7

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

 

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.

 

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) and also 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

 

8

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

 

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

 

(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.

 

9

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

 

(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 that,
without any reservation of rights against any Pledgor and without notice to or
further assent by any Pledgor, (a) 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) 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) 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, and (d) 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 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 US
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 US Borrower or any Pledgor or pledgor or any release of the US 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.

 

10

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

 

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 US 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 14.1 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 or
conservator of, or trustee or similar officer for, the US 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 14.2 of the Credit Agreement.  All
communications and notices hereunder to any Subsidiary Pledgor shall be given to
it in care of the US Borrower at the US Borrower’s address set forth in Section
14.2 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 US Borrower.

 

11

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

 

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 14.1 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.

 

(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

 

12

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

 

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

 

13

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

 

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.

 

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

 

SUBSIDIARY PLEDGORS

 

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

 

SCHEDULE 2

TO THE PLEDGE AGREEMENT

 

Pledged Shares

 

[Schedule To Come]

 

Pledged Debt

 

[Schedule To Come]

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SUPPLEMENT NO. [  ] dated as of [            ], to the Pledge Agreement (the
“Pledge Agreement”) dated as of July 30, 2004, among ROCKWOOD SPECIALTIES
INTERNATIONAL, INC., a Delaware corporation (“Holdings”) ROCKWOOD SPECIALTIES
GROUP, INC., a Delaware corporation (the “US Borrower”), the Subsidiaries of the
US Borrower listed on Schedule 1 thereto (each a “Subsidiary Pledgor” and,
collectively, the “Subsidiary Pledgors”; the US Borrower, Holdings and the
Subsidiary Pledgors are referred to collectively herein as the “Pledgors”) and
CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
administrative 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 July 30, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the US Borrower, Rockwood Specialties Limited, a company
incorporated under the laws of England and Wales, Holdings, the Lenders, the
Administrative Agent, UBS Securities LLC and Goldman Sachs Credit Partners L.P.,
as co-syndication agents, and (b) the Guarantee dated as of July 30, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Guarantee”),
among the US 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 Co-Syndication 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
Borrowers under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the Borrowers 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 a “Pledgor” in the
Pledge Agreement shall be deemed to include each Additional Pledgor.  The Pledge
Agreement is hereby incorporated herein by reference.] (10)

 

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

(10) Include for new pledgors only.

 

2

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

 

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 US 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.

 

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.

 

3

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

 

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
US Borrower at the US Borrower’s address set forth in Section 14.2 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.

 

4

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

 

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 FIRST BOSTON, AS ADMINISTRATIVE AGENT,

 

 

 

By

 

 

 

 

 

 

Name:

 

 

Title: 

 

 

 

 

 

 

By

 

 

 

 

 

 

Name:

 

 

Title: 

 

5

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

 

ANNEX A 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

 

Date of Note

 

Maturity Date

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT I

 

FORM OF SECURITY AGREEMENT

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENT dated as of July 30, 2004, among ROCKWOOD SPECIALTIES
INTERNATIONAL, INC., a Delaware corporation (“Holdings”), ROCKWOOD SPECIALTIES
GROUP, INC., a Delaware corporation (the “US Borrower”), each of the
Subsidiaries of the US Borrower listed on Annex A hereto (each such undersigned
Subsidiary being a “Subsidiary Grantor” and collectively the “Subsidiary
Grantors”; the Subsidiary Grantors, Holdings and the US Borrower are referred to
collectively as the “Grantors”) and CREDIT SUISSE FIRST BOSTON, acting through
its Cayman Islands Branch, as administrative agent (in such capacity, the
“Administrative Agent”) for the lenders (“Lenders”) from time to time party to
the Credit Agreement dated as of July 30, 2004 (as the same may be amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among the US Borrower, Rockwood Specialties Limited, a company incorporated
under the laws of England and Wales (the “UK Borrower” and, together with the US
Borrower, the “Borrowers”), Holdings, the Lenders, the Administrative Agent, and
UBS Securities LLC and Goldman Sachs Credit Partners L.P., as co-syndication
agents (in such capacity, the “Co-Syndication Agents”) for the Lenders.

 

WITNESSETH:

 

WHEREAS, (a) pursuant to the Credit Agreement, the Lenders have severally agreed
to make Loans to the Borrowers and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the Borrowers (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 Borrowers or any of their Restricted
Subsidiaries;

 

WHEREAS, pursuant to the Guarantee (the “Guarantee”) dated as of the date
hereof, Holdings and each Subsidiary Grantor party thereto 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;

 

WHEREAS, each Subsidiary Grantor is a Domestic Subsidiary of the US

 

Borrower;

 

2

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

 

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

 

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

 

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
Borrowers under the Credit Agreement that the Grantors shall have executed and
delivered this Security Agreement to the Administrative Agent for the ratable
benefit of the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Co-Syndication 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
Borrowers under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the Borrowers and/or
the Restricted Subsidiaries, the Grantors 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)        The following terms shall have the following meanings:

 

“Administrative Agent” shall have the meaning assigned to such term in the
recitals hereto.

 

“Closing Time” shall mean 24:00 (German time) on the Closing Date. “Collateral”
shall have the meaning assigned to such term in Section 2.

 

“Collateral Account” shall mean any collateral account established by the
Administrative Agent as provided in Section 5.1.

 

“Copyright License” means any written agreement, now or hereafter in effect,
granting any right to any third party under any copyright now or hereafter owned
by any Grantor (including all Copyrights) or that any Grantor otherwise has the
right to license, or granting any right to any Grantor under any copyright now
or hereafter owned by any third party, and all rights of any Grantor under any
such agreement, including those listed on Schedule 1.

 

“copyrights” means, with respect to any Person, all of the following now owned
or hereafter acquired by such Person: (i) all copyright rights in any work
subject to the copyright laws of the United States or any other country, whether
as author, assignee, transferee or

 

3

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

 

otherwise, and (ii) all registrations and applications for registration of any
such copyright in the United States or any other country, including
registrations, recordings, supplemental registrations and pending applications
for registration in the United States Copyright Office.

 

“Copyrights” means all copyrights now owned or hereafter acquired by any
Grantor, including those listed on Schedule 2.

 

“Equipment” shall mean any “equipment,” as such term is defined in the NY UCC,
now or hereafter owned by any Grantor and, in any event, shall include all
machinery, equipment, furnishings, movable trade fixtures and vehicles now or
hereafter owned by any Grantor and any and all additions, substitutions and
replacements of any of the foregoing, wherever located, together with all
attachments, components, parts, equipment and accessories installed thereon or
affixed thereto; but excluding Equipment to the extent it is subject to a
Permitted Lien and the terms of the Indebtedness securing such Permitted Lien
prohibit assignment of, or granting of a security interest in, such Grantor’s
rights and interests therein, provided, that immediately upon the repayment of
all Indebtedness secured by such Permitted Lien, such Grantor shall be deemed to
have granted a Security Interest in all the rights and interests with respect to
such Equipment.

 

“General Intangibles” shall mean all “general intangibles” as such term is
defined in Section 9-102 of the NY UCC and, in any event, including with respect
to any Grantor, all contracts, agreements, instruments and indentures in any
form, and portions thereof, to which such Grantor is a party or under which such
Grantor has any right, title or interest or to which such Grantor or any
property of such Grantor is subject, as the same may from time to time be
amended, supplemented or otherwise modified, including (a) all rights of such
Grantor to receive moneys due and to become due to it thereunder or in
connection therewith, (b) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guarantee with respect thereto, (c) all claims
of such Grantor for damages arising out of any breach thereof or default
thereunder and (d) all rights of such Grantor to terminate, amend, supplement,
modify or exercise rights or options thereunder, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder, in each case
to the extent the grant by such Grantor of a Security Interest pursuant to this
Security Agreement in its right, title and interest in any such contract,
agreement, instrument or indenture is not prohibited by such contract,
agreement, instrument or indenture without the consent of any other party
thereto, would not give any other party to any such contract, agreement,
instrument or indenture the right to terminate its obligations thereunder or is
permitted with consent if all necessary consents to such grant of a Security
Interest have been obtained from the other parties thereto (it being understood
that the foregoing shall not be deemed to obligate such Grantor to obtain such
consents), provided, that the foregoing limitation shall not affect, limit,
restrict or impair the grant by such Grantor of a Security Interest pursuant to
this Security Agreement in any Account or any money or other amounts due or to
become due under any such contract, agreement, instrument or indenture.

 

“Guarantors” shall mean each Grantor other than the US Borrower. “Grantor” shall
have the meaning assigned to such term in the recitals hereto.

 

“Intellectual Property” shall mean all rights, priorities and privileges
relating to intellectual property, whether arising under United States,
multinational or foreign laws or

 

4

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

 

otherwise now owned or hereafter acquired, including (a) all information used or
useful arising from the business including all goodwill, trade secrets, trade
secret rights, know-how, customer lists, processes of production, ideas,
confidential business information, techniques, processes, formulas and all other
proprietary information, and (b) the Copyrights, the Patents, the Trademarks and
the Licenses and all rights to sue at law or in equity for any infringement or
other impairment thereof, including the right to receive all proceeds and
damages therefrom, in each case to the extent the grant by such Grantor of a
Security Interest pursuant to this Security Agreement in any such rights,
priorities and privileges relating to intellectual property is not prohibited by
any contract, agreement or other instrument governing such rights, priorities
and privileges without the consent of any other party thereto, would not give
any other party to any such contract, agreement or other instrument the right to
terminate its obligations thereunder or is permitted with consent if all
necessary consents to such grant of a Security Interest have been obtained from
the relevant parties (it being understood that the foregoing shall not be deemed
to obligate such Grantor to obtain such consents).

 

“Investment Property” shall mean all Securities (whether certificated or
uncertificated), Security Entitlements, Securities Accounts, Commodity Contracts
and Commodity Accounts of any Grantor, whether now or hereafter acquired by any
Grantor, in each case to the extent the grant by a Grantor of a Security
Interest therein pursuant to this Security Agreement in its right, title and
interest in any such Investment Property is not prohibited by any contract,
agreement, instrument or indenture governing such Investment Property without
the consent of any other party thereto, would not give any other party to any
such contract, agreement, instrument or indenture the right to terminate its
obligations thereunder or is permitted with consent if all necessary consents to
such grant of a Security Interest have been obtained from the other parties
thereto (it being understood that the foregoing shall not be deemed to obligate
such Grantor to obtain such consents).

 

“License” shall mean any Patent License, Trademark License, Copyright License or
other license or sublicense to which any Grantor is a party.

 

“NY UCC” has the meaning assigned to such term in Section 1(a).

 

“Obligations” shall mean 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 Borrowers 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, 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 Borrowers 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 Borrowers under or

 

5

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

 

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
Security 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.

 

“Patent License” means any written agreement, now or hereafter in effect,
granting to any third party any right to make, use or sell any invention on
which a patent, now or hereafter owned by any Grantor (including all Patents) or
that any Grantor otherwise has the right to license, is in existence, or
granting to any Grantor any right to make, use or sell any invention on which a
patent, now or hereafter owned by any third party, is in existence, and all
rights of any Grantor under any such agreement, including those listed on
Schedule 3.

 

“patents” means, with respect to any Person, all of the following now owned or
hereafter acquired by such Person: (a) all letters patent of the United States
or the equivalent thereof in any other country, all registrations and recordings
thereof, and all applications for letters patent of the United States or the
equivalent thereof in any other country, including registrations, recordings and
pending applications in the United States Patent and Trademark Office or any
similar offices in any other country, and (b) all reissues, continuations,
divisions, continuations-in-part, renewals or extensions thereof, and the
inventions disclosed or claimed therein, including the right to make, use and/or
sell the inventions disclosed or claimed therein.

 

“Patents” means all patents now owned or hereafter acquired by any Grantor,
including those listed on Schedule 4.

 

“Proceeds” shall mean all “proceeds” as such term is defined in Section 9-102 of
the NY UCC and, in any event, shall include with respect to any Grantor, any
consideration received from the sale, exchange, license, lease or other
disposition of any asset or property that constitutes Collateral, any value
received as a consequence of the possession of any Collateral and any payment
received from any insurer or other person or entity as a result of the
destruction, toss, theft, damage or other involuntary conversion of whatever
nature of any asset or property that constitutes Collateral, and shall include
(a) all cash and negotiable instruments received by or held on behalf of the
Administrative Agent, (b) any claim of any Grantor against any third party for
(and the right to sue and recover for and the rights to damages or profits due
or accrued arising out of or in connection with) (i) past, present or future
infringement of any Patent now or hereafter owned by any Grantor, or licensed
under a Patent License, (ii) past, present or future infringement or dilution of
any Trademark now or hereafter owned by any Grantor or licensed under a
Trademark License or injury to the goodwill associated with or symbolized by any
Trademark now or hereafter owned by any Grantor, (iii) past, present or future
breach of any License and (iv) past, present or future infringement of any
Copyright now or hereafter owned by any Grantor or licensed under a Copyright
License and (c) any and all

 

6

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

 

other amounts from time to time paid or payable under or in connection with any
of the Collateral.

 

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

 

“Security Agreement” shall mean this Security Agreement, as the same may be
amended, supplemented or otherwise modified from time to time.

 

“Security Interest” shall have the meaning assigned to such term in Section 2.

 

“Trademark License” means any written agreement, now or hereafter in effect,
granting to any third party any right to use any trademark now or hereafter
owned by any Grantor (including any Trademark) or that any Grantor otherwise has
the right to license, or granting to any Grantor any right to use any trademark
now or hereafter owned by any third party, and all rights of any Grantor under
any such agreement, including those listed on Schedule 5.

 

“trademarks” means, with respect to any Person, all of the following now owned
or hereafter acquired by such Person: (i) all trademarks, service marks, trade
names, corporate names, company names, business names, fictitious business
names, trade styles, trade dress, logos, other source or business identifiers,
designs and general intangibles of like nature, now existing or hereafter
adopted or acquired, all registrations and recordings thereof (if any), and all
registration and recording applications filed in connection therewith, including
registrations and registration applications in the United States Patent and
Trademark Office or any similar offices in any State of the United States or any
other country or any political subdivision thereof, and all extensions or
renewals thereof, (ii) all goodwill associated therewith or symbolized thereby
and (iii) all other assets, rights and interests that uniquely reflect or embody
such goodwill.

 

“Trademarks” means all trademarks now owned or hereafter acquired by any
Grantor, including those listed on Schedule 6 hereto.

 

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

 

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

 

(e)        Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

 

7

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

 

(f)         References to “Lenders” in this Security Agreement shall be deemed
to include Affiliates of Lenders that may from time to time enter into Hedge
Agreements with the Borrowers.

 

2. Grant of Security Interest.

 

(a) Each Grantor hereby bargains, sells, conveys, assigns, sets over, mortgages,
pledges, hypothecates and transfers to the Administrative Agent, 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 (the “Security Interest”), in all of the following
property now owned or hereafter acquired by such Grantor or in which such
Grantor now has or at any time in future may acquire any right, title or
interest (collectively, the “Collateral”), as collateral security for the prompt
and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations:

 

(i)            all Accounts;

 

(ii)           all Equipment;

 

(iii)          all General Intangibles;

 

(iv)          all Intellectual Property;

 

(v)           all Inventory;

 

(vi)          all cash and cash accounts;

 

(vii)         all Investment Property;

 

(viii)        all books and records pertaining to the Collateral; and

 

(ix)           to the extent not otherwise included, all Proceeds and products
of any and all of the foregoing.

 

(b) Each Grantor hereby irrevocably authorizes the Administrative Agent at any
time and from time to time to file in any relevant jurisdiction any initial
financing statements with respect to the Collateral or any part thereof and
amendments thereto that contain the information required by Article 9 of the
Uniform Commercial Code of each applicable jurisdiction for the filing of any
financing statement or amendment, including whether such Grantor is an
organization, the type of organization and any organizational identification
number issued to such Grantor. Such financing statements may describe the
Collateral as “all assets” or “all property” or such other description as the
Administrative Agent determines in its sole discretion. Each Grantor agrees to
provide such information to the Administrative Agent promptly upon request.

 

Each Grantor also ratifies its authorization for the Administrative Agent to
file in any relevant jurisdiction any initial financing statements or amendments
thereto if filed prior to the date hereof.

 

8

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

 

The Administrative Agent is further authorized to file with the United States
Patent and Trademark Office or United States Copyright Office (or any successor
office or any similar office in any other country) such documents as may be
necessary or advisable for the purpose of perfecting, confirming, continuing,
enforcing or protecting the Security Interest granted by each Grantor, without
the signature of any Grantor, and naming any Grantor or the Grantors as debtors
and the Administrative Agent as secured party.

 

The Security Interests are granted as security only and shall not subject the
Administrative Agent or any other Secured Party to, or in any way alter or
modify, any obligation or liability of any Grantor with respect to or arising
out of the Collateral.

 

3. Representations And Warranties.

 

Each Grantor hereby represents and warrants to the Administrative Agent and each
Secured Party that:

 

3.1. Title: No Other Liens. Except for the Security Interest granted to the
Administrative Agent for the ratable benefit of the Secured Parties pursuant to
this Security Agreement, the Liens permitted by the Credit Agreement and any
Liens securing Indebtedness which is no longer outstanding or any Liens with
respect to commitments to lend which have been terminated, such Grantor owns
each item of the Collateral free and clear of any and all Liens or claims of
others. No security agreement, financing statement or other public notice with
respect to all or any part of the Collateral that evidences a Lien securing any
material Indebtedness is on file or of record in any public office, except such
as have been filed in favor of the Administrative Agent, for the ratable benefit
of the Secured Parties, pursuant to this Security Agreement or are permitted by
the Credit Agreement.

 

3.2. Perfected First Priority Liens. (a) Subject to the limitations set forth in
clause (b) of this Section 3.2, the Security Interests granted pursuant to this
Security Agreement (i) will constitute valid perfected Security Interests in the
Collateral in favor of the Administrative Agent, for the ratable benefit of the
Secured Parties, as collateral security for the Obligations, upon (A) completion
of all filings, registrations, recordings and other actions specified in Section
6 of the Perfection Certificate (as such information is updated pursuant to
Section 9.1(d) of the Credit Agreement) to the extent that a Security Interest
may be perfected by the filing of any UCC financing statement, (B) in the case
of Equipment that is covered by a certificate of title, the filing with the
registrar of motor vehicles or other appropriate authority in the applicable
jurisdiction (as specified in the Perfection Certificate (as such information is
updated pursuant to Section 9.1(d) of the Credit Agreement)) of an application
requesting the notation of the Security Interest created hereunder on such
certificate of title and (C) completion of the filing, registration and
recording of a fully executed agreement in the form hereof (or a supplement
hereto) and containing a description of all Collateral constituting Intellectual
Property in the United Stated Patent and Trademark Office within the three-month
period (commencing as of the date hereof) or, in the case of Collateral
constituting Intellectual Property acquired after the date hereof, thereafter
pursuant to 35 USC §261 and 15 USC § 1060 and the regulations thereunder with
respect to United States Patents and United States registered Trademarks and in
the United States Copyright Office within the one-month period (commencing as of
the date hereof) or, in the case of Collateral constituting Intellectual
Property acquired after the date hereof, thereafter with

 

9

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

 

respect to United States registered Copyrights pursuant to 17 USC §205 and the
regulations thereunder and otherwise as may be required pursuant to the laws of
any other necessary jurisdiction to the extent that a security interest may be
perfected by such filings, registrations and recordings, and (ii) are prior to
all other Liens on the Collateral other than Liens permitted pursuant to Section
10.2 of the Credit Agreement.

 

(b) Notwithstanding anything to the contrary herein, no Grantor shall be
required to perfect the Security Interests granted by this Security Agreement
(including Security Interests in cash, cash accounts and Investment Property) by
any means other than by (i) filings pursuant to the Uniform Commercial Codes of
the relevant State(s), (ii) filings with the registrars of motor vehicles or
other appropriate authorities in the relevant jurisdictions, (iii) filings
approved by United States government offices with respect to Intellectual
Property or (iv) when applicable, possession by the Administrative Agent in the
United States. No Grantor shall be required to complete any filings or other
action with respect to the perfection of Security Interests in any jurisdiction
outside the United States.

 

(c) It is understood and agreed that the Security Interests in cash, cash
accounts and Permitted Investments created hereunder shall not prevent the
Grantors from using such assets in the ordinary course of their respective
businesses.

 

4. Covenants.

 

Each Grantor hereby covenants and agrees with the Administrative Agent and the
Secured Parties that, from and after the date of this Security Agreement until
the Obligations under the Credit Documents are paid in full, the Commitments are
terminated and no Letter of Credit remains outstanding:

 

4.1. Maintenance of Perfected Security Interest: Further Documentation. (a) Such
Grantor shall maintain the Security Interest created by this Security Agreement
as a perfected Security Interest having at least the priority described in
Section 3.2 and shall defend such Security Interest against the claims and
demands of all Persons whomsoever, in each case subject to Section 3.2(b).

 

(b)         Such Grantor will furnish to the Administrative Agent and the
Lenders from time to time statements and schedules further identifying and
describing the assets and property of such Grantor and such other reports in
connection therewith as the Administrative Agent may reasonably request. In
addition, within 30 days after the end of each calendar quarter, such Grantor
will deliver to the Administrative Agent (i) copies of all such certificates of
title issued during such calendar quarter with the notation thereon of the
Administrative Agent’s Security Interest created hereunder in the items of
Equipment covered hereby and (ii) a written supplement hereto substantially in
the form of Annex 2 hereto with respect to any additional Copyrights, Copyright
Licenses, Patents, Patent Licenses, Trademarks and Trademark Licenses acquired
by such Grantor after the date hereof, all in reasonable detail.

 

(c)          Subject to clause (d) below and Section 3.2(b), each Grantor agrees
that at any time and from time to time, at the expense of such Grantor, it will
execute any and all further documents, financing statements, agreements and
instruments, and take all such further actions

 

10

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

 

(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 grant, preserve, protect and perfect the
validity and priority of the Security Interests created or intended to be
created hereby or (y) to enable the Administrative Agent to exercise and enforce
its rights and remedies hereunder with respect to any Collateral, including the
filing of any financing or continuation statements under the Uniform Commercial
Code in effect in any jurisdiction with respect to the Security Interests
created hereby, all at the expense of such Grantor.

 

(d)         Notwithstanding anything in this Section 4.1 to the contrary, (i)
with respect to any assets acquired by such Grantor after the date hereof that
are required by the Credit Agreement to be subject to the Lien created hereby or
(ii) with respect to any Person that, subsequent to the date hereof, becomes a
Subsidiary of the US Borrower that is required by the Credit Agreement to become
a party hereto, the relevant Grantor after the acquisition or creation thereof
shall promptly take all actions required by the Credit Agreement or this Section
4.1.

 

4.2. Changes in Locations, Name, etc. Each Grantor will furnish to the
Administrative Agent prompt written notice of any change (i) in its legal name,
(ii) in its jurisdiction of incorporation or organization, (iii) in the location
of its chief executive office, its principal place of business, any office in
which it maintains books or records relating to Collateral owned by it
(including the establishment of any such new office), (iv) in its identity or
type of organization or corporate structure or (v) in its Federal Taxpayer
Identification Number or organizational identification number. Each Grantor
agrees promptly to provide the Administrative Agent with certified
organizational documents reflecting any of the changes described in the first
sentence of this paragraph. Each Grantor agrees not to effect or permit any
change referred to in the preceding sentence unless all filings have been made
under the Uniform Commercial Code or otherwise that are required in order for
the Administrative Agent to continue at all times following such change to have
a valid, legal and perfected security interest in all the Collateral having at
least the priority described in Section 3.2. Each Grantor also agrees promptly
to notify the Administrative Agent if any material portion of the Collateral is
damaged or destroyed.

 

4.3. Notices. Each Grantor will advise the Administrative Agent and the Lenders
promptly, in reasonable detail, of any Lien of which it has knowledge (other
than the Security Interests created hereby or Liens permitted under the Credit
Agreement) on any of the Collateral which would adversely affect, in any
material respect, the ability of the Administrative Agent to exercise any of its
remedies hereunder.

 

4.4. Special Covenants with Respect to Equipment. (a) Each Grantor shall,
promptly after the acquisition by such Grantor of any item of Equipment that is
covered by a certificate of title under a statute of any jurisdiction under the
law of which indication of a Security Interest on such certificate is required
as a condition of perfection thereof, execute and file with the registrar of
motor vehicles or other appropriate authority in such jurisdiction an
application or other document requesting the notation or other indication of the
Security Interest created hereunder on such certificate of title.

 

11

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

 

(b)         Upon the occurrence and during the continuation of any Event of
Default, all insurance payments in respect of such Equipment shall be paid to
and applied by Administrative Agent as specified in Section 5.5 hereof.

 

(c)          At the Administrative Agent’s request at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
deliver to the Administrative Agent the certificates of title covering each item
of Equipment the perfection of which is governed by the notation on the
certificate of title of the Administrative Agent’s Security Interest created
hereunder.

 

5. Remedial Provisions.

 

5.1. Certain Matters Relating to Accounts. (a) At any time after the occurrence
and during the continuance of an Event of Default, the Administrative Agent
shall have the right to make test verifications of the Accounts in any manner
and through any medium that it reasonably considers advisable, and each Grantor
shall furnish all such assistance and information as the Administrative Agent
may require in connection with such test verifications. The Administrative Agent
shall have the absolute right to share any information it gains from such
inspection or verification with any Secured Party.

 

(b)           The Administrative Agent hereby authorizes each Grantor to collect
such Grantor’s Accounts and the Administrative Agent may curtail or terminate
said authority at any time after the occurrence and during the continuance of an
Event of Default. If required in writing by the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, any
payments of Accounts, when collected by any Grantor, (i) shall be forthwith
(and, in any event, within two Business Days) deposited by such Grantor in the
exact form received, duly endorsed by such Grantor to the Administrative Agent
if required, in a Collateral Account maintained under the sole dominion and
control of and on terms and conditions reasonably satisfactory to the
Administrative Agent, subject to withdrawal by the Administrative Agent for the
account of the Secured Parties only as provided in Section 5.5, and (ii) until
so turned over, shall be held by such Grantor in trust for the Administrative
Agent and the Secured Parties, segregated from other funds of such Grantor. Each
such deposit of Proceeds of Accounts shall be accompanied by a report
identifying in reasonable detail the nature and source of the payments included
in the deposit.

 

(c)           At the Administrative Agent’s request at any time after the
occurrence and during the continuance of an Event of Default, each Grantor shall
deliver to the Administrative Agent all original and other documents evidencing,
and relating to, the agreements and transactions which gave rise to the
Accounts, including all original orders, invoices and shipping receipts.

 

(d)           Upon the occurrence and during the continuance of an Event of
Default, a Grantor shall not grant any extension of the time of payment of any
of the Accounts, compromise, compound or settle the same for less than the full
amount thereof, release, wholly or partly, any person liable for the payment
thereof, or allow any credit or discount whatsoever thereon if the
Administrative Agent shall have instructed the Grantors not to grant or make any

 

12

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

 

such extension, credit, discount, compromise, or settlement under any
circumstances during the continuance of such Event of Default.

 

5.2. Communications with Obligors: Grantors Remain Liable. (a) The
Administrative Agent in its own name or in the name of others may at any time
after the occurrence and during the continuance of an Event of Default, after
giving reasonable notice to the relevant Grantor of its intent to do so,
communicate with obligors under the Accounts to verify with them to the
Administrative Agent’s satisfaction the existence, amount and terms of any
Accounts. The Administrative Agent shall have the absolute right to share any
information it gains from such inspection or verification with any Secured
Party.

 

(b)         Upon the written request of the Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, each
Grantor shall notify obligors on the Accounts that the Accounts have been
assigned to the Administrative Agent for the ratable benefit of the Secured
Parties and that payments in respect thereof shall be made directly to the
Administrative Agent.

 

(c)          Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Accounts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise thereto. Neither the
Administrative Agent nor any Secured Party shall have any obligation or
liability under any Account (or any agreement giving rise thereto) by reason of
or arising out of this Security Agreement or the receipt by the Administrative
Agent or any Secured Party of any payment relating thereto, nor shall the
Administrative Agent or any Secured Party be obligated in any manner to perform
any of the obligations of any Grantor under or pursuant to any Account (or any
agreement giving rise thereto), to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to the
sufficiency of any performance by any party thereunder, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be entitled
at any time or times.

 

5.3. Proceeds to be Turned Over To Administrative Agent. In addition to the
rights of the Administrative Agent and the Secured Parties specified in Section
5.1 with respect to payments of Accounts, if an Event of Default shall occur and
be continuing and the Administrative Agent so requires by notice in writing to
the relevant Grantor (it being understood that the exercise of remedies by the
Secured Parties in connection with an Event of Default under Section 11.5 of the
Credit Agreement shall be deemed to constitute a request by the Administrative
Agent for the purposes of this sentence and in such circumstances, no such
written notice shall be required), all Proceeds received by any Grantor
consisting of cash, checks and other near-cash items shall be held by such
Grantor in trust for the Administrative Agent and the Secured Parties,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the Administrative Agent in the exact form
received by such Grantor (duly endorsed by such Grantor to the Administrative
Agent, if required). All Proceeds received by the Administrative Agent hereunder
shall be held by the Administrative Agent in a Collateral Account maintained
under its sole dominion and control and on terms and conditions reasonably
satisfactory to the Administrative Agent. All Proceeds while held by the
Administrative Agent in a Collateral Account (or by such Grantor in trust for
the Administrative

 

13

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

 

Agent and the Secured Parties) shall continue to be held as collateral security
for all the Obligations and shall not constitute payment thereof until applied
as provided in Section 5.5.

 

5.4. Application of Proceeds. The Administrative Agent shall apply the proceeds
of any collection or sale of the Collateral as well as any Collateral consisting
of cash, 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 Security 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 Grantor 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 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

 

(iii)          third, any surplus then remaining shall be paid to the Grantors
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.

 

5.5. Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent may exercise in respect of the Collateral,
in addition to all 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 or any other applicable law and also 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

 

14

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

 

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 Grantor, and each
Grantor 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 5.4(i), and (y) the ratable satisfaction
of the Obligations in accordance with Section 5.4(ii), pay the purchase price by
crediting the amount thereof against the Obligations. Each Grantor agrees that,
to the extent notice of sale shall be required by law, at least ten days’ notice
to such Grantor 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 Grantor 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. Each Grantor
further agrees, at the Administrative Agent’s request, to assemble the
Collateral and make it available to the Administrative Agent at places which the
Administrative Agent shall reasonably select, whether at such Grantor’s premises
or elsewhere. The Administrative Agent shall apply the net proceeds of any
action taken by it pursuant to this Section 5.5 in accordance with the
provisions of Section 5.4.

 

5.6. Deficiency. Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any Secured Party to collect such deficiency.

 

5.7. Amendments, etc. with Respect to the Obligations; Waiver of Rights. Each
Grantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Grantor and without notice to or further
assent by any Grantor, (a) 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) 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) 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

 

15

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

 

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, and (d) 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 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
Security Agreement or any property subject thereto. When making any demand
hereunder against any Grantor, the Administrative Agent or any other Secured
Party may, but shall be under no obligation to, make a similar demand on the US
Borrower or any Grantor or grantor, and any failure by the Administrative Agent
or any other Secured Party to make any such demand or to collect any payments
from the US Borrower or any Grantor or grantor or any release of the US Borrower
or any Grantor or grantor shall not relieve any Grantor in respect of which a
demand or collection is not made or any Grantor 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 Grantor. For the purposes hereof
“demand” shall include the commencement and continuance of any legal
proceedings.

 

6. The Administrative Agent.

 

6.1. Administrative Agent’s Appointment as Attorney-in-Fact, etc.             
(a) Each Grantor hereby appoints, which appointment is irrevocable and coupled
with an interest, effective upon and during the occurrence of an Event of
Default, the Administrative Agent and any officer or agent thereof, with full
power of substitution, as its true and lawful attorney-in-fact with full
irrevocable power and authority in the place and stead of such Grantor and in
the name of such Grantor or otherwise, for the purpose of carrying out the terms
of this Security 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 Security Agreement, and, without
limiting the generality of the foregoing, each Grantor hereby gives the
Administrative Agent the power and right, on behalf of such Grantor, either in
the Administrative Agent’s name or in the name of such Grantor or otherwise,
without assent by such Grantor, to do any or all of the following, in each case
after and during the occurrence of an Event of Default and after written notice
by the Administrative Agent of its intent to do so:

 

(i)            take possession of and endorse and collect any checks, drafts,
notes, acceptances or other instruments for the payment of moneys due under any
Account or with respect to any other Collateral and file any claim or take any
other action or proceeding in any court of law or equity or otherwise deemed
appropriate by the Administrative Agent for the purpose of collecting any and
all such moneys due under any Account or with respect to any other Collateral
whenever payable;

 

(ii)           in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and papers as
the Administrative Agent may request to evidence the Administrative Agent’s and
the Secured Parties’ Security Interest in such Intellectual Property and the

 

16

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

 

goodwill and general intangibles of such Grantor relating thereto or represented
thereby;

 

(iii)          pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral;

 

(iv)          execute, in connection with any sale provided for in Section 5.5,
any endorsements, assignments or other instruments of conveyance or transfer
with respect to the Collateral;

 

(v)           obtain and adjust insurance required to be maintained by such
Grantor or paid to the Administrative Agent pursuant to Section 4.4;

 

(vi)          direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the Administrative Agent or as the Administrative Agent shall
direct;

 

(vii)         ask or demand for, collect and receive payment of and receipt for,
any and all moneys, claims and other amounts due or to become due at any time in
respect of or arising out of any Collateral;

 

(viii)        sign and endorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors, assignments,
verifications, notices and other documents in connection with any of the
Collateral;

 

(ix)           commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of any Collateral;

 

(x)            defend any suit, action or proceeding brought against such
Grantor with respect to any Collateral (with such Grantor’s consent to the
extent such action or its resolution could materially affect such Grantor or any
of its Affiliates in any manner other than with respect to its continuing rights
in such Collateral);

 

(xi)           settle, compromise or adjust any such suit, action or proceeding
and, in connection therewith, give such discharges or releases as the
Administrative Agent may deem appropriate (with such Grantor’s consent to the
extent such action or its resolution could materially affect such Grantor or any
of its Affiliates in any manner other than with respect to its continuing rights
in such Collateral);

 

(xii)          assign any Copyright, Patent or Trademark (along with the
goodwill of the business to which any such Copyright, Patent or Trademark
pertains), throughout the world for such term or terms, on such conditions, and
in such manner, as the Administrative Agent shall in its sole discretion
determine; and

 

(xiii)         generally, sell, transfer, pledge and make any agreement with
respect to or otherwise deal with any of the Collateral as fully and completely
as though

 

17

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

 

the Administrative Agent were the absolute owner thereof for all purposes, and
do, at the Administrative Agent’s option and such Grantor’s expense, at any
time, or from time to time, all acts and things that the Administrative Agent
deems necessary to protect, preserve or realize upon the Collateral and the
Administrative Agent’s and the Secured Parties’ Security Interests therein and
to effect the intent of this Security Agreement, all as fully and effectively as
such Grantor might do.

 

Anything in this Section 6.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section 6.1(a) unless an Event of Default shall
have occurred and be continuing.

 

(b)           If any Grantor fails to perform or comply with any of its
agreements contained herein, the Administrative Agent, at its option, but
without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.

 

(c)           The expenses of the Administrative Agent incurred in connection
with actions undertaken as provided in this Section 6.1, together with interest
thereon at a rate per annum equal to the highest rate per annum at which
interest would then be payable on any category of past due ABR Loans under the
Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.

 

(d)           Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof. All powers, authorizations and
agencies contained in this Security Agreement are coupled with an interest and
are irrevocable until this Security Agreement is terminated and the Security
Interests created hereby are released.

 

6.2. Duty of Administrative Agent. The Administrative Agent’s sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the NY UCC or otherwise, shall be to
deal with it in the same manner as the Administrative Agent deals with similar
property for its own account. 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. Neither the
Administrative Agent, any Secured Party nor any of their respective officers,
directors, employees or agents shall be liable for failure to demand, collect or
realize upon any of the Collateral or for any delay in doing so or shall be
under any obligation to sell or otherwise dispose of any Collateral upon the
request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the Administrative Agent and the Secured Parties hereunder are
solely to protect the Administrative Agent’s and the Secured Parties’ interests
in the Collateral and shall not impose any duty upon the Administrative Agent or
any Secured Party to exercise any such powers. The Administrative Agent and the
Secured Parties shall be accountable only for amounts that they actually receive
as a result of the exercise of such powers, and neither they nor any of their
officers, directors, employees or agents shall be responsible to any Grantor for
any act or failure to act hereunder, except for their own gross negligence or
willful misconduct.

 

18

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

 

6.3. Authority of Administrative Agent. Each Grantor acknowledges that the
rights and responsibilities of the Administrative Agent under this Security
Agreement with respect to any action taken by the Administrative Agent or the
exercise or non-exercise by the Administrative Agent of any option, voting
right, request, judgment or other right or remedy provided for herein or
resulting or arising out of this Security Agreement shall, as between the
Administrative Agent and the Secured Parties, be governed by the Credit
Agreement and by such other agreements with respect thereto as may exist from
time to time among them, but, as between the Administrative Agent and the
Grantors, the Administrative Agent shall be conclusively presumed to be acting
as agent for the Secured Parties with full and valid authority so to act or
refrain from acting, and no Grantor shall be under any obligation, or
entitlement, to make any inquiry respecting such authority.

 

6.4. Security Interest Absolute. All rights of the Administrative Agent
hereunder, the security interest and all obligations of the Grantors hereunder
shall be absolute and unconditional.

 

6.5. Continuing Security Interest; Assignments Under the Credit Agreement 
Release. (a) This Security Agreement shall remain in full force and effect and
be binding in accordance with and to the extent of its terms upon each Grantor
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 Obligations under the
Credit Documents and the obligations of each Grantor under this Security
Agreement 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 Security
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 Grantor shall automatically be released from its
obligations hereunder and the Security Interest in the Collateral of such
Subsidiary Grantor shall be automatically released upon the consummation of any
transaction permitted by the Credit Agreement as a result of which such
Subsidiary Grantor ceases to be a Domestic Subsidiary of the US Borrower.

 

(c)                 Upon any sale or other transfer by any Grantor 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 14.1 of the Credit
Agreement, the Security Interest 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 Grantor, at such Grantor’s expense, all documents that such Grantor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 6.5 shall be without recourse to
or warranty by the Administrative Agent.

 

19

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

 

6.6. Reinstatement. This Security 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 the US Borrower or any
other Credit Party, or upon or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the US Borrower
or any other Credit Party or any substantial part of its property, or otherwise,
all as though such payments had not been made.

 

7. Administrative Agent As Agent.

 

(a)           Credit Suisse First Boston has been appointed to act as
Administrative Agent hereunder by the Lenders and, by their acceptance of the
benefits hereof, the other Secured Parties. The Administrative Agent shall be
obligated, and shall have the right hereunder, to make demands, to give notices,
to exercise or refrain from exercising any rights, and to take or refrain from
taking any action (including the release or substitution of Collateral), solely
in accordance with this Security Agreement and the Credit Agreement, provided
that the Administrative Agent shall exercise, or refrain from exercising, any
remedies provided for in Section 5 in accordance with the instructions of (i)
Required Lenders or (ii) after the termination of this Security Agreement. In
furtherance of the foregoing provisions of this Section 7(a), each Secured
Party, by its acceptance of the benefits hereof, agrees that it shall have no
right individually to realize upon any of the Collateral hereunder, it being
understood and agreed by such Secured Party that all rights and remedies
hereunder may be exercised solely by the Administrative Agent for the ratable
benefit of the Lenders and Secured Parties in accordance with the terms of this
Section 7(a).

 

(b)           The Administrative Agent shall at all times be the same Person
that is the Administrative Agent under the Credit Agreement. Written notice of
resignation by the Administrative Agent pursuant to Section 12.9 of the Credit
Agreement shall also constitute notice of resignation as Administrative Agent
under this Security Agreement; removal of the Administrative Agent shall also
constitute removal as Administrative Agent under this Security Agreement; and
appointment of a successor Administrative Agent pursuant to Section 12.9 of the
Credit Agreement shall also constitute appointment of a successor Administrative
Agent under this Security Agreement. Upon the acceptance of any appointment as
Administrative Agent under Section 12.9 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent under this Security Agreement,
and the retiring or removed Administrative Agent under this Security Agreement
shall promptly (i) transfer to such successor Administrative Agent all sums,
securities and other items of Collateral held hereunder, together with all
records and other documents necessary or appropriate in connection with the
performance of the duties of the successor Administrative Agent under this
Security Agreement, and (ii) execute and deliver to such successor
Administrative Agent such amendments to fmancing statements and take such other
actions, as may be necessary or appropriate in connection with the assignment to
such successor Administrative Agent of the Security Interests created hereunder,
whereupon such retiring or removed Administrative Agent shall be discharged from
its duties and obligations under this Security Agreement. After any retiring or
removed Administrative Agent’s resignation or

 

20

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

 

removal hereunder as Administrative Agent, the provisions of this Security
Agreement shall inure to its benefit as to any actions taken or omitted to be
taken by it under this Security Agreement while it was Administrative Agent
hereunder.

 

(c) The Administrative Agent shall not be deemed to have any duty whatsoever
with respect to any Secured Party that is a counterparty to a Hedge Agreement
the obligations under which constitute Obligations, until it shall have received
written notice in form and substance satisfactory to the Administrative Agent
from a Grantor or any such Secured Party as to the existence and terms of the
applicable Hedge Agreement.

 

8. Miscellaneous.

 

8.1. Amendments in Writing. None of the terms or provisions of this Security
Agreement may be waived, amended, supplemented or otherwise modified except by a
written instrument executed by the affected Grantor and the Administrative Agent
in accordance with Section 14.1 of the Credit Agreement.

 

8.2. Notices. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 14.2 of the Credit Agreement. All communications and
notices hereunder to any Subsidiary Grantor shall be given to it in care of the
US Borrower at the US Borrower’s address set forth in Section 14.2 of the Credit
Agreement.

 

8.3. No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Secured Party shall by any act (except by a written
instrument pursuant to Section 8.1 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. 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.

 

8.4. Enforcement Expenses; Indemnification. (a) Each Grantor agrees to pay any
and all expenses (including all reasonable fees and disbursements of counsel)
that may be paid or incurred by any Secured Party in enforcing, or obtaining
advice of counsel in respect of, any rights with respect to, or collecting, any
or all of the Obligations and/or enforcing any rights with respect to, or
collecting against, such Grantor under this Security Agreement.

 

(b)         Each Grantor agrees to pay, and to save the Administrative Agent and
the Secured Parties harmless from, any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to

 

21

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

 

be payable with respect to any of the Collateral or in connection with any of
the transactions contemplated by this Security Agreement.

 

(c)          Each Grantor agrees to pay, and to save the Administrative Agent
and the Secured Parties harmless from, any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Security Agreement
to the extent either of the Borrowers would be required to do so pursuant to
Section 12.7 of the Credit Agreement.

 

(d)         The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Credit Documents.

 

8.5. Successors and Assigns. The provisions of this Security Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Grantor may assign,
transfer or delegate any of its rights or obligations under this Security
Agreement without the prior written consent of the Administrative Agent except
pursuant to a transaction permitted by the Credit Agreement.

 

8.6. Counterparts. This Security Agreement may be executed by one or more of the
parties to this Security 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 Security Agreement signed by all the
parties shall be lodged with the Administrative Agent and the US Borrower.

 

8.7. Severability. Any provision of this Security 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.

 

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

 

8.9. Integration. This Security Agreement represents the agreement of each of
the Grantors 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.

 

8.10. GOVERNING LAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED

 

22

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

 

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

 

8.11. Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably and
unconditionally:

 

(a)          submits for itself and its property in any legal action or
proceeding relating to this Security 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 Grantor at its
address referred to in Section 8.2 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 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 8.11 any special, exemplary, punitive or consequential damages.

 

8.12. Acicnowledgments. Each Grantor hereby acknowledges that:

 

(a)          it has been advised by counsel in the negotiation, execution and
delivery of this Security Agreement and the other Credit Documents to which it
is a party;

 

(b)         neither the Administrative Agent nor any other Secured Party has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Security Agreement or any of the other Credit Documents,
and the relationship between the Grantors, on the one hand, and the
Administrative Agent and the other Secured Parties, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor; and

 

(c) no joint venture is created hereby or by the other Credit Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders and any other Secured Party or among the Grantors and the Lenders and
any other Secured Party.

 

8.13. Additional Grantors. Each Subsidiary of the US Borrower that is required
to become a party to this Security Agreement pursuant to Section 9.11 of the
Credit Agreement

 

23

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

 

shall become a Grantor, with the same force and effect as if originally named as
a Grantor herein, for all purposes of this Agreement upon execution and delivery
by such Subsidiary of a Supplement substantially in the form of Annex 1 hereto.
The execution and delivery of any instrument adding an additional Grantor as a
party to this Security Agreement shall not require the consent of any other
Grantor hereunder. The rights and obligations of each Grantor hereunder shall
remain in full force and effect notwithstanding the addition of any new Grantor
as a party to this Security Agreement.

 

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

 

24

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

ANNEX 1 TO THE

SECURITY AGREEMENT

 

SUPPLEMENT NO. [  ] dated as of [                  ], tothe Security Agreement
dated as of July 30, 2004, among ROCKWOOD SPECIALTIES GROUP, INC., a Delaware
corporation (the “US Borrower”), ROCKWOOD SPECIALTIES INTERNATIONAL, INC., a
Delaware corporation (“Holdings”), each subsidiary of the US Borrower listed on
Schedule 1 thereto (each such subsidiary individually a “Subsidiary Grantor”
and, collectively, the “Subsidiary Grantors”; the Subsidiary Grantors, Holdings
and the US Borrower are referred to collectively herein as the “Grantors”),
CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
administrative 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 July 30, 2004
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the US Borrower, Rockwood Specialties Limited, a company
incorporated under the laws of England and Wales (the “UK Borrower” and,
together with the US Borrower, the “Borrowers”), Holdings, the Lenders, the
Administrative Agent, UBS Securities LLC and Goldman Sachs Credit Partners L.P.,
as co-syndication agents and (b) the Guarantee dated as of July 30, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Guarantee”),
among the US 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 Security Agreement.

 

C.      The Grantors have entered into the Security Agreement in order to induce
Administrative Agent, the Co-Syndication 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
Borrowers under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the Borrowers and/or
the Restricted Subsidiaries.

 

D.      Section 9.11 of the Credit Agreement and Section 8.13 of the Security
Agreement provide that each Subsidiary of the US Borrower that is required to
become a party to the Security Agreement pursuant to Section 9.11 of the Credit
Agreement shall become a Grantor, with the same force and effect as if
originally named as a Grantor therein, for all purposes of the Security
Agreement upon execution and delivery by such Subsidiary of an instrument in the
form of this Supplement. Each undersigned Subsidiary (each a “New Grantor”) is
executing this Supplement in accordance with the requirements of the Security
Agreement to become a Subsidiary Grantor under the Security 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 the New Grantors agree as follows:

 

SECTION 1. In accordance with Section 8.13 of the Security Agreement, each New
Grantor by its signature below becomes a Grantor under the Security Agreement
with the same force and effect as if originally named therein as a Grantor and
each New Grantor hereby (a) agrees to all the terms and provisions of the
Security Agreement applicable to it as a Grantor thereunder and (b) represents
and warrants that the representations and warranties made by it as a Grantor
thereunder are true and correct on and as of the date hereof. In furtherance of
the foregoing, each New Grantor, as security for the payment and performance in
full of the Obligations, does hereby bargain, sell, convey, assign, set over,
mortgage, pledge, hypothecate and transfer to the Administrative Agent, and
hereby grants to the Administrative Agent, for the ratable benefit of the
Secured Parties, a Security Interest in all of the Collateral of such New
Grantor. Each reference to a “Grantor” in the Security Agreement shall be deemed
to include each New Grantor. The Security Agreement is hereby incorporated
herein by reference.

 

SECTION 2. Each New Grantor represents and warrants to the Administrative Agent
and the other Secured Parties that this Supplement has been duly authorized,
executed and delivered by it and constitutes its legal, valid and binding
obligation, enforceable against it in accordance with its terms.

 

SECTION 3. 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 US Borrower. This Supplement shall become effective
as to each New Grantor when the Administrative Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of such New Grantor and the Administrative Agent.

 

SECTION 4. Each New Grantor hereby represents and warrants that (a) set forth on
Schedule I attached hereto is a true and correct schedule of the location of any
and all Collateral of such New Grantor, (b) set forth under its signature hereto
is (i) the legal name of such New Grantor, (ii) the jurisdiction of
incorporation or organization of such New Grantor, (iii) the true and correct
location of the chief executive office and principal place of business and any
office in which it maintains books or records relating to Collateral owned by
it, (iv) the identity or type of organization or corporate structure of such New
Grantor and (v) the Federal Taxpayer Identification Number and organizational
number of such New Grantor and (c) as of the date hereof (i) Schedule II hereto
sets forth all of each New Grantor’s Copyright Licenses, (ii) Schedule III
hereto sets forth, in proper form for filing with the United States Copyright
Office, all of each New Grantor’s Copyrights (and all applications therefor),
(iii) Schedule IV hereto sets forth all of each New Grantor’s Patent Licenses,
(iv) Schedule V hereto sets forth, in proper form for filing with the United
States Patent and Trademark Office, all of each New Grantor’s Patents (and all
applications therefor), (v) Schedule VI hereto sets forth all of each New
Grantor’s Trademark Licenses, (vi) Schedule VII hereto sets forth, in proper
form for filing

 

2

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

 

with the United States Patent and Trademark Office, all of each New Grantor’s
Trademarks (and all applications therefor).

 

SECTION 5. Except as expressly supplemented hereby, the Security Agreement shall
remain in full force and effect.

 

SECTION 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 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 Security 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 8. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 14.2 of the Credit Agreement. All communications and
notices hereunder to each New Grantor shall be given to it in care of the US
Borrower at the US Borrower’s address set forth in Section 14.2 of the Credit
Agreement.

 

SECTION 9. Each New Grantor 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.

 

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

 

 

[NAME OF NEW GRANTOR],

 

 

 

 

By

 

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
Administrative Agent

 

 

 

 

By

 

 

 

 

 

 

 

 

Name:

 

3

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

 

 

 

 

Title:

 

 

 

 

 

 

 

 

By

 

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

4

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE I

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

COLLATERAL

 

Legal Name Jurisdiction of Location of Chief

Incorporation or Executive Office Organization and Principal

Place of Business

 

 

Type of Organization or Corporate Structure

 

Federal Taxpayer Identification Number and  Organizational Identification 
Number

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE II

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

COPYRIGHT LICENSES

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE III

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

COPYRIGHTS

 

 

 

 

 

Registration

Registered Owner/Grantor

 

Title

 

Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE IV

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

PATENT LICENSES

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE V

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

PATENTS

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE VI

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

TRADEMARK LICENSES

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE VII

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

TRADEMARKS

 

Domestic Trademarks

 

Registered

 

 

 

Registration

 

Application

Owner/Grantor

 

Trademark

 

No.

 

No.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Trademarks

 

Registered

 

 

 

Registration

 

Application Country

Owner/Grantor

 

Trademark

 

No.

 

No.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

ANNEX 2 TO THE

SECURITY AGREEMENT

 

SUPPLEMENT NO. [ ] dated as of [          ], to the Security Agreement dated as
of [        ], 2004, among ROCKWOOD SPECIALTIES GROUP, INC., a Delaware
corporation (the “US Borrower”), ROCKWOOD SPECIALTIES INTERNATIONAL, INC., a
Delaware corporation (“Holdings”), each subsidiary of the US Borrower listed on
Schedule 1 thereto (each such subsidiary individually a “Subsidiary Grantor”
and, collectively, the “Subsidiary Grantors”; the Subsidiary Grantors, Holdings
and the US Borrower are referred to collectively herein as the “Grantors”),
CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
administrative 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 July 30, 2004
(as amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the US Borrower, Rockwood Specialties Limited, a company
incorporated under the laws of England and Wales (the “UK Borrower” and,
together with the US Borrower, the “Borrowers”), Holdings, the Lenders, the
Administrative Agent, UBS Securities LLC and Goldman Sachs Credit Partners L.P.,
as co-syndication agents and (b) the Guarantee dated as of July 30, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Guarantee”),
among the US 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 Security Agreement.

 

C.        The Grantors have entered into the Security Agreement in order to
induce the Administrative Agent, the Co-Syndication 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 Borrowers under the Credit Agreement and to induce one or more
Lenders or Affiliates of Lenders to enter into Hedge Agreements with the
Borrowers. Pursuant to Section 4.1(b) of the Security Agreement, within 30 days
after the end of each calendar quarter, each Grantor has agreed to deliver to
the Administrative Agent a written supplement substantially in the form of Annex
2 thereto with respect to any additional Copyrights, Copyright Licenses,
Patents, Patent Licenses, Trademarks and Trademark Licenses acquired by such
Grantor after the date of the Credit Agreement. The Grantors have identified the
additional Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarks
and Trademark Licenses acquired by such Grantors after the date of the Credit
Agreement set forth on Schedule I, II, III, IV, V and VI hereto. The undersigned
Grantors are executing this Supplement in order to facilitate supplemental
filings to be made by the Administrative Agent with the United States Copyright
Office and the United States Patent and Trademark Office.

 

Accordingly, the Administrative Agent and the Grantors agree as follows:

 

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

 

SECTION 1. (a) Schedule 1 of the Security Agreement is hereby supplemented, as
applicable, by the information set forth in Schedule I hereto, (b) Schedule 2 of
the Security Agreement is hereby supplemented, as applicable, by the information
set forth in Schedule II hereto, (c) Schedule 3 of the Security Agreement is
hereby supplemented, as applicable, by the information set forth in Schedule III
hereto, (d) Schedule 4 of the Security Agreement is hereby supplemented, as
applicable, by the information set forth in Schedule IV hereto, (e) Schedule 5
of the Security Agreement is hereby supplemented, as applicable, by the
information set forth in Schedule V hereto, and (f) Schedule 6 of the Security
Agreement is hereby supplemented, as applicable, by the information set forth in
Schedule VI hereto.

 

SECTION 3. Each Grantor hereby represents and warrants that the information set
forth on Schedules I, H, III, IV, V and VI hereto is true and correct.

 

SECTION 2. 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 US Borrower. This Supplement shall become effective
as to each Grantor when the Administrative Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of such Grantor and the Administrative Agent.

 

SECTION 4. Except as expressly supplemented hereby, the Security Agreement shall
remain in full force and effect.

 

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

 

SECTION 6. 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 Security 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. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 14.2 of the Credit Agreement. All communications and
notices hereunder to each Grantor shall be given to it in care of the US
Borrower at the US Borrower’s address set forth in Section 14.2 of the Credit
Agreement.

 

SECTION 8. Each Grantor 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.

 

2

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

 

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

 

 

[GRANTOR],

 

 

 

 

 

 

By

 

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
Administrative Agent

 

 

 

 

 

 

By

 

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

 

 

 

 

 

 

By

 

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

3

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE I

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

COPYRIGHT LICENSES

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE II

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

COPYRIGHTS

 

Registered Owner/Grantor

 

Title

 

Registration
Number

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE III

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

PATENT LICENSES

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE IV

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

PATENTS

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE V

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

TRADEMARK LICENSES

 

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

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE VI

TO SUPPLEMENT NO.      TO THE

SECURITY AGREEMENT

 

TRADEMARKS

 

Domestic Trademarks

 

Registered

 

 

 

Registration

 

Application

Owner/Grantor

 

Trademark

 

No.

 

No.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign Trademarks

 

Registered

 

 

 

Registration

 

Application Country

Owner/Grantor

 

Trademark

 

No.

 

No.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT J-2

 

FORMS OF SINGAPORE PLEDGE AGREEMENTS

 

SINGAPORE PLEDGE dated 30 July 2004 and intended to come into effect on 31
July 2004, among ROCKWOOD SPECIALTIES GROUP, INC., a Delaware corporation (the
“Pledgor”) and CREDIT SUISSE FIRST BOSTON, acting through its 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 30 July, 2004 (as the same may be
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the Pledgor, Rockwood Specialties Limited, a company
incorporated under the laws of England and Wales (the “UK Borrower” and,
together with the Pledgor, the “Borrowers”), Rockwood Specialties
International, Inc., a Delaware corporation (“Holdings”), the Lenders, the
Administrative Agent and Goldman Sachs Credit Partners L.P. and UBS Loan Finance
LLC, as co-syndication agents (in such capacity, the “Co-Syndication Agents”)
for the Lenders.

 

WITNESSETH:

 

WHEREAS, (a) pursuant to the Credit Agreement, the Lenders have severally agreed
to make Loans to the Borrowers and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the Borrowers (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 Borrowers;

 

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

 

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
Borrowers under the Credit Agreement that the Pledgor shall have executed and
delivered this Pledge to the Administrative Agent for the ratable benefit of the
Secured Parties; and

 

WHEREAS, the Pledgor is the legal and beneficial owner of the shares described
under Schedule 1 hereto and issued by Rockwood Specialties (Singapore) Pte
Limited (the “Charged Company”) (the pledged shares described above are,
together with any shares obtained in the future of the Charged Company (the
“After-acquired Shares”), referred to collectively herein as the “Pledged
Shares”).

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Co-Syndication 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
Borrowers under the Credit Agreement and to

 

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

 

induce one or more Lenders or Affiliates of Lenders to enter into Hedge
Agreements with the Borrowers, the Pledgor hereby agrees 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.

 

(b)                                      As used herein, the term “Act” means
the Conveyancing and Law of Property Act, Chapter 61 of Singapore.

 

(c)                                       As used herein, the term “Equity
Interests” means securities and investments of any kind in a limited liability
company, 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, any warrants, options or
other rights entitling the holder thereof to subscribe for, purchase or acquire
any of the foregoing and all other rights attaching or relating to securities or
investments or other securities or investments in the future deriving from 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 Borrowers 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, 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 Borrowers 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
Borrowers 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 other Credit Party
under or pursuant to this Pledge or the other Credit Documents, (iv) the due and
punctual payment and performance of all obligations of each Credit Party 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.

 

2

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

 

(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 Co-Syndication Agents,
(vi) each counterparty to a Hedge Agreement the obligations under which
constitute Obligations, (vii) the beneficiaries of each indemnification
obligation undertaken by any Credit Party under any Credit Document and
(viii) any successors, indorsees, transferees and assigns of each of the
foregoing.

 

(f)                                         References to “Lenders” in this
Pledge shall be deemed to include Affiliates of Lenders that may from time to
time enter into Hedge Agreements with the Borrowers.

 

(g)                                      The words “hereof,” “herein” and
“hereunder” and words of similar import when used in this Pledge shall refer to
this Pledge as a whole and not to any particular provision of this Pledge, and
Section references are to Sections of this Pledge 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.

 

(i)                                          Unless expressly provided to the
contrary, a Person (other than the Secured Parties) who is not a party hereto
has no right under the Contracts (Rights of Third Parties) Act, Chapter 53B of
Singapore to enforce or to enjoy the benefit of any term of this Pledge.
Notwithstanding any terms herein, the consent of any Person not party hereto is
not required for any variation (including any release or compromise of any
liability under) or termination of this Pledge.

 

2. Grant of Security. The Pledgor, as beneficial owner and as a continuing
security for the due and punctual payment and discharge of all Obligations,
hereby charges and agrees to charge in favour of the Administrative Agent (for
the ratable benefit of the Secured Parties) by way of first fixed charge and
assigns, and agrees to assign absolutely to the Administrative Agent (for the
ratable benefit of the Secured Parties), all of the 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 the Pledgor
and the certificates representing such Pledged Shares and any interest of the
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, options or other rights to subscribe for, purchase or otherwise
acquire any of the Pledged Shares, 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 Pledged Shares, provided that
the Pledged Shares under this Pledge shall not include more than 65 percent of
the issued and outstanding Equity Interests in the Charged Company; and

 

(b)                                      to the extent not covered by clause
(a) above, all proceeds of any or all of the foregoing Collateral. For purposes
of this Pledge, the term “proceeds” includes whatever is receivable or received
when Collateral or proceeds are sold, exchanged, collected or otherwise

 

3

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

 

disposed of, whether such disposition is voluntary or involuntary, and includes
proceeds of any indemnity or guarantee payable to the Pledgor or the
Administrative Agent from time to time with respect to any of the Collateral.

 

3.                                       Security for Obligations. This Pledge
secures the payment and discharge of all Obligations of the Credit Parties.
Without limiting the generality of the foregoing, this Pledge secures the
payment of all amounts that constitute part of the Obligations and would be owed
by 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 the Credit Parties.

 

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 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 the 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 1 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.
The Pledgor represents and warrants as follows:

 

(a)                                       Schedule 1 hereto (i) correctly
represents as of the date hereof 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 (ii) includes all Equity Interests required to be pledged hereunder. Except
as set forth on Schedule 1, the Pledged Shares represent 65 percent of the
issued and outstanding Equity Interests of each class of Equity Interests in the
Charged Company on the date hereof.

 

(b)                                      The Pledgor is a corporation
established and existing and is in good standing under the laws of the state of
Delaware, United States of America, and is not a foreign company for the
purposes of, and which should be registered under, Division 2 of Part XI of the
Companies Act, Chapter 50 of Singapore.

 

(c)                                       The Pledgor is the legal and
beneficial owner of the Collateral charged by the Pledgor hereunder free and
clear of any Lien, except for the Lien created by this Pledge.

 

(d)                                      As of the date of this Pledge, the
Pledged Shares pledged by the Pledgor hereunder have been duly authorized and
validly issued and are fully paid and non-assessable.

 

4

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

 

(e)                                       The execution and delivery by the
Pledgor of this Pledge and the charge of the Collateral by the Pledgor hereunder
pursuant hereto create a valid and perfected first-priority

 

charge over the Collateral, securing the payment of the Obligations, in favor of
the Administrative Agent for the ratable benefit of the Secured Parties.

 

(f) The Pledgor has full power, authority and legal right to charge all the
Collateral pursuant to this Pledge.

 

6.                                       Further Assurances. The Pledgor agrees
that at any time and from time to time, at the expense of the 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.

 

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

 

(i)                                          The 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 the terms of
this Pledge or the other Credit Documents.

 

(ii)                                       The Administrative Agent shall
execute and deliver (or cause to be executed and delivered) to the Pledgor all
such proxies and other instruments as the Pledgor may reasonably request for the
purpose of enabling the 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, the Pledgor
shall be entitled to receive and retain and use, free and clear of the Lien of
this Pledge, any and all dividends and distributions 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, 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 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 the
Pledgor, be received in trust for the benefit of the Administrative Agent, be
segregated from the other property or funds of the 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 the Pledgor by the
Administrative Agent following the occurrence and during the continuance of an
Event of Default,

 

5

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

 

(i)                                     all rights of the Pledgor to exercise or
refrain from exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 7(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
Pledgor to exercise such rights. After all Events of Default have been cured or
waived and the Pledgor has delivered to the Administrative Agent a certificate
to that effect, the Pledgor will have the right to exercise the voting and
consensual rights that the Pledgor would otherwise be entitled to exercise
pursuant to the terms of Section 7(a)(i) (and the obligations of the
Administrative Agent under Section 7(a)(ii) shall be reinstated);

 

(ii)                                  all rights of the Pledgor to receive the
dividends and distributions that the Pledgor would otherwise be authorized to
receive and retain pursuant to Section 7(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 such dividends and
distributions during the continuance of such Event of Default. After all Events
of Default have been cured or waived and the Pledgor has delivered to the
Administrative Agent a certificate to that effect, the Administrative Agent
shall repay to the Pledgor (without interest) all dividends, distributions and
principal and interest payments that the Pledgor would otherwise be permitted to
receive, retain and use pursuant to the terms of Section 7(b);

 

(iii)                               all dividends and distributions that are
received by the Pledgor contrary to the provisions of Section 7(b) and
7(c)(ii) shall be received in trust for the benefit of the Administrative Agent,
shall be segregated from other property or funds of the 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 and distributions to which it may be entitled under
Section 7(b) above, to exercise the voting and other consensual rights that it
may be entitled to exercise pursuant to Section 7(c)(i) above, and to receive
all dividends, distributions and principal and interest payments that it may be
entitled to under Sections 7(c)(ii) and (c)(iii) above, the 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 as the Administrative Agent may reasonably
request.

 

8.                                       Transfers and Other Liens. The 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,
provided that in the event the 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

 

6

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

 

Collateral free and clear of the Lien under this Pledge concurrently with the
consummation of such sale;

 

(b)                                 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), however arising,
and any and all Persons whomsoever.

 

9.                                            Administrative Agent Appointed
Attorney. The Pledgor by way of security appoints, which appointment shall (for
so long as any of the Obligations under the Credit Documents and the obligations
of the Pledgor under this Pledge have not been satisfied by payment in full, any
of the Commitments are still in force or any of the Letters of Credit are
outstanding) be irrevocable, the Administrative Agent as the Pledgor’s attorney,
with full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise to take any action and to execute any instrument, 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, including to receive, indorse and
collect all instruments made payable to the Pledgor representing any dividend or
distribution payment in respect of the Collateral or any part thereof and to
give full discharge for the same.

 

10.                                      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.

 

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

 

(a)                                  The Administrative Agent and any nominee of
the Administrative Agent may exercise in respect of all or any of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it and without the restrictions contained in section 21
of the Act, all the rights and remedies of the registered holder of the
Collateral and all other powers conferred on mortgagees by section 24 of the Act
(as hereby varied or extended) and 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,

 

7

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

 

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 the Pledgor, and the
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 11(b)(i), and (y) the ratable
satisfaction of the Obligations in accordance with Section 11(b)(ii) pay the
purchase price by crediting the amount thereof against the Obligations. The
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least ten days’ notice to the 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, the 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. Section 25 of the Act shall not apply to this Pledge or to any
security given pursuant hereto. Any third party referred to in this
sub-Section (a) may enjoy the benefit or enforce the terms of this
sub-Section (a) in accordance with the provisions of the Contracts (Rights of
Third Parties) Act, Chapter 53B of Singapore.

 

(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, 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

 

(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.

 

8

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

 

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. Any third party referred to in this sub-Section (b) may enjoy the
benefit or enforce the terms of this sub-Section (b) in accordance with the
provisions of the Contracts (Rights of Third Parties) Act, Chapter 53B of
Singapore.

 

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

 

(d)                                 All payments received by the 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 the Pledgor and shall
be forthwith delivered to the Administrative Agent as Collateral in the same
form as so received (with any necessary indorsement).

 

(e)                                  The Pledgor and Administrative Agent agree
and acknowledge that the Administrative Agent is entering into this Pledge, and
holds its rights and benefits hereunder, as trustee for and on behalf of the
Secured Parties.

 

12.                                 Amendments, etc. with Respect to the
Obligations., Waiver of Rights. The Pledgor shall remain obligated hereunder,
and the charges created hereby shall not be adversely affected, notwithstanding
that, without any reservation of rights against the Pledgor and without notice
to or further assent by the Pledgor, (a) 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) 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) 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, and (d) 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 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

 

9

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

 

or any property subject thereto. When making any demand hereunder against the
Pledgor, the Administrative Agent or any other Secured Party may, but shall be
under no obligation to, make a similar demand on the Pledgor or any pledgor and
any failure by the Administrative Agent or any other such Secured Party to make
any such demand or to collect any payments from the Pledgor or any pledgor or
any release of the Pledgor or any pledgor shall not relieve the Pledgor in
respect of which a demand or collection is not made or the 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 the Pledgor.
For the purposes hereof “demand” shall include the commencement and continuance
of any legal proceedings.

 

13.                                 Continuing Security Interest; Assignments
Under the Credit Agreement;  Release. (a) This Pledge shall remain in full force
and effect and be binding in accordance with and to the extent of its terms upon
the 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 and the obligations of the Pledgor under
this Pledge 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.

 

(b)                                      Upon any sale or other transfer by the
Pledgor of any Collateral that is permitted under the Credit Agreement to any
Person, or upon the effectiveness of any written consent to the release of the
security interest granted hereby in any Collateral pursuant to Section 14.1 of
the Credit Agreement, the obligations of such Pledgor with respect to such
Collateral shall be automatically released and such Collateral sold free and
clear of the Lien created hereby.

 

(c)                                       In connection with any termination or
release pursuant to paragraph (a) or (b), the Administrative Agent shall execute
and deliver to the Pledgor, at the Pledgor’s expense, all documents that the
Pledgor shall reasonably request to evidence such termination or release. Any
execution and delivery of documents pursuant to this Section 13 shall be without
recourse to or warranty by the Administrative Agent.

 

14.                                 Reinstatement. This Pledge 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, administration, liquidation or
reorganization of the Pledgor or any Credit Party, or upon or as a result of the
appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Pledgor or any Credit Party or any substantial part of its
property, or otherwise, all as though such payments had not been made.

 

15.                                 Notices. All notices, requests and demands
pursuant hereto shall be made in accordance with Section 14.2 of the Credit
Agreement.

 

16.                                 Counterparts. This Pledge may be executed by
one or more of the parties to this Pledge on any number of separate counterparts
(including by facsimile or other electronic

 

10

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

 

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
signed by all the parties hereto shall be lodged with the Administrative Agent
and the Pledgor.

 

17.                                 Severability. Any provision of this Pledge
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 shall
endeavour 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.

 

18.                                 Integration. This Pledge represents the
agreement of the Pledgor 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.

 

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

 

(a)                                       None of the terms or provisions of
this Pledge 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 14.1 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 19(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.

 

(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.

 

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

 

21. Successors and Assigns. This Pledge shall be binding upon the successors and
assigns of the Pledgor and shall inure to the benefit of the Administrative
Agent and the other Secured Parties and their respective successors and assigns,
except that the Pledgor may not

 

11

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

 

assign, transfer or delegate any of its rights or obligations under this Pledge
without the prior written consent of the Administrative Agent.

 

22.                            Submission to Jurisdiction; Waivers. The Pledgor
hereby irrevocably and unconditionally:

 

(a)                                            submits itself in any legal
action or proceeding relating to this Pledge, or for recognition and enforcement
of any judgement in respect thereof, to the non-exclusive general jurisdiction
of the courts of Singapore, 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 Rockwood Specialties (Singapore) Pte Ltd (which the Pledgor
hereby irrevocably appoints as its agent for receipt of service of process) do
One Marina Boulevard #28-00 Singapore 018989 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 22 any special, exemplary, punitive or
consequential damages.

 

24. GOVERNING LAW. THIS PLEDGE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF SINGAPORE.

 

12

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

 

EXHIBIT K

 

FORMS OF TAIWAN PLEDGE AGREEMENTS

 

FORM OF TAIWAN PLEDGE AGREEMENT (US Obligations)

 

TAIWAN PLEDGE AGREEMENT dated as of July 30, 2004, among ROCKWOOD SPECIALTIES
GROUP, INC., a Delaware corporation (the “Pledgor”) and CREDIT SUISSE FIRST
BOSTON, acting through its Cayman Islands Branch, as administrative agent (in
such capacity, the “Administrative Agent”) for and on behalf of the Secured
Parties (as defined below) in respect of the Credit Agreement dated as of
July 30, 2004 (as the same may be amended, supplemented or otherwise modified
from time to time, the “Credit Agreement”), among the Pledgor, Rockwood
Specialties Limited, a company incorporated under the laws of England and Wales
(the “UK Borrower” and together with the Pledgor, the “Borrowers”), Rockwood
Specialties International, Inc., a Delaware corporation (“Holdings”), the
Lenders (as defined in the Credit Agreement), the Administrative Agent, Goldman
Sachs Credit Partners L.P., and UBS Securities LLC, together with the
Administrative Agent, as joint lead arrangers and joint bookrunners (in such
capacity, the “Joint Lead Arrangers and Joint Bookrunners”) for the Lenders, and
UBS Securities LLC and Goldman Sachs Credit Partners L.P., as co-syndication
agents (in such capacities, the “Co-Syndication Agents”).

 

WITNESSETH:

 

WHEREAS, (a) pursuant to the Credit Agreement, the Lenders have severally agreed
to make Loans to the Borrowers and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the Borrowers (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 Borrowers;

 

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

 

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
Borrowers under the Credit Agreement that the Pledgor shall have executed and
delivered this Pledge Agreement to the Administrative Agent for the ratable
benefit of the Secured Parties; and

 

WHEREAS, the Pledgor is the legal and beneficial owner of the shares described
under Schedule 1 hereto and issued by Rockwood Electrochemicals Asia Limited
(the “Issuer”) (the pledged shares described above are, together with any shares
acquired by the Pledgor in the future of the Issuer (the “After-acquired
Shares”) referred to collectively herein as the “Pledged Shares”).

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Joint Lead Arrangers and Joint Bookrunners, the
Co-Syndication 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 Borrowers under the Credit Agreement and to induce
one or more Lenders or affiliates of Lenders to enter into Hedge Agreements with
the Borrowers, the Pledgor hereby agrees 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.

 

(b)                                           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.

 

(c)                                            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 Borrowers 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, 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 Borrowers 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 Borrowers 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 other 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 Credit Party 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.

 

(d)                                           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 Co-Syndication Agents,
(vi) each counterparty to a Hedge Agreement the obligations under

 

2

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

 

which constitute Obligations, (vii) the beneficiaries of each indemnification
obligation undertaken by any Credit Party under any Credit Document and
(viii) any successors, indorsees, transferees and assigns of each of the
foregoing.

 

(e)                                            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 the Borrowers.

 

(f)                                              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”.

 

(g)                                           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. The Pledgor hereby
charges to the Administrative Agent and the other Secured Parties for their
ratable benefit with full title guarantee all of the 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 and the
certificates representing such Pledged Shares and any interest of the 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 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 the Issuer; and

 

(b)                                           to the extent not covered by
clause (a) above, all proceeds of any or all of the foregoing Collateral. For
purposes of this Pledge Agreement, the term “proceeds” includes whatever is
receivable or received when Collateral or proceeds are sold, exchanged,
collected or otherwise disposed of, whether such disposition is voluntary or
involuntary, and includes proceeds of any indemnity or guarantee payable to the
Pledgor or the Administrative Agent or any Secured Parties 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.
Subject to Sections 7 (b) and (c), all certificates or instruments, if any,
representing or evidencing the Collateral shall be promptly duly endorsed in
blank by the Pledgor, and delivered to the Administrative Agent, for and on
behalf of the Secured Parties, pursuant hereto and shall be accompanied by duly
executed

 

3

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

 

instruments in blank, all in form and substance reasonably satisfactory to the
Administrative Agent. In addition, the Pledgor shall on the date of this Pledge
Agreement jointly with the Administrative Agent issue a notification (in the
form of Schedule 2 hereto) to the Issuer to (i) state that the Pledgor is
entitled to retain and dispose of the dividends and distributions prior to a
notice is given by the Administrative Agent to the Issuer indicating that an
Event of Default has occurred, and stating that the Administrative Agent and the
Secured Parties are entitled to receive and retain any dividends and
distributions made by the Issuer after serving such notice to the Issuer and
(ii) cause the Issuer to register the share pledge created hereby onto its
shareholders’ register. 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 1 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. The Pledgor represents and warrants as follows:

 

(a)                                            Schedule 1 hereto (i) correctly
represents as of the date hereof 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 (ii) includes all Equity Interests required to be pledged hereunder. Except
as set forth on Schedule 1, the Pledged Shares represent 65 percent of the
issued and outstanding Equity Interests of each class of Equity Interests in the
Issuer on the date hereof.

 

(b)                                           The Pledgor is the legal and
beneficial owner of the Collateral charged by the 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 the Pledgor hereunder have been duly
authorized and validly issued and are fully paid and non-assessable.

 

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

 

(e)                                       The Pledgor has full power, authority
and legal right to charge all the Collateral pursuant to this Pledge Agreement
and this Pledge Agreement constitutes a legal, valid and binding obligation of
the 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.

 

6.                                            Further Assurances. The 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

 

4

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

 

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 and the other Secured Parties to exercise and
enforce its rights and remedies hereunder with respect to any Collateral.

 

7.                                            Voting Rights; Dividends and
Distributions; Etc. (a) So long as no Event of Default shall have occurred and
be continuing , 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 the terms of this Pledge Agreement or the other
Credit Documents.

 

(b) Subject to paragraph (c) below, the Pledgor shall be entitled to receive and
retain and use, free and clear of the Lien of this Pledge Agreement, any and all
dividends and distributions made or paid in respect of the Collateral to the
extent permitted by the Credit Agreement; provided, however, that any and all
noncash dividends or other distributions that would constitute Pledged Shares,
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 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 duly endorsed by the Pledgor in favor of the Administrative Agent and
the other Secured Parties, delivered to the Administrative Agent to hold as,
Collateral and shall, if received by the Pledgor, be received in trust for the
benefit of the Administrative Agent and the other Secured Parties, be segregated
from the other property or funds of the 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 the Pledgor by the Administrative Agent following the
occurrence and during the continuance of an Event of Default,

 

(i)                                     all rights of the Pledgor to exercise or
refrain from exercising the voting and other consensual rights that it would
otherwise be entitled to exercise pursuant to Section 7(a) shall cease, and all
such rights shall thereupon become vested in the Administrative Agent and the
other Secured Parties, which shall thereupon have the sole right to, through the
Administrative Agent, 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 Pledgor to exercise such
rights. After all Events of Default have been cured or waived and the Pledgor
has delivered to the Administrative Agent a certificate to that effect, the
Pledgor will have the right to exercise the voting and consensual rights that
the Pledgor would otherwise be entitled to exercise pursuant to the terms of
Section 7(a);

 

(ii)                                  all rights of the Pledgor to receive the
dividends and distributions that the Pledgor would otherwise be authorized to
receive and retain pursuant to Section 7(b) shall cease, and all such rights
shall thereupon become vested in the Administrative Agent and the other Secured
Parties, which shall thereupon have the

 

5

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

 

sole right to, through the Administrative Agent, receive and hold as Collateral
such dividends and distributions during the continuance of such Event of
Default. After all Events of Default have been cured or waived and the Pledgor
has delivered to the Administrative Agent a certificate to that effect, the
Administrative Agent shall repay to the Pledgor (without interest) all dividends
and distributions that the Pledgor would otherwise be permitted to receive,
retain and use pursuant to the terms of Section 7(b);

 

(iii)                               all dividends and distributions that are
received by the Pledgor contrary to the provisions of Section 7(b) and
7(c)(ii) shall be received in trust for the benefit of the Administrative Agent
and the other Secured Parties, shall be segregated from other property or funds
of the 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 and distributions to which the Administrative Agent and
the other Secured Parties may be entitled under Section 7(b) above, to exercise
the voting and other consensual rights that it may be entitled to exercise for
and on behalf of the Administrative Agent and the other Secured Parties pursuant
to Section 7(c)(i) above, and to receive all dividends and distributions that
the Administrative Agent and the other Secured Parties may be entitled to under
Sections 7(c)(ii) and (c)(iii) above, the 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 as the Administrative Agent may reasonably request.

 

8.                                       Transfers and Other Liens. The 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 the 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 the
Pledgor free and clear of the Lien under this Pledge Agreement concurrently with
the consummation of such sale;

 

(b)                defend its and the Secured Parties’ 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.

 

9.                                       Administrative Agent Appointed
Attorney. The Pledgor hereby appoints, which appointment is irrevocable and
coupled with an interest, the Administrative Agent as the Pledgor’s attorney,
with full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise to take any action and to execute any instrument, 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 the Pledgor

 

6

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

 

representing any dividend or distribution payment in respect of the Collateral
or any part thereof and to give full discharge for the same.

 

10.                                 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.

 

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

 

(a)                                  The Administrative Agent and any nominee of
the Administrative Agent may, on behalf of the Secured Parties, exercise in
respect of all or any 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 pledgee under the law of the Republic of China. The Administrative
Agent and any nominee of the Administrative Agent may, on behalf of the Secured
Parties and with prior notice to the Pledgor, except as specified below, sell
the Collateral or any part thereof at a public sale. To the extent permitted by
the law of the Republic of China, 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 the Pledgor, and the 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 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 11(b)(i), and (y) the ratable satisfaction of the Obligations in
accordance with Section 11(b)(ii) pay the purchase price by crediting the amount
thereof against the Obligations. The Pledgor agrees that, to the extent notice
of sale shall be required by law, at least ten days’ notice to the Pledgor of
the time and place of any public sale 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 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, the
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 public sale was less than the price that might have

 

7

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

 

been obtained through any other means of disposal of the Collateral, 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 the 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

 

(iii)                          third, any surplus then remaining shall be paid
to the Pledgor or its 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, on behalf of
the Secured Parties, exercise any and all rights and remedies of the Pledgor in
respect of the Collateral.

 

(d)                                 All payments received by the 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 and the other Secured Parties, shall be segregated from other property or
funds of the Pledgor and shall be forthwith delivered to the Administrative
Agent for the benefit of the Secured Parties as Collateral in the same form as
so received (with any necessary indorsement).

 

(e)                                  The Pledgor and Administrative Agent agree
and acknowledge that the Administrative Agent is entering into this Pledge
Agreement, and holds its rights and benefits hereunder, as trustee for and on
behalf of the Secured Parties until the date this Pledge Agreement is released
in accordance with its terms.

 

12. Amendments. etc. with Respect to the Obligations: Waiver of Rights. The
Pledgor shall remain obligated hereunder, and the charges created hereby shall
not be adversely

 

8

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

 

affected, notwithstanding that, without any reservation of rights against the
Pledgor and without notice to or further assent by the Pledgor, (a) 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) 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) 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, and (d) 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 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.

 

13. 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 the 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.

 

(b)           Upon any sale or other transfer by the Pledgor of any Collateral
that is permitted under the Credit Agreement to any person, or upon the
effectiveness of any written consent to the release of the security interest
granted hereby in any Collateral pursuant to Section 14.1 of the Credit
Agreement, the obligations of such Pledgor with respect to such Collateral shall
be automatically released and such Collateral sold free and clear of the Lien
created hereby.

 

(c)           In connection with any termination or release pursuant to
paragraph (a) or (b), the Administrative Agent shall execute and deliver to the
Pledgor, at the Pledgor’s expense, all documents that the Pledgor shall
reasonably request to evidence such termination

 

9

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

 

or release. Any execution and delivery of documents pursuant to this Section 13
shall be without recourse to or warranty by the Administrative Agent.

 

14. 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, administration, liquidation or reorganization of the
Pledgor, or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for any Pledgor or any substantial
part of its property, or otherwise, all as though such payments had not been
made.

 

15.          Notices. All notices, requests and demands pursuant hereto shall be
made in accordance with Section 14.2 of the Credit Agreement.

 

16.          Counterparts. This Pledge Agreement may be executed by 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 hereto shall be lodged
with the Administrative Agent and the Pledgor.

 

17.          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.

 

18.          Integration. This Pledge Agreement represents the agreement of the
Pledgor 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.

 

19.          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 Pledgor and the Administrative Agent in accordance
with Section 14.1 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 19(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

 

10

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

 

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.

 

(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.

 

20.            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.

 

21.            Successors and Assigns. This Pledge Agreement shall be binding
upon the successors and assigns of the Pledgor and shall inure to the benefit of
the Administrative Agent and the other Secured Parties and their respective
successors and assigns, except that the Pledgor may not assign, transfer or
delegate any of its rights or obligations under this Pledge Agreement without
the prior written consent of the Administrative Agent.

 

22.            Submission to Jurisdiction; Waivers. The Pledgor hereby
irrevocably and unconditionally:

 

(a)           submits itself in any legal action or proceeding relating to this
Pledge Agreement, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the Republic
of China, 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 the Pledgor at its
address set forth in Section 15 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

 

11

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

 

(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 22 any special, exemplary, punitive or consequential damages.

 

23.          Effective Date. This Pledge Agreement shall become effective at
24:00 (German time) on the Closing Date.

 

24.          GOVERNING LAW. THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE REPUBLIC OF CHINA.

 

12

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

 

SCHEDULE 2

 

NOTIFICATION TO THE COMPANY REGARDING PLEDGE OF SHARES

 

 

Date:

 

To: Rockwood Electrochemicals Asia Limited

 

Rockwood Specialties Group, Inc.

 

Rockwood Specialties Group, Inc. (the “Pledgor”), a shareholder of Rockwood
Electrochemicals Asia Limited (the “Company”), hereby notifies, jointly with the
Administrative Agent named below, the Company that the Pledgor has created a
pledge over the shares described below in favor of the Secured Parties (as
defined in the Pledge Agreement entered into on July 30, 2004 by Pledgors and
the Administrative Agent), among which CREDIT SUISSE FIRST BOSTON acts as the
administrative agent (“Administrative Agent”) and hereby request the Company to
record the pledge on its shareholders’ roster accordingly.

 

The Pledgor and the Administrative Agent further notifies the Company that the
Pledgor and the Administrative Agent have agreed that (i) before the
Administrative Agent serves a notice to the Company indicating that an Event of
Default (as defined in the Pledge Agreement) has occurred, the Pledgor is
entitled to retain and dispose of all dividends, interest, cash, and other
property arising from the shares below (“Distributions”) from time to time
distributed by the Company, and (ii) after the Administrative Agent serves such
notice to the Company, it is entitled to receive and retain the Distributions;
in which case, the Company shall deliver the Distributions to the Administrative
Agent for the ratable benefit of the Secured Parties.

 

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

 

Type of Shares

 

Serial Number of
Share
Certificates

 

Number of
Share Certificates

 

Number of Shares
Represented by the Share
Certificate

 

Ordinary

 

92-NX-0000001

 

1

 

325,000

 

 

 

 

 

 

 

 

 

Total

 

 

 

1

 

325,000

 

A

Account

 

01

 

 

 

Pledgor

Number

 

 

 

 

 

 

Account
Name

 

Rockwood Specialties Group Inc.

 

Registered
Chop

 

 

 

Rockwood Specialties Group, Inc.

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

CREDIT SUISSE FIRST BOSTON, ACTING THROUGH ITS CAYMAN ISLANDS BRANCH, as
Administrative Agent

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

 

By:

 

 

 

 

Name:

 

 

 

Title:

 

 

2

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

 

EXHIBIT L-1

 

FORM OF UK DEBENTURE

 

 

Dated 30 July 2004

 

ROCKWOOD SPECIALTIES LIMITED
and
OTHERS
and
CREDIT SUISSE FIRST BOSTON

 

 

FIXED AND FLOATING CHARGE

 

 

LATHAM&WATKINS

 

London

 

99 Bishopsgate
London EC2M 3XF
+44 020 7710 1000 (Tel)
+44 020 7374 4460 (Fax)
www.lw.com

 

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

 

Contents

 

Clause

 

Page

 

 

 

1.

Interpretation

1

 

 

 

2.

Covenant to pay secured amounts

4

 

 

 

3.

Fixed and floating charges

4

 

 

 

4.

Continuance of security and release

7

 

 

 

5.

General covenants and representations

8

 

 

 

6.

The Administrative Agent’s powers

13

 

 

 

7.

Receiver or Administrator

14

 

 

 

8.

Application of proceeds

17

 

 

 

9.

Protection of third parties

18

 

 

 

10.

Protection of Administrative Agent and Receiver

19

 

 

 

11.

Expenses and indemnity

19

 

 

 

12.

Protection of charges

20

 

 

 

13.

Crystallisation

21

 

 

 

14.

Power of attorney, etc

22

 

 

 

15.

Inspection

23

 

 

 

16.

Other security, etc

23

 

 

 

17.

Set-off

25

 

 

 

18.

Avoidance of payments

26

 

 

 

19.

Currency conversion

26

 

 

 

20.

Declaration of Trust

27

 

 

 

21.

Execution of documents

27

 

 

 

22.

Notices and demands

27

 

 

 

23.

Further provisions

27

 

i

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

 

24.

Choice of law

29

 

 

Schedule 1 List of Charging Companies other than UK Borrower

30

 

 

Schedule 2 List of Properties

31

 

ii

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

 

THIS DEED OF CHARGE is made on 30 July 2004 BETWEEN

 

(1)                                  ROCKWOOD SPECIALTIES LIMITED (the “UK
Borrower”), registered in England under number 4050394, and the companies listed
in schedule 1 (together the “Charging Companies” and each a “Charging Company);
and

 

(2)                                  CREDIT SUISSE FIRST BOSTON, acting through
its Cayman Islands Branch, at Eleven Madison Avenue, New York, NY 10010, United
States of America, as administrative agent and trustee for the Secured Parties.

 

WHEREAS:

 

(A)                              The Lenders have severally agreed to make the
Loans to Rockwood Specialties Group, Inc. (the “US Borrower”) and the UK
Borrower and the Letter of Credit Issuer has agreed to issue Letters of Credit
for the account of the US Borrower and the UK Borrower upon the terms and
subject to the conditions set forth in the credit agreement (the “Credit
Agreement”) dated as of 30 July 2004, among the US Borrower, the UK Borrower,
Rockwood Specialties International, Inc., the lending institutions from time to
time party thereto as Lenders, Credit Suisse First Boston (acting through its
Cayman Islands Branch) as administrative agent and collateral agent and UBS
Securities LLC and Goldman Sachs Credit Partners L.P. as co-syndication agents;
and

 

(B)                                Under Section 6.1(h) of the Credit Agreement,
the Charging Companies are required to execute this Deed in favour of the
Administrative Agent for the rateable benefit of the Secured Parties.

 

WITNESSES AS FOLLOWS:

 

1.                                       Interpretation

 

1.1                                 Definitions: In this Deed, each of the
following expressions has, except so far as the context otherwise requires, the
meaning shown:

 

“1925 Act” means the Law of Property Act 1925 (as amended); “Act” means the
Companies Act 1985 (as amended);

 

“Administrative Agent” means Credit Suisse First Boston (acting through its
Cayman Island Branch) as administrative agent and trustee for the Secured
Parties under this Deed or such other Person as may from time to time be
appointed as successor Administrative Agent to hold the whole or any part of the
security created hereby;

 

“Charged Property” means the property, assets, undertaking and rights for the
time being comprised in or subject to the Liens created by this Deed; and
references to the Charged Property include references to any part of it;

 

“Closing Time” means 24:00 (German time) on the Closing Date;

 

1

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

 

“Debts” means, in relation to each Charging Company, the assets of such Charging
Company described in clause 3.1.1(e);

 

“this Deed” means this present deed and any other document by which, pursuant to
any of its provisions or otherwise, any Charging Company may grant a Lien to the
Administrative Agent in respect of the Charged Property, as, in each case, from
time to time varied in any manner or respect whatsoever, and “charges contained
in this Deed” and “Liens contained in this Deed” and similar expressions shall
be construed accordingly;

 

“Enforcement Event” means the occurrence of an Event of Default, provided that
the Administrative Agent has served notice upon the UK Borrower to the effect
that an Event of Default has occurred and the Liens constituted under this Deed
have become enforceable and provided further that, notwithstanding the
provisions of any other Credit Document, the Administrative Agent shall not be
obliged to enforce the Liens from time to time constituted by or pursuant to
this Deed unless it is satisfied that such action is in accordance with all
applicable laws and regulations;

 

“Incapacity”, in relation to a Person, means the insolvency, liquidation,
dissolution, winding-up, administration, receivership, amalgamation,
reconstruction or any analogous proceeding occurring in relation to that Person
whatsoever;

 

“Insolvency Act” means the Insolvency Act 1986 as amended by the Insolvency Act
2000 and the Enterprise Act 2002;

 

“Investments” means, in relation to each Charging Company, all shares, stocks,
options, debentures, bonds, warrants, certificates and other securities
(including all shares in its subsidiaries) of any kind whatsoever now or in the
future owned legally or beneficially by such Charging Company or in which such
Charging Company has an interest;

 

“Obligations” means the collective reference to: (i) (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 extended to the UK
Borrower, 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 UK 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, 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 UK Borrower or any other Credit
Party that is a Foreign Subsidiary to any of the Secured Parties under the
Credit Agreement and the other Credit Documents; (ii) alt covenants, agreements,
obligations and liabilities of the UK Borrower under or pursuant to the Credit
Agreement and the other Credit Documents; (iii) all the covenants, agreements,

 

2

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

 

obligations and liabilities of each other Credit Party that is a Foreign
Subsidiary under or pursuant to this Deed or the other Credit Documents; (iv)
all obligations of the UK Borrower and each Credit Party that is a Foreign
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) all obligations in respect of overdrafts and related
liabilities owed to the Administrative Agent or its Affiliates by the UK
Borrower or any other Credit Party that is a Foreign Subsidiary arising from or
in connection with treasury, depositary or cash management services or in
connection with any automated clearinghouse transfer of funds; and references to
Obligations include references to any of them;

 

“Properties” means the properties referred to in clauses 3.1.1(a) and (b);

 

“Receiver’ means any Person or Persons appointed (and any additional Person or
Persons appointed or substituted) as administrative receiver, receiver, manager,
or receiver and manager by the Administrative Agent under this Deed or
otherwise;

 

“Secured Amounts” means in relation to each Charging Company, the moneys,
obligations and liabilities which such Charging Company covenants in clause 2 to
pay or discharge and all claims, demands and damages for breach of any such
covenant; and references to the Secured Amounts include references to any of
them;

 

“Secured Parties” means (i) the Lenders, (ii) the Letter of Credit Issuer, (iii)
the Swingline Lender, (iv) the Administrative Agent, (v) the Co-Syndication
Agents, (vi) each counterparty to a Hedge Agreement the obligations under which
constitute Secured Amounts, (vii) the beneficiaries of each indemnification
obligation undertaken by the UK Borrower or any other Credit Party that is a
Foreign Subsidiary under any Credit Document and (viii) any successors,
endorsees, transferees and assigns of each of the foregoing and “Secured Party”
means any one of them; and

 

“Taxes” includes all present and future taxes, levies, imposts, duties, fees or
charges of whatever nature together with interest thereon and penalties in
respect thereof and “Taxation” shall be construed accordingly.

 

1.2                                 Construction: In this Deed, except where the
context otherwise requires:

 

1.2.1                        references to a Charging Company include its
permitted successors and assigns and Persons deriving title through or under
such Charging Company in whole or in part and whether at law or in equity and to
the Administrative Agent includes its successors and assigns and Persons
deriving title through or under the Administrative Agent in whole or in part and
whether at law or in equity;

 

1.2.2                        references to freehold and leasehold property
include all estates, rights and interests in all freehold and leasehold property
and all buildings, structures, fixtures (including trade fixtures), fittings and
all fixed plant, machinery and equipment for the time being thereon (and the
benefit of all contracts, licences and warranties relating thereto) and
references

 

3

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

 

to a mortgage or charge of any freehold or leasehold property includes (i) the
proceeds of sale of any part of that property to the extent that the Charging
Company of that property is entitled to the benefit of those proceeds and (ii)
the benefit of any covenants for title given or entered into by any predecessor
in title of the Charging Company in respect of that property or any moneys paid
or payable in respect of those covenants;

 

1.2.3                        references to intellectual property rights include
all patents, trademarks, service marks, topographical rights, know-how,
technical and confidential information, copyrights, designs, utility models,
inventions, computer software, rights in intemet domain names and databases and
similar assets or rights (whether or not registered or the subject of an
application to register and including improvements, extensions and rights to
apply therefor);

 

1.2.4                        references to a document include any deed
(including this Deed), neogitable instrument, certificate, notice or other
document of any kind and references to any document (or a provision thereof)
shall be construed as a reference to that document or provision as from time to
time amended, supplemented, varied, restated or replaced (in whole or in part);

 

1.2.5                        “subsidiary” has the meaning ascribed to it by
section 736 of the Act;

 

1.2.6                        references to any statute or other legislative
provision shall include any statutory or legislative modification or
re-enactment thereof, or any substitution therefor;

 

1.2.7                        references to insurances mean, in relation to each
Charging Company, all non-life present and future contracts or policies of
insurance taken out by that Charging Company or in which that Charging Company
from time to time has an interest;

 

1.2.8                        references to “the usual course of business” (and
similar expressions) mean, in relation to any Charging Company, the usual course
of business of that Charging Company as carried on by it at the date of this
Deed or otherwise without a breach of the Credit Agreement occurring;

 

1.2.9                        references to “Lenders” shall be deemed to include
Affiliates of Lenders that may from time to time enter into Hedge Agreements
with the UK Borrower;

 

1.2.10                  the words “hereof, “herein”, “hereto” and “hereunder”
and words of similar import when used in this Deed shall refer to this Deed as a
whole and not to any particular provision of this Deed, and Section, subsection,
clause and Schedule references are to this Deed unless otherwise specified. The
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”; and

 

1.2.11                  the meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.

 

1.3                                 Headings: The headings in this Deed shall
not affect its interpretation.

 

4

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

 

1.4                                 Defined terms: Terms and expressions used in
this Deed and not defined in this Deed shall, except so far as the context
otherwise requires, have the meanings given to them in the Credit Agreement.

 

1.5                                 Effect as a deed: This Deed is intended to
take effect as a deed notwithstanding that the Administrative Agent may have
executed it under hand only.

 

2.           Covenant to pay secured amounts

 

Each Charging Company as primary obligor covenants with the Administrative Agent
(on behalf of the Secured Parties) that it will pay when due and payable all
moneys and liabilities and discharge all obligations and liabilities whatsoever
which now are or at any time hereafter may (whether on or after any demand)
become due, owing or payable or due for discharge, in any currency, to the
Secured Parties by it, actually or contingently, solely or jointly and/or
severally with another or others, as principal or surety, under or in connection
with the UK Guarantee and/or this Deed and/or, in the case of the UK Borrower
only, the Credit Agreement and any Hedge Agreement and for the avoidance of
doubt, including the Obligations.

 

3.           Fixed and floating charges

 

3.1                                 Charges: Each Charging Company (and in the
case of clause 3.1.1(a)(i), AlphaGary Limited, CSI Wood Protection Limited and
Rockwood Additives Limited only), with full title guarantee and effective
immediately upon the Closing Time, hereby charges and mortgages to the
Administrative Agent (on behalf of the Secured Parties) as a continuing security
for the payment or discharge of the Secured Amounts:

 

3.1.1                        by way of:

 

(a)                                  first legal mortgage:

 

(i)                                     the freehold property listed in schedule
2; and

 

(ii)                                  all other freehold and, subject to any
required third party consents, all leasehold property wheresoever situate (other
than any heritable property in Scotland) now owned by such Charging Company or
in which such Charging Company has an interest provided that, in any such case,
the book value or Market Value (as defined in the current Appraisal and
Valuation Manual issued by the Royal Institution of Chartered Surveyors) thereof
at the date of this Deed exceeds US$1,000,000 (or the equivalent thereof in any
other currency);

 

(b)                                 first fixed charge, all freehold and,
subject to any required third party consents, leasehold property now owned or
hereafter acquired by such Charging Company or in which such Charging Company
has an interest or obtains an interest after the date of this Deed, save for any
such property the subject of a legal mortgage pursuant to clauses 3.1.1(a) or
12.1.2;

 

5

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

 

(c)                                  first fixed charge, all present and future
goodwill and uncalled capital of such Charging Company;

 

(d)                                 first fixed charge, all intellectual
property rights for the time being or hereafter owned by such Charging Company
or in which such Charging Company has or obtains an interest including all fees,
royalties and other rights derived therefrom or incidental thereto, subject to
any required third party consents to such charge being obtained;

 

(e)                                  first fixed charge, all book debts and
other debts (including rents, revenues and claims) and all moneys and
liabilities whatsoever whether actual or contingent for the time being or
hereafter owing to such Charging Company (including the benefit of any judgment
or order to pay a sum of money) and the benefit of any Liens and securities for
the time being held by such Charging Company in respect of any such debts or
moneys and all cash deposits in any account of such Charging Company with any
Person and all bills of exchange, promissory notes and negotiable instruments of
any description at any time owned or held by such Charging Company provided
that, to the extent such Charging Company creates a Lien which is a Permitted
Lien within the meaning of paragraph (k) of the definition of “Permitted Lien”
over such assets in accordance with the terms of the Credit Agreement, the fixed
charge created by this clause 3.1.1(e) shall be subject to such Permitted Lien;

 

(f)                                    first fixed charge, all the right, title
and interest of such Charging Company to and in any proceeds of any present or
future insurances; and

 

(g)                                 first fixed charge, all Investments and
rights and options to acquire Investments for the time being or hereafter owned
by such Charging Company or in which such Charging Company has or obtains an
interest and all rights in respect of or incidental thereto including all
allotments, dividends, interest and other distributions and all accretions,
benefits and advantages whatsoever and all property accruing or offered at any
time by way of conversion or redemption, bonus, preference, option, dividend,
distribution, interest or otherwise in respect thereof; and

 

3.1.2                        by way of first floating charge, the undertaking of
such Charging Company and all its property, assets and rights, whatsoever and
wheresoever, both present and future (including all stock in trade and including
all freehold and leasehold property) and whether or not expressed to be
mortgaged or charged to the Administrative Agent under clause 3.1.1 above, if
and to the extent such property, assets and rights are not or have ceased to be
effectively mortgaged or charged by way of first mortgage or fixed charge. The
floating charges created by each Charging Company pursuant to this clause 3.1.2
are “qualifying floating charges” for the purposes of paragraph 14.2(a) of
schedule B1 to the Insolvency Act and paragraph 14 of schedule B1 to the
Insolvency Act shall apply to this Deed.

 

6

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

 

3.2                                 The Credit Documents: The obligation on the
part of the Lenders to make further advances under the Credit Agreement shall be
deemed to be incorporated in this Deed and each Charging Company must apply to
the Chief Land Registrar to enter a note of such obligations on the register of
each of the titles referred to in clause 3.3.

 

3.3                                 Registration of restriction against
registered titles: Each Charging Company must apply to the Chief Land Registrar
for the registration against the registered titles (if any) specified in
schedule 2 to this Deed of which it is the owner and any other registered title
against which this Deed may be noted (and against any title to any unregistered
property specified in any such schedule which is or ought to be the subject of a
first registration of title at H.M. Land Registry at the date of this Deed) of a
restriction in the following terms:

 

“Except under an order of the Registrar, no disposition or dealing by the
proprietor of the land is to be registered without the consent of the proprietor
for the time being of the legal charge dated [ ] 2004 between Rockwood
Specialties Limited and others (1) and Credit Suisse First Boston (acting
through its Cayman Islands Branch) (2)”.

 

3.4                                 Assignment: Each Charging Company, with full
title guarantee and as a continuing security for the payment or discharge of the
Secured Amounts (to the extent the same are not the subject of any fixed charge
under clause 3.1.1(e)) assigns to the Administrative Agent by way of security
all its rights to any proceeds of claims brought against professional advisers
in connection with the acquisition and other transactions consummated pursuant
to the Purchase Agreement, to the extent such proceeds are not used to reinstate
or replace assets or to meet a liability in respect of which such monies are
received.

 

3.5                                 Warranty: Each Charging Company warrants to
the Administrative Agent that it is absolutely legally and beneficially entitled
to all of the Charged Property vested in it as at the date of this Deed (and, in
particular, to the property and assets described in the schedules to this Deed)
free from all Liens (other than those arising pursuant to this Deed, the Liens
permitted by the Credit Agreement and any Liens securing Indebtedness which is
no longer outstanding or any Liens with respect to commitments to lend which
have been terminated).

 

3.6                                 Rights attaching to the Investments:

 

3.6.1                        With respect to each Charging Company’s rights and
powers relating to the Investments:

 

(a)                                  such rights and powers shall not be
exercised in any manner which is
inconsistent with the security intended to be conferred on the Administrative
Agent by or pursuant to this Deed (save that to the extent such exercise is
permitted by the Credit Agreement it shall be deemed not to be inconsistent with
such security);

 

(b)                                 each Charging Company shall not permit or
agree to any variation of the rights and powers attaching to or conferred by any
of the Investments, participate in any rights issue, elect to receive or vote in
favour of receiving any dividends

 

7

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

 

other than in the form of cash or participate in any vote concerning a members
voluntary winding-up or a compromise or arrangement pursuant to Section 425 of
the Act, in each case other than as permitted by the Credit Documents;

 

(c)                                  subject to paragraph (d) below, each
Charging Company shall be entitled to receive all dividends, interest and other
monies arising from the Investments and the Administrative Agent undertakes to
pay to the relevant Charging Company all dividends, interest and other movies
arising from the Investments which it may receive promptly upon receipt or to
execute a dividend mandate in favour of such Charging Company; and

 

(d)                                 after the occurrence of an Enforcement Event
and whilst such event is continuing (and without any consent or authority on the
part of any Charging Company) the Administrative Agent may at the Administrative
Agents discretion (in the name of the relevant Charging Company or otherwise):

 

(i)                                     exercise (or refrain from exercising)
any voting rights in respect of the Investments;

 

(ii)                                  apply all dividends, interest and other
monies arising from the Investments as though they were the proceeds of sale
under this Deed as set out in clause 8.1;

 

(iii)                               transfer the Investments into the name of
the Administrative Agent or such nominee(s) of the Administrative Agent as it
shall require; and

 

(iv)                              exercise (or refrain from exercising) the
powers and rights conferred on or exercisable by the legal or beneficial owner
of the Investments to exercise all powers given to trustees by the Trustee Act
2000 in respect of securities or property subject to a trust.

 

4.                                       Continuance of security and release

 

4.1                                 Continuing security: Without prejudice to
the generality of clause 2, the charges contained in this Deed are made for
securing the Secured Amounts, including further advances and shall be without
prejudice and in addition to any other security whatsoever which may be held by
the Administrative Agent from any Charging Company or any other Person for or in
respect of the whole or part of the Secured Amounts; and the charges, covenants
and provisions contained in this Deed shall remain in force as continuing
security to the Administrative Agent notwithstanding any settlement of account
or the existence at any time of a credit balance on any current or other account
or any other act, event or matter whatsoever, except only the execution by the
Administrative Agent as a deed of an absolute and unconditional release or the
execution by or on behalf of the Administrative Agent of a receipt for all (and
not part only) of the Secured Amounts.

 

4.2              Retention of security: Subject to clause 4.3, the
Administrative Agent shall be entitled to retain the security constituted by
this Deed until the date on which all the Secured

 

8

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

 

Amounts and the obligations of the Charging Companies under this Deed 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 Secured Amounts.

 

4.3                                 Release of security:

 

(a)                                  Upon any sale or other transfer by any
Charging Company of any Charged Property that is permitted under the Credit
Agreement to any Person, or upon the effectiveness of any written consent to the
release of the security interest granted hereby in any such Charged Property
pursuant to Section 14.1 of the Credit Agreement, the obligations of such
Charging Company with respect to such Charged Property shall be automatically
released.

 

(b)                                  A Charging Company shall automatically be
released from its obligations hereunder and the security constituted by this
Deed in the assets of such Charging Company shall be automatically released upon
the consummation of any transaction permitted by the Credit Agreement as a
result of which such Charging Company ceases to be a subsidiary of the US
Borrower.

 

4.4                                 Documents of release: In connection with any
termination or release pursuant to clause 4.3 the Administrative Agent shall
execute and deliver to any Charging Company, at such Charging Company’s expense,
all documents that such Charging Company shall reasonably request to evidence
such termination or release. Any execution and delivery of documents pursuant to
this clause 4.4 shall be without recourse to or warranty by the Administrative
Agent.

 

5.                                       General covenants and representations

 

5.1                                 Covenants: During the subsistence of the
security constituted by this Deed, each Charging Company in respect of its own
Charged Property further covenants with the Administrative Agent as follows,
subject in each case to the provisions of the Credit Agreement so that matters
not restricted thereunder shall not be restricted by this Deed:

 

5.1.1                        it will not create or permit to exist any Lien in,
over or affecting any of the Charged Property;

 

5.1.2                        it will 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 Charged Property or (ii) except as permitted by the
Credit Agreement, create or suffer to exist any consensual Lien upon or with
respect to any of the Charged Property, except for the Lien created under this
Deed; provided that in the event a Charging Company sells or otherwise disposes
of assets permitted by the Credit Agreement and such assets are or include any
of the Charged Property, the Administrative Agent shall release such Charged
Property in accordance with clauses 4.3 and 4.4 above;

 

9

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

 

5.1.3                        it will furnish to the Administrative Agent and the
Lenders from time to time statements and schedules further identifying and
describing the assets and property of such Charging Company and such other
reports in connection therewith as the Administrative Agent may reasonably
request;

 

5.1.4                        it will collect in the usual course of business as
agent for the Administrative Agent in a proper and efficient manner and pay into
its account with the Administrative Agent or such other account as the
Administrative Agent may from time to time permit all moneys which it may
receive in respect of its Debts forthwith on receipt (such Charging Company
acknowledging that it may not, without the prior written consent of the
Administrative Agent, at any time when an Enforcement Event is continuing,
withdraw any such moneys from such account) and not transfer, factor, discount,
sell, release, compound, subordinate, defer or vary the terms of any Debts for
the time being due, owing or payable to such Charging Company, nor otherwise set
off or otherwise deal with the same except by getting in the same in the usual
course of business;

 

5.1.5                        it will not call up or receive in advance of calls
all or any part of the uncalled capital of such Charging Company;

 

5.1.6                        it shall maintain the security constituted by this
Deed as a perfected security interest having at least the priority described in
clause 5.2(i) and shall defend such security interest against the claims and
demands of all Persons whomsoever;

 

5.1.7                        it will advise the Administrative Agent and the
Lenders promptly, in reasonable detail, of any Lien of which it has knowledge
(other than the security constituted hereby or Permitted Liens) on any of the
Charged Property which would adversely affect, in any material respect, the
ability of the Administrative Agent to exercise any of its remedies hereunder;

 

5.1.8                        it will, as soon as reasonably practicable, inform
the Administrative Agent in writing if it acquires or agrees to acquire:

 

(a)                                  any freehold or leasehold property or any
beneficial interest therein and in the case of the acquisition or agreement to
acquire any beneficial interest to notify to the Administrative Agent the names
and addresses of the trustees thereof;

 

(b)                                  any Investments or rights to acquire
Investments; and/or

 

(c)                                  any intellectual property rights,

 

but, in each case (other than, in the case of clause 5.1.8(b), where the
relevant Investments are Investments in a Charging Company or in any other
company all or substantially all of the shares of which are at that time owned
by Charging Companies), only if the book value or Market Value (for the time
being as defined in the Appraisal and Valuation Manual issued by the Royal
Institution of Chartered Surveyors) thereof exceeds US$1,000,000 (or its
equivalent in another currency);

 

10

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

 

5.1.9                        it shall take all such action as is available to it
and (prior to the occurrence of an Enforcement Event) requested of it by the
Administrative Agent (acting reasonably):

 

(b)                                 to make all such filings and registrations
and to take all such other steps as may be necessary in connection with the
creation, perfection, protection or maintenance of any security which it may, or
may be required to, create in connection herewith;

 

5.1.10                  if so requested by the Administrative Agent, it will
deliver to the Administrative Agent (or procure delivery to the Administrative
Agent of), and the Administrative Agent shall be entitled to hold and retain,
all (or such part thereof as may from time to time be specified by the
Administrative Agent) of the Investments or the certificates and other documents
of title to or representing the same held or acquired by the Charging Company or
its nominee(s) together with, in each case in form and substance satisfactory to
the Administrative Agent:

 

(a)                                  if any of the Investments are not in the
sole name of such Charging Company, a declaration of trust in respect of such
Investments (to the extent of such Charging Company’s interest therein) in
favour of such Charging Company executed by each Person other than such Charging
Company in whose name such Investments are registered or held;

 

(b)                                  an instrument or instruments of or relating
to the transfer or assignment of such Investments (with the name of the
transferee or assignee, the consideration and the date left blank, but otherwise
duly completed) executed by each Person in whose name any of such Investments
are registered or held; and

 

(c)                                  any other document or thing which the
Administrative Agent may reasonably specify with a view to perfecting or
protecting its security over the Investments,

 

and so that:

 

(i)                                    the Administrative Agent may at any time
after the occurrence of an Enforcement Event which is continuing have the
Investments registered in its name or in the name of, or otherwise have the same
held by, one or more nominees on its behalf; and

 

(ii)                                notwithstanding any other provisions of this
Deed, the Administrative Agent shall not register itself or any nominee as the
owner (whether by legal mortgage or otherwise) of any of the shares in any
Charging Company prior to the occurrence of an Enforcement Event;

 

5.1.11                  it will promptly upon the accrual, offer or issue of any
Investments (in the form of stocks, shares, warrants or other securities) in
which such Charging Company has a beneficial interest, procure the delivery to
the Administrative Agent of (a) all certificates and other documents of title to
or representing such Investments and (b) each of the other documents referred to
in paragraphs (a), (b) and (c) of clause 5.1.10;

 

11

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

 

5.1.12                  it will during the subsistence of the security from time
to time constituted by or pursuant to this Deed pay on the same becoming due all
calls or other payments which may be or become due in respect of any of the
Investments, and in any case of default by such Charging Company in this
respect, the Administrative Agent may if it thinks fit make any such payment on
behalf of such Charging Company in which event any sums so paid by the
Administrative Agent shall be reimbursed by the relevant Charging Company to the
Administrative Agent on demand and shall carry interest from the date of payment
by the Administrative Agent until so reimbursed at the rate and otherwise as
mentioned in Section 2.8(c)(y) of the Credit Agreement;

 

5.1.13                  it will observe and perform all material covenants,
requirements and obligations from time to time imposed on, applicable to or
otherwise affecting the Properties and/or the use, ownership, occupation,
possession, operation, repair, maintenance or other enjoyment or exploitation of
its Properties whether imposed by statute, law or regulation, contract, lease,
licence, grant or otherwise, carry out all registrations or renewals and
generally do all other acts and things (including the taking of legal
proceedings) necessary or desirable to maintain, defend or preserve its right,
title and interest to and in the Properties without infringement by any third
party and not without the prior written consent of the Administrative Agent
(such consent not to be unreasonably withheld or delayed) enter into any onerous
or restrictive obligations affecting any of the same or agree any rent review
relating to any interest in any of its Properties, save in all such cases to the
extent that any failure to do so could not be reasonably expected to have a
Material Adverse Effect;

 

5.1.14                  it will not make any structural or material alteration
without the prior written consent of the Administrative Agent (not to be
unreasonably withheld or delayed) to or to the user of any of the Properties or
do or permit to be done anything which is a “development” within the meaning of
the Town and Country Planning Acts from time to time or any orders or
regulations under such Acts or do or permit or omit to be done any act, matter
or thing as a consequence of which any provision of any statute, bye-law, order
or regulation or any condition of any consent, licence, permission or approval
(whether of a public or private nature) from time to time in force imposed on,
applicable to or otherwise affecting any of its Properties is or may be
infringed to the extent that, in all cases, such an action could reasonably be
expected to have a Material Adverse Effect;

 

5.1.15                  it will:

 

(a)                                  punctually pay, or procure the payment
(using all reasonable endeavours) of, all present and future rent, rates, taxes,
duties, charges, assessments, impositions and outgoings whatsoever (whether
imposed by agreement, statute or otherwise) now or at any time during the
continuance of this security payable in respect of its Properties or any part
thereof or by the owner or occupier thereof in each case where failure to do so
could reasonably be expected to have a Material Adverse Effect; and

 

(b)                                  punctually indemnify the Administrative
Agent and the other Secured Parties and any Receiver (on a several basis)
against all present and future rent, rates, taxes,

 

12

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

 

duties, charges, assessments, impositions and outgoings whatsoever (whether
imposed by agreement, statute or otherwise) now or at any time during the
continuance of this security payable in respect of its Properties or any part
thereof or by the owner or occupier thereof to the extent paid by the
Administrative Agent, any Secured Party or any Receiver in accordance with the
terms hereof;

 

5.1.16                  it will not without the prior written consent of the
Administrative Agent (such consent not to be unreasonably withheld) grant any
lease, part with possession or share occupation of the whole or any part of any
of its Properties or confer any licence, right or interest to occupy or grant
any licence or permission to assign, underlet or part with possession of the
same or any part thereof or permit any Person:

 

(a)                                  to be registered (jointly with the relevant
Charging Company or otherwise) as proprietor under the Land Registration Acts of
any of its Properties nor create or permit to arise any overriding interest
affecting the same within the definition in those Acts or within the meaning of
the Land Registration (Scotland) Act 1979; or

 

(b)                                 to become entitled to any right, easement,
covenant, interest or other title encumbrance which might reasonably be expected
to materially adversely affect the use, value or marketability of any of its
Properties; and

 

5.1.17                  it will not without the prior written consent of the
Administrative Agent (such consent not to be unreasonably withheld) vary,
surrender, cancel or dispose of, or permit to be forfeit, any leasehold interest
in any of its Properties.

 

The obligations of each Charging Company under this clause 5 shall be in
addition to and not in substitution for the covenants for title deemed to be
included in this Deed by virtue of Part 1 of the Law of Property (Miscellaneous
Provisions) Act 1994.

 

5.2                                 Representations: During the subsistence of
the security constituted by this Deed, each Charging Company in respect of its
own Charged Property represents to the Administrative Agent that (i) the
security constituted by this Deed constitutes valid and perfected first-priority
security in the Charged Property in favour of the Administrative Agent, for the
rateable benefit of the Secured Parties, as security for the Secured Amounts
subject to (a) the filing of the prescribed particulars of such security
pursuant to Section 395 of the Act and (b) the registration of such security at
the Land Registry or the Land Charges Registry (as appropriate) and (ii) except
for the security constituted by this Deed, the Liens permitted by the Credit
Agreement and any Liens securing Indebtedness which is no longer outstanding or
any Liens with respect to commitments to lend which have been terminated, such
Charging Company owns each item of the Charged Property free and clear of any
and all Liens or claims of others. Each Charging Company covenants with and
represents to the Administrative Agent that no security agreement, financing
statement or other public notice with respect to all or any part of the Charged
Property that evidences a Lien securing any material Indebtedness is on file or
of record in any public office, except such as have been filed in favour of the
Administrative Agent, for the rateable benefit of the Secured Parties, pursuant
to this Deed or are permitted by the Credit Agreement.

 

13

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

 

5.3                                 Powers and authorisations: Each Charging
Company covenants with and represents to the Administrative Agent that the
documents which contain or establish such Charging Company’s constitution
include provisions which give power, and all necessary corporate authority has
been obtained and action taken, for such Charging Company to grant the charges
contained in this Deed and execute and deliver, and perform the covenants and
obligations contained in, this Deed and that this Deed constitutes valid and
binding obligations of such Charging Company enforceable in accordance with its
terms.

 

5.4                                 Non-violation: Each Charging Company further
covenants and represents to the Administrative Agent that neither the execution
and delivery of this Deed nor the performance of any of the covenants contained
in it does or will contravene or constitute a default under (or result in the
creation or imposition of, or the obligation to create or impose, any Lien upon
any of its property or assets pursuant to), or cause to be exceeded any
limitation on it or the powers of its directors imposed by or contained in:

 

5.4.1                        any law by which it or any of its assets is bound
or affected;

 

5.4.2                        any document which contains or establishes its
constitution; or

 

5.4.3                        any agreement to which it is a party or by which
any of its assets is bound.

 

5.5                                 Non-compliance by any Charging Company: If
any Charging Company for any reason fails to perform any of its obligations to
the Administrative Agent under this Deed, the Administrative Agent shall have
power but shall not be obliged, on behalf of or in the name of such Charging
Company or otherwise, to perform the obligation and to take any steps which the
Administrative Agent may, in its absolute discretion, reasonably consider
appropriate with a view to remedying or mitigating the consequences of such
failure, but so that the exercise of this power, or the failure to exercise it,
shall in no circumstances prejudice the Administrative Agents rights under this
Deed. Any moneys so expended by the Administrative Agent shall be repayable by
such Charging Company to the Administrative Agent on demand together with
interest at the rate specified in Section 2.8(c)(y) of the Credit Agreement from
the date of payment by the Administrative Agent until such repayment, both
before and after judgment. No exercise by the Administrative Agent of its powers
under this clause 5.5 shall make the Administrative Agent or any other of the
Secured Parties liable to account as a mortgagee or heritable creditor in
possession.

 

5.6                                 Credit Agreement: Each Charging Company
hereby warrants and represents that the representations and warranties set forth
in Section 8 of the Credit Agreement as they relate to the Charging Companies or
in the other Credit Documents to which each of the Charging Companies is a
party, each of which is hereby incorporated herein by reference, are true and
correct, and the Administrative Agent and each other Secured Party shall be
entitled to rely on each of them as if they were fully set forth herein.

 

6.                                       The Administrative Agent’s powers

 

6.1                                 Amounts due: The Secured Amounts shall be
deemed to have become due for the purposes of section 101 of the 1925 Act and
the statutory power of sale and of appointing

 

14

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

 

a receiver which are conferred on the Administrative Agent under that Act (as
varied or extended by this Deed) and all other powers shall be deemed to arise
immediately after execution of this Deed but shall only be exercisable after the
occurrence of an Enforcement Event which is continuing.

 

6.2                                 Power of sale: Section 103 of the 1925 Act
shall not apply in relation to any of the charges contained in this Deed and the
statutory power of sale (as extended by this Deed) and all other powers shall be
exercisable at any time after the occurrence of an Enforcement Event which is
continuing.

 

6.3                                 Law of Property Act 1925: The provisions of
the 1925 Act relating to the power of sale and the other powers conferred by
section 101(1) and (2) are hereby extended (as if such extensions were contained
therein) to authorise the Administrative Agent at its absolute discretion, but
only after the occurrence of an Enforcement Event which is continuing:

 

6.3.1                        to sell all of each Charging Company’s title to or
interest in the Charged Property, and to do so for any shares, debentures or
other securities whatsoever, or in consideration of an agreement to pay all or
part of the purchase price at a later date or dates, or an agreement to make
periodical payments, whether or not the agreement is secured by a Lien or a
guarantee, or for such other consideration whatsoever as the Administrative
Agent may think fit, and also to grant any option to purchase, and to effect
exchanges;

 

6.3.2                        with a view to selling the Charged Property (or
offering it for sale), to repair, replace and develop the Charged Property and
to apply for any appropriate permission, licence or approval;

 

6.3.3                        with a view to or in connection with the sale of
the Charged Property, to carry out any transaction, scheme or arrangement which
the Administrative Agent may, in its absolute discretion, consider appropriate;

 

6.3.4                        to insure the Charged Property against such risks
and for such amounts as the Administrative Agent may consider prudent; and

 

6.3.5                        to do all or any of the things or exercise all or
any of the powers which are mentioned or referred to in clause 7.6 as if each of
them was expressly conferred on the Administrative Agent by this Deed and which
may not be included in clauses 6.3.1 to 6.3.4 above.

 

6.4                                 Delegation to Receiver: In addition and
without prejudice to any of its statutory powers, the Administrative Agent may
at any time by deed delegate to the Receiver all or any of the extended powers
of leasing, surrendering or accepting surrenders of leases conferred on the
Administrative Agent by this Deed.

 

6.5                                 Statutory power of leasing: The
Administrative Agent shall have the power to lease and make agreements for
leases at a premium or otherwise, to accept surrenders of leases and to grant
options on such terms as the Administrative Agent shall consider expedient and
without the need to observe any of the provisions of sections 99 and 100 of the
1925 Act.

 

7.                                       Receiver or Administrator

 

15

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

 

7.1                                 Appointment: Subject to clause 7.7, the
Administrative Agent may by writing or by deed appoint such Person or Persons
(including an officer or officers of the Administrative Agent) as it thinks fit
to be administrator for the company concerned or Receiver of the Charged
Property or any part thereof and, in the case of an appointment of more than one
Person, to act together or independently of the other or others and the
Administrative Agent may make such appointment at any time after it has demanded
payment of the Secured Amounts which are due and payable but unpaid or if it is
requested to do so by the relevant Charging Company or upon the presentation of
a petition or application to the court for an administration order in respect of
the relevant Charging Company or if any Person who is entitled to do so gives
written notice of its intention to appoint an administrator or files such a
notice with the court. Where more than one Receiver is appointed, each joint
Receiver shall have the power to act severally and independently of any other
joint Receivers, except to the extent the Administrative Agent may specify to
the contrary. The powers of appointment of a Receiver shall be in addition to
all statutory and other powers of appointment under the 1925 Act (as extended by
this Deed) or otherwise and such powers shall remain exercisable from time to
time by the Administrative Agent in respect of any part of the Charged Property
in accordance with the terms of this Deed.

 

7.2                                 Removal and replacement: Except as otherwise
required by statute, the Administrative Agent may by writing or by deed remove
(so far as it is lawfully able) a Receiver and appoint another in his place or
to act as an additional Receiver.

 

7.3                                 Extent of appointment: The exclusion of any
part of the Charged Property from the appointment of any Receiver shall not
preclude the Administrative Agent from subsequently extending his or their
appointment (or that of any Receiver replacing him or them) to that part or
appointing another Receiver over any other part of the Charged Property.

 

7.4                                 Agent of the relevant Charging Company: A
Receiver shall be the agent of the Charging Company in respect of whose Charged
Property he is appointed and such Charging Company alone shall be responsible
for his acts and defaults and liable on any contracts or engagements made or
entered into or adopted by him; and in no circumstances whatsoever shall the
Administrative Agent be in any way responsible for or incur any liability in
connection with his contracts, engagements, acts, omissions, misconduct,
negligence or default and, if a liquidator of such Charging Company shall be
appointed, the Receiver shall act as principal and not as agent for the
Administrative Agent

 

7.5                                 Remuneration: Subject to section 36 of the
Insolvency Act 1986, the remuneration of any Receiver may be fixed by the
Administrative Agent at a rate appropriate to the work and responsibilities
involved (and may be or include a commission calculated by reference to the
gross amount of all moneys received or otherwise and may include remuneration in
connection with claims, actions or proceedings made or brought against such
Receiver by any Charging Company or any other Person or the performance or
discharge of any obligation imposed upon him by statute or otherwise) but such
remuneration shall be payable by the relevant Charging Company alone; and the
amount of such remuneration may be debited by the Administrative Agent to any
account of such Charging Company,

 

16

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

 

but shall, in any event, form part of the Secured Amounts and accordingly be
secured on the Charged Property under the charges contained in this Deed.

 

7.6                                 Powers: A Receiver of a Charging Company
shall have any and all powers conferred on an administrative receiver, receiver,
manager, receiver and manager, mortgagor and mortgagee in possession by statute
or common law. In addition, a Receiver of a Charging Company shall have the
following powers in relation to the Charged Property in respect of which he is
appointed:

 

7.6.1                        to enter upon, take possession of, get in and
collect the Charged Property (or such part thereof in respect of which he may be
appointed) including rents and income whether accrued before or after the date
of his appointment;

 

7.6.2                        to carry on, manage, concur in or authorise the
management of, or appoint a manager of the whole or any part of the business of
the relevant Charging Company;

 

7.6.3                        to sell, exchange, license, surrender, release,
disclaim, abandon, return or otherwise dispose of or in any way whatsoever deal
with the Charged Property or any interest in the Charged Property for such
consideration (if any), including any Investments whatsoever, and upon such
terms (including by deferred payment or payment by instalments) as he may think
fit and to concur in any such transaction;

 

7.6.5                        to grant any leases whatsoever and to let on
charter, sub-charter, hire, lease or sell on condition and to grant rights,
options, licences or easements over the whole or any part of the Charged
Property and (with or without consideration) to rescind, surrender or disclaim
or accept or agree to accept surrenders or disclaimers of leases, hire purchase
contracts or agreements relating to or affecting the Charged Property in such
circumstances, to such Persons (including, without limitation, to the
Administrative Agent), for such purposes and upon such terms whatsoever as he
may think fit and also to vary the terms of any lease or contract affecting the
Charged Property and to act in relation to any review of the rent or provide
payments under such a lease in such manner as he may think fit;

 

7.6.6                        to appoint, engage, dismiss or vary the terms of
employment of employees, officers, managers, agents and advisers of the relevant
Charging Company upon such terms as to remuneration and otherwise and for such
periods as he may determine;

 

7.6.7                        to insure, protect, decorate, maintain, repair,
alter, improve, replace, exploit, sever fixtures from, demolish, add to and
develop or concur in so doing the Charged Property or any part thereof in any
manner and for any purpose whatsoever;

 

7.6.8                        for such consideration and on such terms as he may
think fit, to purchase outright or acquire by leasing, hiring, licensing or
otherwise, any land, buildings, plant, equipment, vehicles or materials or any
other property, assets or rights of any description which he considers necessary
or desirable for the carrying on, improvement or realisation of any of the
Charged Property or the business of the relevant Charging Company or otherwise
for the benefit of the Charged Property;

 

17

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

 

7.6.9                        in connection with the exercise or the proposed
exercise of any of his powers or in order to obtain payment of his remuneration
(whether or not it is already payable), to borrow or raise money from any
Person, including the Administrative Agent, without security or on the security
of the Charged Property and generally in such manner and on such terms as he may
think fit;

 

7.6.10                  to bring, defend, submit to arbitration, negotiate,
compromise, abandon and settle any claims, disputes and proceedings concerning
the Charged Property or any part thereof;

 

7.6.11                  to transfer all or any of the Charged Property and/or
any of the liabilities of the relevant Charging Company to any other company or
body corporate, whether or not formed or acquired for the purpose and to form a
subsidiary or subsidiaries of the relevant Charging Company;

 

7.6.12                  to call up or require the directors of the relevant
Charging Company to call up all or any portion of the uncalled capital for the
time being of such Charging Company and to enforce payment of any call by action
(in the name of such Charging Company or the Receiver as may be thought fit);

 

7.6.13                  to redeem, discharge or compromise any Lien over or with
respect to the Charged Property;

 

7.6.14                  to effect or maintain indemnity insurance and other
insurance and obtain bonds and performance guarantees;

 

Charging Company or otherwise, as he may think fit, all documents, receipts,
registrations, acts or things which he may consider appropriate;

 

7.6.16                  to exercise all powers, discretions, voting, conversion
or other rights or entitlements in relation to any of the Charged Property of an
absolute owner, together with all powers which are incidental to the ownership
of or rights in or to any Charged Property and to complete or effect any
transaction entered into by the relevant Charging Company and complete,
disclaim, abandon or modify all or any of the outstanding contracts or
arrangements of such Charging Company relating to or affecting the Charged
Property;

 

7.6.17                  to exercise all powers as are described in Schedule 1 to
the Insolvency Act 1986, whether or not the Receiver is an “administrative
receiver” as defined in that Act; and

 

7.6.18                  generally to carry out, or cause or authorise to be
carried out, any transaction, scheme or arrangement whatsoever, whether similar
or not to any of the foregoing, in relation to the Charged Property which he may
consider expedient or conducive to any of the functions, powers, authorities or
discretions on or vested in him and as effectually as if he were solely and
absolutely entitled to the Charged Property.

 

7.7                                 Insolvency Act 2000, void provisions: The
Administrative Agent may not appoint a Receiver solely as a result of:

 

7.7.1                        the obtaining of a moratorium by any Charging
Company; or

 

18

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

 

7.7.2                        anything done by any Charging Company with a view
to obtaining a moratorium, in each case under section lA of and schedule Al to
the Insolvency Act to the extent they are applicable to any Charging Company.

 

8.                                       Application of proceeds

 

8.1                                 Application: All moneys arising from the
exercise of the powers of the Receiver or the Administrative Agent shall be held
on trust by the Administrative Agent for the benefit of itself and the other
Secured Parties (for so long as they remain Secured Parties) and (subject to any
claims ranking in priority to the Secured Amounts and except as otherwise
directed by the Administrative Agent) shall be applied in or towards
discharging, in the following order of priority:

 

8.1.1                        first, to the amount of all moneys raised or
borrowed by the Receiver, and all costs, charges, expenses and liabilities paid,
incurred or charged by the Receiver (including any amounts for which he is
entitled to be indemnified) in connection with or as a result of the exercise of
his powers and the remuneration of the Receiver, in such order as the Receiver
or the Administrative Agent may from time to time determine;

 

8.1.2                        second, 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 Deed, the
other Credit Documents or any of the Secured Amounts, 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 Charging Company 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;

 

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

 

8.1.4                        fourth, any surplus then remaining shall be paid to
the Charging Companies or to whomsoever may be lawfully entitled to receive the
same or as a court of competent jurisdiction may direct.

 

Each Charging Company agrees and acknowledges that the Administrative Agent is
entering into this Deed, and holds its rights and benefits hereunder, as trustee
for and on behalf of the Secured Parties in accordance with the terms of clause
20.

 

8.2                                 Accounts: Notwithstanding the provisions of
clause 8.1, all moneys from time to time received by the Administrative Agent
from any Charging Company or any Person or Persons liable to pay the same or
from any Receiver or otherwise on the realisation or enforcement of the charges
contained in this Deed may be applied by the Administrative Agent either as a
whole or in such proportion as the Administrative Agent shall think fit to any
account or item of account or any transaction and, without limitation, the
Administrative Agent may in its absolute discretion at all times pending the
payment to

 

19

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

 

the Administrative Agent of all of the Secured Amounts place and keep to the
credit of a separate or suspense interest bearing account (subject to the
accrual of interest at market rates for the account of the relevant Charging
Company) any money received by the Administrative Agent from such Charging
Company or such other Persons for so long and in such manner as the
Administrative Agent may determine without any obligation to apply the same or
any part thereof in or towards the discharge of any of the Secured Amounts.

 

8.3                                 Receiver’s Receipts: Sections 109(6) and
(8) of the 1925 Act shall not apply in relation to a Receiver appointed under
this Deed.

 

9.                                       Protection of third parties

 

9.1                                 Enquiry: No purchaser from, or other Person
dealing with, the Administrative Agent or any Receiver shall be concerned to
enquire whether any of the powers exercised or purported to be exercised has
arisen or become exercisable, whether the Secured Amounts remain outstanding,
whether the Administrative Agent or any Receiver is authorised to act or as to
the propriety or validity of the exercise or purported exercise of any power;
and the title of such a purchaser and the position of such a Person shall not be
impeachable by reference to any of those matters and the protections contained
in sections 104 to 107 of the 1925 Act, section 42(3) of the Insolvency Act or
in any other applicable legislation shall apply to any Person purchasing from or
dealing with a Receiver or the Administrative Agent.

 

9.2                                 Receipts: The receipt of the Administrative
Agent or any Receiver shall be an absolute and a conclusive discharge to a
purchaser and shall relieve him of any obligation to see to the application of
any moneys paid to or by the direction of the Administrative Agent or the
Receiver.

 

9.3                                 Construction: In clauses 9.1 and 9.2,
“purchaser” includes any Person acquiring any lease of or Lien over, or any
other interest or right whatsoever in relation to, the Charged Property.

 

10.                Protection of Administrative Agent and Receiver

 

10.1                           Liability: Neither the Administrative Agent nor
any Receiver shall be liable to any Charging Company in respect of any loss or
damage which arises out of the exercise, the attempted or purported exercise or
the failure to exercise any of their respective powers. Notwithstanding the
foregoing, neither the Administrative Agent, any Receiver or any Secured Party
shall be entitled to be indemnified in respect of any part of the foregoing if
it arises as a result of such party’s gross negligence or wilful misconduct.

 

10.2                           Possession: Without prejudice to the generality
of clause 10.1, entry into possession of the Charged Property shall not render
the Administrative Agent or any Receiver liable to account as mortgagee or
heritable creditor in possession; and if and whenever the Administrative Agent
or any Receiver enters into possession of the Charged Property, it shall be
entitled at any time to go out of such possession.

 

20

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

 

11.                Expenses and indemnity

 

11.                                 Expenses: Each Charging Company further
covenants with the Administrative Agent to reimburse or pay to the
Administrative Agent or any Receiver (on the basis of a full indemnity) the
amount of all costs (including legal costs), charges and expenses reasonably
incurred or sustained by the Administrative Agent or such Receiver (including,
for the avoidance of doubt, any such costs, charges and expenses arising from
any act or omission of, or proceedings involving, any third party) in connection
with:

 

11.1.1                  the investigation of title to or any survey, inspection
or valuation of the Charged Property vested in such Charging Company under or in
connection with this Deed, and the preparation, registration or perfecting of
this Deed (or any of the charges contained in it), or any other document entered
into between the relevant Charging Company and the Administrative Agent;

 

11.1.2                  the lawful exercise by or on behalf of the
Administrative Agent or any Receiver of any of the powers of the Administrative
Agent or such Receiver, and the enforcement, preservation or attempted
preservation of this Deed or the Charged Property or any other action taken by
or on behalf of the Administrative Agent or any Receiver with a view to or in
connection with the recovery by the Administrative Agent of the Secured Amounts
from such Charging Company or any other Person; and

 

11.1.3                  the carrying out of any other act or matter which the
Administrative Agent or any Receiver considers to be necessary for the
preservation, improvement or benefit of the Charged Property.

 

11.2                           Indemnity: Each Charging Company hereby agrees to
pay, and to indemnify the Administrative Agent, the Secured Parties, any
Receiver and any attorney, agent or other Person appointed by the Administrative
Agent or any Receiver under this Deed and the Administrative Agent’s officers
and employees (each an indemnified Party”) on an after tax basis from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever with respect to the execution, delivery, enforcement,
performance and administration of this Deed to the extent either of the
Borrowers would be required to do so pursuant to the terms of the Credit
Agreement.

 

11.3                           Taxes: All sums of whatsoever nature which are
payable by any Charging Company under this Deed and which are now or at any time
hereafter become subject to value added tax or any similar tax shall be deemed
to be exclusive of value added tax or any similar tax and each Charging Company
in addition to such sums will indemnify the Administrative Agent from and
against all claims and liabilities whatsoever in respect thereof. Each Charging
Company agrees to pay, and to indemnify the Administrative Agent, any Receiver
and the Secured Parties against any and all liabilities with respect to, or
resulting from any delay in paying, any and all stamp, excise, sales or other
taxes which may be payable or determined to be payable with respect to any of
the Charged Property or in connection with any of the transactions contemplated
by this Deed.

 

21

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

 

12.                                 Protection of charges

 

12.1                           Fixed mortgage: Each Charging Company further
covenants with the Administrative Agent at such Charging Company’s own cost, as
a continuing security for the payment or discharge of the Secured Amounts:

 

12.1.1                  to deposit with the Administrative Agent (which it may,
subject to the terms of the Credit Agreement, retain during the continuance of
the charges contained in this Deed) if the Administrative Agent so requires:

 

(a)                                  all documents of title and other documents
relating to its Properties, any subordinate interest in any of them, the
insurance policies relating thereto and the intellectual property rights of such
Charging Company;

 

(b)                                 all documents representing rights to acquire
Investments; and

 

(c)                                  all documents creating or evidencing Liens
in favour of such Charging Company and all securities in respect of any debts
payable to such Charging Company.

 

12.1.2                  if the Administrative Agent so requires, promptly to
execute a legal mortgage, registered charge or equitable charge (as the
Administrative Agent may require), on terms comparable (so far as reasonably
possible) to the Liens intended to be created by this Deed, over any freehold
or, subject to any required third party consents, leasehold property which is
hereafter acquired by such Charging Company or which, at the date of this Deed,
is owned by such Charging Company, but which is not specified in schedule 2 to
this Deed provided that (in the case of a requirement to execute a legal
mortgage), at the date the Administrative Agent so requires, the book value or
Market Value (for the time being as defined in the Appraisal and Valuation
Manual issued by the Royal Institution of Chartered Surveyors) of such property
exceeds US$1,000,000 (or the equivalent thereof in any other currency);

 

12.1.3                  if the Administrative Agent so requires, promptly to
execute a fixed mortgage or charge (as the Administrative Agent may require), on
terms comparable (so far as reasonably possible) to the Liens intended to be
created by this Deed of all or any part of the Charged Property which is for the
time being subject to the floating charge contained in this Deed;

 

12.1.4                  if the Administrative Agent so requires, promptly to
execute an assignment to the Administrative Agent (on behalf of the Secured
Parties) on terms comparable (so far as reasonably possible) to the Liens
intended to be created by this Deed of all or any debts or moneys payable to
such Charging Company and any Liens or documents relating to them or otherwise
to negotiate the same to the Administrative Agent;

 

12.1.5                  if the Administrative Agent so requires, promptly to
execute a transfer of Investments or any rights to Investments now owned or
hereafter acquired by such Charging Company to the Administrative Agent or its
nominee (in each case, on behalf of the Secured Parties), and also to procure,
in the case of shares in a subsidiary of such Charging Company, that the
transfer to the Administrative Agent or its nominee is duly registered within
one week; and

 

22

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

 

12.1.6                  if the Administrative Agent so requires, promptly to
execute a mortgage or first fixed charge if it acquires or agrees to acquire any
intellectual property rights in terms specified by the Administrative Agent.

 

12.2                           Further security: Each Charging Company further
covenants with the Administrative Agent from time to time (and, for the purposes
mentioned in clause 12.2.2, notwithstanding that the Administrative Agent may
not have served a demand for payment of the Secured Amounts) upon demand to
execute, at such Charging Company’s own cost, any document or do any act or
thing which:

 

12.2.1                  the Administrative Agent may reasonably specify with a
view to perfecting or protecting any charge or security created or intended to
be created by this Deed; or

 

12.2.2                  the Administrative Agent or any Receiver may reasonably
specify with a view to facilitating the exercise or the proposed exercise of any
of their powers.

 

12.3                           Registration: Each Charging Company covenants to
procure that the legal mortgages contained in this Deed in respect of the
Properties vested in it are registered against the registered title of any
registered land hereby affected.

 

13.                                 Crystallisation

 

13.1                           Notice: In addition and without prejudice to any
other event resulting in a crystallisation of the floating charge created by
this Deed or any other right the Administrative Agent may have but subject to
clause 13.4, the Administrative Agent may, at any time (subject to clause 13.2)
after an Enforcement Event has occurred, by notice in writing to the relevant
Charging Company declare that the floating charge hereby created shall be
converted into a first specific fixed charge as to all of the undertaking,
property and assets or such of them as may be specified in the notice, and by
way of further assurance, such Charging Company, at its own expense, shall
execute all documents in such form as the Administrative Agent shall require and
shall deliver to the Administrative Agent all conveyances, deeds, certificates
and documents which may be necessary to perfect the first specific fixed charge.

 

13.2                           Demand: Before a demand for payment has been
made, a notice may only be served by the Administrative Agent under clause 13.1
if the Administrative Agent has reason to believe that such Charging Company’s
property, assets and rights described or referred to in the demand or notice are
in danger of being seized or sold under any form of distress or execution levied
or threatened or are otherwise in immediate jeopardy.

 

13.3                           Automatic crystallisation: In addition and
without prejudice to any other event resulting in a crystallisation of the
floating charge but subject to clause 13.4, the floating charge contained herein
shall automatically be converted into a fixed charge over all property, assets
or undertaking of a Charging Company subject to the floating charge if and when
the holder of any other Lien whether ranking in priority to or pad passu with or
after the

 

23

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

 

charges contained in this Deed shall appoint an administrator, administrative
receiver, receiver, manager or receiver and manager.

 

13.4                           Insolvency Act 2000, void provisions: No floating
charge granted by any Charging Company pursuant to clause 3.1.2 shall, either by
notice given by the Administrative Agent under clause 13.1 or automatically
under clause 13.3, be converted into fixed charges over any Charged Property or
otherwise crystallise solely as a result of:

 

13.4.1                  the obtaining of a moratorium by such Charging Company;
or

 

13.4.2                  anything done by such Charging Company with a view to
obtaining a moratorium, in each case under section 1A of and schedule Al to the
Insolvency Act to the extent they are applicable to any Charging Company.

 

14.                                 Power of attorney, etc.

 

14.1                           Attorneys: For the purpose of securing the
interest of the Administrative Agent in the Charged Property and the performance
of each Charging Company’s obligations to the Administrative Agent whether under
this Deed or the other Credit Documents or otherwise, each Charging Company
irrevocably and by way of security appoints the Administrative Agent and any
Receiver jointly and also severally to be its attorney and attorneys (with full
power to appoint substitutes and to sub-delegate, including power to authorise
the Person so appointed to make further appointments, in both cases, with regard
to all or any part of such Charging Company’s Charged Property) on behalf of
such Charging Company and in its name or otherwise, to execute any document or
do any act or thing which the Administrative Agent or such Receiver (or their
substitutes or delegates) may, in its or his absolute discretion, consider
appropriate in connection with the exercise of any of the powers of the
Administrative Agent or such Receiver or which such Charging Company is obliged
to the Administrative Agent to execute or do, whether under this Deed or
otherwise; and without prejudice to the generality of its power to appoint
substitutes and to sub-delegate, the Administrative Agent may appoint any
Receiver as its substitute or delegate, and any Person appointed the substitute
of the Administrative Agent shall, in connection with the exercise of the said
power of attorney, be the agent of such Charging Company and clause 7.4 shall
apply mutatis mutandis.

 

14.2                           Charged Property on trust: For the purpose of
giving effect to this Deed, each Charging Company hereby declares that, as and
when the charges contained in this Deed shall become enforceable, it will hold
all of the Charged Property vested in it (subject to the right of redemption)
upon trust to convey, assign or otherwise deal with the Charged Property vested
in it in such manner and to such Person as the Administrative Agent shall direct
and declares that it shall be lawful for the Administrative Agent to appoint a
new trustee or trustees of the Charged Property in place of such Charging
Company.

 

14.3                           Powers as trustee: Each Charging Company hereby
agrees and declares that the Administrative Agent or any nominee of the
Administrative Agent may at any time after the Administrative Agent or any
nominee or nominees of the Administrative Agent has/have been registered as
owner(s) of any Investments, without any further consent or

 

24

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

 

authority on the part of such Charging Company, exercise (in the name of such
Charging Company or otherwise) with respect to such Investments and to the
exclusion of such Charging Company, all rights and powers conferred by statute
or otherwise upon an absolute owner of those Investments and all the powers
given to trustees by the Trustee Act 2000 in respect of Investments or property
subject to a trust, and all rights or powers incidental to or conducive to the
exercise of rights and powers in relation to the Investments; provided that
until the security constituted by this Deed shall become enforceable the
Administrative Agent shall:

 

14.3.1                  exercise or procure that its nominees shall exercise all
such rights and powers at the specific request of and in accordance with the
instructions of such Charging Company but so that neither the Administrative
Agent nor any nominees of the Administrative Agent shall be obliged to give
effect to any request or instruction which the Administrative Agent may consider
would be prejudicial to the charges contained in this Deed or if in doing so it
would incur any cost or expense or render itself subject to any liability,
unless previously indemnified to its satisfaction; and

 

14.3.2                  pay or procure that its nominee shall pay to such
Charging Company all dividends, interest and other distributions of an income
nature that it or its nominee receives.

 

14.4                           Ratification: Each Charging Company in respect of
its Charged Property ratifies and confirms and agrees to ratify and confirm all
acts and things which any attorney as mentioned in clause 14.1 shall do or
purport to do in the lawful and proper exercise of his powers under such clause.

 

15.                Inspection

 

Each Charging Company shall permit the Administrative Agent and any Persons
appointed by it full access to the Charged Property vested in it upon reasonable
notice and, following an Enforcement Event, to carry out any survey, inspection,
assessment or review of the Charged Property and shall permit an inspection to
be made and copies and extracts to be taken of books, accounts, records and
documents relating to the Charged Property vested in it or the covenants and
obligations of such Charging Company under this Deed and any reasonable costs,
fees and expenses incurred by the Administrative Agent in connection with any
such inspection, assessment or review shall be payable by such Charging Company
and shall form part of the Secured Amounts. The Administrative Agent shall have
the absolute right to share any information it gains from such inspection and
review with any Secured Party.

 

16.                Other security, etc.

 

16.1                           No merger: The charges contained in or created
pursuant to this Deed are in addition to, and shall neither be merged in, nor in
any way exclude or prejudice any other Lien, right of recourse, set off or other
right whatsoever which the Secured Parties may now or at any time hereafter hold
or have (or would apart from this Deed or any charge contained or created
pursuant to this Deed hold or have) as regards each Charging Company or any
other Person in respect of the Secured Amounts and the Administrative Agent
shall be

 

25

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

 

under no obligation to take any steps to call in or to enforce any security for
the Secured Amounts and shall not be liable to any Charging Company for any loss
arising from any omission on the part of the Administrative Agent to take any
such steps or for the manner in which the Administrative Agent shall enforce or
refrain from enforcing any such security.

 

16.2                           Consolidation: Section 93 of the 1925 Act shall
not apply in relation to any of the charges contained in this Deed.

 

16.3                           Ruling off: Without prejudice to clause 5.1.1, if
the Administrative Agent receives notice of any Lien or any other interest
(other than an interest arising out of a sale in the usual course of business
which is permitted by the Credit Documents) affecting the Charged Property:

 

16.3.1                  the Administrative Agent may open a new account with the
relevant Charging Company and, if it does not, it shall nevertheless be deemed
to have done so at the time it received such notice; and

 

16.3.2                  all payments made by such Charging Company to the
Administrative Agent after the Administrative Agent receives such notice shall
be credited or deemed to have been credited to the new account, and in no
circumstances whatsoever shall operate to reduce the Secured Amounts as at the
time the Administrative Agent received such notice.

 

16.4                           Change of name, etc.: This Deed shall remain
valid and enforceable notwithstanding any:

 

16.4.1                  Incapacity, change in the name, composition or
constitution of the Administrative Agent or any Charging Company or any
amalgamation or consolidation by the Administrative Agent or any Charging
Company with any other corporation; or

 

16.4.2                  any amendment, waiver or variation (however material or
fundamental) of any Credit Document.

 

Without prejudice to the foregoing, each Charging Company shall be deemed to be
a principal debtor and the sole, original and independent obligor for the
Secured Amounts and its Charged Property shall be deemed to be a principal
security for the Secured Amounts. The liability of each Charging Company under
this Deed shall not be discharged, impaired or otherwise affected by any
circumstance, act, omission, matter or thing which but for this provision might
operate to reduce, release, prejudice or otherwise exonerate any Charging
Company from its obligations under the Credit Documents in whole or in part,
including without limitation and whether or not known to any Credit Party, the
Administrative Agent or any other Person:

 

(a)                                  the winding-up, dissolution,
administration, re-organisation, amalgamation, merger or reconstruction of any
Charging Company or any other Person or any change in its status, function,
control or ownership; or

 

(b)                                 any time, indulgence, concession, waiver or
consent granted to, or composition with, any Charging Company or any other
Person; or

 

26

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

 

(c)                                  the release of any Charging Company or any
other Person under the terms of any composition or arrangement with any creditor
of the such Charging Company or any of its Affiliates; or

 

(d)                                 the taking, variation, compromise, exchange,
renewal or release of, or refusal or neglect to perfect, take-up or enforce, any
rights against, or security over, the assets of any Charging Company or any
other Person or any non-presentation or non-observance of any formality or other
requirement in respect of any instrument or any failure to release or to realise
the full value of any security; or

 

(e)                                  any legal limitation,
disability, Incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of, or other circumstance
relating to, any Charging Company or any other Person; or

 

(f)                                    any variation (however fundamental and
whether or not involving any increase in the liability of any Charging Company
or any other Credit Party thereunder) or replacement of any Credit Document or
any other document or security; or

 

(g)                                 any unenforceability, illegality, invalidity
or frustration of any obligation of any Charging Company or any other Person
under any Credit Document or any other document or security, or any failure of
any Charging Company or any other Credit Party to become bound by the terms of
any other Credit Document, in each case whether through any want of power or
authority or otherwise; or

 

(h)                                 any postponement, discharge, reduction,
non-provability or similar circumstances affecting any obligation of any
Charging Company or any other Credit Party under a Credit Document resulting
from any insolvency, liquidation or dissolution proceedings or from any law,
regulation or order,

 

so that each Charging Company’s obligations under this Deed remain in full force
and effect and that this Deed shall be construed accordingly as if there were no
such circumstance, act, omission, matter or thing.

 

16.5                           Non-competition: Subject as provided below, until
the date on which all the Secured Amounts and the obligations of the Charging
Companies under this Deed 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 Secured
Amounts), no Charging Company shall, by virtue of any payment made, security
realised or moneys received or recovered under any of the Credit Documents for
or on account of the liability of any Credit Party:

 

16.5.1                  be subrogated to any rights, security or moneys held,
received or receivable by the Administrative Agent or any other Secured Party or
be entitled to any right of contribution or indemnity; or

 

16.5.2                  claim, rank, prove or vote as a creditor of any Credit
Party or its estate in competition with the Administrative Agent or any other
Secured Party; or

 

27

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

 

16.5.3                  receive, claim or have the benefit of any payment,
distribution or security from or on account of any Credit Party, or exercise any
right of set-off against any Credit Party.

 

Each Charging Company shall hold in trust for and forthwith pay or transfer to
the Administrative Agent for the benefit of the Secured Parties any payment or
distribution or benefit of security received by it contrary to the above. If any
Charging Company exercises any right of set-off contrary to the above it will
forthwith pay an amount equal to the amount set off to the Administrative Agent
for the benefit of the Secured Parties. Notwithstanding the foregoing, following
any enforcement of the security created hereunder by the Administrative Agent
under this Deed, each Charging Company will (at its own cost) promptly take such
steps or actions as are referred to above as the Administrative Agent may from
time to time stipulate.

 

17.                                 Set-off

 

Each Secured Party may upon the occurrence of an Enforcement Event and
notwithstanding any settlement of account or other matter whatsoever combine or
consolidate all or any of its existing accounts including accounts in the name
of such Secured Party or of any Charging Company jointly with others and may set
off or transfer all or any part of any credit balance or any sum standing to the
credit of any account (whether or not the same is due to such Charging Company
from such Secured Party and whether or not the credit balance and the account in
debit or the Secured Amounts are expressed in the same currency in which case
such Secured Party is hereby authorised to effect any necessary conversions at
its then prevailing rates of exchange) in or towards satisfaction of any of the
Secured Amounts and may in its absolute discretion (acting reasonably) estimate
the amount of any liability of such Charging Company which is contingent or
unascertained and thereafter set off such estimated amount and no amount shall
be payable by such Secured Party to such Charging Company unless and until all
Secured Amounts have been ascertained and fully repaid or discharged.

 

18.         Avoidance of payments

 

18.1                           No release: No assurance, security or payment
which may be avoided or adjusted under the law, including under any enactment
relating to bankruptcy or insolvency, and no release, settlement or discharge
given or made by the Administrative Agent on the faith of any such assurance,
security or payment, shall prejudice or affect the right of the Administrative
Agent to recover the Secured Amounts from any Charging Company (including any
moneys which it may be compelled to pay or refund under the provisions of the
Insolvency Act and any costs payable by it pursuant to or otherwise incurred in
connection therewith) or to enforce the charges contained in this Deed to the
full extent of the Secured Amounts.

 

18.2                           Retention of charges: If the Administrative Agent
shall have reasonable grounds in its absolute discretion for believing that any
Charging Company may be insolvent or deemed to be insolvent pursuant to the
provisions of the Insolvency Act as at the date of any payment made by such
Charging Company to the Administrative Agent, the Administrative Agent shall be
at liberty to retain the charges contained in or created

 

28

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

 

pursuant to this Deed until the expiry of a period of one month plus such
statutory period within which any assurance, security, guarantee or payment can
be avoided or invalidated after the payment and discharge in full of all Secured
Amounts notwithstanding any release, settlement, discharge or arrangement which
may be given or made by the Administrative Agent on, or as a consequence of,
such payment or discharge of liability provided that, if at any time within such
period, a petition shall be presented to a competent court for an order for the
winding up or the making of an administration order in respect of such Charging
Company, or such Charging Company shall commence to be wound up or to go into
administration or any analogous proceedings shall be commenced by or against
such Charging Company, the Administrative Agent shall be at liberty to continue
to retain such security for such further period as the Administrative Agent may
determine and such security shall be deemed to continue to have been held as
security for the payment and discharge to the Administrative Agent of all
Secured Amounts.

 

19.         Currency conversion

 

19.1                           Indemnity: If under any applicable law, whether
as a result of a judgment against any Charging Company or the liquidation of any
Charging Company or for any other reason, any payment under or in connection
with this Deed is made or any amount is received or recovered by the
Administrative Agent in respect of the Secured Amounts in a currency (the “other
currency”) other than the currency in which the Secured Amounts are payable (the
“original currency”), then to the extent that the payment to or receipt by the
Administrative Agent (when converted at the rate of exchange on the date of
payment or receipt) falls short of the whole of the Secured Amounts the relevant
Charging Company shall as a separate and independent obligation fully indemnify
the Administrative Agent against the amount of the shortfall; and for the
purposes of this clause, “rate of exchange” means the rate at which the
Administrative Agent is able on the relevant date to purchase the original
currency in London with the other currency.

 

19.2                           Purchases: If any Charging Company fails to pay
or discharge any part of the Secured Amounts when due (except where such payment
or discharge is made within three Business Days of the due date), the
Administrative Agent from time to time may purchase an amount of the currency in
which such sum is due with any other currency or currencies and such Charging
Company’s obligation thereafter shall be to pay to the Administrative Agent the
amount of the other currency or currencies so used to purchase.

 

20.         Declaration of Trust

 

20.1                           Declaration of Trust: The Administrative Agent
hereby declares itself as trustee to hold the benefit of the covenants,
agreements and undertakings of each of the Charging Companies contained in this
Deed and the Liens and other rights, titles and interests constituted by this
Deed and all other moneys, property and assets paid to it or held by it or
received or recovered by it pursuant to or in connection with this Deed with
effect from the date of this Deed on trust for the Secured Parties for
application in accordance with clause 8.1.

 

29

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

 

20.2                           Perpetuity period: The trusts constituted or
evidenced in or by clause 20.1 shall remain in full force and effect until
whichever is the earlier of:

 

20.2.1                  the expiration of a period of 80 years from the date of
this Deed; and

 

20.2.2                  the security constituted by this Deed having been
released in accordance with its terms, and the parties to this Deed declare that
the perpetuity period applicable to this Deed shall for the purposes of the
Perpetuities and Accumulations Act 1964 be the period of 80 years from the date
of this Deed.

 

21.         Execution of documents

 

Any document required to be executed as a deed by the Administrative Agent under
or in connection with this Deed shall be validly executed if executed as a deed
by a duly authorised attorney of the Administrative Agent.

 

22.         Notices and demands

 

All notices, requests and demands pursuant hereto shall be made in accordance
with Section 14.2 of the Credit Agreement. All communications and notices
hereunder to any Charging Company shall be given to it in care of the US
Borrower at the US Borrower’s address set forth in Section 14.2 of the Credit
Agreement.

 

23.                                 Further provisions

 

23.1                           Evidence of indebtedness: In any action,
proceedings or claim relating to this Deed or the charges contained in this
Deed, a statement as to any amount due to the Administrative Agent or of the
Secured Amounts or any part thereof which is certified as being correct by an
officer of the Administrative Agent shall, save in the case of manifest error,
be conclusive evidence that such amount is in fact due and payable.

 

23.2                           Rights cumulative, waiver: The rights of the
Administrative Agent and any Receiver are cumulative, may be exercised as often
as they consider appropriate and are in addition to their respective rights
under general law (including the right to appoint an administrator under the
Insolvency Act). The respective rights of the Administrative Agent and any
Receiver (whether arising under this Deed or under the general law) shall not be
capable of being waived or varied otherwise than by express waiver or variation
in writing; and, in particular, any failure to exercise or any delay in
exercising any such rights shall not operate as a variation or waiver of that or
any other such right; any defective or partial exercise of such rights shall not
preclude any other or further exercise of that or any other such right; and no
act or course of conduct or negotiation on their part or on their behalf shall
in any way preclude them from exercising any such right or constitute a
suspension or variation of any such right.

 

23.3                           Invalidity of any provision: If any provisions of
this Deed become invalid, illegal or unenforceable in any respect under any law,
the validity, legality and enforceability of the remaining provisions shall not
in any way be affected or impaired.

 

30

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

 

23.4                           No set-off or counterclaim; payments free and
clear: All payments to be made by a Charging Company under this Deed shall be
made in full, without any set-off or counterclaim whatsoever and free and clear
of any deductions or withholdings in the currency in which they are due on the
due date to such account as the Administrative Agent may from time to time
specify.

 

23.5                           Liabilities survive deficiencies and releases:
Each Charging Company agrees to be bound by this Deed notwithstanding that any
other Person intended to execute or to be bound by this Deed or any other Credit
Document may not do so or may not be effectually bound and notwithstanding that
any guarantees or Liens contained in any other Credit Document may be terminated
or released or may be or become invalid or unenforceable, whether or not the
deficiency is known to any of the Secured Parties.

 

23.6                           Law of Property (Miscellaneous Provisions) Act
1989: For the purposes of the Law of Property (Miscellaneous Provisions) Act
1989 any provisions of the Credit Documents relating to any disposition of an
interest in land shall be deemed to be incorporated in this Deed.

 

23.7                           Contracts (Rights of Third Parties) Act 1999:
Without prejudice to clause 8.1, and save for clauses 10.1, 11.2 and 17, no
provision of this Deed is enforceable by a Person who is not a party to this
Deed.

 

23.8                           Change to constitutional documents: The UK
Borrower undertakes with the Administrative Agent to procure in respect of each
of the other Charging Companies that, to the extent such Charging Company has
not already done so, it will remove from its respective articles of association:

 

23.8.1                  any and all restrictions on the transfer of its shares;
or 23.8.2 any and all liens on shares, whether fully or partly paid.

 

23.9                           Charge over Shares: The UK Borrower hereby
irrevocably accepts its appointment under clause 21.8 of each UK Pledge
Agreement as process agent in England for the US Borrower and hereby agrees that
it will not revoke such appointment without the prior written consent of the
Administrative Agent which consent shall not be unreasonably withheld or
delayed.

 

23.10                     Assignments and Transfers: No Charging Company shall
be entitled to assign or transfer all or any of its rights or obligations under
this Deed without the prior written consent of the Administrative Agent. The
Administrative Agent may at any time assign or otherwise transfer all or any
part of its rights under this Deed in accordance with the Credit Documents and
each Charging Company authorises the Administrative Agent to execute on its
behalf any document required to effect the necessary transfer of rights and
obligations.

 

23.11                     Counterparts: This Deed may be executed in any number
of counterparts, all of which taken together shall be deemed to constitute one
and the same instrument

 

31

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

 

23.12                     Joint and several liability: The liability of each
Charging Company under this Deed shall be joint and several. Each agreement and
undertaking of any Charging Company shall be construed accordingly.

 

24. Choice of law

 

This Deed is governed by, and shall be construed in accordance with, the laws of
England.

 

DULY DELIVERED AS A DEED by each Charging Company or on its behalf on the date
inserted above.

 

32

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

 

Schedule 1
List of Charging Companies other than UK Borrower

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1

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

 

EXHIBIT L-2

 

FORM OF UK GUARANTEE

 

UK GUARANTEE

 

GUARANTEE dated as of July 30, 2004, made among ROCKWOOD SPECIALTIES
GROUP, INC., a Delaware corporation (the “US Borrower”) and each of the
subsidiaries of ROCKWOOD SPECIALTIES LIMITED, a company incorporated under the
laws of England and Wales (the “UK Borrower”), listed on Annex A hereto or that
becomes a party hereto pursuant to Section 19 hereof (each such subsidiary
individually, a “Subsidiary Guarantor” and, collectively, the “Subsidiary
Guarantors”; the Subsidiary Guarantors and the US Borrower are referred to
collectively as the “Guarantors”) and CREDIT SUISSE FIRST BOSTON, acting through
its Cayman Islands Branch, as administrative agent (in such capacity, the
“Administrative Agent”) for the lenders to the UK Borrower (the “Lenders”) from
time to time parties to the Credit Agreement dated as of July 30, 2004 (as the
same may be amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among the US Borrower, the UK Borrower, Rockwood
Specialties International, Inc., a Delaware corporation (“Holdings”), the
Lenders, the Administrative Agent and UBS Securities LLC and Goldman Sachs
Credit Partners L.P., as co-syndication agents (in such capacities, the
“Co-Syndication 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 UK Borrower and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the UK 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 UK Borrower or any of the Restricted
Subsidiaries of the UK Borrower;

 

WHEREAS, each Subsidiary Guarantor is a Subsidiary of the UK Borrower;

 

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

 

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

 

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

 

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 UK
Borrower under the Credit Agreement that the Guarantors shall have executed and
delivered this Guarantee to the Administrative Agent for the ratable benefit of
the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Co-Syndication 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
UK Borrower under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the UK Borrower and/or
the Restricted Subsidiaries of the UK Borrower, the Guarantors 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.

 

(b)           As used herein, the term “Closing Time” means 24:00 (German time)
on the Closing Date.

 

(c)           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 extended to the UK
Borrower, 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 UK 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, 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 UK Borrower or any other Credit
Party that is a Foreign Subsidiary 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 UK
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 other Credit Party
that is a Foreign Subsidiary under or pursuant to this Guarantee or the other
Credit Documents, (iv) the due and punctual payment and performance of all
obligations of the UK Borrower and each Borrower or Restricted Subsidiary that
is a Foreign 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

 

2

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

 

Affiliates by the UK Borrower or any other Credit Party that is a Foreign
Subsidiary arising from or in connection with treasury, depositary or cash
management services or in connection with any automated clearinghouse transfer
of funds.

 

(d)           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 Co-Syndication Agents, (vi) each counterparty to a
Hedge Agreement the obligations under which constitute Obligations, (vii) the
beneficiaries of each indemnification obligation undertaken by the UK Borrower
or any other Credit Party that is a Foreign Subsidiary under any Credit Document
and (viii) any successors, indorsees, transferees and assigns of each of the
foregoing.

 

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

 

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

 

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

 

2.             Guarantee.

 

(a)           Subject to the provisions of Section 2(b) and effective
immediately upon the Closing Time, each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees, 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.

 

(b)           [Reserved].

 

(c)           Each Guarantor further agrees to pay any and all expenses
(including all fees and disbursements of counsel) that may be paid or incurred
by the Administrative Agent or any other Secured Party in enforcing, or
obtaining advice of counsel in respect of, any rights with respect to, or
collecting, any or all of the Obligations and/or enforcing any rights with
respect to, or collecting against, such Guarantor under this Guarantee.

 

(d)           Each Guarantor agrees that the Obligations may at any time and
from time to time exceed the amount of the liability of such Guarantor hereunder
without impairing this Guarantee or affecting the rights and remedies of the
Administrative Agent or any other Secured Party hereunder.

 

(e)           No payment or payments made by the UK Borrower, any of the
Guarantors, any other guarantor or any other Person or received or collected by
the

 

3

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

 

Administrative Agent or any other Secured Party from the UK Borrower, any of the
Guarantors, any other guarantor or any other Person by virtue of any action or
proceeding or any set-off or appropriation or application at any time or from
time to time in reduction of or in payment of the Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder, which shall, notwithstanding any such payment or payments other than
payments made by such Guarantor in respect of the Obligations or payments
received or collected from such Guarantor in respect of the Obligations, remain
liable for the Obligations up to the maximum liability of such Guarantor
hereunder until the Obligations under the Credit Documents are paid in full, the
Commitments are terminated and no Letters of Credit drawn by the UK Borrower
shall be outstanding.

 

(f)            Each Guarantor agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agent or any other Secured
Party on account of its liability hereunder, it will notify the Administrative
Agent in writing that such payment is made under this Guarantee for such
purpose.

 

3.             Right of Contribution.  Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of any
payment made hereunder, such Guarantor shall be entitled to seek and receive
contribution from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment.  Each Guarantor’s right of contribution
shall be subject to the terms and conditions of Section 5 hereof.  The
provisions of this Section 3 shall in no respect limit the obligations and
liabilities of any Guarantor to the Administrative Agent and the other Secured
Parties, and each Guarantor shall remain liable to the Administrative Agent and
the other Secured Parties for the full amount guaranteed by such Guarantor
hereunder.

 

4.             Right of Set-off.  In addition to any rights and remedies of the
Secured Parties provided by law, each Guarantor hereby irrevocably authorizes
each Secured Party at any time and from time to time following the occurrence
and during the continuance of an Event of Default without notice to such
Guarantor or any other Guarantor, any such notice being expressly waived by each
Guarantor, upon any amount becoming due and payable by such Guarantor hereunder
(whether at stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Secured Party to or for the credit or the account of such
Guarantor.  Each Secured Party shall notify such Guarantor promptly of any such
set-off and the appropriation and application made by such Secured Party,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.

 

5.             No Subrogation.  Notwithstanding any payment or payments made by
any of the Guarantors hereunder or any set-off or appropriation and application
of funds of any of the Guarantors by the Administrative Agent or any other
Secured Party, no Guarantor shall be entitled to be subrogated to any of the
rights of the Administrative Agent or any other Secured Party against the UK
Borrower or any other Guarantor or any collateral security or guarantee or right
of offset held by the Administrative Agent or any other Secured Party for the
payment of the Obligations, nor shall any Guarantor seek or be entitled to seek
any contribution or

 

4

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

 

reimbursement from the UK Borrower or any other Guarantor in respect of payments
made by such Guarantor hereunder, until all amounts owing to the Administrative
Agent and the other Secured Parties by the Credit Parties on account of the
Obligations under the Credit Documents are paid in full, the Commitments are
terminated and no Letters of Credit drawn by the UK Borrower shall be
outstanding.  If any amount shall be paid to any Guarantor on account of such
subrogation rights at any time when all the Obligations shall not have been paid
in full, such amount shall be held by such Guarantor in trust for the
Administrative Agent and the other Secured Parties, segregated from other funds
of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be
turned over to the Administrative Agent in the exact form received by such
Guarantor (duly indorsed by such Guarantor to the Administrative Agent, if
required), to be applied against the Obligations, whether due or to become due,
in such order as the Administrative Agent may determine.

 

6.             Amendments, etc. with Respect to the Obligations; Waiver of
Rights.  Each Guarantor shall remain obligated hereunder notwithstanding that,
without any reservation of rights against any Guarantor and without notice to or
further assent by any Guarantor, (a) 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) 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) 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, and (d) 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 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
Guarantee or any property subject thereto.  When making any demand hereunder
against any Guarantor, the Administrative Agent or any other Secured Party may,
but shall be under no obligation to, make a similar demand on the UK Borrower or
any Guarantor or guarantor, and any failure by the Administrative Agent or any
other Secured Party to make any such demand or to collect any payments from the
UK Borrower or any Guarantor or guarantor or any release of the UK Borrower or
such Guarantor or guarantor shall not relieve any Guarantor in respect of which
a demand or collection is not made or any Guarantor 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 Guarantor.  For the
purposes hereof, “demand” shall include the commencement and continuance of any
legal proceedings.

 

5

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

 

7.             Guarantee Absolute and Unconditional.  Each Guarantor waives any
and all notice of the creation, contraction, incurrence, renewal, extension,
amendment, waiver or accrual of any of the Obligations, and notice of or proof
of reliance by the Administrative Agent or any other Secured Party upon this
Guarantee or acceptance of this Guarantee, the Obligations or any of them, shall
conclusively be deemed to have been created, contracted or incurred, or renewed,
extended, amended, waived or accrued, in reliance upon this Guarantee; and all
dealings between the UK Borrower and any of the Guarantors, on the one hand, and
the Administrative Agent and the other Secured Parties, on the other hand,
likewise shall be conclusively presumed to have been had or consummated in
reliance upon this Guarantee.  Each Guarantor waives diligence, presentment,
protest, demand for payment and notice of default or nonpayment to or upon the
UK Borrower or any of the Guarantors with respect to the Obligations.  Each
Guarantor understands and agrees that this Guarantee shall be construed as a
continuing, absolute and unconditional guarantee of payment without regard to
(a) the validity, regularity or enforceability of the Credit Agreement, any
other Credit Document, any Letter of Credit or any Hedge Agreement, any of the
Obligations or any other collateral security therefor or guarantee or right of
offset with respect thereto at any time or from time to time held by the
Administrative Agent or any other Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) that may at any
time be available to or be asserted by the UK Borrower against the
Administrative Agent or any other Secured Party or (c) any other circumstance
whatsoever (with or without notice to or knowledge of the UK Borrower or such
Guarantor) that constitutes, or might be construed to constitute, an equitable
or legal discharge of the UK Borrower for the Obligations, or of such Guarantor
under this Guarantee, in bankruptcy, liquidation, administration, or in any
other instance.  When pursuing its rights and remedies hereunder against any
Guarantor, the Administrative Agent and any other Secured Party may, but shall
be under no obligation to, pursue such rights and remedies as it may have
against the UK Borrower or any other Person or against any collateral security
or guarantee for the Obligations or any right of offset with respect thereto,
and any failure by the Administrative Agent or any other Secured Party to pursue
such other rights or remedies or to collect any payments from the UK Borrower or
any such other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the UK
Borrower or any such other Person or any such collateral security, guarantee or
right of offset, shall not relieve such Guarantor of any liability hereunder,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Administrative Agent and the other
Secured Parties against such Guarantor.  This Guarantee shall remain in full
force and effect and be binding in accordance with and to the extent of its
terms upon each Guarantor 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 drawn by
the UK Borrower 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.  A Guarantor shall automatically be
released from its obligations hereunder and the Guarantee of such Guarantor
shall be automatically released upon the consummation of any transaction
permitted by the Credit Agreement as a result of which such Guarantor ceases to
be a Subsidiary of the UK Borrower.  In connection with any such release, the
Administrative Agent shall execute and deliver to any Guarantor, at such
Guarantor’s expense, all documents that such Guarantor shall

 

6

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

 

reasonably request to evidence such termination or release.  Any execution and
delivery of documents pursuant to the preceding sentence of this Section 7 shall
be without recourse to or warranty by the Administrative Agent.

 

8.             Reinstatement.  This Guarantee 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 the UK Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the UK Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

 

9.             Payments.  Each Guarantor hereby guarantees that payments
hereunder will be paid to the Administrative Agent without set-off or
counterclaim in Dollars at the Administrative Agent’s Office.

 

10.           Representations and Warranties; Covenants.

 

(a)           Each Guarantor hereby represents and warrants that the
representations and warranties set forth in Section 8 of the Credit Agreement as
they relate to such Guarantor or in the other Credit Documents to which such
Guarantor is a party, each of which is hereby incorporated herein by reference,
are true and correct, and the Administrative Agent and each other Secured Party
shall be entitled to rely on each of them as if they were fully set forth
herein.

 

(b)           Each Guarantor hereby covenants and agrees with the Administrative
Agent and each other Secured Party that, from and after the date of this
Guarantee until the Obligations under the Credit Documents are paid in full, the
Commitments are terminated and no Letter of Credit drawn by the UK Borrower
remains outstanding, such Guarantor shall take, or shall refrain from taking, as
the case may be, all actions that are necessary to be taken or not taken so that
no violation of any provision, covenant or agreement contained in Section 9 or
10 of the Credit Agreement, and so that no Default or Event of Default, is
caused by any act or failure to act of such Guarantor or any of its
Subsidiaries.

 

11.           Authority of Agent.  Each Guarantor acknowledges that the rights
and responsibilities of the Administrative Agent under this Guarantee with
respect to any action taken by the Administrative Agent or the exercise or
non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this
Guarantee shall, as between the Administrative Agent and the other Secured
Parties, be governed by the Credit Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Administrative Agent and such Guarantor, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Secured Parties with full
and valid authority so to act or refrain from acting, and no Guarantor shall be
under any obligation, or entitlement, to make any inquiry respecting such
authority.

 

12.           Notices.  All notices, requests and demands pursuant hereto shall
be made in accordance with Section 14.2 of the Credit Agreement. All
communications and notices

 

7

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

 

hereunder to each Guarantor shall be given to it in care of the UK Borrower at
the UK Borrower’s address set forth in Section 14.2 of the Credit Agreement.

 

13.           Counterparts.  This Guarantee may be executed by one or more of
the parties to this Guarantee 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 Guarantee signed by all the parties shall be lodged with
the Administrative Agent and the UK Borrower.

 

14.           Severability.  Any provision of this Guarantee 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.

 

15.           Integration.  This Guarantee represents the agreement of each
Guarantor and the Administrative Agent 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.

 

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

 

(a)           None of the terms or provisions of this Guarantee may be waived,
amended, supplemented or otherwise modified except by a written instrument
executed by the affected Guarantor(s) and the Administrative Agent in accordance
with Section 14.1 of the Credit Agreement.

 

(b)           Neither the Administrative Agent nor any other Secured Party shall
by any act (except by a written instrument pursuant to Section 16(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 any Secured Party would otherwise have on any future occasion.

 

(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.

 

8

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

 

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

 

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

 

19.           Additional Guarantors.  Each Subsidiary of the US Borrower that is
required to become a party to this Guarantee pursuant to Section 9.11 of the
Credit Agreement shall become a Guarantor, with the same force and effect as if
originally named as a Guarantor herein, for all purposes of this Guarantee upon
execution and delivery by such Subsidiary of a Supplement in the form of Annex B
hereto.  The execution and delivery of any instrument adding an additional
Guarantor as a party to this Guarantee shall not require the consent of any
other Guarantor hereunder.  The rights and obligations of each Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Guarantee.

 

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

 

21.           Submission to Jurisdiction; Waivers.  Each Guarantor hereby
irrevocably and unconditionally:

 

(a)           submits for itself and its property in any legal action or
proceeding relating to this Guarantee 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 Guarantor at
its address referred to in Section 12 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

 

9

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

 

(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 21 any special, exemplary, punitive or consequential damages.

 

22.          GOVERNING LAW.  THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

10

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

 

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

 

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

 

 

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
Administrative Agent

 

 

 

 

 

by

 

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

by

 

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

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

 

ANNEX A

TO THE GUARANTEE

 

 

SUBSIDIARY GUARANTORS

 

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

 

ANNEX B TO THE

UK GUARANTEE AGREEMENT

 

SUPPLEMENT NO. [  ] dated as of [            ], to the Guarantee dated as of
July 30, 2004, among ROCKWOOD SPECIALTIES GROUP, INC. (the “US Borrower”) and
each of the subsidiaries of ROCKWOOD SPECIALTIES LIMITED, a company incorporated
under the laws of England and Wales (the “UK Borrower”) listed on Annex A
thereto (each such subsidiary individually a “Subsidiary Guarantor”, and,
collectively, the “Subsidiary Guarantors”; the Subsidiary Guarantors and the US
Borrower are referred to collectively as the “Guarantors”) and CREDIT SUISSE
FIRST BOSTON, acting through its Cayman Islands Branch, as administrative agent
(in such capacity, the “Administrative Agent”) for the lenders to the UK
Borrower (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 July 30, 2004 (as
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among the US Borrower, the UK Borrower, Rockwood Specialties
International, Inc., a Delaware corporation, the Lenders from time to time party
thereto, Credit Suisse First Boston, acting through its Cayman Islands Branch,
as Administrative Agent for the Lenders and UBS Securities LLC and Goldman Sachs
Credit Partners L.P., as co-syndication agents (in such capacities, the
“Co-Syndication Agents”).

 

B.  Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Guarantee (or, if not defined
therein, in the Credit Agreement).

 

C.  The Guarantors have entered into the Guarantee in order to induce the
Administrative Agent, the Co-Syndication 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 Borrowers under the Credit Agreement and to induce one or more Lenders or
Affiliates of Lenders to enter into Hedge Agreements with the Borrowers. 
Section 9.11 of the Credit Agreement and Section 19 of the Guarantee provide
that additional Subsidiaries may become Guarantors under the Guarantee by
execution and delivery of an instrument in the form of this Supplement.  Each
undersigned Subsidiary (each a “New Guarantor”) is executing this Supplement in
accordance with the requirements of the Credit Agreement to become a Guarantor
under the Guarantee in order to induce the Lenders and the Letter of Credit
Issuer to make additional Extensions of Credit to the UK Borrower and as
consideration for the Extensions of Credit previously made to the UK Borrower.

 

Accordingly, the Administrative Agent and each New Guarantor agrees as follows:

 

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

 

SECTION 1.  In accordance with Section 19 of the Guarantee, each New Guarantor
by its signature below becomes a Guarantor under the Guarantee with the same
force and effect as if originally named therein as a Guarantor and each New
Guarantor hereby (a) agrees to all the terms and provisions of the Guarantee
applicable to it as a Guarantor thereunder and (b) represents and warrants that
the representations and warranties made by it as a Guarantor thereunder are true
and correct on and as of the date hereof. Each reference to a Guarantor in the
Guarantee shall be deemed to include each New Guarantor.  The Guarantee is
hereby incorporated herein by reference.

 

SECTION 2.  Each New Guarantor represents and warrants to the Administrative
Agent and the other Secured Parties that this Supplement has been duly
authorized, executed and delivered by it and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms.

 

SECTION 3.  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 US
Borrower and the Administrative Agent.  This Supplement shall become effective
as to each New Guarantor when the Administrative Agent shall have received
counterparts of this Supplement that, when taken together, bear the signatures
of such New Guarantor and the Administrative Agent.

 

SECTION 4.  Except as expressly supplemented hereby, the Guarantee shall remain
in full force and effect.

 

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

 

SECTION 6.  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 Guarantee, 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.  All notices, requests and demands pursuant hereto shall be made in
accordance with Section 14.2 of the Credit Agreement.  All communications and
notices hereunder to each New Guarantor shall be given to it in care of the
UK Borrower at the UK Borrower’s address set forth in Section 14.2 of the Credit
Agreement.

 

2

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

 

SECTION 8.  Each New Guarantor agrees to reimburse the Administrative Agent for
its out-of-pocket expenses in connection with this Supplement, including the
fees, disbursements and other charges of counsel for the Administrative Agent.

 

3

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

 

ANNEX B TO THE

UK GUARANTEE AGREEMENT

 

IN WITNESS WHEREOF, each New Guarantor and the Administrative Agent have duly
executed this Supplement to the Guarantee as of the day and year first above
written.

 

 

[NAME OF NEW GUARANTOR],

 

 

 

 

by

 

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
Administrative Agent

 

 

 

 

by

 

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

 

 

 

by

 

 

 

 

 

 

 

 

Name:

 

 

 

Title:

 

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

 

EXHIBIT L-3

 

FORMS OF UK PLEDGE AGREEMENTS

 

 

Dated 30 July 2004

 

ROCKWOOD SPECIALTIES GROUP, INC.

And

CREDIT SUISSE FIRST BOSTON

 

CHARGE OVER SHARES

 

LATHAM&WATKINS

 

London

 

99 Bishopsgate

London EC2M 3XF

+44 020 7710 1000 (Tel)

+44 020 7374 4460 (Fax)

www.lw.com

 

2

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

 

ANNEX B TO THE

UK GUARANTEE AGREEMENT

 

Contents

 

Clause

 

Page

 

 

 

1.

Interpretation

1

 

 

 

2.

Covenant to pay secured amounts

4

 

 

 

3.

Fixed charge

5

 

 

 

4.

Continuance of security and release

7

 

 

 

5.

General covenants and representations

8

 

 

 

6.

The Administrative Agent’s powers

10

 

 

 

7.

Receiver

11

 

 

 

8.

Application of proceeds

13

 

 

 

9.

Protection of third parties

14

 

 

 

10.

Protection of Administrative Agent and Receiver

15

 

 

 

11.

Expenses and indemnity

15

 

 

 

12.

Protection of charges

16

 

 

 

13.

Power of attorney, etc.

17

 

 

 

14.

Other security, etc

18

 

 

 

15.

Avoidance of payments

20

 

 

 

16.

Currency conversion

21

 

 

 

17.

Declaration of Trust

21

 

 

 

18.

Execution of documents

22

 

 

 

19.

Notices and demands

22

 

 

 

20.

Further provisions

22

 

 

 

21.

Choice of law

24

 

 

 

22.

Jurisdiction

24

 

 

 

Schedule 1 The Shares

23

 

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

 

THIS DEED OF CHARGE is made on 30 July 2004 BETWEEN

 

(A)                               ROCKWOOD SPECIALTIES GROUP, INC. (the
“Chargor”), a Delaware corporation of 100 Overlook Center, Princeton, NJ 08542,
United States of America; and

 

(B)                               CREDIT SUISSE FIRST BOSTON, acting through its
Cayman Islands Branch, at Eleven Madison Avenue, New York, NY 10010, United
States of America, as administrative agent and trustee for the Secured Parties.

 

WHEREAS:

 

(1)                                 The Lenders have severally agreed to make
the Loans to the Chargor and to Rockwood Specialties Limited (the “UK Borrower”)
and the Letter of Credit Issuer has agreed to issue Letters of Credit for the
account of the Chargor and the UK Borrower upon the terms and subject to the
conditions set forth in the credit agreement (the “Credit Agreement”) dated as
of 30 July 2004, among the Chargor, the UK Borrower, Rockwood Specialties
International, Inc., the lending institutions from time to time party thereto as
Lenders, Credit Suisse First Boston (acting through its Cayman Islands Branch)
as administrative agent and collateral agent and UBS Securities LLC and Goldman
Sachs Credit Partners L.P. as co-syndication agents; and

 

(2)                                 Under Section 6.1(g) of the Credit
Agreement, the Chargor is required to execute this Deed in favour of the
Administrative Agent for the rateable benefit of the Secured Parties.

 

WITNESSES AS FOLLOWS:

 

1.                                      Interpretation

 

1.1                               Definitions: In this Deed, each of the
following expressions has, except so far as the context otherwise requires, the
meaning shown:

 

“Act” means the Companies Act 1985 (as amended);

 

“Administrative Agent” means Credit Suisse First Boston (acting through its
Cayman Island Branch) as administrative agent and trustee for the Secured
Parties under this Deed or such other Person as may from time to time be
appointed as successor Administrative Agent to hold the whole or any part of the
security created hereby;

 

“After-acquired Shares” means any shares obtained by the Chargor in the future
in the UK Borrower, provided that such future shares are not charged under the
US Share Charge;

 

“Charged Property” means:

 

(a)                                 the shares listed in Schedule 1 hereto and
any After-acquired Shares;

 

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

 

(b)                                 all rights in respect of or incidental to
the shares identified in paragraph (a) above, including the certificates
representing such shares and any interest of the Chargor in the entries on the
books of the issuer of such shares or any financial intermediary pertaining to
such 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 such shares; and

 

(c)                                  to the extent not covered by paragraphs (a)
and (b) above, all proceeds of any or all of paragraphs (a) and (b) above. For
the purposes of this Deed, the term “proceeds” includes whatever is receivable
or received when assets or proceeds are sold, exchanged, collected or otherwise
disposed of, whether such disposition is voluntary or involuntary, and includes
proceeds of any indemnity or guarantee payable to the Chargor or the
Administrative Agent from time to time with respect to any of the Charged
Property,

 

and references to the Charged Property include references to any part of it;
“Closing Time” means 24:00 (German time) on the Closing Date;

 

“this Deed” means this present deed and any other document by which, pursuant to
any of its provisions or otherwise, the Chargor may grant a Lien to the
Administrative Agent in respect of the Charged Property, as, in each case, from
time to time varied in any manner or respect whatsoever, and “charges contained
in this Deed” and “Liens contained in this Deed” and similar expressions shall
be construed accordingly;

 

“Enforcement Event” means the occurrence of an Event of Default, provided that
the Administrative Agent has served notice upon the Chargor to the effect that
an Event of Default has occurred and the Liens constituted under this Deed have
become enforceable and provided further that, notwithstanding the provisions of
any other Credit Document, the Administrative Agent shall not be obliged to
enforce the Liens from time to time constituted by or pursuant to this Deed
unless it is satisfied that such action is in accordance with all applicable
laws and regulations;

 

“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;

 

“Incapacity”, in relation to a Person, means the insolvency, liquidation,
dissolution, winding-up, administration, receivership, amalgamation,
reconstruction or any analogous proceeding occurring in relation to that Person
whatsoever;

 

“Receiver” means any Person or Persons appointed (and any additional Person or
Persons appointed or substituted) as administrative receiver, receiver, manager,
or receiver and manager by the Administrative Agent under this Deed or
otherwise;

 

“Secured Amounts” means in relation to the Chargor, the collective reference to:
(i) (x) the principal of and premium, if any, and interest at the applicable
rate provided in the

 

2

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

 

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 extended to the UK
Borrower, 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 UK 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, 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 UK Borrower or any other Credit
Party that is a Foreign Subsidiary to any of the Secured Parties under the
Credit Agreement and the other Credit Documents; (ii) all covenants, agreements,
obligations and liabilities of the UK Borrower under or pursuant to the Credit
Agreement and the other Credit Documents; (iii) all covenants, agreements,
obligations and liabilities of each other Credit Party that is a Foreign
Subsidiary under or pursuant to the Credit Documents; (iv) all obligations of
the UK Borrower and each Credit Party that is a Foreign 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)
all obligations in respect of overdrafts and related liabilities owed to the
Administrative Agent or its Affiliate by the UK Borrower or any other Credit
Party that is a Foreign Subsidiary arising from or in connection with treasury,
depositary or cash management services or in connection with any automated
clearinghouse transfer of funds; and references to Secured Amounts include
references to any of them;

 

“Secured Parties” means (i) the Lenders, (ii) the Letter of Credit Issuer, (iii)
the Swingline Lender, (iv) the Administrative Agent, (v) the Co-Syndication
Agents, (vi) each counterparty to a Hedge Agreement the obligations under which
constitute Secured Amounts, (vii) the beneficiaries of each indemnification
obligation undertaken by the UK Borrower or any other Credit Party that is a
Foreign Subsidiary and (viii) any successors, indorsees, transferees and assigns
of each of the foregoing and “Secured Party” means any one of them;

 

“Taxes” includes all present and future taxes, levies, imposts, duties, fees or
charges of whatever nature together with interest thereon and penalties in
respect thereof and “Taxation” shall be construed accordingly; and

 

“US Share Charge” means a charge dated 30 July 2004, among the Chargor and the
Administrative Agent creating a charge over 65 percent of the issued and
outstanding Equity Interests in the UK Borrower.

 

1.2                          Construction: In this Deed, except where the
context otherwise requires:

 

3

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

 

1.2.1                references to the Chargor include its permitted successors
and assigns and Persons deriving title through or under the Chargor in whole or
in part and whether at law or in equity and to the Administrative Agent includes
its successors and assigns and Persons deriving title through or under the
Administrative Agent in whole or in part and whether at law or in equity;

 

1.2.2                references to a document include any deed (including this
Deed), negotiable instrument, certificate, notice or other document of any kind
and references to any document (or a provision thereof) shall be construed as a
reference to that document or provision as from time to time amended,
supplemented, varied, restated or replaced (in whole or in part);

 

1.2.3                “subsidiary” has the meaning ascribed to it by section 736
of the Act;

 

1.2.4                references to any statute or other legislative provision
shall include any statutory or legislative modification or re-enactment thereof,
or any substitution therefor;

 

1.2.5                references to “the usual course of business” (and similar
expressions) mean, in relation to the Chargor, the usual course of business of
the Chargor as carried on by it at the date of this Deed or otherwise without a
breach of the Credit Agreement occurring;

 

1.2.6                references to “Lenders” shall be deemed to include
Affiliates of Lenders that may from time to time enter into Hedge Agreements
with the Borrowers (or either of them);

 

1.2.7                the words “hereof’, “herein”, “hereto” and “hereunder” and
words of similar import when used in this Deed shall refer to this Deed as a
whole and not to any particular provision of this Deed, and Section, subsection,
clause and Schedule references are to this Deed unless otherwise specified. The
words “include”, “includes” and “including” shall be deemed to be followed by
the phrase “without limitation”; and

 

1.2.8                the meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.

 

1.3                          Headings: The headings in this Deed shall not
affect its interpretation.

 

1.4                          Defined terms: Terms and expressions used in this
Deed and not defined in this

 

Deed shall, except so far as the context otherwise requires, have the meanings
given to them in the Credit Agreement and the appendices thereto.

 

1.5                          Effect as a deed: This Deed is intended to take
effect as a deed notwithstanding

 

that the Administrative Agent may have executed it under hand only.

 

2.                                 Covenant to pay secured amounts

 

The Chargor as primary obligor covenants with the Administrative Agent (on
behalf of the Secured Parties) that it will pay when due and payable all of the
Secured Amounts

 

4

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

 

which now are or at any time hereafter may (whether on or after any demand)
become due, owing or payable or due for discharge, in any currency, to the
Secured Parties by the UK Borrower or any other Credit Party that is a Foreign
Subsidiary, actually or contingently, solely or jointly and/or severally with
another or others, as principal or surety.

 

3.                                 Fixed charge

 

3.1                          Charge: The Chargor with full title guarantee and
effective immediately upon the

 

Closing Time, hereby charges to the Administrative Agent (on behalf of the
Secured Parties) the Charged Property by way of first fixed charge as a
continuing security for the payment or discharge of the Secured Amounts.

 

3.2                          Warranty: The Chargor warrants to the
Administrative Agent that it is absolutely

 

entitled to all of the Charged Property vested in it as at the date of this Deed
free from all Liens (other than those arising pursuant to this Deed) and that,
as of the date of this Deed, the shares forming part of the Charged Property
vested in it have been duly authorised and validly issued and are fully paid and
no calls have been or can be made in their respect.

 

3.3                          Rights attaching to the Charged Property:

 

3.3.1                With respect to the Chargor’s rights and powers relating to
the Charged Property:

 

(i)                                the Chargor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the Charged Property or
any part thereof for any purpose not prohibited by the terms of this Deed or the
other Credit Documents and to the extent that such exercise is not inconsistent
with the security intended to be conferred on the Administrative Agent by or
pursuant to this Deed; and

 

(ii)                             in the event that the Administrative Agent
registers itself as the legal owner of any shares constituting part of the
Charged Property, the Administrative Agent shall execute and deliver (or cause
to be executed and delivered) to the Chargor all such proxies and other
instruments as the Chargor may reasonably request for the purpose of enabling
the Chargor to exercise the voting and other rights that it is entitled to
exercise pursuant to clause 3.3.1(a)(1) above;

 

(b)                                 the Chargor shall not, except to the extent
permitted by the Credit Agreement, permit or agree to any variation of the
rights attaching to or conferred by any of the Charged Property, participate in
any rights issue, elect to receive or vote in favour of receiving any dividends
other than in the form of cash or participate in any vote concerning a members
voluntary winding-up or a compromise or arrangement pursuant to Section 425 of
the Act;

 

5

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

 

(c)                                  subject to clause 3.1.1(d) below, the
Chargor shall be entitled to receive and retain and use, free and clear of any
Lien created by this Deed, any and all dividends and distributions made or paid
in respect of the Charged Property to the extent permitted by the Credit
Agreement provided, however, that any and all non-cash dividends, interest,
principal or other distributions that would constitute Charged Property, whether
resulting from a subdivision, combination or reclassification of the outstanding
Equity Interests of the UK Borrower or received in exchange for shares forming
part of the Charged Property 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, Charged Property and
shall, if received by the Chargor, be received in trust for the benefit of the
Administrative Agent (on behalf of the Secured Parties), be segregated from the
other property or funds of the Chargor and be forthwith delivered to the
Administrative Agent as Charged Property in the same form as so received (with
any necessary endorsement); and

 

(d)                                 after the occurrence of an Enforcement Event
and whilst such event is continuing (and without any consent or authority on the
part of the Chargor) the Administrative Agent may at the Administrative Agents
discretion (in the name of the Chargor or otherwise):

 

(i)           exercise (or refrain from exercising) any voting rights in respect
of the

 

Charged Property, provided that, unless otherwise directed by the Required
Lenders, the Administrative Agent shall have the right from time to time
following and during the continuance of an Event of Default to permit the
Chargor to exercise such rights. After all of the Events of Default have been
cured or waived and the Chargor has delivered to the Administrative Agent a
certificate to that effect, the Chargor will have the right to exercise the
voting and consensual

 

rights that the Chargor would otherwise be entitled to exercise pursuant to the
terms of this clause 3.3.1 (and the obligations of the Administrative Agent
under the same shall be reinstated);

 

(ii)                           receive all dividends and distributions that the
Chargor would otherwise be authorised to receive and retain and apply all
dividends, interest and other monies arising from the Charged Property as though
they were the proceeds of sale under this Deed as set out in clause 8.1,
provided that after all Events of Default have been cured or waived, and the
Chargor has delivered to the Administrative Agent a certificate to that effect,
the Administrative Agent shall repay to the Chargor (without interest) all
dividends and distributions that the Chargor would otherwise be permitted to
receive, retain and use pursuant to the terms of clause 3.1.1(c);

 

6

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

 

(iii)                       transfer the Charged Property into the name of the
Administrative Agent or such nominee(s) of the Administrative Agent as it shall
require; and

 

(iv)                          exercise (or refrain from exercising) the powers
and rights conferred on or exercisable by the legal or beneficial owner of the
Charged Property to exercise all powers given to trustees by the Trustee Act
2000 in respect of securities or property subject to a trust.

 

3.3.2                   All dividends and distributions that are received by the
Chargor contrary to the provisions of clause 3.3.1 above shall be received in
trust for the benefit of the Administrative Agent (on behalf of the Secured
Parties), shall be segregated from other property or funds of the Chargor and
shall forthwith (and, in any event, within two Business Days) be delivered to
the Administrative Agent as Charged Property in the same form as so received
(with any necessary endorsements).

 

4.                                  Continuance of security and release

 

4.1                                 Continuing security: Without prejudice to
the generality of clause 2, the charges contained in this Deed are made for
securing the Secured Amounts, including further advances and shall be without
prejudice and in addition to any other security whatsoever which may be held by
the Administrative Agent from the Chargor or any other Person for or in respect
of the whole or part of the Secured Amounts; and the charges, covenants and
provisions contained in this Deed shall remain in force as continuing security
to the Administrative Agent notwithstanding any settlement of account or the
existence at any time of a credit balance on any current or other account or any
other act, event or matter whatsoever, except only the execution by the
Administrative Agent as a deed of an absolute and unconditional release or the
execution by or on behalf of the Administrative Agent of a receipt for all (and
not part only) of the Secured Amounts.

 

4.2                                 Retention of security: Subject to clause
4.3, the Administrative Agent shall be entitled to retain the security
constituted by this Deed until the date on which all the Secured Amounts and the
obligations of the Chargor under this Deed 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
Secured Amounts.

 

4.3                                 Release of security: Upon any sale or other
transfer by the Chargor of any Charged Property that is permitted under the
Credit Agreement to any Person, or upon the effectiveness of any written consent
to the release of the security interest granted hereby in any such Charged
Property pursuant to Section 14.1 of the Credit Agreement, the obligations of
the Chargor with respect to such Charged Property shall be automatically
released.

 

4.4                                 Documents of release: In connection with any
termination or release pursuant to clause 4.3 the Administrative Agent shall
execute and deliver to the Chargor, at the Chargor’s

 

7

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

 

expense, all documents that the Chargor shall reasonably request to evidence
such termination or release. Any execution and delivery of documents pursuant to
this clause 4.4 shall be without recourse to or warranty by the Administrative
Agent.

 

5.                                       General covenants and representations

 

5.1                                 Covenants: During the subsistence of the
security constituted by this Deed, the Chargor further covenants with the
Administrative Agent as follows:

 

5.1.1                        it will 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 Charged Property or (ii) create or suffer to exist any
consensual Lien upon or with respect to any of the Charged Property, except for
the Lien created under this Deed; provided that in the event the Chargor sells
or otherwise disposes of assets permitted by the Credit Agreement and such
assets are or include any of the Charged Property, the Administrative Agent
shall release such Charged Property in accordance with clauses 4.3 and 4.4
above;

 

5.1.2                        it shall maintain the security constituted by this
Deed as a perfected security interest having at least the priority described in
clause 5.2.2(i) and shall defend its and the Administrative Agent’s title or
interest in and to all the Charged Property against any and all Liens (other
than the Lien created in accordance with the terms of this Deed), however
arising, and any and all Persons whomsoever;

 

5.1.3                        it will advise the Administrative Agent and the
Lenders promptly, in reasonable detail, of any Lien of which it has knowledge
(other than the security constituted hereby) on any of the Charged Property
which would adversely affect, in any material respect, the ability of the
Administrative Agent to exercise any of its remedies hereunder;

 

5.1.4                        it will deliver to the Administrative Agent (or
procure delivery to the Administrative Agent of), and the Administrative Agent
shall be entitled to hold and retain, all (or such part thereof as may from time
to time be specified by the Administrative Agent) of the Charged Property
(including, for the avoidance of doubt, the After-acquired Shares) or the
certificates and other documents of title to or representing the same held or
acquired by the Chargor or its nominee(s) together with, in each case in form
and substance satisfactory to the Administrative Agent:

 

(a)                                  an instrument or instruments of or relating
to the transfer of such Charged Property (with the name of the transferee or
assignee, the consideration and the date left blank, but otherwise duly
completed} executed by the Chargor; and

 

(b)                                  any other document or thing which the
Administrative Agent may reasonably specify with a view to perfecting or
protecting its security over the Charged Property,

 

and so that:

 

(i)                               the Administrative Agent may at any time after
the occurrence of an Enforcement Event which is continuing have the Charged
Property

 

8

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

 

registered in its name or in the name of, or otherwise have the same held by,
one or more nominees on its behalf; and

 

(ii)                           notwithstanding any other provisions of this
Deed, the Administrative Agent shall not register itself or any nominee as the
owner (whether by legal mortgage or otherwise) of any of the shares in the UK
Borrower prior to the occurrence of an Enforcement Event; and

 

5.1.5                        it will during the subsistence of the security from
time to time constituted by or pursuant to this Deed pay on the same becoming
due all calls or other payments which may be or become due in respect of any of
the Charged Property, and in any case of default by the Chargor in this respect,
the Administrative Agent may if it thinks fit make any such payment on behalf of
the Chargor in which event any sums so paid by the Administrative Agent shall be
reimbursed by the Chargor to the Administrative Agent on demand and shall carry
interest from the date of payment by the Administrative Agent until so
reimbursed at the rate and otherwise as mentioned in Section 2.8(c)(y) of the
Credit Agreement.

 

The obligations of the Chargor under this clause 5 shall be in addition to and
not in substitution for the covenants for title deemed to be included in this
Deed by virtue of Part 1 of the Law of Property (Miscellaneous Provisions) Act
1994.

 

5.2                                 Representations: During the subsistence of
the security constituted by this Deed, the Chargor represents to the
Administrative Agent as follows:

 

5.2.1                        Schedule 1 hereto (i) correctly represents as of
the date hereof the issuer, the certificate number, the number and class and the
percentage of the issued and outstanding Equity Interests of such class of all
current shares charged as Charged Property hereunder and (ii) includes all
Equity Interests required to be charged hereunder. Except as set forth on
Schedule 1, the Charged Property represents all of the issued and outstanding
Equity Interests of each class of current shares in the UK Borrower on the date
hereof that are required to be charged hereunder; and

 

5.2.2 (i) the charge of the Charged Property by the Chargor hereunder
constitutes valid and perfected first-priority security in the Charged Property
in favour of the Administrative Agent, for the rateable benefit of the Secured
Parties, as security for the Secured Amounts subject to the filing of the
prescribed particulars of such security pursuant to Section 395 of the Act,
(ii) except for the security constituted by this Deed, the Chargor is the legal
and beneficial owner of each item of the Charged Property free and clear of any
and all Liens and (iii) the Chargor has full power, authority and legal right to
charge all the Charged Property pursuant to this Deed.

 

5.3                                 Powers and authorisations: The Chargor
covenants with and represents to the Administrative Agent that the documents
which contain or establish the Chargor’s constitution include provisions which
give power, and all necessary corporate authority has been obtained and action
taken, for the Chargor to grant the charges contained in this Deed and execute
and deliver, and perform the covenants and obligations contained in,

 

9

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

 

this Deed and that this Deed constitutes valid and binding obligations of the
Chargor enforceable in accordance with its terms.

 

5.4                                 Non-violation: The Chargor further covenants
and represents to the AdministrativeAgent that neither the execution and
delivery of this Deed nor the performance of any of the covenants contained in
it does or will contravene or constitute a default under (or result in the
creation or imposition of, or the obligation to create or impose, any Lien upon
any of its property or assets pursuant to), or cause to be exceeded any
limitation on it or the powers of its directors imposed by or contained in:

 

5.4.1                        any law by which it or any of its assets is bound
or affected;

 

5.4.2                        any document which contains or establishes its
constitution; or

 

5.4.3                        any agreement to which it is a party or by which
any of its assets is bound.

 

5.5                                 Non-compliance by the Chargor: If the
Chargor for any reason fails to perform any of its obligations to the
Administrative Agent under this Deed, the Administrative Agent shall have power
but shall not be obliged, on behalf of or in the name of the Chargor or
otherwise, to perform the obligation and to take any steps which the
Administrative Agent may, in its absolute discretion, reasonably consider
appropriate with a view to remedying or mitigating the consequences of such
failure, but so that the exercise of this power, or the failure to exercise it,
shall in no circumstances prejudice the Administrative Agents rights under this
Deed. Any moneys so expended by the Administrative Agent shall be repayable by
the Chargor to the Administrative Agent on demand together with interest at the
rate specified in Section 2.8(c)(y) of the Credit Agreement from the date of
payment by the Administrative Agent until such repayment, both before and after
judgment. No exercise by the Administrative Agent of its powers under this
clause 5.5 shall make the Administrative Agent or any other of the Secured
Parties liable to account as a mortgagee in possession.

 

6.                                       The Administrative Agent’s powers

 

6.1                                 Amounts due: The Secured Amounts shall be
deemed to have become due for the purposes of section 101 of the Law of Property
Act 1925 (the “1925 Act”) and the statutory power of sale and of appointing a
receiver which are conferred on the Administrative Agent under that Act (as
varied or extended by this Deed) and all other powers shall be deemed to arise
immediately after execution of this Deed but shall only be exercisable after the
occurrence of an Enforcement Event which is continuing

 

6.2                                 Power of sale: Section 103 of the 1925 Act
shall not apply in relation to any of the charges contained in this Deed and the
statutory power of sale (as extended by this Deed) and all other powers shall be
exercisable at any time after the occurrence of an Enforcement Event which is
continuing.

 

6.3                                 Law of Property Act 1925: The provisions of
the 1925 Act relating to the power of sale and the other powers conferred by
section 101(1) and (2) are hereby extended (as if such

 

10

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

 

extensions were contained therein) to authorise the Administrative Agent at its
absolute discretion, but only after the occurrence of an Enforcement Event which
is continuing:

 

6.3.1                        to sell all of the Chargor’s title to or interest
in the Charged Property or any part thereof, and to do so for any shares,
debentures or other securities whatsoever, or in consideration of an agreement
to pay all or part of the purchase price at a later date or dates, or an
agreement to make periodical payments, whether or not the agreement is secured
by a Lien or a guarantee, or for such other consideration whatsoever as the
Administrative Agent may think fit, and also to grant any option to purchase,
and to effect exchanges;

 

6.3.2                        with a view to or in connection with the sale of
the Charged Property, to carry out any transaction, scheme or arrangement which
the Administrative Agent may, in its absolute discretion, consider appropriate;

 

6.3.3                        to insure the Charged Property against such risks
and for such amounts as the Administrative Agent may consider prudent; and

 

6.3.4                        to do all or any of the things or exercise all or
any of the powers which are mentioned or referred to in clause 7.6 as if each of
them was expressly conferred on the Administrative Agent by this Deed and which
may not be included in clauses 6.3.1 to 6.3.3 above.

 

7.                                       Receiver

 

7.1                                 Appointment: The Administrative Agent may by
writing or by deed appoint such Person or Persons (including an officer or
officers of the Administrative Agent) as it thinks fit to be receiver or manager
of the Charged Property or any part thereof and, in the case of an appointment
of more than one Person, to act together or independently of the other or others
and the Administrative Agent may make such appointment at any time after it has
demanded payment of any of the Secured Amounts which are due and payable but
unpaid or if it is requested to do so by the Chargor or upon the presentation of
a petition or application to the court for an administration order in respect of
the Chargor. Where more than one Receiver is appointed, each joint Receiver
shall have the power to act severally and independently of any other joint
Receivers, except to the extent the Administrative Agent may specify to the
contrary. The powers of appointment of a Receiver shall be in addition to all
statutory and other powers of appointment under the 1925 Act (as extended by
this Deed) or otherwise and such powers shall remain exercisable from time to
time by the Administrative Agent in respect of any part of the Charged Property
in accordance with the terms of this Deed.

 

7.2                                 Removal and replacement: Except as otherwise
required by statute, the Administrative Agent may by writing or by deed remove
(so far as it is lawfully able) a Receiver and appoint another in his place or
to act as an additional Receiver.

 

7.3                                 Extent of appointment: The exclusion of any
part of the Charged Property from the appointment of any Receiver shall not
preclude the Administrative Agent from subsequently extending his or their
appointment (or that of any Receiver replacing him or them) to that part or
appointing another Receiver over any other part of the Charged Property.

 

11

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

 

7.4                                 Agent of the Chargor: A Receiver shall be
the agent of the Chargor and the Chargor alone shall be responsible for his acts
and defaults and liable on any contracts or engagements made or entered into or
adopted by him; and in no circumstances whatsoever shall the Administrative
Agent be in any way responsible for or incur any liability in connection with
his contracts, engagements, acts, omissions, misconduct, negligence or default
and, if a liquidator of the Chargor shall be appointed, the Receiver shall act
as principal and not as agent for the Administrative Agent.

 

7.5                                 Remuneration: Subject to section 36 of the
Insolvency Act 1986, the remuneration of any Receiver may be fixed by the
Administrative Agent at a rate appropriate to the work and responsibilities
involved (and may be or include a commission calculated by reference to the
gross amount of all moneys received or otherwise and may include remuneration in
connection with claims, actions or proceedings made or brought against such
Receiver by the Chargor or any other Person or the performance or discharge of
any obligation imposed upon him by statute or otherwise) but such remuneration
shall be payable by the Chargor alone; and the amount of such remuneration may
be debited by the Administrative Agent to any account of the Chargor, but shall,
in any event, form part of the Secured Amounts and accordingly be secured on the
Charged Property under the charges contained in this Deed.

 

7.6                                 Powers: A Receiver of the Chargor shall have
any and all powers conferred on a receiver, manager, receiver and manager,
mortgagor and mortgagee in possession by statute or common law. In addition, a
Receiver of the Chargor shall have the following powers in relation to the
Charged Property in respect of which he is appointed:

 

7.6.1                        to enter upon, take possession of, get in and
collect the Charged Property (or such part thereof in respect of which he may be
appointed) including rents and income whether accrued before or after the date
of his appointment;

 

7.6.2                        to sell, exchange, license, surrender, release,
disclaim, abandon, return or otherwise dispose of or in any way whatsoever deal
with the Charged Property or any interest in the Charged Property for such
consideration (if any), including any Charged Property whatsoever, and upon such
terms (including by deferred payment or payment by instalments) as he may think
fit and to concur in any such transaction;

 

7.6.3                        to sell on condition and to grant rights, options,
licences or easements over the whole or any part of the Charged Property and
(with or without consideration) to rescind, surrender or disclaim or accept or
agree to accept surrenders or disclaimers of agreements relating to or affecting
the Charged Property in such circumstances, to such Persons (including, without
limitation, to the Administrative Agent), for such purposes and upon such terms
whatsoever as he may think fit and also to vary the terms of any contract
affecting the Charged Property and to provide payments under such contract in
such manner as he may think fit;

 

7.6.4                        in connection with the exercise or the proposed
exercise of any of his powers or in order to obtain payment of his remuneration
(whether or not it is already payable), to borrow or raise money from any
Person, including the Administrative Agent, without security or on

 

12

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

 

the security of the Charged Property and generally in such manner and on such
terms as he may think fit;

 

7.6.5                        to bring, defend, submit to arbitration, negotiate,
compromise, abandon and settle any claims, disputes and proceedings concerning
the Charged Property or any part thereof;

 

7.6.6                        to transfer all or any of the Charged Property
and/or any of the liabilities of the Chargor to any other company or body
corporate, whether or not formed or acquired for the purpose and to form a
subsidiary or subsidiaries of the Chargor;

 

7.6.7                        to redeem, discharge or compromise any Lien over or
with respect to the Charged Property;

 

7.6.8                        to effect or maintain indemnity insurance and other
insurance and obtain bonds and performance guarantees;

 

7.6.9                        in connection with the exercise of any of his
powers, to execute or do, or cause or authorise to be executed or done, on
behalf of or in the name of the Chargor or otherwise, as he may think fit, all
documents, receipts, registrations, acts or things which he may consider
appropriate;

 

7.6.10                  to exercise all powers, discretions, voting, conversion
or other rights or entitlements in relation to any of the Charged Property of an
absolute owner, together with all powers which are incidental to the ownership
of or rights in or to any Charged Property and to complete or effect any
transaction entered into by the Chargor and complete, disclaim, abandon or
modify all or any of the outstanding contracts or arrangements of the Chargor
relating to or affecting the Charged Property;

 

7.6.11                  to exercise all powers as are described in Schedule 1 to
the Insolvency Act 1986, whether or not the Receiver is an “administrative
receiver” as defined in that Act; and

 

7.6.12                  generally to carry out, or cause or authorise to be
carried out, any transaction, scheme or arrangement whatsoever, whether similar
or not to any of the foregoing, in relation to the Charged Property which he may
consider expedient or conducive to any of the functions, powers, authorities or
discretions conferred on or vested in him and as effectually as if he were
solely and absolutely entitled to the Charged Property.

 

8.                                       Application of proceeds

 

8.1                                 Application: All moneys arising from the
exercise of the powers of the Receiver or the Administrative Agent shall be held
on trust by the Administrative Agent for the benefit of itself and the other
Secured Parties (for so long as they remain Secured Parties) and (subject to any
claims ranking in priority to any of the Secured Amounts and except as otherwise
directed by the Administrative Agent) shall be applied in or towards
discharging, in the following order of priority:

 

8.1.1                        first, to the amount of all moneys raised or
borrowed by the Receiver, and all costs, charges, expenses and liabilities paid,
incurred or charged by the Receiver (including any amounts for which he is
entitled to be indemnified) in connection with or as a result of

 

13

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

 

the exercise of his powers and the remuneration of the Receiver, in such order
as the Receiver or the Administrative Agent may from time to time determine;

 

8.1.2                        second, 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 Deed, the
other Credit Documents or any of the Secured Amounts, 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 the Chargor 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;

 

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

 

8.1.4                        fourth, any surplus then remaining shall be paid to
the Chargor or to whomsoever may be lawfully entitled to receive the same or as
a court of competent jurisdiction may direct.

 

The Chargor agrees and acknowledges that the Administrative Agent is entering
into this Deed, and holds its rights and benefits hereunder, as trustee for and
on behalf of the Secured Parties in accordance with the terms of clause 17.

 

8.2                                 Accounts: Notwithstanding the provisions of
clause 8.1, all moneys from time to time received by the Administrative Agent
from the Chargor or any Person or Persons liable to pay the same or from any
Receiver or otherwise on the realisation or enforcement of the charges contained
in this Deed may be applied by the Administrative Agent either as a whole or in
such proportion as the Administrative Agent shall think fit to any account or
item of account or any transaction and, without limitation, the Administrative
Agent may in its absolute discretion at all times pending the payment to the
Administrative Agent of all of the Secured Amounts place and keep to the credit
of a separate or suspense interest bearing account (subject to the accrual of
interest at market rates for the account of the Chargor) any money received by
the Administrative Agent from the Chargor or such other Persons for so long and
in such manner as the Administrative Agent may determine without any obligation
to apply the same or any part thereof in or towards the discharge of any of the
Secured Amounts.

 

8.3                                 Receiver’s Receipts: Sections 109(6) and
(8) of the 1925 Act shall not apply in relation to a Receiver appointed under
this Deed.

 

9.                                      Protection of third parties

 

9.1                                 Enquiry: No purchaser from, or other Person
dealing with, the Administrative Agent or any Receiver shall be concerned to
enquire whether any of the powers exercised or purported to be exercised has
arisen or become exercisable, whether the Secured Amounts remain outstanding,
whether the Administrative Agent or any Receiver is authorised to act or as to
the propriety or validity of the exercise or purported exercise of

 

14

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

 

any power; and the title of such a purchaser and the position of such a Person
shall not be impeachable by reference to any of those matters and the
protections contained in sections 104 to 107 of the 1925 Act, section 42(3) of
the Insolvency Act 1986 (as amended) or in any other applicable legislation
shall apply to any Person purchasing from or dealing with a Receiver or the
Administrative Agent.

 

9.2                                 Receipts: The receipt of the Administrative
Agent or any Receiver shall be an absolute and a conclusive discharge to a
purchaser and shall relieve him of any obligation to see to the application of
any moneys paid to or by the direction of the Administrative Agent or the
Receiver.

 

9.3                                 Construction: in clauses 9.1 and 9.2,
“purchaser’’ includes any Person acquiring any Lien over, or any other interest
or right whatsoever in relation to, the Charged Property.

 

10.                               Protection of Administrative Agent and
Receiver

 

10.1                           Liability: Neither the Administrative Agent nor
any Receiver shall be liable to the Chargor in respect of any loss or damage
which arises out of the exercise, the attempted or purported exercise or the
failure to exercise any of their respective powers. Notwithstanding the
foregoing, neither the Administrative Agent, any Receiver or any Secured Party
shall be entitled to be indemnified in respect of any part of the foregoing if
it arises as a result of such party’s gross negligence or wilful misconduct.

 

10.2                           Possession: Without prejudice to the generality
of clause 10.1, entry into possession of the Charged Property shall not render
the Administrative Agent or any Receiver liable to account as mortgagee in
possession; and if and whenever the Administrative Agent or any Receiver enters
into possession of the Charged Property, it shall be entitled at any time to go
out of such possession.

 

11.                                 Expenses and indemnity

 

11.1                           Expenses: The Chargor further covenants with the
Administrative Agent to reimburse or pay to the Administrative Agent or any
Receiver (on the basis of a full indemnity) the amount of all costs (including
legal costs), charges and expenses reasonably incurred or sustained by the
Administrative Agent or such Receiver (including, for the avoidance of doubt,
any such costs, charges and expenses arising from any act or omission of, or
proceedings involving, any third party) in connection with:

 

11.1.1                  the investigation of title to or any inspection or
valuation of the Charged Property vested in the Chargor under or in connection
with this Deed, and the preparation, registration or perfecting of this Deed (or
any of the charges contained in it), or any other document entered into between
the Chargor and the Administrative Agent;

 

11.1.2                  the lawful exercise by or on behalf of the
Administrative Agent or any Receiver of any of the powers of the Administrative
Agent or such Receiver, and the enforcement, preservation or attempted
preservation of this Deed or the Charged Property or any other action taken by
or on behalf of the Administrative Agent or any Receiver with a view to

 

15

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

 

or in connection with the recovery by the Administrative Agent of the Secured
Amounts from the Chargor or any other Person; and

 

11.1.3                  the carrying out of any other act or matter which the
Administrative Agent or any Receiver considers to be necessary for the
preservation, improvement or benefit of the Charged Property.

 

11.2                           Indemnity: The Chargor hereby agrees to pay, and
to indemnify the Administrative Agent, the Secured Parties, any Receiver and any
attorney, agent or other Person appointed by the Administrative Agent or any
Receiver under this Deed and the Administrative Agent’s officers and employees
(each an “Indemnified Party”) on an after tax basis from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever with respect
to the execution, delivery, enforcement, performance and administration of this
Deed to the extent either of the Borrowers would be required to do so pursuant
to the terms of the Credit Agreement.

 

11.3                           Taxes: All sums of whatsoever nature which are
payable by the Chargor under this Deed and which are now or at any time
hereafter become subject to value added tax or any similar tax shall be deemed
to be exclusive of value added tax or any similar tax and the Chargor in
addition to such sums will indemnify the Administrative Agent from and against
all claims and liabilities whatsoever in respect thereof. The Chargor agrees to
pay, and to indemnify the Administrative Agent, any Receiver and the Secured
Parties against any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable with respect to any of the Charged Property
or in connection with any of the transactions contemplated by this Deed.

 

12.                               Protection of charges

 

12.1                           Fixed mortgage: The Chargor further covenants
with the Administrative Agent at the Chargor’s own cost, as a continuing
security for the payment or discharge of the Secured Amounts that it shall, if
the Administrative Agent so requires, promptly execute a transfer of Charged
Property or any rights to Charged Property now owned or hereafter acquired by
the Chargor to the Administrative Agent or its nominee (in each case, on behalf
of the Secured Parties), and also to procure that the transfer to the
Administrative Agent or its nominee is duly registered within one week.

 

12.2                           Further security: The Chargor further covenants
with the Administrative Agent from time to time (and, for the purposes mentioned
in clause 12.2.2, notwithstanding that the Administrative Agent may not have
served a demand for payment of the Secured Amounts) upon demand to execute, at
the Chargor’s own cost, any document or do any act or thing which:

 

12.2.1                  the Administrative Agent may reasonably specify with a
view to perfecting or protecting any charge or security created or intended to
be created by this Deed; or

 

16

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

 

12.2.2                  the Administrative Agent or any Receiver may reasonably
specify with a view to facilitating the exercise or the proposed exercise of any
of their powers.

 

13.                               Power of attorney, etc.

 

13.1                           Attorneys: For the purpose of securing the
interest of the Administrative Agent in the Charged Property and the performance
of the Chargor’s obligations to the Administrative Agent whether under this Deed
or the other Credit Documents or otherwise, the Chargor irrevocably and by way
of security appoints the Administrative Agent and any Receiver jointly and also
severally to be its attorney and attorneys (with full power to appoint
substitutes and to sub-delegate, including power to authorise the Person so
appointed to make further appointments, in both cases, with regard to all or any
part of the Charged Property) on behalf of the Chargor and in its name or
otherwise, to execute any document or do any act or thing which the
Administrative Agent or such Receiver (or their substitutes or delegates) may,
in its or his absolute discretion, consider appropriate in connection with the
exercise of any of the powers of the Administrative Agent or such Receiver or
which the Chargor is obliged to the Administrative Agent to execute or do,
whether under this Deed or otherwise; and without prejudice to the generality of
its power to appoint substitutes and to sub-delegate, the Administrative Agent
may appoint any Receiver as its substitute or delegate, and any Person appointed
the substitute of the Administrative Agent shall, in connection with the
exercise of the said power of attorney, be the agent of the Chargor and clause
7.4 shall apply mutatis mutandis.

 

13.2                           Charged Property on trust: For the purpose of
giving effect to this Deed, the Chargor hereby declares that, as and when the
charges contained in this Deed shall become enforceable, it will hold all of the
Charged Property vested in it (subject to the right of redemption) upon trust to
convey, assign or otherwise deal with the Charged Property vested in it in such
manner and to such Person as the Administrative Agent shall direct and declares
that it shall be lawful for the Administrative Agent to appoint a new trustee or
trustees of the Charged Property in place of the Chargor.

 

13.3                           Powers as trustee: The Chargor hereby agrees and
declares that the Administrative Agent or any nominee of the Administrative
Agent may at any time after the Administrative Agent or any nominee or nominees
of the Administrative Agent has/have been registered as owner(s) of any Charged
Property, without any further consent or authority on the part of the Chargor,
exercise (in the name of the Chargor or otherwise) with respect to such Charged
Property and to the exclusion of the Chargor, all rights and powers conferred by
statute or otherwise upon an absolute owner of such Charged Property and all the
powers given to trustees by the Trustee Act 2000 in respect of charged property
or property subject to a trust, and all rights or powers incidental to or
conducive to the exercise of rights and powers in relation to the Charged
Property; provided that until the security constituted by this Deed shall become
enforceable the Administrative Agent shall:

 

13.3.1                  exercise or procure that its nominees shall exercise all
such rights and powers at the specific request of and in accordance with the
instructions of the Chargor but so that neither the Administrative Agent nor any
nominees of the Administrative Agent shall be obliged to give effect to any
request or instruction which the Administrative Agent may

 

17

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

 

consider would be prejudicial to the charges contained in this Deed or if in
doing so it would incur any cost or expense or render itself subject to any
liability, unless previously indemnified to its satisfaction; and

 

13.3.2                  pay or procure that its nominee shall pay to the Chargor
all dividends, interest and other distributions of an income nature that it or
its nominee receives.

 

13.4                           Ratification: The Chargor ratifies and confirms
and agrees to ratify and confirm all acts and things which any attorney as
mentioned in clause 13.1 shall do or purport to do in the lawful and proper
exercise of his powers under such clause.

 

14.                                 Other security, etc.

 

14.1                           No merger: The charges contained in or created
pursuant to this Deed are in addition to, and shall neither be merged in, nor in
any way exclude or prejudice any other Lien, right of recourse, set off or other
right whatsoever which the Secured Parties may now or at any time hereafter hold
or have (or would apart from this Deed or any charge contained or created
pursuant to this Deed hold or have) as regards the Chargor or any other Person
in respect of the Secured Amounts and the Administrative Agent shall be under no
obligation to take any steps to call in or to enforce any security for the
Secured Amounts and shall not be liable to the Chargor for any loss arising from
any omission on the part of the Administrative Agent to take any such steps or
for the manner in which the Administrative Agent shall enforce or refrain from
enforcing any such security.

 

14.2                           Consolidation: Section 93 of the 1925 Act shall
not apply in relation to any of the charges contained in this Deed.

 

14.3                           Ruling off: Without prejudice to clause 5.1.1, if
the Administrative Agent receives notice of any Lien or any other interest
(other than an interest arising out of a sale in the usual course of business
which is permitted by Section 10.4 of the Credit Agreement) affecting the
Charged Property:

 

14.3.1                  the Administrative Agent may open a new account with the
relevant Chargor and, if it does not, it shall nevertheless be deemed to have
done so at the time it received such notice; and

 

14.3.2                  all payments made by the Chargor to the Administrative
Agent after the Administrative Agent receives such notice shall be credited or
deemed to have been credited to the new account, and in no circumstances
whatsoever shall operate to reduce the Secured Amounts as at the time the
Administrative Agent received such notice.

 

14.4                           Change of name, etc.:  This Deed shall remain
valid and enforceable notwithstanding any:

 

14.4.1                  Incapacity, change in the name, composition or
constitution of the Administrative Agent or the Chargor or any amalgamation or
consolidation by the Administrative Agent or the Chargor with any other
corporation; or

 

18

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

 

14.4.2                  any amendment, waiver or variation (however material or
fundamental) of any Credit Document.

 

Without prejudice to the foregoing, the Chargor shall be deemed to be a
principal debtor and the sole, original and independent obligor for the Secured
Amounts and the Charged Property shall be deemed to be a principal security for
the Secured Amounts. The liability of the Chargor under this Deed shall not be
discharged, impaired or otherwise affected by any circumstance, act, omission,
matter or thing which but for this provision might operate to reduce, release,
prejudice or otherwise exonerate the Chargor from its obligations under the
Credit Documents in whole or in part, including without limitation and whether
or not known to any Credit Party, the Administrative Agent or any other Person:

 

(a)                                  the winding-up, dissolution,
administration, re-organisation, amalgamation, merger or reconstruction of the
Chargor or any other Person or any change in its status, function, control or
ownership; or

 

(b)                                 any time, indulgence, concession, waiver or
consent granted to, or composition with, the Chargor or any other Person; or

 

(c)                                  the release of the Chargor or any other
Person under the terms of any composition or arrangement with any creditor of
the Chargor or any of its Affiliates; or

 

(d)                                 the taking, variation, compromise, exchange,
renewal or release of, or refusal or neglect to perfect, take-up or enforce, any
rights against, or security over, the assets of the Chargor or any other Person
or any non-presentation or non-observance of any formality or other requirement
in respect of any instrument or any failure to release or to realise the full
value of any security; or

 

(e)                                  any legal limitation,
disability, Incapacity or lack of power, authority or legal personality of or
dissolution or change in the members or status of, or other circumstance
relating to, the Chargor or any other Person; or

 

(f)                                    any variation (however fundamental and
whether or not involving any increase in the liability of the Chargor or any
other Credit Party thereunder) or replacement of any Credit Document or any
other document or security; or

 

(g)                                 any unenforceability, illegality, invalidity
or frustration of any obligation of the Chargor or any other Person under any
Credit Document or any other document or security, or any failure of the Chargor
or any other Credit Party to become bound by the terms of any other Credit
Document, in each case whether through any want of power or authority or
otherwise; or

 

(h)                                 any postponement, discharge, reduction,
non-provability or similar circumstances affecting any obligation of the Chargor
or any other Credit Party under a Credit

 

19

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

 

Document resulting from any insolvency, liquidation or dissolution proceedings
or from any law, regulation or order,

 

so that the Chargor’s obligations under this Deed remain in full force and
effect and that this Deed shall be construed accordingly as if there were no
such circumstance, act, omission, matter or thing.

 

14.5                      Non-competition: Subject as provided below, until the
date on which all the Secured Amounts and the obligations of the Chargor under
this Deed 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 Secured Amounts), the Chargor
shall not, by virtue of any payment made, security realised or moneys received
or recovered under any of the Credit Documents for or on account of the
liability of any Credit Party:

 

14.5.1             be subrogated to any rights, security or moneys held,
received or receivable by the Administrative Agent or any other Secured Party or
be entitled to any right of contribution or indemnity; or

 

14.5.2             claim, rank, prove or vote as a creditor of any Credit Party
or its estate in competition with the Administrative Agent or any other Secured
Party; or

 

14.5.3             receive, claim or have the benefit of any payment,
distribution or security from or on account of any Credit Party, or exercise any
right of set-off against any Credit Party.

 

The Chargor shall hold in trust for and forthwith pay or transfer to the
Administrative Agent for the benefit of the Secured Parties any payment or
distribution or benefit of security received by it contrary to the above. If the
Chargor exercises any right of set-off contrary to the above it will forthwith
pay an amount equal to the amount set off to the Administrative Agent for the
benefit of the Secured Parties. Notwithstanding the foregoing, following any
enforcement of the security created hereunder by the Administrative Agent under
this Deed, the Chargor will (at its own cost) promptly take such steps or
actions as are referred to above as the Administrative Agent may from time to
time stipulate.

 

15.                            Avoidance of payments

 

15.1                      No release: No assurance, security or payment which
may be avoided or adjusted under the law, including under any enactment relating
to bankruptcy or insolvency, and no release, settlement or discharge given or
made by the Administrative Agent on the faith of any such assurance, security or
payment, shall prejudice or affect the right of the Administrative Agent to
recover the Secured Amounts from the Chargor (including any moneys which it may
be compelled to pay or refund under the provisions of the Insolvency Act 1986
and any costs payable by it pursuant to or otherwise incurred in connection
therewith) or to enforce the charges contained in this Deed to the full extent
of the Secured Amounts.

 

20

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

 

15.2                      Retention of charges: If the Administrative Agent
shall have reasonable grounds in its absolute discretion for believing that the
Chargor may be insolvent or deemed to be insolvent pursuant to the provisions of
the Insolvency Act 1986 as at the date of any payment made by the Chargor to the
Administrative Agent, the Administrative Agent shall be at liberty to retain the
charges contained in or created pursuant to this Deed until the expiry of a
period of one month plus such statutory period within which any assurance,
security, guarantee or payment can be avoided or invalidated after the payment
and discharge in full of all Secured Amounts notwithstanding any release,
settlement, discharge or arrangement which may be given or made by the
Administrative Agent on, or as a consequence of, such payment or discharge of
liability provided that, if at any time within such period, a petition shall be
presented to a competent court for an order for the winding up or the making of
an administration order in respect of the Chargor, or the Chargor shall commence
to be wound up or to go into administration or any analogous proceedings shall
be commenced by or against the Chargor, the Administrative Agent shall be at
liberty to continue to retain such security for such further period as the
Administrative Agent may determine and such security shall be deemed to continue
to have been held as security for the payment and discharge to the
Administrative Agent of all Secured Amounts.

 

16.                          Currency conversion

 

16.1                      Indemnity: If under any applicable law, whether as a
result of a judgment against the Chargor or the liquidation of the Chargor or
for any other reason, any payment under or in connection with this Deed is made
or any amount is received or recovered by the Administrative Agent in respect of
the Secured Amounts in a currency (the “other currency”) other than the currency
in which the Secured Amounts are payable (the “original currency”), then to the
extent that the payment to or receipt by the Administrative Agent (when
converted at the rate of exchange on the date of payment or receipt) falls short
of the whole of the Secured Amounts the Chargor shall as a separate and
independent obligation fully indemnify the Administrative Agent against the
amount of the shortfall; and for the purposes of this clause, “rate of exchange”
means the rate at which the Administrative Agent is able on the relevant date to
purchase the original currency in London with the other currency.

 

16.2                      Purchases: If the Chargor fails to pay or discharge
any part of the Secured Amounts when due (except where such payment or discharge
is made within three Business Days of the due date), the Administrative Agent
from time to time may purchase an amount of the currency in which such sum is
due with any other currency or currencies and the Chargor’s obligation
thereafter shall be to pay to the Administrative Agent the amount of the other
currency or currencies so used to purchase.

 

17.                          Declaration of Trust

 

17.1                      Declaration of Trust: The Administrative Agent hereby
declares itself as trustee to hold the benefit of the covenants, agreements and
undertakings of the Chargor contained in this Deed and the Liens and other
rights, titles and interests constituted by this Deed and all other moneys,
property and assets paid to it or held by it or received or

 

21

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

 

recovered by it pursuant to or in connection with this Deed with effect from the
date of this Deed on trust for the Secured Parties for application in accordance
with clause 8.1.

 

17.2                      Perpetuity period: The trusts constituted or evidenced
in or by clause 17.1 shall remain in full force and effect until whichever is
the earlier of:

 

17.2.1   the expiration of a period of 80 years from the date of this Deed; and

 

17.2.2             the security constituted by this Deed having been released in
accordance with its terms,

 

and the parties to this Deed declare that the perpetuity period applicable to
this Deed shall for the purposes of the Perpetuities and Accumulations Act 1964
be the period of 80 years from the date of this Deed.

 

18.                          Execution of documents

 

Any document required to be executed as a deed by the Administrative Agent under
or in connection with this Deed shall be validly executed if executed as a deed
by a duly authorised attorney of the Administrative Agent.

 

19.                          Notices and demands

 

All notices, requests and demands pursuant hereto shall be made in accordance
with Section 14.2 of the Credit Agreement.

 

20.                          Further provisions

 

20.1                      Evidence of indebtedness: In any action, proceedings
or claim relating to this Deed or the charges contained in this Deed, a
statement as to any amount due to the Administrative Agent or of the Secured
Amounts or any part thereof which is certified as being correct by an officer of
the Administrative Agent shall, save in the case of manifest error, be
conclusive evidence that such amount is in fact due and payable.

 

20.2                      Rights cumulative, waiver: The rights of the
Administrative Agent and any Receiver are cumulative, may be exercised as often
as they consider appropriate and are in addition to their respective rights
under general law. The respective rights of the Administrative Agent and any
Receiver (whether arising under this Deed or under the general law) shall not be
capable of being waived or varied otherwise than by express waiver or variation
in writing; and, in particular, any failure to exercise or any delay in
exercising any such rights shall not operate as a variation or waiver of that or
any other such right; any defective or partial exercise of such rights shall not
preclude any other or further exercise of that or any other such right; and no
act or course of conduct or negotiation on their part or on their behalf shall
in any way preclude them from exercising any such right or constitute a
suspension or variation of any such right.

 

20.3                      Invalidity of any provision: If any provisions of this
Deed become invalid, illegal or unenforceable in any respect under any law, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired.

 

22

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

 

20.4                      No set-off or counterclaim; payments free and clear:
All payments to be made by the Chargor under this Deed shall be made in full,
without any set-off or counterclaim whatsoever and free and clear of any
deductions or withholdings in the currency in which they are due on the due date
to such account as the Administrative Agent may from time to time specify.

 

20.5                      Liabilities survive deficiencies and releases: The
Chargor agrees to be bound by this Deed notwithstanding that any other Person
intended to be bound by any other Credit Document may not do so or may not be
effectually bound and notwithstanding that any guarantees or Liens contained in
any other Credit Document may be terminated or released or may be or become
invalid or unenforceable, whether or not the deficiency is known to any of the
Secured Parties.

 

20.6                      Contracts (Rights of Third Parties) Act 1999: Without
prejudice to clause 8.1, and save for clauses 10.1, 11.2 and 17, no provision of
this Deed is enforceable by a Person that is not a party to this Deed.

 

20.7                      Change to constitutional documents: The Chargor
undertakes with the Administrative Agent to procure in respect of the UK
Borrower that, if it has not already done so, the UK Borrower will remove from
its articles of association:

 

20.7.1   any and all restrictions on the transfer of its shares; or 20.7.2 any
and all liens on shares, whether fully or partly paid.

 

20.8                      Process Agent: Without prejudice to any other mode of
service allowed under any relevant law, the Chargor:

 

20.8.1             irrevocably appoints the UK Borrower at its registered
address from time to time as its agent for service of process in relation to any
proceedings before the English courts in connection with this Deed and any
Credit Documents; and

 

20.8.2             agrees that failure by a process agent to notify the Chargor
of the process will not invalidate the proceedings concerned.

 

If the appointment of the UK Borrower ceases to be effective in respect of the
Chargor, the Chargor shall immediately appoint a further person in England to
accept service of process on its behalf in England and, failing such appointment
within 15 days, the Administrative Agent shall be entitled to appoint such a
person by notice to the Chargor. Nothing contained in this Deed shall affect the
right to serve process in any other manner permitted by law.

 

20.9                      Assignments and Transfers: The Chargor shall not be
entitled to assign or transfer all or any of its rights or obligations under
this Deed without the prior written consent of the Administrative Agent. The
Administrative Agent may at any time assign or otherwise transfer all or any
part of its rights under this Deed in accordance with the Credit Documents and
the Chargor authorises the Administrative Agent to execute on its behalf any
document required to effect the necessary transfer of rights and obligations.

 

23

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

 

20.10                Counterparts: This Deed may be executed in any number of
counterparts, all of which taken together shall be deemed to constitute one and
the same instrument.

 

21.                          Choice of law

 

This Deed is governed by, and shall be construed in accordance with, the laws of
England.

 

22.                          Jurisdiction

 

22.1                      Submission: The Chargor agrees for the benefit of the
Administrative Agent that the courts of England shall have jurisdiction to hear
and determine any suit, action or proceeding, and to settle any dispute, which
may arise out of or in connection with this Deed and, for such purposes,
irrevocably submits to the jurisdiction of such courts.

 

22.2                      Forum: The Chargor irrevocably waives any objection
which it might now or hereafter have to the courts referred to in clause 22.1
being nominated as the forum

 

to hear and determine any suit, action or proceeding, and to settle any dispute,
which may arise out of or in connection with this Deed and agrees not to claim
that any such court is not a convenient or appropriate forum.

 

22.3                      Other competent jurisdictions: The submission to the
jurisdiction of the courts referred to in clause 22.1 shall not (and shall not
be construed so as to) limit the right of the Administrative Agent to take
proceedings against the Chargor in any other court of competent jurisdiction nor
shall the taking of proceedings in any one or more jurisdictions preclude the
taking of proceedings in any other jurisdiction, whether concurrently or not.

 

22.4                      Consent to enforcement: The Chargor hereby consents
generally in respect of any legal action or proceeding arising out of or in
connection with this Deed to the giving of any relief or the issue of any
process in connection with such action or proceeding including, without
limitation, the making, enforcement or execution against any property whatsoever
of the Chargor (irrespective of its use or intended use) of any order or
judgment which may be made or given in such action or proceeding.

 

DULY DELIVERED AS A DEED by the Chargor or on its behalf on the date inserted
above.

 

24

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

 

Schedule 1
The Shares

 

Issuer

 

Class of Share

 

Share
Certificate No(s)

 

Number
of Shares

 

Percentage
of Issued and
Outstanding
Shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

EXHIBIT M

 

FORM OF LUXEMBOURG PLEDGE AGREEMENTS

 

LUXEMBOURG PLEDGE AGREEMENT dated as of 31 July, 2004, among ROCKWOOD
SPECIALTIES GROUP, INC., a Delaware corporation having its registered office at
1029 Orange Street, Corporation Trust Center, Wilmington, DE 19801, U.S.A., (the
“Pledgor”), and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands
Branch, as Administrative Agent and as Collateral Agent (in such capacities, the
“Administrative Agent”) for the lenders (each, a “Lender” and, collectively, the
“Lenders”) and for the Secured Parties (as defined below) from time to time
parties to the Credit Agreement dated as of 30 July, 2004 (as the same may be
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among, inter alia, the Pledgor (as “US Borrower”), ROCKWOOD
SPECIALTIES LIMITED, a company incorporated under the laws of England and Wales
(the “UK Borrower” and, together with the US Borrower, the “Borrowers”),
ROCKWOOD SPECIALTIES INTERNATIONAL, INC., a Delaware corporation, the
Syndication Agent (as defined in the Credit Agreement), the Lenders and the
other Secured Parties.

 

WITNESSETH:

 

WHEREAS, (a) pursuant to the Credit Agreement, the Lenders have severally agreed
to make Loans to the Borrowers and the Letter of Credit Issuer has agreed to
issue Letters of Credit for the account of the Borrowers (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 Borrowers;

 

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

 

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
Borrowers under the Credit Agreement that the Pledgor shall have executed and
delivered this Pledge Agreement; and

 

WHEREAS, the Pledgor is the owner of the shares described under Schedule 1
hereto and issued by Knight Lux 1 S.a r.1., a Luxembourg societe a
responsabilite limitee, with a share capital of one hundred thirty seven
thousand five hundred euros (£ 137,500), whose registered office is at 61, rue
de Rollingergrund, L-2440 Luxembourg, registered with the Luxembourg trade and
companies’ registry under the number B 100.495 (the “Company”) (the pledged
shares .described above are, together with any shares of the Company obtained in
the future by the Pledgor, including any shares issued by the Company as a
result of the conversion of any or all Convertible Preferred Equity Certificates
(the “CPECs”) and registered in the Pledgor’s name in the Company’s CPEC
register (the “After-acquired Shares”), referred to collectively herein as the
“Pledged Shares”).

 

NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent, the Syndication Agent, the Documentation Agent 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
Borrowers under the Credit Agreement and to induce one or more Lenders or
affiliates of Lenders to enter into Hedge Agreeements with the Borrowers, the
Pledgor hereby agrees with the Adminiitrative Agent, as agent for the Lenders
and for the ratable benefit of the Secured Parties, as follows:

 

1.                                      Defined Terms.

 

a)            Unless otherwise defined herein (including in the above recitals),
terms defined in the Credit Agreement and used herein shall have the meanings
given to them in the Credit Agreement

 

b)            As used herein, the term “Equity Interests” means quotas or shares
of capital stock of the Company as well as any quotas or shares which may be
substituted for, or added to, the Pledged Shares by way of exchange,
consolidation, division, free distribution, or otherwise and any warrants,
options or other rights entitling the holder thereof to purchase or acquire any
of the foregoing and any of the foregoing class of securities being a “Class of
Equity Interest”.

 

c)             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 Borrowers 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, 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 Borrowers 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
Borrowers 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 other 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
Credit Party 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 a 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 a connection with
treasury, .depositary or cash managment services or in connection with any
automated clearinghouse transfer of funds.

 

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

 

d)            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 Documentation Agent
and (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.

 

e)             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 the Borrowers as hedging counterparties.

 

f)             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”.

 

g)            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. The Pledgor hereby
undertakes to pledge to the Administrative Agent as agent for the Secured
Parties for their ratable benefit, all of the Pledgor’s right, title and
interest in the following, now owned or existing, and hereby undertakes to
pledge to the Administrative Agent as agent for the Secured Parties all of the
Pledgor’s right, title and interest in any of the following hereafter acquired
or existing (collectively, the “Collateral”):

 

a)                                     the Pledged Shares registered in the
Pledgor’s name and, subject to Section 7 hereof, 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 Pledged Shares, subject in all cases to the limit that the Pledged Shares
shall never exceed 65% of the total issued share capital of the Company; and

 

b)                                     to the extent not covered by clause
(a) above, and subject to Section 7 hereof; the Equity Interests, subject in all
cases, to the limit that the Pledged Shares shall never exceed 65% of the total
issued share capital of the Company and all proceeds of any or all of the
foregoing Collateral. For purposes of this Pledge Agreement, the term “proceeds”
includes whatever is receivable or received when Collateral or proceeds are
sold, exchanged, collected or otherwise disposed of, whether such disposition is
voluntary or involuntary, and includes proceeds of any indemnity or guarantee
payable to the Pledgor or the Administrative Agent from time to time with
respect to any of the Collateral;

 

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

 

c)                                      all and any rights which the Pledgor may
have or obtain against the Company in case the Pledged Shares were held to be
invalidly issued, regardless of the qualification given to such rights.

 

3.                                      Security for Obligations. This Pledge
Agreement secures the payment of all Obligations owed by the Borrowers and/or
each other Credit Party to the Administrative Agent or the Secured Parties for
their ratable benefit. 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 the Borrowers to the Administrative Agent or
the Secured Parties 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 the Borrowers and/or each other
Credit Party.

 

4.             Delivery of the Collateral. The pledge of the Pledged Shares
shall be perfected by (i) an acknowledgement by the Company in compliance with
article 114 of the Luxembourg commercial code and (ii) the immediate
registration in the share register of the Company (registre des associes) of the
name of the Administrative Agent, as agent for the Secured Parties. Both the
Pledgor and the Administrative Agent as agent for the Secured Parties as well as
the Company authorise and empower and hereby instruct any manager of the Company
and/or any employee of Demag Holding S.a r.l. and/or any lawyer of Clifford
Chance Luxembourg to proceed immediately with the registration of the Pledge in
the share register of the Company. The Pledgor hereby undertakes to bring
satisfactory evidence to the Administrative Agent as agent for the Secured
Parties of such notification or acceptance and recording in the shares register
of the Company including, without limitation, a certified true copy of the
page or the pages bearing the recording of the pledge, and the registration of
the name of the Administrative Agent as agent for the Secured Parties in the
share register of the Company.

 

The Pledgor undertakes to reiterate the above formalities each time that the
pledge is extended to further quotas or shares of the Company.

 

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

 

a)            Schedule 1 hereto (i) correctly represents as of the date hereof
the issuer, the Pledgor, the number, the Class of Equity Interest and the
percentage of the issued and outstanding Class of Equity Interests of such
Class of Equity Interests of all Pledged Shares and (ii) includes all Equity
Interests required to be pledged hereunder. Except as set forth on Schedule 1,
the Pledged Shares represent 65 percent of such issued and outstanding Class of
Equity Interests and no other Class of Equity Interests in the Company has been
issued on the date hereof.

 

b)            The Pledgor is the owner of the Collateral pledged or assigned by
the 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 the Pledgor hereunder have been duly authorized by a meeting of the
shareholders of the Company and are validly issued and are fully paid up.

 

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

 

d)            The execution and delivery by the Pledgor of this Pledge Agreement
and the pledge of the Collateral by the 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 as
agent for the Secured Parties. ·

 

e)             The Pledgor has full power, authority and legal right to pledge
all the Collateral pursuant to this Pledge. Agreement and this Pledge Agreement
constitutes a legal, valid and binding obligation of the Pledgor, enforceable in
accordance with its terms, except as enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws affecting creditor’s rights
generally.

 

f)             In the event the Administrative Agent enforces this Luxembourg
Pledge Agreement, shareholders of the Company representing at least
three-quarters of the share capital of the Company shall have agreed in advance
to accept the Secured Parties as new shareholders of the Company.

 

6.                                      Further Assurances. The Pledgor agrees
that at any time and from time to time, at the expense of the Pledgor, it will
execute any and all further documents, agreements and instruments and take all
such further actions, 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 the rights and
remedies hereunder with respect to any Collateral.

 

The Pledgor further agrees, that if new shares are issued through a resolution
of the managez(s) of the Company under the authorised capital mechanism, such
issuance will be formally approved and ratified by a proper shareholder’s
meeting of the Company held in front of a Luxembourg notary within a period of
two weeks following the issuance.

 

7.                        Voting Rights: Dividends and Distributions: Etc.

 

a)            Subject to paragraph (b) below, the Pledgor shall be entitled to
receive and retain and use, free and clear of the Lien of this Pledge Agreement,
any and all dividends and distributions made or paid in respect of the
Collateral to the extent permitted by the Credit Agreement; provided, however,
that any and all noncash dividends or other distributions that would constitute
Pledged Shares, 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 any par 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 become Collateral, shall be held as Collateral and shall, if received by
the Pledgor, be held for the benefit of the Administrative Agent, be segregated
from the other property or funds of the Pledgor and be forthwith remitted as
Collateral to the Administrative Agent in the same form as so received and
provided, that the valid issuance of the Pledged Shares is not being challenged
in court proceedings.

 

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

 

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

 

(i)            all rights of the Pledgor to receive the dividends and
distributions that the Pledgor would otherwise be authorized to receive and
retain pursuant to Section 7 (a) shall, cease, and all such rights shall
thereupon become vested in the Administrative Agent as agent for the Secured
Parties, which shall thereupon have the sole right to receive and hold as
Collateral such dividends and distributions during the continuance of such Event
of Default. The Administrative Agent shall retain those amounts as a “gage “.
After all Events of Default have been cured or waived and the relevant Pledgor
has delivered to the Administrative Agent a certificate to that effect, the
Administrative Agent shall repay to the Pledgor (without interest) all such
dividends and distributions that the Pledgor would otherwise be permitted to
receive, retain and use pursuant to the terms of Section 7 (a);

 

(ii)           all dividends and distributions that are received by the Pledgor
contrary to the provisions of Section 7 (a) and 7 (b)(i) shall be held for the
benefit of the Administrative Agent, shall be segregated from other property or
funds of the Pledgor and shall forthwith be remitted to the Administrative
Agent, which shall retain the same as a “gage”;

 

c) The Pledgor agrees as of the date hereof and as long as the Pledge Agreement
remains in force:

 

(i)            to refrain from using any voting rights in respect of the
Collateral in a way which would be contrary to the provisions of this Pledge
Agreement or of any other Credit Document to which the Pledgor is a party;

 

(ii)           (x) if the Company proceeds with a reduction of share capital
which is not motived by losses, not to offer the Pledged Shares to the Company
for repurchase and (y) if the Company proceeds with a share capital reduction
which is motivated by losses, to inform the Administrative Agent of the proposed
reduction before its adoption by the shareholders’ meeting and to cause any new
shares issued and attributed to the Pledgor as a result of the reduction in
capital to be included in the Collateral; and

 

(iii)         not to permit the Company’s by-laws or any other instrument to
contain any provision (including preemption rights, rights of replacement or
similar rights) which would limit in any way the execution or the performance of
this Pledge Agreement or the enforcement by the Administrative Agent of the
security interest herein created.

 

8. Transfers and Other Liens. The 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 contractual Lien upon or with
respect to any of the Collateral, except for the

 

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

 

Lien under this Pledge Agreement, provided that in the event the 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 the Pledgor free and clear of the Lien under this
Pledge Agreement concurrently with the consummation of such sale;

 

b)            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.

 

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

 

a) The Administrative Agent and any nominee of the Administrative Agent may on
behalf of the Secured Parties exercise in respect of all or any of the
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies conferred on a secured
creditor (creamier gagiste) pursuant to Luxembourg law and regulations, and may,
provided that the Obligations remain unpaid ten (10) business days after the
notification of a demand to pay (mise en demeure) addressed to the Borrowers,
(x) proceed to a public sale of the Collateral in accordance with the provisions
of Article 116 of the Luxembourg Commercial Code, or (y) petition a Luxembourg
court, as provided for in Article 117 of the Luxembourg Commercial Code, that
title to the Collateral be assigned to it for payment of all or any part of the
outstanding amount of the Collateral. In this case, the Pledged Shares may not
be transferred to non-shareholders, unless shareholders of the Company
representing at least three-quarters of its share capital agree to such transfer
in a general meeting.

 

In the event ownership of the Collateral is attributed to the Secured Parties
pursuant to clause (y) above, subject to mandatory provisions of Luxembourg law
and except as specified below, the Administrative Agent acting in such capacity:

 

(i)            shall be entitled to sell the Collateral or any part thereof in
one or more parcels 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;

 

(ii)      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, subject to the aforementioned restrictions, 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 the Pledgor, and the 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; and

 

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

 

(iii)         The Administrative Agent or any Secured Party shall have the
right, to the extent permitted by law, upon any such sale, to purchase the whole
or any part of the Collateral so sold.

 

Subject to applicable law, 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 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, the 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 Agreeement, 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 the 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

 

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

 

c) All payments received by the Pledgor after the occurrence and during the
continuance of an Event of Default in respect of the Collateral shall be held
for the benefit of the Administrative Agent, shall be segregated from other
property or funds of the Pledgor and shall be forthwith delivered to the
Administrative Agent as Collateral (“gage”) in the same form as so received.

 

d) The Pledgor hereby waives its rights under Articles 2032 and 2039 of the
Luxembourg Civil Code.

 

10. Amendments. etc. with Respect to the Obligations: Waiver of Rights. The
Pledgor shall remain obligated hereunder, and the charges created hereby shall
not be adversely

 

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

 

affected nor shall this Agreement be novated unless expressly agreed in writing
by the parties hereto, notwithstanding that, without any reservation of rights
against the Pledgor and without notice to or further assent by the Pledgor,
(a) 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) 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, accelerated, compromised, waived, surrendered or released by
the Administrative Agent or any other Secured Party, (c) 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 document 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, and (d) 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 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 the Pledgor, the Administrative Agent or any other Secured Party may,
but shall be under no obligation to, make a similar demand on the Borrowers or
any pledgor and any failure by the Administrative Agent or any other such
Secured Party to make any such demand or to collect any payments from the
Borrowers or any pledgor or any release of the Borrowers or any pledgor shall
not relieve the Pledgor in respect of which a demand or collection is not made
or the 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 the Pledgor. For the purposes hereof “demand” shall include the
commencement and continuance of any legal proceedings.

 

11. 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 the 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.

 

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

 

b)            Upon any sale or other transfer by the Pledgor of any Collateral
that is permitted under the Credit Agreement to any Person, or upon the
effectiveness of any written consent to the release of the security interest
granted hereby in any Collateral pursuant to Section 14.1 of the Credit
Agreement, the obligations of such Pledgor with respect to such Collateral shall
be automatically released and such Collateral sold free and clear of the Lien
created hereby.

 

c)             In connection with any termination or release pursuant to
paragraph (a) or (13), the Administrative Agent shall execute and deliver to the
Pledgor, at the Pledgor’s expense, all documents that the Pledgor shall
reasonably request to evidence such termination or release. Any execution and
delivery of documents pursuant to this Section 11 shall be without recourse to
or warranty by the Administrative Agent.

 

12. 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, administration, liquidation or reorganization of the
Pledgor, or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, the Pledgor or any
substantial part of its property, or otherwise, all as though such payments had
not been made.

 

13. Notices. All notices, requests and demands pursuant hereto shall be made in
accordance with Section 14.2 of the Credit Agreement.

 

14. 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 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.

 

15. Integration. This Pledge Agreement and the Schedules hereto represent the
agreement of the Pledgor 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.

 

16. 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 14.1 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 16(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 or 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 hereof. 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 otherwise have on any future occasion.

 

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

 

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

 

18. Successors and Assigns. This Pledge Agreement shall be binding upon the
successors and assigns of the Pledgor and shall inure to the benefit of the
Administrative Agent and the other Secured Parties and their respective
successors and assigns, except that the Pledgor may not assign, transfer or
delegate any of its rights or obligations under this Pledge Agreement without
the prior written consent of the Administrative Agent.

 

19. Governing law — Jurisdiction. This Agreement shall be governed by, and
interpreted in accordance with, the laws of Luxembourg. The Pledgor submits in
favor of the Secured Parties with respect to any dispute arising from or in
connection with this Pledge Agreement to the non-exclusive jurisdiction of the
Luxembourg tribunal d’arrondissement without prejudice to the rights for the
Secured Parties to commence proceedings before any other court of competent
jurisdiction.

 

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

 

EXHIBIT N

 

FORM OF LETTER OF CREDIT REQUEST

 

No.                                         (11)                                    Dated
                                        (12)

 

To:                              CREDIT SUISSE FIRST BOSTON, acting through its
Cayman Islands Branch, as Administrative Agent and as the Letter of Credit
Issuer, under the Credit Agreement dated as of July 30, 2004 (as the same may be
amended, supplemented or otherwise modified from time to time, the “Credit
Agreement”), among Rockwood Specialties Group, Inc., Rockwood Specialties
Limited, and Rockwood Specialties International, Inc., the several lenders from
time to time parties thereto, the Administrative Agent referred to above and UBS
Securities LLC and Goldman Sachs Credit Partners L.P., as Co-Syndication Agents.

 

Ladies and Gentlemen:

 

The undersigned hereby requests that the Letter of Credit Issuer issue a Letter
of Credit on                                            (13) (the “Date of
Issuance”) in the aggregate stated amount of the Dollar Equivalent of
                                             (14) in
                                 (15).

 

For purposes of this Letter of Credit Request, unless otherwise defined, all
capitalized terms used herein that are defined in the Credit Agreement shall
have the respective meanings provided therein.

 

The beneficiary of the requested Letter of Credit will be
                               (16), and such Letter of Credit will be in
support of                                              (17) and will have a
stated termination date of                                    (18).

 

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

(11) Letter of Credit Request Number.

 

(12) Date of standby Letter of Credit Request (at least five Business Days prior
to the Date of Issuance or such lesser number of Business Days as may be agreed
by the Administrative Agent and such Letter of Credit Issuer).

 

(13) Date of Issuance.

 

(14) Aggregate initial stated amount of Letter of Credit.

 

(15) Dollars, Euro or Sterling.

 

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

 

The undersigned hereby certifies that:

 

(a)  All representations and warranties made by any Credit Party contained in
the Credit Agreement or in the other Credit Documents shall be true and correct
in all material respects with the same effect as though such representations and
warranties had been made on and as of the Date of Issuance (except where such
representations and warranties expressly relate to an earlier date, in which
case such representations and warranties were true and correct in all material
respects as of such earlier date).

 

(b) No Default or Event of Default has occurred and is continuing as of the date
hereof nor, after giving effect to the issuance of the Letter of Credit
requested hereby, would such a Default or Event of Default occur.

 

Copies of all documentation with respect to the supported transaction are
attached hereto.

 

 

 

[ROCKWOOD SPECIALTIES GROUP, INC.,]

 

 

 

 

 

[ROCKWOOD SPECIALTIES LIMITED]

 

 

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

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

(16) Insert name and address of beneficiary.

 

(17) Insert description of supported obligations and name of agreement to which
it relates, if any.

 

(18) Insert last date upon which drafts may be presented.

 

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

 

EXHIBIT O-1

 

FORM OF OPINION OF SIMPSON THACHER & BARTLETT LLP

 

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

 

EXHIBIT O-2

 

FORM OF OPINION OF TOM RIORDAN

 

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

 

EXHIBIT O-3

 

FORM OF OPINION OF LATHAM & WATKINS LLP

 

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

 

EXHIBIT O-4

 

FORM OF OPINION OF LATHAM & WATKINS LLP

 

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

 

EXHIBIT O-5

 

FORM OF OPINION OF BORDEN LADNER GERVAIS

 

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

 

EXHIBIT O-6

 

FORM OF OPINION OF LATHAM & WATKINS LLP

 

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

 

EXHIBIT O-7

 

FORM OF OPINION OF LEE AND LI

 

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

 

EXHIBIT O-8

 

FORM OF OPINION OF NORTON ROSE MILAN

 

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

 

EXHIBIT O-9

 

FORM OF OPINION OF BURNESS

 

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

 

EXHIBIT O-10

 

FORM OF OPINION OF ARENDT & MEDERNACH

 

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

 

EXHIBIT O-11

 

FORM OF OPINION OF LOCAL COUNSEL

 

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

 

EXHIBIT P

 

FORM OF CLOSING CERTIFICATE

 

Reference is made to the Credit Agreement dated as of July 30, 2004 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among Rockwood Specialties Group, Inc., a Delaware corporation, Rockwood
Specialties Limited, a company incorporated under the laws of England and Wales,
Rockwood Specialties International, Inc., a Delaware corporation, the several
lenders from time to time parties thereto, Credit Suisse First Boston, acting
through its Cayman Islands Branch, as Administrative Agent and UBS Loan Finance
LLC and Goldman Sachs Credit Partners L.P., as Co-Syndication Agents.  Terms
used but not defined herein shall have the meanings given to such terms in the
Credit Agreement.

 

1.             The undersigned [President or Vice President] of
[                        ] (the “Certifying Credit Party”) hereby certifies as
follows:

 

(a) The representations and warranties made by the Certifying Credit Party(19)
in Sections 8.1(a), 8.2 and 8.3 of the Credit Agreement, in each case as they
relate to the Credit Parties on the date hereof, are true and correct in all
material respects on and as of the date hereof; and

 

(b) [                             ] is the duly elected and qualified
[Assistant] Secretary of the Certifying Credit Party and the signature set forth
on the signature line for such officer below is such officer’s true and genuine
signature, and such officer is duly authorized to execute and deliver on behalf
of the Certifying Credit Party each Credit Document to which it is a party and
any certificate or other document to be delivered by the Certifying Credit Party
pursuant to such Credit Documents; and

 

2.             The undersigned [Assistant] Secretary of the Certifying Credit
Party hereby certifies as follows:

 

(a) There are no liquidation or dissolution proceedings pending or to my
knowledge threatened against the Certifying Credit Party, nor to my knowledge
has any other event occurred affecting or threatening the corporate existence of
the Certifying Credit Party;

 

(b) The Certifying Credit Party is a [corporation][limited liability company]
duly organized, validly existing and in good standing under the laws of
[jurisdiction];

 

(c) Attached hereto as Exhibit A is a complete and correct copy of resolutions
duly adopted by the Board of Directors (or a duly authorized committee thereof)
of the Certifying

 

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

(19) Only applicable for Rockwood Specialties Group, Inc., Rockwood Specialties
Limited and Rockwood Specialties International, Inc.

 

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

 

Credit Party on                   , 2004 authorizing [(a)] the execution,
delivery and performance of the Credit Documents (and any agreements relating
thereto) to which it is a party [and (b) the extensions of credit contemplated
by the Credit Agreement](20); such resolutions have not in any way been amended,
modified, revoked or rescinded and have been in full force and effect since
their adoption to and including the date hereof and are now in full force and
effect; and such resolutions are the only corporate proceedings of the
Certifying Credit Party now in force relating to or affecting the matters
referred to therein;

 

(d) Attached hereto as Exhibit B is a true and complete copy of the certificate
of [incorporation][formation] of the Certifying Credit Party as in effect at all
times since [              ], to and including the date hereof, certified by the
[Secretary of State of the State of Delaware or appropriate Governmental
Authority in the jurisdiction] as of a recent date;

 

(e) Attached hereto as Exhibit C is a true and complete copy of the
[by-laws][limited liability company agreement] of the Certifying Credit Party as
in effect at all times since [         ], to and including the date hereof; and

 

(f) The following persons are now duly elected and qualified officers of the
Certifying Credit Party holding the offices indicated next to their respective
names below, and such officers have held such offices with the Certifying Credit
Party at all times since the date appearing opposite their respective names
below, to and including the date hereof, and the signatures appearing opposite
their respective names below are the true and genuine signatures of such
officers, and each of such officers is duly authorized to execute and deliver on
behalf of the Certifying Credit Party each Credit Document to which it is a
party and any certificate or other document to be delivered by the Certifying
Credit Party pursuant to such Credit Documents:

 

Name

 

Office

 

Date

 

Signature

 

 

 

 

 

 

 

 

 

[                ]

 

 

 

 

 

 

[Assistant] Secretary

 

 

 

 

 

 

IN WITNESS WHEREOF, the undersigned have hereto set our names as of [     ],
2004.

 

 

 

 

Name:

 

Name:

Title: [                      ]

 

Title: [Assistant] Secretary

 

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

(20) To be included for Rockwood Specialties Group, Inc. and Rockwood
Specialties Limited only.

 

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

 

EXHIBIT Q

 

FORM OF ASSIGNMENT AND ACCEPTANCE

 

This Assignment and Acceptance (the “Assignment and Acceptance”) is dated as of
the Effective Date (as defined below) and is entered into by and between the
Assignor (as defined below) and the Assignee (as defined below).  Capitalized
terms used in this Assignment and Acceptance and not otherwise defined herein
shall have the meanings specified in the Credit Agreement dated as of July 30,
2004 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”), among Rockwood Specialties Group, Inc., a Delaware
corporation (the “US Borrower”), Rockwood Specialties Limited, a company
incorporated under the laws of England and Wales (the “UK Borrower” and,
together with the US Borrower, the “Borrowers”), Rockwood Specialties
International, Inc., a Delaware corporation, the several lenders from time to
time parties thereto (each a “Lender” and, collectively, the “Lenders”), Credit
Suisse First Boston, acting through its Cayman Islands Branch, as Administrative
Agent and UBS Securities LLC and Goldman Sachs Credit Partners L.P., as
Co-Syndication Agents.  The Standard Terms and Conditions set forth in Annex 1
attached hereto are hereby agreed to and incorporated herein by reference and
made a part of this Assignment and Acceptance as if set forth herein in full.

 

For an agreed consideration, the Assignor hereby irrevocably sells and assigns
to the Assignee, and the Assignee hereby irrevocably purchases and assumes from
the Assignor, subject to and in accordance with the Standard Terms and
Conditions and the Credit Agreement, as of the Effective Date inserted by the
Administrative Agent as contemplated below (i) all the Assignor’s rights and
obligations in its capacity as a Lender under the Credit Agreement and any other
documents or instruments delivered pursuant thereto to the extent related to the
amount and percentage interest identified below of the Credit Facility
identified below and (ii) to the extent permitted to be assigned under
applicable law, all claims, suits, causes of action and any other right of the
Assignor (in its capacity as a Lender) against any Person, whether known or
unknown, arising under or in connection with the Credit Agreement, any other
documents or instruments delivered pursuant thereto or the loan transactions
governed thereby or in any way based on or related to any of the foregoing,
including contract claims, tort claims, malpractice claims, statutory claims and
all other claims at law or in equity related to the rights and obligations sold
and assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as the “Assigned Interest”).  Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Acceptance, without representation or warranty by the Assignor.

 

1.             Assignor (the “Assignor”):

 

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

 

2.             Assignee (the “Assignee”):

 

3.             Assigned Interest:

 

Credit Facility

 

Total Commitment of
all Lenders

 

Amount of Credit
Facility Assigned

 

Percentage Assigned of
Total Commitment of
all Lenders (Set forth,
to at least 9 decimals,
as a percentage of the
Total Commitment of
all Lenders)

 

Revolving Credit Commitment

 

$

250,000,000.00

 

 

 

[0.000000000%]

 

Tranche A Term Loan Commitment

 

€

209,538,177.86

 

 

 

[0.000000000%]

 

Tranche B Term Loan Commitment

 

$

985,000,000.00

 

 

 

[0.000000000%]

 

Tranche C Term Loan Commitment

 

€

222,110,486.53

 

 

 

[0.000000000%]

 

 

4.             Effective Date of Assignment (the “Effective Date”):
                   , 20  (21).

 

 

The terms set forth in this Assignment and Acceptance are hereby agreed to:

 

 

[NAME OF ASSIGNOR], as Assignor,

 

 

 

 

by

 

 

 

Name:

 

 

Title: 

 

 

 

 

 

 

 

[NAME OF ASSIGNEE], as Assignee,

 

 

 

 

by

 

 

 

Name:

 

 

Title: 

 

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

(21) To be inserted by Administrative Agent and which shall be the effective
date of recordation of transfer in the Register therefor.

 

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

 

[Consented to and](22) Accepted:

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
Administrative Agent,

 

 

 

 

 

by

 

 

 

Name:

 

 

Title: 

 

 

 

 

 

 

 

by

 

 

 

Name:

 

 

Title: 

 

 

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

(22) See Section 14.6 of Credit Agreement.

 

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

 

[Consented to:

ROCKWOOD SPECIALTIES GROUP, INC.,

 

 

 

 

 

 

 

by

 

 

 

Name:

 

 

Title:                                            ](23)

 

 

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

(23) See Section 14.6 of Credit Agreement.

 

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

 

ANNEX 1

 

STANDARD TERMS AND CONDITIONS FOR

ASSIGNMENT AND ACCEPTANCE

 

1.  Representations and Warranties and Agreements.

 

1.1  Assignor.  The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Acceptance and to consummate the transactions
contemplated hereby and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Credit Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Documents or any collateral thereunder, (iii) the financial condition of the
Borrowers, Holdings, any of their respective Subsidiaries or Affiliates or any
other Person obligated in respect of any Credit Document or (iv) the performance
or observance by any of the Borrowers, Holdings, any of their respective
Subsidiaries or Affiliates or any other Person obligated in respect of any
Credit Document of any of their respective obligations under any Credit
Document.

 

1.2.  Assignee.  The Assignee (a) represents and warrants that (i) it has full
power and authority, and has taken all action necessary, to execute and deliver
this Assignment and Acceptance and to consummate the transactions contemplated
hereby and to become a Lender under the Credit Agreement, (ii) it satisfies the
requirements, if any, specified in the Credit Agreement that are required to be
satisfied by it in order to acquire the Assigned Interest and become a Lender
thereunder, (iii) from and after the Effective Date, it shall be a party to the
Credit Agreement and, to the extent provided in this Assignment and Acceptance,
have the rights and obligations of a Lender under the Credit Agreement, and
(iv) it has received a copy of the Credit Agreement, together with copies of the
most recent financial statements delivered pursuant to Section 9.1 of the Credit
Agreement, and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance and to purchase the Assigned Interest on the basis of which it has
made such analysis and decision independently and without reliance on the
Administrative Agent, any other Agent, or any other Lender and (b) agrees that
(i) it will, independently and without reliance on the Administrative Agent, any
other Agent, the Assignor or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under the Credit Documents, and
(ii) it will perform in accordance with their terms all of the obligations which
by the terms of the Credit Documents are required to be performed by it as a
Lender, including, if it is a Non-U.S. Lender, its obligations pursuant to
Section 5.4 of the Credit Agreement.

 

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

 

2.  Payments.  From and after the Effective Date, the Administrative Agent shall
make all payments in respect of the Assigned Interest (including payments of
principal, interest, fees and other amounts) to the Assignor for amounts which
have accrued to but excluding the Effective Date and to the Assignee for amounts
which have accrued from and after the Effective Date.

 

3.  General Provisions.

 

3.1  In accordance with Section 14.6 of the Credit Agreement, upon execution,
delivery, acceptance and recording of this Assignment and Acceptance, from and
after the Effective Date, (a) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender under the Credit Agreement with a
Commitment as set forth herein and (b) the Assignor shall, to the extent of the
Assigned Interest assigned pursuant to this Assignment and Acceptance, be
released from its obligations under the Credit Agreement (and, in the case of
this Assignment and Acceptance covers all of the Assignor’s rights and
obligations under the Credit Agreement, the Assignor shall cease to be a party
to the Credit Agreement but shall continue to be entitled to the benefits of
Sections 2.10, 2.11, 3.5, 5.4 and 14.5 thereof).

 

3.2  This Assignment and Acceptance shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns.  This
Assignment and Acceptance may be executed by one or more of the parties to this
Assignment and Acceptance 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.  This
Assignment and Acceptance and the rights and obligations of the parties
hereunder shall be construed in accordance with and governed by and interpreted
under the law of the state of New York.

 

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

 

EXHIBIT R-1

 

FORM OF PROMISSORY NOTE (TRANCHE A-1 TERM LOANS)

 

 

 

New York

€

 

[           ], 20[  ]

 

FOR VALUE RECEIVED, the undersigned, ROCKWOOD SPECIALTIES GROUP, INC., a
Delaware corporation (the “US Borrower”), hereby unconditionally promises to pay
to the order of [Lender] or its registered assigns (the “Lender”), at the
Administrative Agent’s Office or such other place as Credit Suisse First Boston,
acting through its Cayman Islands Branch (the “Administrative Agent”), shall
have specified, in Euro and in immediately available funds, in accordance with
Section 2.5 of the Credit Agreement (as defined below) on the Tranche A-1 Term
Loan Maturity Date (capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement), the
principal amount of [                       ] Euro (€[      ]) or, if less, the
aggregate unpaid principal amount of all Tranche A-1 Term Loans, if any, made by
the Lender to the US Borrower pursuant to the Credit Agreement.  The US Borrower
further unconditionally promises to pay interest in like money at such office on
the unpaid principal amount hereof from time to time outstanding at the rates
per annum and on the dates specified in Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notes referred to in Section 14.6
of the Credit Agreement dated as of July 30, 2004 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the US
Borrower, Rockwood Specialties Limited (the “UK Borrower”), Rockwood Specialties
International, Inc., the several lenders from time to time parties thereto, the
Administrative Agent and UBS Securities LLC and Goldman Sachs Credit Partners
L.P., as Co-Syndication Agents.  This Promissory Note is subject to, and the
Lender is entitled to the benefits of, the provisions of the Credit Agreement,
and the Tranche A-1 Term Loans evidenced hereby are guaranteed and secured as
provided therein and in the other Credit Documents.  The Tranche A-1 Term Loans
evidenced hereby are subject to prepayment prior to the Tranche A-1 Term Loan
Maturity Date, in whole or in part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect to this Promissory Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
diligence, presentment, demand, protest and notice of any kind whatsoever in
connection with this Promissory Note.  No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or the Lender, any right,
remedy, power or privilege hereunder or under the Credit Documents shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  A waiver by the Administrative Agent or the Lender of any right,
remedy, power or privilege hereunder or under any Credit Document on any one
occasion shall not be construed as a bar to any right or remedy that the
Administrative Agent or the Lender would otherwise have on any future occasion. 
The rights, remedies, powers and

 

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

 

privileges herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights, remedies, powers and
privileges provided by law.

 

All payments in respect of the principal of and interest on this Promissory Note
shall be made to the Person recorded in the Register as the holder of this
Promissory Note, as described more fully in Section 14.6(b) of the Credit
Agreement, and such Person shall be treated as the Lender hereunder for all
purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

ROCKWOOD SPECIALTIES GROUP, INC.,

 

 

 

 

 

by

 

 

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT R-2

 

FORM OF PROMISSORY NOTE (TRANCHE A-2 TERM LOANS)

 

 

 

New York

€

 

[           ], 20[  ]

 

FOR VALUE RECEIVED, the undersigned, ROCKWOOD SPECIALTIES LIMITED, a company
incorporated under the laws of England and Wales (the “UK Borrower”), hereby
unconditionally promises to pay to the order of [Lender] or its registered
assigns (the “Lender”), at the Administrative Agent’s Office or such other place
as Credit Suisse First Boston, acting through its Cayman Islands Branch (the
“Administrative Agent”), shall have specified, in Euro and in immediately
available funds, in accordance with Section 2.5 of the Credit Agreement (as
defined below) on the Tranche A-2 Term Loan Maturity Date (capitalized terms
used and not otherwise defined herein shall have the meanings assigned to such
terms in the Credit Agreement), the principal amount of [                      
] Euro (€[      ]) or, if less, the aggregate unpaid principal amount of all
Tranche A-2 Term Loans, if any, made by the Lender to the UK Borrower pursuant
to the Credit Agreement.  The UK Borrower further unconditionally promises to
pay interest in like money at such office on the unpaid principal amount hereof
from time to time outstanding at the rates per annum and on the dates specified
in Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notes referred to in Section 14.6
of the Credit Agreement dated as of July 30, 2004 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among Rockwood
Specialties Group, Inc., (the “US Borrower”), the UK Borrower, Rockwood
Specialties International, Inc., the several lenders from time to time parties
thereto, the Administrative Agent and UBS Securities LLC and Goldman Sachs
Credit Partners L.P., as Co-Syndication Agents.  This Promissory Note is subject
to, and the Lender is entitled to the benefits of, the provisions of the Credit
Agreement, and the Tranche A-2 Term Loans evidenced hereby are guaranteed and
secured as provided therein and in the other Credit Documents.  The Tranche A-2
Term Loans evidenced hereby are subject to prepayment prior to the Tranche A-2
Term Loan Maturity Date, in whole or in part, as provided in the Credit
Agreement.

 

All parties now and hereafter liable with respect to this Promissory Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
diligence, presentment, demand, protest and notice of any kind whatsoever in
connection with this Promissory Note.  No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or the Lender, any right,
remedy, power or privilege hereunder or under the Credit Documents shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  A waiver by the Administrative Agent or the Lender of any right,
remedy, power or privilege hereunder or under any Credit Document on any one
occasion shall not be construed as a bar to any right or remedy that the
Administrative Agent

 

--------------------------------------------------------------------------------

 

or the Lender would otherwise have on any future occasion.  The rights,
remedies, powers and privileges herein provided are cumulative, may be exercised
singly or concurrently and are not exclusive of any rights, remedies, powers and
privileges provided by law.

 

All payments in respect of the principal of and interest on this Promissory Note
shall be made to the Person recorded in the Register as the holder of this
Promissory Note, as described more fully in Section 14.6(b) of the Credit
Agreement, and such Person shall be treated as the Lender hereunder for all
purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

ROCKWOOD SPECIALTIES LIMITED

 

 

 

 

 

by

 

 

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT R-3

 

FORM OF PROMISSORY NOTE (TRANCHE B TERM LOANS)

 

 

 

New York

$

 

[           ], 20[  ]

 

FOR VALUE RECEIVED, the undersigned, ROCKWOOD SPECIALTIES GROUP, INC., a
Delaware corporation (the “US Borrower”), hereby unconditionally promises to pay
to the order of [Lender] or its registered assigns (the “Lender”), at the
Administrative Agent’s Office or such other place as Credit Suisse First Boston,
acting through its Cayman Islands Branch (the “Administrative Agent”), shall
have specified, in Dollars and in immediately available funds, in accordance
with Section 2.5 of the Credit Agreement (as defined below) on the Tranche B
Term Loan Maturity Date (capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement), the
principal amount of [           ] Dollars ($[        ]) or, if less, the
aggregate unpaid principal amount of all Tranche B Term Loans, if any, made by
the Lender to the US Borrower pursuant to the Credit Agreement.  The US Borrower
further unconditionally promises to pay interest in like money at such office on
the unpaid principal amount hereof from time to time outstanding at the rates
per annum and on the dates specified in Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notes referred to in Section 14.6
of the Credit Agreement dated as of July 30, 2004 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the US
Borrower, Rockwood Specialties Limited (the “UK Borrower”), Rockwood Specialties
International, Inc., the several lenders from time to time parties thereto, the
Administrative Agent and UBS Securities LLC and Goldman Sachs Credit Partners
L.P., as Co-Syndication Agents.  This Promissory Note is subject to, and the
Lender is entitled to the benefits of, the provisions of the Credit Agreement,
and the Tranche B Term Loans evidenced hereby are guaranteed and secured as
provided therein and in the other Credit Documents.  The Tranche B Term Loans
evidenced hereby are subject to prepayment prior to the Tranche B Term Loan
Maturity Date, in whole or in part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect to this Promissory Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
diligence, presentment, demand, protest and notice of any kind whatsoever in
connection with this Promissory Note.  No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or the Lender, any right,
remedy, power or privilege hereunder or under the Credit Documents shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  A waiver by the Administrative Agent or the Lender of any right,
remedy, power or privilege hereunder or under any Credit Document on any one
occasion shall not be construed as a bar to any right or remedy that the
Administrative Agent or the Lender would otherwise have on any future occasion. 
The rights, remedies, powers and

 

--------------------------------------------------------------------------------

 

privileges herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights, remedies, powers and
privileges provided by law.

 

All payments in respect of the principal of and interest on this Promissory Note
shall be made to the Person recorded in the Register as the holder of this
Promissory Note, as described more fully in Section 14.6(b) of the Credit
Agreement, and such Person shall be treated as the Lender hereunder for all
purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

ROCKWOOD SPECIALTIES GROUP, INC.,

 

 

 

 

 

by

 

 

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT R-4

 

FORM OF PROMISSORY NOTE (TRANCHE C TERM LOANS)

 

 

 

[London]

€

 

[           ], 20[  ]

 

FOR VALUE RECEIVED, the undersigned, ROCKWOOD SPECIALTIES GROUP, INC., a
Delaware corporation (the “US Borrower”), hereby unconditionally promises to pay
to the order of [Lender] or its registered assigns (the “Lender”), at the
Administrative Agent’s Office or such other place as Credit Suisse First Boston,
acting through its Cayman Islands Branch (the “Administrative Agent”), shall
have specified, in Euro and in immediately available funds, in accordance with
Section 2.5 of the Credit Agreement (as defined below) on the Tranche C Term
Loan Maturity Date (capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement), the
principal amount of [                ] Euro (€[        ]) or, if less, the
aggregate unpaid principal amount of all Tranche C Term Loans, if any, made by
the Lender to the US Borrower pursuant to the Credit Agreement.  The US Borrower
further unconditionally promises to pay interest in like money at such office on
the unpaid principal amount hereof from time to time outstanding at the rates
per annum and on the dates specified in Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notes referred to in Section 14.6
of the Credit Agreement dated as of July 30, 2004 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among the US
Borrower, Rockwood Specialties Limited, (the “UK Borrower”), Rockwood
Specialties International, Inc., the several lenders from time to time parties
thereto, the Administrative Agent and UBS Securities LLC and Goldman Sachs
Credit Partners L.P., as Co-Syndication Agents.  This Promissory Note is subject
to, and the Lender is entitled to the benefits of, the provisions of the Credit
Agreement, and the Tranche C Term Loans evidenced hereby are guaranteed and
secured as provided therein and in the other Credit Documents.  The Tranche C
Term Loans evidenced hereby are subject to prepayment prior to the Tranche C
Term Loan Maturity Date, in whole or in part, as provided in the Credit
Agreement.

 

All parties now and hereafter liable with respect to this Promissory Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
diligence, presentment, demand, protest and notice of any kind whatsoever in
connection with this Promissory Note.  No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or the Lender, any right,
remedy, power or privilege hereunder or under the Credit Documents shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  A waiver by the Administrative Agent or the Lender of any right,
remedy, power or privilege hereunder or under any Credit Document on any one
occasion shall not be construed as a bar to any right or remedy that the
Administrative Agent or the Lender would otherwise have on any future occasion. 
The rights, remedies, powers and

 

--------------------------------------------------------------------------------

 

privileges herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any rights, remedies, powers and
privileges provided by law.

 

All payments in respect of the principal of and interest on this Promissory Note
shall be made to the Person recorded in the Register as the holder of this
Promissory Note, as described more fully in Section 14.6(b) of the Credit
Agreement, and such Person shall be treated as the Lender hereunder for all
purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

ROCKWOOD SPECIALTIES GROUP, INC.,

 

 

 

 

 

by

 

 

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT R-5

 

FORM OF PROMISSORY NOTE (REVOLVING CREDIT AND SWINGLINE LOANS)

 

 

 

[London][New York]

[$][€]

 

[           ], 20[  ]

 

FOR VALUE RECEIVED, the undersigned, [ROCKWOOD SPECIALTIES GROUP, INC., a
Delaware corporation (the “US Borrower”)] [ROCKWOOD SPECIALTIES LIMITED, a
company incorporated under the laws of England and Wales (the “UK Borrower”)],
hereby unconditionally promises to pay to the order of [Lender] or its
registered assigns (the “Lender”), at the Administrative Agent’s Office or such
other place as CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands
Branch (the “Administrative Agent”), shall have specified, in [Dollars][Euro]
and in immediately available funds, in accordance with Section 2.5 of the Credit
Agreement (as defined below) on the [Revolving Credit Maturity Date][Swingline
Maturity Date] (capitalized terms used and not otherwise defined herein shall
have the meanings assigned to such terms in the Credit Agreement), the principal
amount of [      ] [Dollars][Euro] ([$][€][             ]) or, if less, the
aggregate unpaid principal amount of all [Revolving Credit Loans][Swingline
Loans], if any, made by the Lender to the [US Borrower][UK Borrower] pursuant to
the Credit Agreement.  The [US Borrower][UK Borrower] further unconditionally
promises to pay interest in like money at such office on the unpaid principal
amount hereof from time to time outstanding at the rates per annum and on the
dates specified in Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notes referred to in Section 14.6
of the Credit Agreement dated as of July 30, 2004 (as amended, supplemented or
otherwise modified from time to time, the “Credit Agreement”), among [Rockwood
Specialties Group, Inc.], [Rockwood Specialties Limited], Rockwood Specialties
International, Inc., the several lenders from time to time parties thereto, the
Administrative Agent and UBS Securities LLC and Goldman Sachs Credit Partners
L.P., as Co-Syndication Agents.  This Promissory Note is subject to, and the
Lender is entitled to the benefits of, the provisions of the Credit Agreement,
and the [Revolving Credit Loans][Swingline Loans] evidenced hereby are
guaranteed and secured as provided therein and in the other Credit Documents. 
The [Revolving Credit Loans][Swingline Loans] evidenced hereby are subject to
prepayment prior to the [Revolving Credit Maturity Date][Swingline Maturity
Date], in whole or in part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect to this Promissory Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
diligence, presentment, demand, protest and notice of any kind whatsoever in
connection with this Promissory Note.  No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or the Lender, any right,
remedy, power or privilege hereunder or under the Credit Documents shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  A waiver by the Administrative Agent or the

 

--------------------------------------------------------------------------------

 

Lender of any right, remedy, power or privilege hereunder or under any Credit
Document on any one occasion shall not be construed as a bar to any right or
remedy that the Administrative Agent or the Lender would otherwise have on any
future occasion.  The rights, remedies, powers and privileges herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights, remedies, powers and privileges provided by law.

 

All payments in respect of the principal of and interest on this Promissory Note
shall be made to the Person recorded in the Register as the holder of this
Promissory Note, as described more fully in Section 14.6(b) of the Credit
Agreement, and such Person shall be treated as the Lender hereunder for all
purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

[ROCKWOOD SPECIALTIES GROUP, INC.][ROCKWOOD SPECIALTIES LIMITED],

 

 

 

 

 

by

 

 

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

 

EXHIBIT R-6

 

FORM OF PROMISSORY NOTE (TRANCHE H TERM LOANS)

 

 

 

New York

$

 

[           ], 20[  ]

 

FOR VALUE RECEIVED, the undersigned, ROCKWOOD SPECIALTIES GROUP, INC., a
Delaware corporation (the “US Borrower”), hereby unconditionally promises to pay
to the order of [Lender] or its registered assigns (the “Lender”), at the
Administrative Agent’s Office or such other place as Credit Suisse (the
“Administrative Agent”), shall have specified, in Dollars and in immediately
available funds, in accordance with Section 2.5 of the Credit Agreement (as
defined below) on the Tranche H Term Loan Maturity Date (capitalized terms used
and not otherwise defined herein shall have the meanings assigned to such terms
in the Credit Agreement), the principal amount of [           ] Dollars
($[        ]) or, if less, the aggregate unpaid principal amount of all Tranche
H Term Loans, if any, made by the Lender to the US Borrower pursuant to the
Credit Agreement.  The US Borrower further unconditionally promises to pay
interest in like money at such office on the unpaid principal amount hereof from
time to time outstanding at the rates per annum and on the dates specified in
Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notes referred to in Section 14.6
of the Amended and Restated Credit Agreement, dated as of June 12, 2009 (the
“Amended and Restated Credit Agreement”), which amends and restates in its
entirety that certain Credit Agreement, dated as of July 30, 2004 (the “Existing
Credit Agreement” and together with the Amended and Restated Credit Agreement
and as otherwise amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”), among the US Borrower, Rockwood Specialties Limited
(the “UK Borrower”), Rockwood Specialties International, Inc., the several
lenders from time to time parties thereto, the Administrative Agent and UBS
Securities LLC and Goldman Sachs Credit Partners L.P., as Co-Syndication
Agents.  This Promissory Note is subject to, and the Lender is entitled to the
benefits of, the provisions of the Credit Agreement, and the Tranche H Term
Loans evidenced hereby are guaranteed and secured as provided therein and in the
other Credit Documents.  The Tranche H Term Loans evidenced hereby are subject
to prepayment prior to the Tranche H Term Loan Maturity Date, in whole or in
part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect to this Promissory Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
diligence, presentment, demand, protest and notice of any kind whatsoever in
connection with this Promissory Note.  No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or the Lender, any right,
remedy, power or privilege hereunder or under the Credit Documents shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  A waiver by the Administrative Agent or the

 

--------------------------------------------------------------------------------

 

Lender of any right, remedy, power or privilege hereunder or under any Credit
Document on any one occasion shall not be construed as a bar to any right or
remedy that the Administrative Agent or the Lender would otherwise have on any
future occasion.  The rights, remedies, powers and privileges herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights, remedies, powers and privileges provided by law.

 

All payments in respect of the principal of and interest on this Promissory Note
shall be made to the Person recorded in the Register as the holder of this
Promissory Note, as described more fully in Section 14.6(b) of the Credit
Agreement, and such Person shall be treated as the Lender hereunder for all
purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

ROCKWOOD SPECIALTIES GROUP, INC.

 

 

 

 

 

by

 

 

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT R- 7

 

FORM OF PROMISSORY NOTE (TRANCHE I TERM LOANS)

 

 

 

New York

$

 

[           ], 20[  ]

 

FOR VALUE RECEIVED, the undersigned, ROCKWOOD SPECIALTIES GROUP, INC., a
Delaware corporation (the “US Borrower”), hereby unconditionally promises to pay
to the order of [Lender] or its registered assigns (the “Lender”), at the
Administrative Agent’s Office or such other place as Credit Suisse acting
through its Cayman Islands Branch (the “Administrative Agent”), shall have
specified, in Euro and in immediately available funds, in accordance with
Section 2.5 of the Credit Agreement (as defined below) on the Tranche I Term
Loan Maturity Date (capitalized terms used and not otherwise defined herein
shall have the meanings assigned to such terms in the Credit Agreement), the
principal amount of [           ] Euro (€ [        ]) or, if less, the aggregate
unpaid principal amount of all Tranche I Term Loans, if any, made by the Lender
to the US Borrower pursuant to the Credit Agreement.  The US Borrower further
unconditionally promises to pay interest in like money at such office on the
unpaid principal amount hereof from time to time outstanding at the rates per
annum and on the dates specified in Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notes referred to in Section 14.6
of the Amended and Restated Credit Agreement, dated as of June 12, 2009 (the
“Amended and Restated Credit Agreement”) which amends and restates in its
entirety that certain Credit Agreement, dated as of July 30, 2004 (the “Existing
Credit Agreement” and together with the Amended and Restated Credit Agreement
and as otherwise amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”), among the US Borrower, Rockwood Specialties Limited
(the “UK Borrower”), Rockwood Specialties International, Inc., the several
lenders from time to time parties thereto, the Administrative Agent and UBS
Securities LLC and Goldman Sachs Credit Partners L.P., as Co-Syndication
Agents.  This Promissory Note is subject to, and the Lender is entitled to the
benefits of, the provisions of the Credit Agreement, and the Tranche I Term
Loans evidenced hereby are guaranteed and secured as provided therein and in the
other Credit Documents.  The Tranche I Term Loans evidenced hereby are subject
to prepayment prior to the Tranche I Term Loan Maturity Date, in whole or in
part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect to this Promissory Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
diligence, presentment, demand, protest and notice of any kind whatsoever in
connection with this Promissory Note.  No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or the Lender, any right,
remedy, power or privilege hereunder or under the Credit Documents shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  A waiver by the Administrative Agent or the

 

--------------------------------------------------------------------------------

 

Lender of any right, remedy, power or privilege hereunder or under any Credit
Document on any one occasion shall not be construed as a bar to any right or
remedy that the Administrative Agent or the Lender would otherwise have on any
future occasion.  The rights, remedies, powers and privileges herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights, remedies, powers and privileges provided by law.

 

All payments in respect of the principal of and interest on this Promissory Note
shall be made to the Person recorded in the Register as the holder of this
Promissory Note, as described more fully in Section 14.6(b) of the Credit
Agreement, and such Person shall be treated as the Lender hereunder for all
purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

ROCKWOOD SPECIALTIES GROUP, INC.

 

 

 

 

 

by

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT R-8

 

FORM OF PROMISSORY NOTE (EXTENDED REVOLVING CREDIT AND SWINGLINE LOANS)

 

 

 

[London][New York]

[$][€]

 

[           ], 20[  ]

 

FOR VALUE RECEIVED, the undersigned, [ROCKWOOD SPECIALTIES GROUP, INC., a
Delaware corporation (the “US Borrower”)] [ROCKWOOD SPECIALTIES LIMITED, a
company incorporated under the laws of England and Wales (the “UK Borrower”)],
hereby unconditionally promises to pay to the order of [Lender] or its
registered assigns (the “Lender”), at the Administrative Agent’s Office or such
other place as CREDIT SUISSE (the “Administrative Agent”), shall have
specified, in [Dollars][Euro] and in immediately available funds, in accordance
with Section 2.5 of the Credit Agreement (as defined below) on the [Extended
Revolving Credit Maturity Date][Swingline Maturity Date] (capitalized terms used
and not otherwise defined herein shall have the meanings assigned to such terms
in the Credit Agreement), the principal amount of [      ] [Dollars][Euro]
([$][€][             ]) or, if less, the aggregate unpaid principal amount of
all [Extended Revolving Credit Loans][Swingline Loans], if any, made by the
Lender to the [US Borrower][UK Borrower] pursuant to the Credit Agreement.  The
[US Borrower][UK Borrower] further unconditionally promises to pay interest in
like money at such office on the unpaid principal amount hereof from time to
time outstanding at the rates per annum and on the dates specified in
Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notes referred to in Section 14.6
of the Amended and Restated Credit Agreement, dated as of June 12, 2009 (the
“Amended and Restated Credit Agreement”), which amends and restates in its
entirety that certain Credit Agreement, dated as of July 30, 2004 (the “Existing
Credit Agreement” and together with the Amended and Restated Credit Agreement
and as otherwise amended, supplemented or otherwise modified from time to time,
the “Credit Agreement”), among [Rockwood Specialties Group, Inc.], [Rockwood
Specialties Limited], Rockwood Specialties International, Inc., the several
lenders from time to time parties thereto, the Administrative Agent and UBS
Securities LLC and Goldman Sachs Credit Partners L.P., as Co-Syndication
Agents.  This Promissory Note is subject to, and the Lender is entitled to the
benefits of, the provisions of the Credit Agreement, and the [Extended Revolving
Credit Loans][Swingline Loans] evidenced hereby are guaranteed and secured as
provided therein and in the other Credit Documents.  The [Extended Revolving
Credit Loans][Swingline Loans] evidenced hereby are subject to prepayment prior
to the [Extended Revolving Credit Maturity Date][Swingline Maturity Date], in
whole or in part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect to this Promissory Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
diligence, presentment, demand, protest and notice of any kind whatsoever in
connection with this Promissory Note.  No failure to exercise and no delay in
exercising, on the part of the Administrative Agent or the Lender, any right,
remedy, power or privilege hereunder or under the Credit Documents shall operate
as a waiver thereof, nor shall any single or partial exercise of any right,
remedy, power or privilege hereunder or thereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or
privilege.  A waiver by the Administrative Agent or the

 

--------------------------------------------------------------------------------

 

Lender of any right, remedy, power or privilege hereunder or under any Credit
Document on any one occasion shall not be construed as a bar to any right or
remedy that the Administrative Agent or the Lender would otherwise have on any
future occasion.  The rights, remedies, powers and privileges herein provided
are cumulative, may be exercised singly or concurrently and are not exclusive of
any rights, remedies, powers and privileges provided by law.

 

All payments in respect of the principal of and interest on this Promissory Note
shall be made to the Person recorded in the Register as the holder of this
Promissory Note, as described more fully in Section 14.6(b) of the Credit
Agreement, and such Person shall be treated as the Lender hereunder for all
purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

 

[ROCKWOOD SPECIALTIES GROUP, INC.][ROCKWOOD SPECIALTIES LIMITED],

 

 

 

 

 

by

 

 

 

 

 

 

Name:

 

 

Title:

 

--------------------------------------------------------------------------------

 

EXHIBIT S

 

FORM OF CONFIDENTIALITY AGREEMENT

 

Memorandum To:

 

[Insert Name and Address of the Prospective Lender/Counterparty to Swap
Agreement to be entered into in connection with Loans]

Date:

 

[          ]

 

 

 

Subject:

 

Confidentiality Agreement for the Credit Agreement (as defined below).

 

In connection with your interest in becoming a [Lender][counterparty to a swap
agreement to be entered into in connection with Loans (a “Counterparty”)] under
the Credit Agreement dated as of July 30, 2004 (as the same may be amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”;
capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement), among Rockwood
Specialties Group, Inc., a Delaware corporation (the “US Borrower”), Rockwood
Specialties Limited, a company incorporated under the laws of England and Wales
(the “UK Borrower” and, together with the US Borrower, the “Borrowers”),
Rockwood Specialties International, Inc., a Delaware corporation, the several
lenders from time to time parties thereto (the “Lenders”), Credit Suisse First
Boston, acting through its Cayman Islands Branch, as administrative agent (in
such capacity, the “Administrative Agent”) and UBS Securities LLC and Goldman
Sachs Credit Partners, L.P. as co-syndication agents, you will be receiving
certain information that is non-public, confidential or proprietary.  Such
information concerning Rockwood Specialties Group, Inc. and each of its
Subsidiaries, Rockwood Specialties Limited, Rockwood Specialties
International, Inc., (each together with its respective affiliates, the
“Companies”), and partnerships controlled by Kohlberg Kravis Roberts & Co.
(“KKR”), including the structure of the transaction in which KKR is involved or
any of the Companies or KKR, furnished to you by Credit Suisse First Boston,
acting through its Cayman Islands Branch, UBS Securities LLC and Goldman Sachs
Credit Partners L.P. or any of their respective affiliates (collectively, the
“Agents”) or otherwise by or on behalf of the Companies (at any time on, before
or after the date of this Confidentiality Agreement), together with analyses,
compilations, studies or other documents prepared by you or by your affiliates,
agents, representatives (including attorneys, accountants and financial
advisors) or employees that contain or otherwise reflect such information or
your review of, or interest in, the Companies, and any information otherwise
concerning the Credit Agreement, is hereinafter referred to as the
“Information”.  In consideration of your receipt of the Information, you agree
that:

 

1.             The Information shall be kept confidential and shall not, without
the prior written consent of the Administrative Agent and the US Borrower, be
reproduced or disclosed by you or by your affiliates, agents, representatives or
employees in any manner whatsoever, in whole or in part, and shall not be used
by you or your affiliates, agents, representatives or employees, other than in
connection with evaluating whether you wish to become a [Lender under the Credit
Agreement] [Counterparty].  Moreover, you agree to reveal Information only to
your affiliates, agents, representatives and employees who need to

 

--------------------------------------------------------------------------------

 

know the Information for the purpose of evaluating whether you wish to become a
[Lender under the Credit Agreement][Counterparty], who are informed by you of
the confidential nature of the Information and who agree to be bound by the
terms and conditions of this Confidentiality Agreement.  You agree to take all
reasonable measures to restrain your affiliates, agents, representatives and
employees from unauthorized disclosure or use of the Information.

 

2.             Without the prior written consent of the Administrative Agent and
the US Borrower except as required by law, you and your affiliates, agents,
representatives and employees shall not disclose to any person or entity
(including, specifically, any representative of the press or media) the fact
that the Information has been made available, that discussions or negotiations
are taking place concerning a possible transaction involving the Credit
Agreement, any of the terms, conditions or other facts with respect to any such
possible transaction (including the status thereof), or that the transaction has
been, or is about to be, consummated.

 

3.             This Confidentiality Agreement shall be inoperative as to such
portions of the Information (or such of the facts referred to in the preceding
paragraph) that (a) are or become generally available to the public on a
non-confidential basis through no fault of or action by you or your affiliates,
agents, representatives or employees so long as you have determined in good
faith that such portions became generally available from a source (an
“Unrestricted Source”) not prohibited from disclosing such portions by a
contractual, legal or fiduciary obligation to any of the Companies or Agents,
(b) become available to you on a non-confidential basis from a source other than
any of the Companies or Agents or any of their respective affiliates, agents,
representatives or employees, which source is an Unrestricted Source, or (c) was
hereafter independently developed or compiled by you, as evidenced by your
records, without the use of the Information.

 

4.             If and to the extent that you or anyone to whom you transmit the
Information pursuant to this Confidentiality Agreement (a) becomes legally
compelled to discuss any of the Information or the existence of the transaction
pursuant to a subpoena or other court process or (b) is requested or required to
provide any of the Information or acknowledge the existence of the Information
by an applicable regulatory agency in connection with an examination of your
financial institution by examiners or by your independent auditors, (i) you
shall use your best efforts to provide the Administrative Agent and the US
Borrower with notice of such event promptly upon your obtaining knowledge
thereof so that any one or more of the Administrative Agent and the US Borrower
may seek confidential treatment of such Information, (ii) you may disclose the
portion of the Information that is the subject of such legal compulsion or
request or requirement of such applicable regulatory agency and (iii) you shall
disclose such Information in a manner reasonably designed to preserve its
confidential nature.

 

Notwithstanding anything express or implied to the contrary herein or by the
documents referred to or incorporated by reference herein, or any other prior or
future oral or written statements by any parties hereto with respect to the
transactions contemplated herein or by the other Credit Documents, and whether
or not any of them are legally binding, the

 

--------------------------------------------------------------------------------

 

obligations of confidentiality contained herein and therein, as they relate to
the transactions contemplated by the Credit Agreement, shall not apply to the
tax structure or tax treatment of such transactions, and each recipient (and its
employees, representatives, or other agents) may immediately disclose to any and
all persons, without limitation of any kind, the U.S. Federal income tax
structure and such recipient’s U.S. Federal income tax treatment of such
transactions and any opinions or other tax analyses that have been provided by
the parties hereto (or any agent thereof) to the recipient regarding such tax
structure or tax treatment.  However, no such recipient shall disclose any
information relating to such tax structure or tax treatment to the extent that
non-disclosure is reasonably necessary to comply with applicable securities
laws.  This paragraph is intended to cause the transactions contemplated by this
Agreement not to be treated as having been offered under conditions of
confidentiality for purposes of Section 1.6011-4(b)(3) (or any successor
provision) of the Treasury Regulations promulgated under Section 6011 of the
Internal Revenue Code of 1986, as amended, and shall be construed in a manner
consistent with such purpose.

 

This Confidentiality Agreement shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.

 

If you are prepared to accept the Information on this basis, please sign and
return to the Administrative Agent the enclosed copy of this Confidentiality
Agreement.  In the event that you decide not to provide financing under the
Credit Agreement referenced above or to become a Counterparty, you shall, within
two business days of such decision, re-deliver to the Administrative Agent the
Information, including the material that was furnished to you by or on behalf of
any of the Companies in connection with the Credit Agreement, and represent to
the Administrative Agent and the US Borrower that you have returned all copies
of such material (except that you may destroy, rather than re-deliver, any
analyses, compilations, studies or other documents prepared by you or by your
affiliates, agents, representatives (including attorneys, accountants and
financial advisors) or employees that contain or otherwise reflect any
Information, and represent to the Administrative Agent and the US Borrower that
you have destroyed all copies of such material).  All of your obligations
hereafter and all of our rights and remedies hereunder shall survive any return
or destruction of the Information.

 

--------------------------------------------------------------------------------

 

 

Very truly yours,

 

 

 

CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as
Administrative Agent,

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

Title:

 

 

 

 

 

 

ACCEPTED:

 

 

 

By:

 

 

 

 

 

 

(Name of [Lender] [Counterparty])

 

 

 

By:

 

 

 

 

 

 

Name:

 

 

Title:

 

 

 

Date:

 

 

--------------------------------------------------------------------------------

 

EXHIBIT T

 

FORM OF POST-CLOSING SCHEDULE

 

--------------------------------------------------------------------------------

 

EXHIBIT U

 

FORM OF JOINDER

 

JOINDER AGREEMENT, dated as of [                        , 20[  ] (this
“Agreement”), by and among [NEW LOAN LENDERS] (each, a “New Loan Lender” and,
collectively, the “New Loan Lenders”), ROCKWOOD SPECIALTIES GROUP, INC., a
Delaware corporation (the “US Borrower”), ROCKWOOD SPECIALTIES LIMITED, a
company incorporated under the laws of England and Wales (the “UK Borrower”),
ROCKWOOD SPECIALTIES INTERNATIONAL, INC., a Delaware corporation (“Holdings”)
and CREDIT SUISSE, as administrative agent (the “Administrative Agent”).

 

RECITALS:

 

WHEREAS, reference is hereby made to the Amended and Restated Credit Agreement,
dated as of June 12, 2009 (the “Amended and Restated Credit Agreement”), which
amends and restates in its entirety that certain Credit Agreement, dated as of
July 30, 2004 (the “Existing Credit Agreement” and together with the Amended and
Restated Credit Agreement and as otherwise amended, supplemented or otherwise
modified from time to time, the “Credit Agreement”), among the US Borrower, the
UK Borrower, Holdings, the lending institutions from time to time parties
thereto (each a “Lender” and, collectively, the “Lenders”), CREDIT SUISSE, as
Administrative Agent and as Collateral Agent and UBS SECURITIES LLC and GOLDMAN
SACHS CREDIT PARTNERS L.P., as Co-Syndication Agents (capitalized terms used but
not defined herein having the meaning provided in the Credit Agreement); and

 

WHEREAS, subject to the terms and conditions of the Credit Agreement, the US
Borrower may establish New Revolving Loan Commitments, New Extended Revolving
Loan Commitments, New Tranche H Term Loan Commitments, New Tranche I Term Loan
Commitments, Incremental Refinancing Term Loan Commitments and/or Incremental
Refinancing Revolving Credit Commitments by, among other things, entering into
one or more Joinder Agreements with New Tranche H Term Loan Lenders, New Tranche
I Term Loan Lenders, New Revolving Loan Lenders, New Extended Revolving Loan
Lenders, Incremental Refinancing Term Loan Lenders, and/or Incremental
Refinancing Revolving Credit Lenders, as applicable;

 

NOW, THEREFORE, in consideration of the premises and agreements, provisions and
covenants herein contained, the parties hereto agree as follows:

 

Each New Revolving Loan Lender party hereto hereby agrees to commit to provide
its respective New Revolving Loan Commitment, each New Extended Revolving Loan
Lender party hereto hereby agrees to commit to provide its respective New
Extended Revolving Loan Commitment, each New Tranche H Term Loan Lender party
hereto agrees to commit to provide its respective New Tranche H Term Loan
Commitment, each New Tranche I Term Loan Lender party hereto agrees to commit to
provide its respective New Tranche I Term Loan Commitment, each Incremental
Refinancing Term Loan Lender party hereto hereby agrees to provide its
respective Incremental Refinancing Term Loan Commitment and/or each Incremental
Refinancing

 

--------------------------------------------------------------------------------

 

Revolving Credit Lender party hereto hereby agrees to commit to provide its
respective Incremental Refinancing Revolving Credit Commitment, as set forth on
Schedule A annexed hereto, on the terms and subject to the conditions set forth
below:

 

Each New Revolving Loan Lender, each New Extended Revolving Loan Lender, each
New Tranche H Term Loan Lender, each New Tranche I Term Loan Lender, each
Incremental Refinancing Term Loan Lender and/or each Incremental Refinancing
Revolving Credit Lender (i) confirms that it has received a copy of the Credit
Agreement and the other Credit Documents, together with copies of the financial
statements referred to therein and such other documents and information as it
has deemed appropriate to make its own credit analysis and decision to enter
into this Agreement; (ii) agrees that it will, independently and without
reliance upon the Administrative Agent or any other New Revolving Loan Lender,
New Extended Revolving Loan Lender, New Tranche H Term Loan Lender, New Tranche
I Term Loan Lender, Incremental Refinancing Term Loan Lender, Incremental
Refinancing Revolving Credit Lender or any other Lender or Agent and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) appoints and authorizes the Administrative to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Credit Documents as are delegated to the Administrative
Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; and (iv) agrees that it will perform in accordance with
their terms all of the obligations which by the terms of the Credit Agreement
are required to be performed by it as a New Tranche H Term Loan Lender, New
Tranche I Term Loan Lender, New Revolving Loan Lender, New Extended Revolving
Loan Lender, Incremental Refinancing Term Loan Lender and/or Incremental
Refinancing Revolving Credit Lender as the case may be.

 

Each New Revolving Loan Lender, New Extended Revolving Loan Lender, New Tranche
H Term Loan Lender, New Tranche I Term Loan Lender, Incremental Refinancing Term
Loan Lender and/or Incremental Refinancing Revolving Credit Lender hereby agrees
to make its respective Commitment on the following terms and conditions:(24)

 

SECTION 24.         Applicable ABR Margin.  The Applicable ABR Margin for each
Series [    ] [New Tranche H Term Loan / Incremental Refinancing Term Loan]
shall mean, as of any date of determination, [    ]% per annum [plus the pricing
premium, if any, less the pricing reduction, if any].

 

SECTION 25.         Applicable Eurodollar Margin.  The Applicable Eurodollar
Margin for each Series [  ] [New Tranche H Term Loans / New Tranche I Term Loans
/ Incremental Refinancing Term Loans] shall mean, as of any date of
determination, [    ]% per annum [plus the pricing premium, if any, less the
pricing reduction].

 

SECTION 26.         Principal Payments.  The US Borrower shall make principal
payments on the Series [    ] New Tranche H Term Loans in installments on the
dates and in the amounts set forth below:

 

--------------------------------------------------------------------------------

(24) Insert completed items 1-7 as applicable with respect to New Tranche H Term
Loans, New Tranche I Term Loans and Incremental Refinancing Term Loans with such
modifications as may be agreed to by the parties hereto to the extent consistent
with the Credit Agreement.

 

--------------------------------------------------------------------------------

 

(A)
Payment
Date

 

(B)
Scheduled
Repayment of Series
[    ] New Tranche H
Term Loans

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

The US Borrower shall make principal payments on the Series [    ] New Tranche I
Term Loans in installments on the dates and in the amounts set forth below:

 

(A)
Payment
Date

 

(B)
Scheduled
Repayment of Series
[    ] New Tranche I
Term Loans

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

The US Borrower shall make principal payments on the Series [    ]Incremental
Refinancing Term Loans in installments on the dates and in the amounts set forth
below:

 

--------------------------------------------------------------------------------

 

(A)
Payment
Date

 

(B)
Scheduled
Repayment of Series
[    ] Incremental
Refinancing
Term Loans

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

 

$

 

 

 

SECTION 27.         Voluntary and Mandatory Prepayments.  Scheduled installments
of principal of the Series [    ] New Tranche H Term Loans, Series [    ] New
Tranche I Term Loans or Series [    ] Incremental Refinancing Term Loans set
forth above shall be reduced in connection with any voluntary or mandatory
prepayments of the Series [    ] New Tranche H Term Loans, Series [    ] New
Tranche I Term Loans or Series [    ] Incremental Refinancing Term Loans, as
applicable, in accordance with Sections 5.1 and 5.2 of the Credit Agreement
respectively.

 

SECTION 28.         Prepayment Fees.  The US Borrower agrees to pay to each [New
Tranche H Term Loan Lender / New Tranche I Term Loan Lender / Incremental
Refinancing Term Loan Lender] the following prepayment fees, if any: 
[                                  ].

 

[Insert other additional prepayment provisions with respect to New Tranche H
Term Loans, New Tranche I Term Loans or Incremental Refinancing Term Loans]

 

SECTION 29.         Other Fees.  The US Borrower agrees to pay each [New Tranche
H Term Loan Lender] [New Tranche I Term Loan Lender] [New Revolving Loan Lender]
[New Extended Revolving Loan Lender] [Incremental Refinancing Term Loan Lender]
[Incremental Refinancing Revolving Credit Lender] its pro rata share of an
aggregate fee equal to [                          ] on
[                        ,         ].

 

SECTION 30.         Proposed Borrowing.  This Agreement represents the US
Borrower’s request to borrow Series [    ] [New Tranche [H] [I] Term Loans /
Incremental Refinancing Term Loans] from the [New Tranche [H] [I] Term Loan
Lenders / Incremental Refinancing Term Loan Lenders] as follows (the “Proposed
Borrowing”):

 

21.1.        Business Day of Proposed Borrowing:                            ,

 

21.2.        Amount of Proposed Borrowing:  $

 

21.3.        Interest rate option:

a.                                       ABR Loan(s)

b.                                      Eurodollar Loans

with an initial Interest

Period of          month(s)

 

--------------------------------------------------------------------------------

 

SECTION 31.         [New Loan Lenders.  Each New Revolving Loan Lender, New
Extended Revolving Loan Lender, New Tranche H Term Loan Lender, New Tranche I
Term Loan Lender, Incremental Refinancing Term Loan Lender and/or Incremental
Refinancing Revolving Credit Lender acknowledges and agrees that upon its
execution of this Agreement and the making of New Revolving Loans, New Extended
Revolving Loans, Series [      ] New Tranche H Term Loans, Series [      ] New
Tranche I Term Loans, Series [    ] Incremental Refinancing Term Loans, and/or
Incremental Refinancing Revolving Credit Commitments,  as the case may be, that
such New Revolving Loan Lender, New Extended Revolving Loan Lender, New Tranche
H Term Loan Lender, New Tranche I Term Loan Lender, Incremental Refinancing Term
Loan Lender and/or Incremental Refinancing Revolving Credit Lender shall become
a “Lender” under, and for all purposes of, the Credit Agreement and the other
Credit Documents, and shall be subject to and bound by the terms thereof, and
shall perform all the obligations of and shall have all rights of a Lender
thereunder.](25)

 

SECTION 32.         Credit Agreement Governs  Except as set forth in this
Agreement, the New Revolving Loans, New Extended Revolving Loans, Series
[      ] New Tranche H Term Loans, Series [      ] New Tranche I Term Loans,
Series [    ] Incremental Refinancing Term Loans and/or Incremental Refinancing
Revolving Credit Commitments shall otherwise be subject to the provisions of the
Credit Agreement and the other Credit Documents.

 

SECTION 33.         Borrower’s Certifications.  By its execution of this
Agreement, the undersigned officer, to the best of his or her knowledge, and the
US Borrower hereby certify that:

 

The representations and warranties contained in the Credit Agreement and the
other Credit Documents are true and correct in all material respects on and as
of the date hereof to the same extent as though made on and as of the date
hereof, except where such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties were true and
correct in all material respects on and as of such earlier date;

 

No event has occurred and is continuing or would result from the consummation of
the proposed Borrowing contemplated hereby that would constitute a Default or an
Event of Default; and

 

The US Borrower has performed in all material respects all agreements and
satisfied all conditions which the Credit Agreement provides shall be performed
or satisfied by it on or before the date hereof.

 

SECTION 34.         Borrower Covenants.  By its execution of this Agreement, the
US Borrower hereby covenants that:

 

[The US Borrower shall make any payments required pursuant to Section 2.11 of
the Credit Agreement in connection with the New Revolving Loan Commitments, New

 

--------------------------------------------------------------------------------

(25) Insert bracketed language if the lending institution is not already a
Lender.

 

--------------------------------------------------------------------------------

 

Extended Revolving Loan Commitments and/or the Incremental Refinancing Revolving
Credit Commitment as applicable;](26)

 

The US Borrower shall deliver or cause to be delivered the following legal
opinions and documents:  [                      ], together with all other legal
opinions and other documents reasonably requested by Administrative Agent in
connection with this Agreement; and

 

Set forth on the attached Officers’ Certificate are the calculations (in
reasonable detail) demonstrating compliance with the financial tests described
in Sections 10.9 and 10.10 of the Credit Agreement.

 

SECTION 35.         Notice.  For purposes of the Credit Agreement, the initial
notice address of each New Revolving Loan Lender, New Extended Revolving Loan
Lender, New Tranche H Term Loan Lender, New Tranche I Term Loan Lender,
Incremental Refinancing Term Loan Lender and/or Incremental Refinancing
Revolving Credit Lender shall be as set forth below its signature below.

 

SECTION 36.         Non-US Lenders.  For each New Revolving Loan Lender, New
Extended Revolving Loan Lender, New Tranche H Term Loan Lender, New Tranche I
Term Loan Lender, Incremental Refinancing Term Loan Lender and/or Incremental
Refinancing Revolving Credit Lender that is a Non-US Lender, delivered herewith
to the Administrative Agent are such forms, certificates or other evidence with
respect to United States federal income tax withholding matters as such New
Revolving Loan Lender, New Extended Revolving Loan Lender, New Tranche H Term
Loan Lender, New Tranche I Term Loan Lender, Incremental Refinancing Term Loan
Lender and/or Incremental Refinancing Revolving Credit Lender may be required to
deliver to the Administrative Agent pursuant to subsection 5.4(d) of the Credit
Agreement.

 

SECTION 37.         Recordation of the New Loans.  Upon execution and delivery
hereof, the Administrative Agent will record the Series [      ] New Tranche H
Term Loans, Series [      ] New Tranche I Term Loans, New Revolving Loans, New
Extended Revolving Loans, Series [    ] Incremental Refinancing Term Loans
and/or Incremental Refinancing Revolving Credit Commitments, as the case may be,
made by each New Revolving Loan Lender, New Extended Revolving Loan Lender, New
Tranche H Term Loan Lender, New Tranche I Term Loan Lender, Incremental
Refinancing Term Loan Lender and/or Incremental Refinancing Revolving Credit
Lender in the Register.

 

SECTION 38.         Amendment, Modification and Waiver  This Agreement may not
be amended, modified or waived except by an instrument or instruments in writing
signed and delivered on behalf of each of the parties hereto.

 

--------------------------------------------------------------------------------

(26)Select this provision in the circumstance where the Lender is a New
Revolving Loan Lender.

 

--------------------------------------------------------------------------------

 

SECTION 39.         Entire Agreement.  This Agreement, the Credit Agreement and
the other Credit Documents constitute the entire agreement among the parties
with respect to the subject matter hereof and thereof and supersede all other
prior agreements and understandings, both written and verbal, among the parties
or any of them with respect to the subject matter hereof.

 

SECTION 40.         GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 41.         Severability.  Any term or provision of this 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
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.  If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as would be enforceable.

 

SECTION 42.         Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.

 

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, each of the undersigned has caused its duly authorized
officer to execute and deliver this Joinder Agreement as of
[                              ,           ].

 

 

[NAME OF NEW LOAN LENDER]

 

 

 

By:

 

 

Name:

 

 

Title:

 

 

 

 

Notice Address:

 

Attention:

 

Telephone:

 

Facsimile:

 

--------------------------------------------------------------------------------

 

SCHEDULE A
TO JOINDER AGREEMENT

 

Name of New Loan
Lender

 

Type of Commitment

 

Amount

 

 

 

 

 

[                    ]

 

[New Tranche H Term Loan Commitment]

[New Tranche I Term Loan Commitment]

[New Revolving Loan Commitment]

[New Extended Revolving Loan Commitment]

[Incremental Refinancing Term Loan Commitment]

[Incremental Refinancing Revolving Credit Commitment]

 

$

 

--------------------------------------------------------------------------------