**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 Lendersfrom 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 andJoint Bookrunners

 

 

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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      |

 

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| 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    |

 

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| 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    |

 

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| 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 |
|------------------|---------------------------------|

 

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| 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         |

 

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| 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                                                      |

 

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AMENDED AND RESTATED CREDIT AGREEMENT dated as ofJune 15, 2009, among ROCKWOOD SPECIALTIES GROUP, INC., a Delawarecorporation (the “US Borrower”), ROCKWOOD SPECIALTIES LIMITED, a companyincorporated 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, asAdministrative Agent and as Collateral Agent (such terms and each othercapitalized term used but not defined in this introductory statement having themeaning provided in Section 1), and UBS SECURITIES LLC and GOLDMAN SACHSCREDIT PARTNERS L.P., as Co-Syndication Agents.

 

WHEREAS, on the Closing Date, the US Borrower, theUK Borrower, Holdings, the Administrative Agent and certain of the Lendersentered into the Existing Credit Agreement pursuant to which certain of theLenders agreed to extend credit to the Borrowers on a revolving credit basisand/or to make term loans to the US Borrower and the UK Borrower as specifiedtherein;

 

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

 

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

 

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

 

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

 

SECTION 1.           Definitions

 

1.1.          Defined Terms.  (a)   As used herein, the following terms shallhave the meanings specified in this Section 1.1 unless the contextotherwise requires (it being understood that defined terms in this Agreementshall include in the singular number the plural and in the plural thesingular):

 

“ABR” shall mean, for any day, a rate perannum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to thegreater of (a) the Prime Rate in effect on such day, (b) the FederalFunds Effective Rate in effect on such day plus 1⁄2 of 1% and (c) theEurodollar Rate for a one-month Interest Period on such day (or if such day isnot a Business Day, the immediately preceding Business Day) plus1%.  Any change in the ABR due to achange in the Prime Rate or the Federal Funds Effective Rate shall be 

 

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

 

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

 

“Accepting Lenders” shall have the meaningprovided in Section 14.18.

 

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

 

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

 

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

 

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

 

“Acquisition Equity Contribution” shall mean,in connection with the Acquisition, (a) the contribution by investmententities controlled by KKR and DLJ Merchant Banking of approximately$488,000,000 (assuming an exchange rate of $1.20 to €1.00 and subject toadjustment based on the Sale and Purchase Agreement such that the amount ofsuch contribution, together with the amount described in Section 6.4, theaggregate amount of the Term Loans funded on the Funding Date and the amount ofany Revolving Credit Loans funded on the Funding Date to finance theAcquisition (which shall be accompanied by a proportionate increase in theamount of such equity contribution), shall be sufficient to pay the purchaseprice under the Sale and Purchase Agreement) in cash made on the Funding Dateto Parent in the form of common equity, (b) the use by Parent of the fullamount of such cash consideration described in clause (a) to purchase commonequity of PIK Holdco and/or to make a cash equity contribution to the commonequity of PIK Holdco, (c) the use by PIK Holdco of the full amount of suchcash consideration described in clause (b) (less up to $21,000,000 used torefinance a portion of the PIK Notes and pay related fees and prepaymentpremiums) to purchase 

 

2

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common equity of Holdings and/or to make a cashequity contribution to the common equity of Holdings and (d) the use byHoldings 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 equitycontribution to the common equity of the US Borrower.

 

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

 

“Additional Cost” shall mean, in relation toany Foreign Currency Borrowing, the cost as calculated by the AdministrativeAgent in accordance with Schedule 1.1(a) imputed to each Lenderparticipating in such Borrowing of compliance with the mandatory liquid assetsrequirements of the Financial Services Authority (or other applicableregulatory authority) during the applicable Interest Period, expressed as apercentage.

 

“Adjusted Total Extended Revolving CreditCommitment” shall mean at any time the Total Extended Revolving CreditCommitment less the aggregate Extended Revolving Credit Commitments of allDefaulting Lenders.

 

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

 

“Adjusted Total Term Loan Commitment” shallmean at any time the Total Term Loan Commitment less the Term Loan Commitmentsof all Defaulting Lenders.

 

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

 

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

 

“Affiliate” shall mean, with respect to anyPerson, any other Person directly or indirectly controlling, controlled by, orunder 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, thepower (a) to vote 10% or more of the securities having ordinary votingpower for the election of directors of such corporation or (b) to director cause the direction of the management and policies of such corporation, 

 

3

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

 

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

 

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

 

“Applicable ABR Margin” shall mean at anydate, 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 SwinglineLoan, 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 eventthat the Tranche E Term Loans and/or the Tranche H Term Loans shall at any timebe 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 untilsuch time as such rating shall no longer be applicable, with respect to eachABR Loan that is a Tranche E Term Loan and/or a Tranche H Term Loan, asapplicable, the applicable percentage per annum set forth above minus 0.25%.

 

“Applicable Eurodollar Margin” shall mean atany date with respect to each Eurodollar Loan that is (a) a RevolvingCredit 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 TermLoan, 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 TermLoans and/or the Tranche H Term Loans shall at any time be rated at least Ba3by Moody’s and at least BB- by S&P, as applicable, the term “ApplicableEurodollar Margin” shall mean, from and after such date and until such time assuch ratings shall no longer be applicable, with respect to each EurodollarLoan 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 theevent that the Tranche G Term Loans and/or the Tranche I Term Loans shall atany time be rated at least Ba3 by 

 

4

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Moody’s and at least BB- by S&P, as applicable,the term “Applicable Eurodollar Margin” shall mean, from and after such dateand until such time as such ratings shall no longer be applicable, with respectto each Eurodollar Loan that is a Tranche G Term Loan and/or a Tranche I TermLoan, as applicable, the applicable percentage per annum set forth above minus0.25%.

 

“Approved Fund” shall have the meaningprovided in Section 14.6.

 

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

 

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

 

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

 

“Available Amount” shall mean, on any date(the “Reference Date”), an amount equal at such time to (a) the sumof, without duplication, (i) for the purposes of Section 10.5(j),Section 10.5(m), Section 10.11(b) and the first proviso to Section10.7 (to the extent, in the case of the first proviso to Section 10.7, that theConsolidated Total Debt to Consolidated EBITDA Ratio at such time and aftergiving effect to the prepayment, repurchase, redemption or defeasance to becompleted 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 $90,000,000can only be used to make investments permitted pursuant to Section 10.5(j) andSection 10.5(m) and in no case shall such portion in excess of $90,000,000 beused, directly or indirectly, to declare or pay any Dividends or make anypayments pursuant to Section 10.7, (ii) the aggregate amount of Net CashProceeds from Prepayment Events refused by Term Loan Lenders and retained bythe US Borrower or the UK Borrower, as the case may be, in accordance withSection 5.2(c)(iv) after the Closing Date and on or prior to the ReferenceDate, (iii) an amount equal to (x) the cumulative amount of ExcessCash Flow for all fiscal years completed after the Closing Date and prior tothe Reference Date minus (y) the portion of such Excess Cash Flowthat has been after the Closing Date and on or prior to the Reference Date (orwill be) applied to (A) the prepayment of Loans in accordance with Section5.2(a)(ii), (B) the payment and or distribution of dividends by the USBorrower to Holdings to pay cash interest of the 2011 Senior Notes inaccordance with Section 10.6(f) or (C) the redemption, repurchase orretirement of the 2011 Senior Notes, the PIK Notes or the PIK 

 

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Refinancing Preferred Stock in accordance withSection 10.6(g), (iv) the amount of any capital contributions made in cashto the US Borrower from and including the Business Day immediately following theClosing Date through and including the Reference Date, including contributionswith the proceeds from any issuance of equity securities by any of theBorrower, the Parent Companies or Holdings, (v) the aggregate amount ofall cash dividends and other cash distributions received by the US Borrower orany Restricted Subsidiary so long as such dividends or distributions are thenimmediately distributed to the US Borrower or a Guarantor from any MinorityInvestments or Unrestricted Subsidiaries after the Closing Date and on or priorto the Reference Date (other than the portion of any such dividends and otherdistributions that is used by the US Borrower or any Guarantor to pay taxes),(vi) the aggregate amount of all cash repayments of principal received bythe US Borrower or any Guarantor from any Minority Investments or UnrestrictedSubsidiaries after the Closing Date and on or prior to the Reference Date inrespect of loans made by the US Borrower or any Guarantor to such MinorityInvestments or Unrestricted Subsidiaries and (vii) the aggregate amount ofall net cash proceeds received by the US Borrower or any Restricted Subsidiaryso long as such proceeds are then immediately distributed to the US Borrower ora Guarantor in connection with the sale, transfer or other disposition of itsownership interest in any Minority Investment or Unrestricted Subsidiary afterthe Closing Date and on or prior to the Reference Date minus(b) the sum at such time of (i) the aggregate amount of anyinvestments (including loans) made by the US Borrower or any RestrictedSubsidiary pursuant to the proviso to Section 10.5(j) or pursuant toSection 10.5(m) after the Restatement Date and on or prior to theReference Date, (ii) the aggregate amount of Capital Expenditures made bythe US Borrower or any of the Restricted Subsidiaries after the RestatementDate 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 withany prepayment, repurchase or redemption of the Subordinated Notes (other thanany such prepayment made pursuant to sub-clause (z) of the proviso of Section10.7(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 amountequal to the excess, if any, of (a) the Dollar Equivalent of the amount ofthe Total Revolving Credit Commitment over (b) the sum of (i) theaggregate 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 atany time (the “Reference Date”) (x) the cumulative amount of ExcessCash Flow for all fiscal years completed after the Closing Date and prior tothe Reference Date minus (y) the portion at such time of suchExcess Cash Flow that has been after the Closing Date and on or prior to theReference Date (A) applied to (i) the prepayment of Loans inaccordance with Section 5.2(a)(ii), (ii) the payment and or distributionof dividends by the US Borrower to Holdings to pay cash interest of the 2011Senior 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 PIKRefinancing Preferred Stock in accordance with Section 10.6(g) or(B) utilized by the US Borrower or any Restricted Subsidiary (i) tomake any investments (including 

 

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loans) pursuant to Section 10.5(j) or Section10.5(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 priorto the Reference Date pursuant to Section 10.11(b) or (iii) in connectionwith any prepayment, repurchase or redemption of the Subordinated Notes (otherthan any such prepayment made pursuant to sub-clause (z) of the proviso ofSection 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 anamount equal to the excess, if any, of (a) the Dollar Equivalent of theamount of the Total Extended Revolving Credit Commitment over (b) the sumof (i) the aggregate principal amount of all Extended Revolving CreditLoans (but not Swingline Loans) then outstanding and (ii) the aggregateapplicable Letter of Credit Outstanding at such time.

 

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

 

“Bankruptcy Code” shall have the meaningprovided in Section 11.5.

 

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

 

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

 

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

 

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

 

“Business Day” shall mean (a) for allpurposes 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 legalholiday or a day on which banking institutions are authorized by law or othergovernmental actions to close and (b) with respect to all notices anddeterminations in connection with, and payments of principal and interest on, 

 

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

 

“Calculation Date” means (a) each dateon which a Borrowing of Foreign Currency Revolving Credit Loans or a Borrowingof Foreign Currency Extended Revolving Credit Loans is requested, (b) eachdate on which a Foreign Currency Letter of Credit is issued, (c) ifrequested by the Administrative Agent, the last Business Day of a calendarmonth, (d) if at any time the Aggregate Revolving Credit Outstandingsexceed 75% of the Total Revolving Credit Commitment or the Aggregate ExtendedRevolving Credit Outstandings exceed 75% of the Total Extended Revolving CreditCommitment, the last Business Day of each week and (e) if a Default or anEvent of Default shall have occurred and be continuing, such additional datesas the Administrative Agent or the Required Lenders shall specify.

 

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

 

“CAMDollar Lender” shall mean any Lender that has made or holds noTranche A-1 Term Loans, Tranche A-2 Term Loans, Tranche G Term Loans or TrancheI Term Loans and has no Revolving Credit Commitment or Extended RevolvingCredit Commitment.

 

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

 

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

 

“CAM Percentage” shall mean, as to eachLender, a fraction, expressed as a decimal, of which (a) the numeratorshall be the aggregate Dollar Equivalent (determined on the basis of ExchangeRates prevailing on the CAM Exchange Date) of the Specified Obligations owed tosuch Lender and such Lender’s participation in the aggregate Letter of CreditOutstanding immediately prior to the CAM Exchange Date and (b) thedenominator shall be the aggregate Dollar Equivalent (as so determined) of theSpecified Obligations owed to all the Lenders and the aggregate Letter ofCredit Outstanding immediately prior to such CAM Exchange Date.  For purposes of computing each Lender’s CAMPercentage, all Specified Obligations and Letter of Credit Exposures which aredenominated in Foreign Currencies shall be translated into Dollars at theExchange Rate in effect on the CAM Exchange Date.

 

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

 

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

 

“Canadian Pledge Agreements” shall mean(a) the Canadian Pledge Agreement, entered into by the US Borrower and theAdministrative Agent for the benefit of the Lenders to the UK Borrower and theother Secured Parties named therein and (b) the Canadian Pledge Agreemententered into by the US Borrower and the Administrative Agent for the benefit ofthe Lenders to the US Borrower and the other Secured Parties named therein ineach 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 totime.

 

“Canadian Security Agreement” shall mean theCanadian Security Agreement entered into by the Canadian Guarantors, certainother Restricted Subsidiaries and the Administrative Agent for the benefit ofthe 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 anyperiod, the aggregate of all expenditures (whether paid in cash or accrued asliabilities and including in all events all amounts expended or capitalizedunder Capital Leases, but excluding any amount representing capitalizedinterest) by the US Borrower and the Restricted Subsidiaries during such periodthat, in conformity with GAAP, are or are required to be included as additionsduring such period to property, plant or equipment reflected in theconsolidated balance sheet of the US Borrower and its Subsidiaries; provided,that the term “Capital Expenditures” shall not include (a) expendituresmade in connection with the replacement, substitution or restoration of assets(i) to the extent financed from insurance proceeds paid on account of theloss of or damage to the assets being replaced or restored or (ii) withawards of compensation arising from the taking by eminent domain or condemnationof the assets being replaced, (b) the purchase price of equipment that ispurchased simultaneously with the trade-in of existing equipment to the extentthat the gross amount of such purchase price is reduced by the credit grantedby 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 ofthe 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.

 

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“Capital Lease” shall mean, as applied to anyPerson, any lease of any property (whether real, personal or mixed) by thatPerson 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 Personor any of its Subsidiaries, in each case taken at the amount thereof accountedfor as liabilities in accordance with GAAP.

 

“Change of Control” shall mean and be deemedto have occurred if (a)(i) KKR, DLJ Merchant Banking, their respectiveAffiliates and the Management Group shall at any time not own, in theaggregate, directly or indirectly, beneficially and of record, at least 35% ofthe outstanding Voting Stock of Parent (other than as the result of one or morewidely distributed offerings of Parent Common Stock, in each case whether byParent or by KKR, DLJ Merchant Banking, their respective Affiliates or theManagement Group) and/or (ii) any person, entity or “group” (within themeaning of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, asamended) shall at any time have acquired direct or indirect beneficialownership of a percentage of the outstanding Voting Stock of Parent thatexceeds the percentage of such Voting Stock then beneficially owned, in theaggregate, by KKR, DLJ Merchant Banking, their respective Affiliates and theManagement Group, unless, in the case of either clause (i) or (ii) above,KKR, DLJ Merchant Banking, their respective Affiliates and the Management Grouphave, at such time, the right or the ability by voting power, contract orotherwise to elect or designate for election a majority of the Board ofDirectors of Parent; and/or (b) at any time Continuing Directors shall notconstitute a majority of the Board of Directors of Parent; and/or (c) anyPerson, other than any of the Parent Companies and any Person who receivescapital stock in PIK Holdco in connection with an investment made pursuant toSection 10.5(g), acquires ownership, directly or indirectly, beneficially or ofrecord, of any equity interest (other than Qualified Preferred Stock or PIKRefinancing Preferred Stock) of any nature in PIK Holdco; and/or (d) anyPerson, other than any of the Parent Companies, acquires ownership, directly orindirectly, beneficially or of record, of any equity interest (other than PIKRefinancing Preferred Stock) of any nature in Holdings; and/or (e) anyPerson, other than Holdings (directly) or any of the Parent Companies(indirectly), acquires ownership, directly or indirectly, beneficially or ofrecord, 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 NoteIndenture, the 2011 Senior Notes Indenture, the Senior Subordinated NotesIndenture, the Senior Subordinated Loan Agreement or any PIK Notes Documents)shall have occurred.

 

“Class”, when used in reference to any Loanor Borrowing, refers to whether such Loan, or the Loans comprising suchBorrowing, are Revolving Credit Loans, Extended Revolving Credit Loans, NewRevolving Loans, New Extended Revolving Loans, Tranche A-1 Term Loans, TrancheA-2 Term Loans, Tranche E Term Loans, New Tranche H Term Loans (or eachSeries), 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 anyCommitment, refers to whether such Commitment is a Revolving

 

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Credit Commitment, Extended Revolving CreditCommitment, New Revolving Credit Commitment, New Extended Revolving CreditCommitment, Tranche A Term Loan Commitment, Tranche E Term Loan Commitment, NewTranche H Term Loan Commitment, New Tranche I Term Loan Commitment, Tranche GTerm Loan Commitment, Tranche H Term Loan Commitment, Tranche I Term LoanCommitment or Incremental Refinancing Term Loan Commitment.

 

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

 

“Closing Date” shall mean July 31, 2004.

 

“Code” shall mean the Internal Revenue Codeof 1986, as amended from time to time, and the regulations promulgated andrulings issued thereunder.  Sectionreferences to the Code are to the Code, as in effect at the Funding Date, andany subsequent provisions of the Code, amendatory thereof, supplemental theretoor substituted therefor.

 

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

 

“Collateral” shall have the meaning providedin the Pledge Agreement, the Security Agreement, any Foreign Security Documentor any Mortgage, as applicable.

 

“Collateral Escrow Agent” shall mean JPMorganChase Bank, as the collateral agent for the Administrative Agent under theFinancing Escrow Agreement.

 

“Commitment Fee Rate” shall mean, withrespect to the Available Commitment on any day, the rate per annum set forthbelow 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 “CommitmentFee Rate” shall mean 0.50%, during the period from and including the FundingDate to but excluding the Initial Financial Statement Delivery Date.

 

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

 

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

 

 “ConfidentialInformation” shall have the meaning provided in Section 14.16.

 

“Confidential Information Memorandum” shallmean the Confidential Information Memorandum of the US Borrower dated June2004, delivered to the Lenders in connection with this Agreement.

 

“Consolidated Earnings” shall mean, for anyperiod, “income (loss) before the deduction of income taxes” of the US Borrowerand the Restricted Subsidiaries, excluding extraordinary items, for suchperiod, determined in a manner consistent with the manner in which such amountwas determined in accordance with the audited financial statements mostrecently required to be delivered pursuant to Section 9.1(a).

 

“Consolidated EBITDA” shall mean, for anyperiod, the sum, without duplication, of the amounts for such period of(a) Consolidated Earnings, (b) Consolidated Interest Expense,(c) depreciation expense, (d) amortization expense, includingamortization of deferred financing fees, (e) extraordinary losses and non-recurringcharges, (f) non-cash charges, (g) losses on asset sales, (h)restructuring charges or reserves (including severance, relocation costs andone-time compensation charges and costs relating to the closures offacilities), (i) Transaction Expenses to the extent deducted in determiningConsolidated Earnings, (j) any expenses or charges incurred in connection withany issuance of debt or equity securities, (k) any fees and expensesrelated to Permitted Acquisitions, (l) any deduction for minority interestexpense and (m) items arising in connection with litigation related to thetimber 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 aggregateduring the term of this Agreement), less the sum of the amounts for suchperiod of (n) extraordinary gains and non-recurring gains,(o) non-cash gains and (p) gains on asset sales, all as determined ona consolidated basis for the US Borrower and the Restricted Subsidiaries in accordancewith GAAP; provided, that (i) except as provided inclause (iv) below, there shall be excluded from Consolidated Earnings forany period the income from continuing operations before income taxes andextraordinary items of all Unrestricted Subsidiaries for such period to theextent otherwise included in Consolidated Earnings, except to the extentactually received in cash by the US Borrower or its Restricted Subsidiariesduring such period through dividends or other distributions (it being understoodthat, to the extent that such income from continuing operations before incometaxes and extraordinary items of any such Unrestricted Subsidiaries isexcluded, the amounts set forth in clauses (b) through (p) above with respectto any such Unrestricted Subsidiaries shall not be included for purposes ofdetermining Consolidated EBITDA for such period), (ii) there shall beexcluded from Consolidated Earnings for any period the income from continuingoperations before income taxes and extraordinary items of each Foreign JointVenture for such period corresponding to the percentage of capital stock orother equity interests in such Foreign Joint Venture not owned by the USBorrower or its Restricted Subsidiaries (other than Foreign Joint Ventures) (itbeing understood that, to the extent that such 

 

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income from continuing operations before incometaxes and extraordinary items of such Foreign Joint Venture is excluded, theratable amounts allocable to such non-owned capital stock or equity interestsof the amounts set forth in clauses (b) through (p) above with respect to suchForeign Joint Venture shall not be included for purposes of determiningConsolidated EBITDA for such period), (iii) there shall be excluded indetermining Consolidated EBITDA non-operating currencytransaction gains and losses and (iv)(x) thereshall be included in determining Consolidated EBITDA for any period(A) the Acquired EBITDA of any Person, property, business or asset (otherthan an Unrestricted Subsidiary) acquired to the extent not subsequently sold,transferred or otherwise disposed of (but not including the Acquired EBITDA ofany related Person, property, business or assets to the extent not so acquired)by the US Borrower or any Restricted Subsidiary during such period (each suchPerson, property, business or asset acquired and not subsequently so disposedof, an “Acquired Entity or Business”), and the Acquired EBITDA of anyUnrestricted Subsidiary that is converted into a Restricted Subsidiary duringsuch period (each, a “Converted Restricted Subsidiary”), in each casebased on the actual Acquired EBITDA of such Acquired Entity or Business orConverted Restricted Subsidiary for such period (including the portion thereofoccurring prior to such acquisition or conversion) and (B) for thepurposes of the definition of the term “Permitted Acquisition” andSections 10.3, 10.9 and 10.10, an adjustment in respect of each AcquiredEntity or Business equal to the amount of the Pro Forma Adjustment with respectto such Acquired Entity or Business for such period (including the portionthereof occurring prior to such acquisition or conversion) as specified in thePro Forma Adjustment Certificate delivered to the Lenders and the AdministrativeAgent and (y) for purposes of determining the Consolidated Total Debt toConsolidated EBITDA Ratio only, there shall be excluded in determiningConsolidated EBITDA for any period the Acquired EBITDA of any Person, property,business or asset (other than an Unrestricted Subsidiary) sold, transferred orotherwise disposed of by the US Borrower or any Restricted Subsidiary duringsuch period (each such Person, property, business or asset so sold or disposedof, a “Sold Entity or Business”), and the Acquired EBITDA of anyRestricted Subsidiary that is converted into an Unrestricted Subsidiary duringsuch period (each, a “Converted Unrestricted Subsidiary”), in each casebased on the actual Acquired EBITDA of such Sold Entity or Business orConverted Unrestricted Subsidiary for such period (including the portionthereof occurring prior to such sale, transfer, disposition or conversion).

 

“Consolidated EBITDA to Consolidated InterestExpense 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 thatattributable to Capital Leases in accordance with GAAP), net of cash interestincome, of the US Borrower and the Restricted Subsidiaries on a consolidatedbasis with respect to all outstanding Indebtedness of the US Borrower and theRestricted Subsidiaries, including all commissions, discounts and other feesand charges owed with respect to letters of credit and bankers’ acceptancefinancing and net costs under Hedge Agreements (other than currency swapagreements, currency future or option contracts and other similar agreements),but excluding, however, amortization of 

 

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deferred financing costs and any other amounts ofnon-cash interest, all as calculated on a consolidated basis in accordance withGAAP plus (y) the aggregate amount of all cash Dividends paid bythe US Borrower to Holdings for such period pursuant to Section 10.6 tothe extent such Dividends were used, either directly or indirectly, to makecash interest payments on any outstanding 2011 Senior Notes; provided,that (a) except as provided in clause (b) below, there shall beexcluded from Consolidated Interest Expense for any period the cash interestexpense (or income) of all Unrestricted Subsidiaries for such period to theextent otherwise included in Consolidated Interest Expense and (b) forpurposes of the definition of the term “Permitted Acquisition” andSections 10.3, 10.9 and 10.10, there shall be included in determiningConsolidated Interest Expense for any period the cash interest expense (orincome) of any Acquired Entity or Business acquired during such period and ofany Converted Restricted Subsidiary converted during such period, in each casebased on the cash interest expense (or income) of such Acquired Entity orBusiness or Converted Restricted Subsidiary for such period (including theportion thereof occurring prior to such acquisition or conversion) assuming anyIndebtedness incurred or repaid in connection with any such acquisition orconversion had been incurred or prepaid on the first day of such period.

 

“Consolidated Lease Expense” shall mean, forany period, all rental expenses of the US Borrower and the RestrictedSubsidiaries during such period under operating leases for real or personalproperty (including in connection with Permitted Sale Leasebacks), excludingreal estate taxes, insurance costs and common area maintenance charges and netof sublease income, other than (a) obligations under vehicle leasesentered into in the ordinary course of business, (b) all such rentalexpenses associated with assets acquired pursuant to a Permitted Acquisition tothe extent that such rental expenses relate to operating leases in effect atthe time of (and immediately prior to) such acquisition and(c) Capitalized Lease Obligations, all as determined on a consolidated basisin accordance with GAAP, provided that there shall be excluded fromConsolidated Lease Expense for any period the rental expenses of allUnrestricted Subsidiaries for such period to the extent otherwise included inConsolidated Lease Expense.

 

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

 

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

 

“Consolidated Total Assets” shall mean, as ofany date of determination, the total assets as set forth on the most recentconsolidated balance sheet of the US Borrower delivered pursuant to Section9.1(a) or (b), as applicable, and the Restricted Subsidiaries prepared inaccordance with GAAP.

 

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“Consolidated Total Debt” shall mean, as ofany date of determination, (a) the sum of (i) all Indebtedness of theUS Borrower and the Restricted Subsidiaries for borrowed money outstanding onsuch date and (ii) all Capitalized Lease Obligations of the US Borrowerand the Restricted Subsidiaries outstanding on such date, all calculated on aconsolidated basis in accordance with GAAP minus (b) the aggregateamount of cash included in the cash accounts listed on the consolidated balancesheet of the US Borrower and the Restricted Subsidiaries as at such date (otherthan any such cash attributable to transactions consummated pursuant to Section10.4(e) in respect of accounts receivable (or any portion thereof) that havenot been collected during the Test Period that includes such date ofdetermination) up to a maximum amount of $100,000,000 to the extent the usethereof for application to payment of Indebtedness is not prohibited by law orany contract to which the US Borrower or any of the Restricted Subsidiaries isa party.

 

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

 

“Consolidated Working Capital” shall mean, atany date, the excess of (a) the sum of all amounts (other than cash, cashequivalents and bank overdrafts) that would, in conformity with GAAP, be setforth opposite the caption “total current assets” (or any like caption) on aconsolidated balance sheet of Holdings, the US Borrower and the RestrictedSubsidiaries at such date over (b) the sum of all amounts that would, inconformity with GAAP, be set forth opposite the caption “total currentliabilities” (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 duplicationof clause (i) above, all Indebtedness consisting of Loans and Letter of CreditExposure to the extent otherwise included therein and (iii) the currentportion 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 onthe Funding Date, (b) who, as at such date, has been a member of suchBoard of Directors for at least the 12 preceding months, (c) who has beennominated to be a member of such Board of Directors, directly or indirectly, byKKR, DLJ Merchant Banking or one of their respective Affiliates or Personsnominated 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 amajority of the other Continuing Directors then in office.

 

“Continuing Lenders” shall mean those Lendersunder the Credit Agreement immediately prior to the Second Amendment EffectiveDate that execute and deliver a signature page to the Second Amendmentspecifically in the capacity of a “Continuing Lender”.

 

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

 

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

 

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

 

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

 

“Converting Letters of Credit” shall meaneach Letter of Credit issued under the Existing Credit Agreement andoutstanding immediately prior to the Restatement Date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“CS” shall mean Credit Suisse and anysuccessor thereto.

 

“Cumulative Consolidated Net Income Available toStockholders” shall mean, as of any date of determination, Consolidated NetIncome less cash dividends paid by Holdings with respect to its capital stockfor the period (taken as one accounting period) commencing on the Funding Dateand ending on the last day of the most recent fiscal quarter for whichSection 9.1 Financials have been delivered to the Lenders underSection 9.1.

 

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“Debt Incurrence Prepayment Event” shall meanany issuance or incurrence by the US Borrower or any of the RestrictedSubsidiaries of any Indebtedness (including any issuance by the US Borrower ofPermitted Additional Subordinated Notes, any incurrence of IncrementalRefinancing Term Loans pursuant to Section 2.15, any incurrence of Indebtednesspursuant to clause (ii) of Section 10.1(n) and any incurrence of Indebtednesspursuant to Section 10.1(q) but excluding any other Indebtedness permitted tobe issued or incurred under Section 10.1 that is not expressly includedherein).

 

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

 

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

 

“Dividends” shall have the meaning providedin Section 10.6.

 

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

 

“Dollar Borrowing” shall mean a Borrowingdenominated in Dollars.

 

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

 

“Dollar Extended Revolving Credit Loan” shallmean an Extended Revolving Credit Loan denominated in Dollars and made pursuantto Section 2.1(b).

 

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

 

“Dollar Revolving Credit Loan” shall mean aRevolving Credit Loan denominated in Dollars and made pursuant toSection 2.1(b).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Environmental Law” shall mean any applicableFederal, state, foreign or local statute, law, rule, regulation, ordinance,code and rule of common law now or hereafter in effect and in each case asamended, and any binding judicial or administrative interpretation thereof, includingany 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 RetirementIncome Security Act of 1974, as amended from time to time.  Section references to ERISA are to ERISA asin effect at the Funding Date and any subsequent provisions of ERISA amendatorythereof, supplemental thereto or substituted therefor.

 

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

 

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

 

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

 

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

 

“Eurodollar Rate” shall mean, in the case ofany Eurodollar Term Loan, Eurodollar Revolving Credit Loan, Eurodollar ExtendedRevolving Credit Loan (other than the Tranche A-1 Term Loans, the Tranche A-2Term Loans, the Tranche G Term Loans, the Tranche I Term Loans, any ForeignCurrency Revolving Credit Loan or any Foreign Currency Extended RevolvingCredit Loan), with respect to each day during each Interest Period pertainingto such Eurodollar Loan, a rate equal to the higher of (a) 2.0% per annumand (b) (i) the rate of interest per annum determined by theAdministrative Agent at approximately 11:00 a.m., London time, on the date thatis two Business Days prior to the commencement of such Interest Period byreference to the British Bankers’ Association Interest Settlement Rates fordeposits in Dollars (as set forth by the Bloomberg Information Service or anysuccessor thereto or any other service selected by the Administrative Agentwhich has been nominated by the British Bankers’ Association as an authorizedinformation vendor for the purpose of displaying such rates) for a period equalto such Interest Period; provided, that, to the extent that an interestrate is not ascertainable pursuant to the foregoing provisions of thisdefinition, the “Eurodollar Rate” shall be the interest rate per annumdetermined by the Administrative Agent to be the average of the rates per annumat which deposits in Dollars in an amount comparable to such Borrowing areoffered for such relevant Interest Period to major banks in the Londoninterbank market in London, England by the Administrative Agent atapproximately 11:00 a.m. (London time) on the date that is two Business Daysprior to the beginning of such Interest Period multiplied by (ii) theStatutory Reserve Rate.  With respect toEurodollar Borrowings denominated in a Foreign Currency, the Eurodollar Ratefor 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 bythe Administrative Agent at approximately 11:00 a.m. (London time) on theQuotation Day for such Interest Period by reference to the British Bankers’Association Interest Settlement Rates for deposits in the currency of suchBorrowing (as set forth by the Bloomberg Information Service or any successorthereto or any other service selected by the Administrative Agent which hasbeen nominated by the British Bankers’ Association as an authorized informationvendor for the purpose of displaying such rates) for a period equal to suchInterest Period; provided, that, to the extent that an interest rate isnot ascertainable pursuant to the foregoing provisions of this sentence, the “EurodollarRate” shall be the interest rate per annum determined by the AdministrativeAgent to be the average of the rates per annum at which deposits in thecurrency of such Borrowing in an amount comparable to such Borrowing areoffered for such relevant Interest Period to major banks in the Londoninterbank market in London, England by the Administrative Agent atapproximately 11:00 a.m. (London time) on the date that is two Business Daysprior to the beginning of such Interest Period multiplied by (ii) theStatutory Reserve Rate.

 

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“Eurodollar Revolving Credit Loan” shall meanany Revolving Credit Loan bearing interest at a rate determined by reference tothe Eurodollar Rate.

 

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

 

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

 

“Excess Cash Flow” shall mean, for anyperiod, an amount equal to the excess of (a) the sum, without duplication,of (i) Consolidated Net Income for such period, (ii) an amount equalto the amount of all non-cash charges to the extent deducted in arriving atsuch Consolidated Net Income, (iii) decreases in Consolidated WorkingCapital for such period and (iv) an amount equal to the aggregate net non-cashloss on the sale, lease, transfer or other disposition of assets by the USBorrower and the Restricted Subsidiaries during such period (other than salesin the ordinary course of business) to the extent deducted in arriving at suchConsolidated Net Income over (b) the sum, without duplication, of(i) an amount equal to the amount of all non-cash credits included inarriving at such Consolidated Net Income, (ii) the aggregate amountactually paid by the US Borrower and the Restricted Subsidiaries in cash duringsuch period on account of Capital Expenditures (excluding the principal amountof Indebtedness incurred in connection with such Capital Expenditures, whetherincurred in such period or in a subsequent period), (iii) the aggregateamount of all prepayments of Revolving Credit Loans, Extended Revolving CreditLoans and Swingline Loans made during such period to the extent accompanyingreductions of the Total Revolving Credit Commitments or the Total ExtendedRevolving Credit Commitments, (iv) the aggregate amount of all principalpayments of Indebtedness of the US Borrower or the Restricted Subsidiaries(including any Term Loans and the principal component of payments in respect ofCapitalized Lease Obligations but excluding Revolving Credit Loans, ExtendedRevolving Credit Loans, Swingline Loans and voluntary prepayments of Term Loanspursuant to Section 5.1) made during such period (other than in respect ofany revolving credit facility to the extent there is not an equivalentpermanent reduction in commitments thereunder), (v) an amount equal to theaggregate net non-cash gain on the sale, lease, transfer or other dispositionof 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 inarriving at such Consolidated Net Income, (vi) increases in ConsolidatedWorking Capital for such period, (vii) payments by the US Borrower and theRestricted Subsidiaries during such period in respect of long-term liabilitiesof the US Borrower and the Restricted Subsidiaries other than Indebtedness,(viii) the amount of investments made during such period pursuant toSection 10.5 to the extent that such investments were financed withinternally generated cash flow of the US Borrower and the RestrictedSubsidiaries, (ix) the amount of dividends paid during such periodpursuant to clause (b), (c), (d) or (e) of the proviso toSection 10.6 to the extent such dividends were paid with the proceeds ofany amount referred to in paragraph (a) of this definition, (x) theaggregate amount of expenditures actually made by the US Borrower and theRestricted Subsidiaries in cash during such period (including expenditures forthe payment of financing fees) to the extent that such expenditures are notexpensed during such period and (xi) the aggregate amount of any premium,make-whole or penalty

 

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

 

“Exchange Rate” shall mean on any day, withrespect to any Foreign Currency, the rate at which such Foreign Currency may beexchanged into Dollars, as set forth at approximately 11:00 a.m. (Londontime) on such day on the Bloomberg Key Cross-Currency Rates Page for suchForeign Currency.  In the event that suchrate does not appear on any Bloomberg Key Cross-Currency Rates Page, theExchange Rate shall be determined by reference to such other publicly availableservice for displaying exchange rates as may be agreed upon by theAdministrative 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 ofexchange of the Administrative Agent in the market where its foreign currencyexchange operations in respect of such Foreign Currency are then beingconducted, at or about 10:00 a.m. (Local Time) on such date for thepurchase of Dollars for delivery two Business Days later, providedthat if at the time of any such determination, for any reason, no such spotrate is being quoted, the Administrative Agent, after consultation with the USBorrower, may use any reasonable method it deems appropriate to determine suchrate, and such determination shall be conclusive absent manifest error.

 

“Existing Credit Agreement” shall mean theCredit Agreement, dated as of the Closing Date, among the US Borrower, the UKBorrower, Holdings, Credit Suisse, as the Administrative Agent and CollateralAgent and UBS Securities LLC and Goldman Sachs Credit Partners L.P., asCo-Syndication Agents, as amended or modified and in effect immediately priorto 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” shallmean, (a) with respect to each Lender that is an Extending RevolvingCredit Lender on the Restatement Date, the amount set forth on Schedule A tothe Amendment Agreement (as appended to the Amendment Agreement on theRestatement Date) as such Lender’s Extended Revolving Credit Commitment and (b) inthe case of any Lender that becomes a Lender after the Restatement Date, theamount specified as such Lender’s Extended Revolving Credit Commitment in theAssignment and Acceptance pursuant to which such Lender assumed a portion ofthe Total Extended Revolving Credit Commitment, in each case as the same may bechanged 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) theaggregate amount of the Extended Revolving Credit Commitments; provided,that at any time when the Total Extended Revolving Credit Commitment shall havebeen terminated, each Lender’s Extended Revolving Credit Commitment Percentageshall be its Extended Revolving Credit Commitment Percentage as in effectimmediately prior to such termination.

 

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“Extended Revolving Credit Exposure” shallmean, with respect to any Lender at any time, the sum of (a) the aggregateprincipal amount of the Dollar Equivalent of the Extended Revolving CreditLoans of such Lender then outstanding, (b) such Lender’s Letter of CreditExposure at such time and (c) such Lender’s Swingline Exposure at suchtime.

 

“Extended Revolving Credit Loans” shall havethe 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 nextpreceding Business Day.

 

“Extending Revolving Credit Lenders” shallmean those Lenders under the Credit Agreement immediately prior to theRestatement Date that execute and deliver a signature page to theAmendment Agreement specifically in the capacity of an Extending RevolvingCredit Lender.

 

“Extending Tranche E Term Loan Lenders” shallmean those Lenders under the Credit Agreement immediately prior to theRestatement Date that execute and deliver a signature page to theAmendment Agreement specifically in the capacity of an Extending Tranche E TermLoan Lender.

 

“Extending Tranche G Term Loan Lenders” shallmean those Lenders under the Credit Agreement immediately prior to theRestatement Date that execute and deliver a signature page to theAmendment Agreement specifically in the capacity of an Extending Tranche G TermLoan Lender.

 

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

 

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

 

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

 

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

 

“Final Extended Date” shall mean the date onwhich the Extended Revolving Credit Commitments shall have terminated, noExtended Revolving Credit 

 

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

 

“Financing Escrow Agent” shall mean The Bankof New York.

 

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

 

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

 

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

 

“Foreign Currencies” shall mean Euro andSterling.

 

“Foreign Currency Borrowing” shall mean aBorrowing comprised of Tranche A-1 Term Loans, Tranche A-2 Term Loans, TrancheG Term Loans, Tranche I Term Loans, Foreign Currency Revolving Credit Loans orForeign Currency Extended Revolving Credit Loans.

 

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

 

“Foreign Currency Letter of Credit” shallmean a Letter of Credit denominated in a Foreign Currency and issued pursuantto Section 3.1.

 

“Foreign Currency Loan” shall mean a TrancheA-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 pursuantto Section 2.1(b).

 

“Foreign Joint Venture” shall mean anyRestricted Foreign Subsidiary in which the US Borrower and its RestrictedSubsidiaries own, collectively, less than 100% of the equity interests anddesignated as such in a written notice to the Administrative Agent by the USBorrower; provided, that in the event a Restricted Subsidiary notpreviously designated by the US Borrower as a Foreign Joint Venture issubsequently re-designated as a Foreign Joint Venture, (x) suchre-designation shall be deemed to be an investment on the date of suchre-designation in a Foreign Joint Venture in an amount equal to the product of(i) the net worth of such re-designated Restricted Subsidiary immediatelyprior to such re-designation (such net worth to be calculated without regard 

 

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to any guarantee provided by such re-designatedRestricted Subsidiary) and (ii) the percentage of capital stock or otherequity interests in such Foreign Joint Venture owned by the US Borrower or itsRestricted Subsidiaries (other than Foreign Joint Ventures) and (y) noDefault 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 GermanPledge Agreement, (f) the German Pledge Agreement (Brockhues),(g) the German Assignment of Claims, (h) the German ConditionalSecurity Agreements, (i) the German Negative Pledge Agreement,(j) the German Abstract Acknowledgments of Indebtedness, (k) theItalian Guarantee, (l) the Italian Share Pledge Agreements, (m) theItalian Trademark Pledge Agreement, (n) the Canadian Guarantee,(o) the Canadian Pledge Agreements, (p) the Canadian SecurityAgreement, (q) the French Pledge Agreements, (r) the SingaporeGuarantee, (s) the Singapore Pledge Agreements, (t) the SingaporeSecurity Agreement, (u) the Taiwan Pledge Agreements, (v) theLuxembourg Pledge Agreements, (w) any Mortgage over Mortgaged Property ofa Foreign Subsidiary, (x) any security document entered into by aRestricted Foreign Subsidiary pursuant to Section 9.11 or 9.12 and(y) any other security document entered into by a Restricted ForeignSubsidiary, including, without limitation, any other security document enteredinto by a Restricted Foreign Subsidiary as required by the Amendment Agreementto secure any of the Obligations.

 

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

 

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

 

“Foreign Subsidiary Guarantors” shall meanthe UK Guarantors, the German Guarantors, the Italian Guarantors, the CanadianGuarantors, the Singapore Guarantors and any other Foreign Subsidiary thatbecomes a Foreign Subsidiary Guarantor pursuant to Section 9.11.

 

“Fourth Amendment” shall mean the FourthAmendment 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) ofthe Fourth Amendment are satisfied.

 

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

 

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

 

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

 

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

 

“Funding Date” shall mean July 30, 2004.

 

“GAAP” shall mean generally acceptedaccounting principles in the United States of America as in effect from time totime; provided, however, that if there occurs after the FundingDate any change in GAAP that affects in any respect the calculation of anycovenant contained in Section 10, the Lenders and the US Borrower shallnegotiate in good faith amendments to the provisions of this Agreement that relateto the calculation of such covenant with the intent of having the respectivepositions of the Lenders and the US Borrower after such change in GAAP conformas nearly as possible to their respective positions as of the Funding Date and,until any such amendments have been agreed upon, the covenants inSection 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 theAdministrative Agent and (y) the agreement between the US Borrower and theAdministrative 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 otherwisemodified from time to time.

 

“German Assignment of Claims” shall mean theagreement entered into by the German Guarantors, certain other RestrictedSubsidiaries and the Administrative Agent for the benefit of the Lenders to theUK Borrower and the other Secured Parties named therein, substantially in theform of Exhibit C-2, as the same may be amended, supplemented or otherwisemodified 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 GermanGuarantee Agreement, made by each of the German Guarantors in favor of theAdministrative Agent for the benefit of the Lenders to the UK Borrower and theother Secured Parties named therein, 

 

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

 

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

 

“German Negative Pledge Agreement” shall meanthe letter and all attachments and exhibits thereto from Rockwood PigmenteHolding GmbH and Silo Pigmente GmbH to the Administrative Agent, substantiallyin the form of Exhibit C-4, as the same may be amended, supplemented orotherwise modified from time to time.

 

“German Pledge Agreement” shall mean theGerman Pledge Agreement entered into among the US Borrower, RockwoodSpecialties 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)” shallmean the German Pledge Agreement entered into among Silo Pigmente GmbH,Rockwood Pigmente Holding GmbH and the Administrative Agent for the benefit ofthe 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 anynation or government, any state or other political subdivision thereof, and anyentity exercising executive, legislative, judicial, regulatory oradministrative functions of or pertaining to government.

 

“Guarantee” shall mean the Guarantee, made byeach Guarantor in favor of the Administrative Agent for the benefit of theSecured Parties, substantially in the form of Exhibit D, as the same maybe 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 SecuredDebt to Consolidated EBITDA Ratio as of the last day of the most recent periodfor which Section 9.1 Financials are delivered by the US Borrower to theLenders under Section 9.1 is less than 2.00 to 1.00, (ii) $75,000,000if the Senior Secured Debt to Consolidated EBITDA Ratio as of the last day ofthe most recent period for which Section 9.1 Financials are delivered bythe US Borrower to the Lenders under Section 9.1 is equal to or greaterthan 2.00 to 1.00 but less than 3.00 to 1.00 or (iii) $50,000,000 if theSenior Secured Debt to Consolidated EBITDA Ratio as of the last day of the mostrecent period for which Section 9.1 Financials are delivered by the USBorrower to the Lenders under Section 9.1 is greater than or equal to 3.00to 1.00 minus (b) the sum of (i) the aggregate amount of 

 

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Indebtedness incurred or assumed following theRestatement Date prior to such time pursuant to Section 10.1(j) or (k) thatis outstanding at such time and that was used to acquire, or was assumed inconnection with the acquisition of, capital stock and/or assets in respect ofwhich guarantees, pledges and security have not been given pursuant toSections 9.11 and 9.12, (ii) the lesser of (x) the aggregateIncreased Commitment Amount at such time and (y) $50,000,000,(iii) any Indebtedness incurred following the Restatement Date by anyForeign Joint Venture and (iv) the aggregate fair market value at the timeeach such investment was made of all outstanding investments made following theRestatement Date pursuant to Section 10.5(j) in respect of whichguarantees, pledges and security have not been given pursuant to Sections 9.11and 9.12; provided, that the Guarantee and Collateral Exception Amountshall be increased to the extent that the Indebtedness and Investments deductedfrom the Guarantee and Collateral Exception Amount prior to the RestatementDate are no longer outstanding; providedfurther, that if suchamount is a negative number, the Guarantee and Collateral Exception Amountshall be zero.

 

“Guarantee Obligations” shall mean, as to anyPerson, any obligation of such Person guaranteeing or intended to guarantee anyIndebtedness of any other Person (the “primary obligor”) in any manner, whetherdirectly or indirectly, including any obligation of such Person, whether or notcontingent, (a) to purchase any such Indebtedness or any propertyconstituting direct or indirect security therefor, (b) to advance orsupply funds (i) for the purchase or payment of any such Indebtedness or(ii) to maintain working capital or equity capital of the primary obligoror otherwise to maintain the net worth or solvency of the primary obligor,(c) to purchase property, securities or services primarily for the purposeof assuring the owner of any such Indebtedness of the ability of the primaryobligor to make payment of such Indebtedness or (d) otherwise to assure orhold harmless the owner of such Indebtedness against loss in respect thereof; provided,however, that the term “Guarantee Obligations” shall not includeendorsements of instruments for deposit or collection in the ordinary course ofbusiness.  The amount of any GuaranteeObligation shall be deemed to be an amount equal to the stated or determinableamount of the Indebtedness in respect of which such Guarantee Obligation ismade or, if not stated or determinable, the maximum reasonably anticipatedliability in respect thereof (assuming such Person is required to performthereunder) as determined by such Person in good faith.

 

“Guarantors” shall mean Holdings and the USSubsidiary Guarantors.

 

“Hazardous Materials” shall mean (a) anypetroleum or petroleum products, radioactive materials, friable asbestos, ureaformaldehyde foam insulation, transformers or other equipment that containdielectric fluid containing regulated levels of polychlorinated biphenyls, andradon gas; (b) any chemicals, materials or substances defined as orincluded in the definition of “hazardous substances”, “hazardous waste”, “hazardousmaterials”, “extremely hazardous waste”, “restricted hazardous waste”, “toxicsubstances”, “toxic pollutants”, “contaminants”, or “pollutants”, or words ofsimilar import, under any applicable Environmental Law; and (c) any otherchemical, material or substance, which is prohibited, limited or regulated byany Environmental Law.

 

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“Hedge Agreements” shall mean interest rateswap, cap or collar agreements, interest rate future or option contracts, currencyswap agreements, currency future or option contracts, commodity priceprotection agreements or other commodity price hedging agreements, and othersimilar agreements entered into by the US Borrower or any of the RestrictedSubsidiaries in the ordinary course of business (and not for speculativepurposes) in order to protect the US Borrower, the UK Borrower or any of theRestricted Subsidiaries against fluctuations in interest rates, currencyexchange rates or commodity prices.

 

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

 

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

 

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

 

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

 

“Incremental Refinancing Revolving CreditCommitments” 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” shallhave the meaning given to such term in Section 2.15.

 

“Incremental Revolving OID” shall have themeaning 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) thedeferred purchase price of assets or services that in accordance with GAAPwould be included as liabilities in the balance sheet of such 

 

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Person, (c) the face amount of all letters ofcredit issued for the account of such Person and, without duplication, alldrafts drawn thereunder, (d) all indebtedness of a second Person securedby any Lien on any property owned by such first Person, whether or not suchindebtedness has been assumed, (e) all Capitalized Lease Obligations ofsuch Person, (f) all net obligations of such Person under interest rateswap, cap or collar agreements, interest rate future or option contracts,currency swap agreements, currency future or option contracts, commodity priceprotection agreements or other commodity price hedging agreements and othersimilar agreements and (g) without duplication, all Guarantee Obligationsof such Person; provided, that Indebtedness shall not include tradepayables and accrued expenses, in each case payable directly or through a bankclearing 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 theLenders under Section 9.1 for the first full fiscal quarter following theClosing Date.

 

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

 

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

 

“Italian Guarantors” shall mean (a) eachSubsidiary of the US Borrower (other than an Unrestricted Subsidiary) on theFunding Date that is a member of the Rockwood Group and that is incorporatedunder 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 lawsof Italy and that becomes a party to the Italian Guarantee after the FundingDate pursuant to Section 9.11.

 

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

 

“Italian Trademark Pledge Agreement” shallmean the unilateral pledge letter entered into by Rockwood Italia S.p.A. infavor of the Administrative Agent for the benefit of the Lenders to the UKBorrower and the other Secured Parties named therein, substantially in the formof Exhibit E-3, as the same may be amended, supplemented or otherwisemodified from time to time.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Lender Default” shall mean (a) withrespect to the determination as to whether a Lender is a Defaulting Lender forpurposes of Section 5.1, Section 5.2 and Section 14.1 (and anydefinitions used in such sections), (i) the failure (which has notbeen cured) of a Lender to make available its portion of any Borrowing or tofund its portion of any unreimbursed payment under Section 3.3 or(ii) a Lender having notified the Administrative Agent and/or the USBorrower 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 tosuch Lender at the direction or request of any regulatory agency or authorityand (b) with respect to the determination as to whether a Lender is aDefaulting 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 availableits portion of any Borrowing or to fund its portion of any unreimbursed paymentunder Section 3.3, (ii) the notification by a Lender to any Borrower,the Administrative Agent, the Letter of Credit Issuer, the Swingline Lender orany Lender in writing that it does not intend to comply with any of itsfunding obligations under this Agreement or a Lender making a public statementto the effect that it does not intend to comply with its funding obligationsunder this Agreement or under other agreements in which it commits to extendcredit, (iii) the failure, within three Business Days after request by theAdministrative Agent, of a Lender to confirm that it will comply with the termsof this Agreement relating to its obligations to fund prospective Loans andparticipations in then outstanding Letters of Credit and Swingline Loans, (iv) thefailure of a Lender to otherwise pay over to the Administrative Agent or anyother Lender any other amount required to be paid by it hereunder within threeBusiness Days of the date when due, unless the subject of a good faith dispute,or (v) a Lender (A)

 

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

 

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

 

“Letter of Credit” shall mean each standbyletter 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, withrespect to any Lender, at any time, the sum of (a) the Dollar Equivalentof 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 pursuantto Section 3.4(a) at such time and (b) such Lender’s RevolvingCredit Commitment Percentage or Extended Revolving Credit CommitmentPercentage, as applicable, of the Letter of Credit Outstanding at such time(excluding the portion thereof consisting of Unpaid Drawings in respect ofwhich the Lenders have made (or are required to have made) payments to theLetter of Credit Issuer pursuant to Section 3.4(a)).

 

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

 

“Letter of Credit Issuer” shall mean CS, anyof its Affiliates or any successor pursuant to Section 3.6.  The Letter of Credit Issuer may, in itsdiscretion, arrange for one or more Letters of Credit to be issued byAffiliates of the Letter of Credit Issuer, including with respect to ForeignCurrency Letters of Credit, and in each such case the term “Letter of CreditIssuer” shall include any such Affiliate with respect to Letters of Creditissued by such Affiliate.  In the eventthat there is more than one Letter of Credit Issuer at any time, referencesherein and in the other Credit Documents to the 

 

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

 

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

 

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

 

“Level I Status” shall mean, on any date, thecircumstance that the Consolidated Total Debt to Consolidated EBITDA Ratio isgreater 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 TotalDebt to Consolidated EBITDA Ratio is greater than or equal to 4.50 to 1.00 asof such date.

 

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

 

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

 

“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, IncrementalRefinancing Revolving Credit Loan, or Incremental Refinancing Term Loan made byany Lender hereunder.

 

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

 

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

 

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substantially in the form of Exhibit M, as thesame 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 VicePresident, any Managing Director, any Treasurer and any Secretary of any of theParent Companies, Holdings, the US Borrower or any Subsidiaries at such time.

 

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

 

“Material Adverse Change” shall mean anychange in the business, assets, operations, properties or financial conditionof Holdings, the US Borrower and its Subsidiaries, taken as a whole, that wouldmaterially adversely affect the ability of Holdings, the US Borrower and theother Credit Parties, taken as a whole, to perform their obligations under thisAgreement or any of the other Credit Documents.

 

“Material Adverse Effect” shall mean acircumstance or condition affecting the business, assets, operations,properties or financial condition of Holdings, the US Borrower and theSubsidiaries, 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 ofthe other Credit Documents or (b) the rights and remedies of theAdministrative Agent and the Lenders under this Agreement or any of the otherCredit Documents.

 

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

 

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

 

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

 

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

 

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

 

“Mortgage” shall mean a Mortgage, Assignmentof Leases and Rents, Security Agreement and Financing Statement or otherSecurity Document entered into by the owner of a Mortgaged Property and theAdministrative Agent for the benefit of the Lenders and the other SecuredParties named therein in respect of that Mortgaged Property, substantially inthe form of Exhibit F or, in the case of Mortgaged Properties locatedoutside the United States of America, in such form as agreed between the USBorrower and the Administrative Agent, as the same may be amended, supplementedor otherwise modified from time to time.

 

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

 

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

 

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

 

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

 

(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 thatare the subject of such Prepayment Event to the extent that the instrumentcreating or evidencing such 

 

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Indebtednessrequires that such Indebtedness be repaid upon consummation of such PrepaymentEvent,

 

(iv)  in the case of any Asset Sale PrepaymentEvent (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 USBorrower has reinvested (or intends to reinvest within one year of the date ofsuch Asset Sale Prepayment Event) in the business of the US Borrower or any ofthe Restricted Subsidiaries (subject to Section 9.14), providedthat any portion of such proceeds that has not been so reinvested within suchone-year period shall (x) be deemed to be Net Cash Proceeds of an AssetSale 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);providedfurther 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 areinvestment period exists pursuant to, or may be extended under the terms of,any instrument governing any publicly offered or privately placed Indebtednessof Holdings or the US Borrower) from the last day of such one-year period solong as (A) such proceeds are to be reinvested within such additionaltwelve-month period under the US Borrower’s business plan as most recentlyadopted in good faith by its Board of Directors and (B) the US Borrowerbelieves in good faith that such proceeds will be so reinvested within suchadditional twelve-month period, and

 

(v)  in the case of any Prepayment Event or theissuance by the US Borrower of any Senior Subordinated Notes or capital stock,reasonable and customary fees, commissions, expenses, issuance costs, discountsand other costs paid by either of the Parent Companies, Holdings, the USBorrower or any of the Restricted Subsidiaries, as applicable, in connectionwith such Prepayment Event or issuance, as the case may be (other than thosepayable to either of the Parent Companies, Holdings, the US Borrower or anySubsidiary of the US Borrower), in each case only to the extent not alreadydeducted in arriving at the amount referred to in clause (a) above.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“OID” shall have the meaning given to thatterm 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 ofcommon stock of Parent outstanding after the Funding Date.

 

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

 

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

 

“PBGC” shall mean the Pension BenefitGuaranty Corporation established pursuant to Section 4002 of ERISA, or anysuccessor thereto.

 

“Perfection Certificate” shall mean acertificate in the form of Exhibit G or any other form approved by theAdministrative Agent.

 

“Permitted Acquisition” shall mean theacquisition, by merger or otherwise, by the US Borrower or any of theRestricted Subsidiaries of assets or capital stock or other equity interests,so long as (a) such acquisition and all transactions related thereto shallbe consummated in accordance with applicable law; (b) such acquisitionshall result in the issuer of such capital stock or other equity interestsbecoming (i) a Restricted Subsidiary and (ii)(x) in the case of aRestricted Domestic Subsidiary, a US Subsidiary Guarantor or (y) in thecase of a Restricted Foreign Subsidiary, a Foreign Subsidiary Guarantor, ineach case to the extent required by Section 9.11; (c) suchacquisition shall result in the Administrative Agent, for the benefit of theapplicable Lenders, being granted a security interest in any capital stock orany assets so acquired to the extent required by Sections 9.11, 9.12 and/or9.15; (d) after giving effect to such acquisition, no Default or Event ofDefault shall have occurred and be continuing; and (e) the US Borrowershall be in compliance, on a proforma basis after giving effectto such acquisition (including any Indebtedness assumed or permitted to existor incurred pursuant to Sections 10.1(j) and 10.1(k), respectively,and any related Pro Forma Adjustment), with the covenants set forth inSections 10.9 and 10.10, as such covenants are recomputed as at the last dayof the most recently ended Test Period under such Sections as if suchacquisition had occurred on the first day of such Test Period.

 

“Permitted Additional Notes” shall meansenior or senior subordinated notes, issued by the US Borrower, (i) theterms of which (1) do not provide for any scheduled repayment orredemption, mandatory repayment or redemption or sinking fund obligation priorto the date that is 182 days following the date that is eight years after theFunding 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 ofdefault) and (2) to the extent senior subordinated notes, provide for customary subordination to the Obligations underthe Credit Documents, (ii) the covenants, events of default, Subsidiaryguarantees and other terms of which (other than interest rate and redemptionpremiums), taken as a whole, are not more restrictive to the US Borrower andthe Subsidiaries than those in the Subordinated Notes, (iii) which shallbear a rate of interest determined by the Board of Directors of the US Borrowerto be a market rate of interest at the date of their issuance, (iv) ofwhich no Subsidiary of the US Borrower (other than a Guarantor) is an obligor undersuch notes that is not an obligor under the Subordinated Notes and (v) theprincipal amount of which, when taken together with the amount of any New LoanCommitments 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.

 

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“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 issuedin connection with any refinancing or replacement of PIK Notes issued underclause (a) of this definition; provided, that the aggregateprincipal amount of Permitted Additional PIK Notes and Permitted AdditionalSubordinated Notes outstanding at any time shall not exceed $250,000,000, plusaccrued interest thereon as provided in the PIK Notes Documents or theSubordinated Note Indenture, as the case may be.

 

“Permitted Additional Subordinated Notes”shall mean (i) Subordinated Notes other than Subordinated Notes issued asPermitted Subordinated Debt and/or (ii) Senior Subordinated Notes otherthan Senior Subordinated Notes issued as Permitted Senior Subordinated Debt; provided,that the aggregate principal amount of Permitted Additional PIK Notes andPermitted Additional Subordinated Notes outstanding at any time shall notexceed $250,000,000, plus accrued interest thereon as provided in thePIK Notes Documents, the Subordinated Note Indenture or the Senior SubordinatedNotes Indenture, as the case may be.

 

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

 

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

 

“Permitted Investments” shall mean(a) securities issued or unconditionally guaranteed by the United Statesgovernment or any agency or instrumentality thereof, in each case havingmaturities 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 anypolitical subdivision of any such state or any public instrumentality thereofor any political subdivision of any such state or any public instrumentalitythereof having maturities of not more than 24 months from the date ofacquisition thereof and, at the time of acquisition, having an investment graderating generally obtainable from either S&P or Moody’s (or, if at any timeneither S&P nor Moody’s shall be rating such obligations, then from anothernationally recognized rating service); (c) commercial paper issued by anyLender or any bank holding company owning any Lender; (d) commercial papermaturing no more than 12 months after the date of creation thereof and, atthe time of acquisition, having a rating of at least A-2 or P-2 from eitherS&P or Moody’s (or, if at any time neither S&P nor Moody’s shall berating such obligations, an equivalent rating from another nationallyrecognized rating service); (e) domestic and 

 

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eurodollar certificates of deposit or bankers’acceptances maturing no more than two years after the date of acquisitionthereof issued by any Lender or any other bank having combined capital andsurplus 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 forunderlying securities of the type described in clauses (a), (b) and (e) aboveentered into with any bank meeting the qualifications specified in clause (e) aboveor securities dealers of recognized national standing; (g) marketableshort-term money market and similar securities, having a rating of at least A-2or P-2 from either S&P or Moody’s (or, if at any time neither S&P norMoody’s shall be rating such obligations, an equivalent rating from anothernationally recognized rating service); (h) shares of investment companiesthat are registered under the Investment Company Act of 1940 and invest solelyin one or more of the types of securities described in clauses (a) through(g) above; and (i) in the case of investments by any RestrictedForeign Subsidiary or investments made in a country outside the United Statesof America, other customarily utilized high-quality investments in the countrywhere such Restricted Foreign Subsidiary is located or in which such investmentis made.

 

“Permitted Liens” shall mean (a) Liensfor taxes, assessments or governmental charges or claims not yet due or whichare being contested in good faith and by appropriate proceedings for whichappropriate reserves have been established in accordance with GAAP;(b) Liens in respect of property or assets of the US Borrower or any ofthe Subsidiaries imposed by law, such as carriers’, warehousemen’s andmechanics’ Liens and other similar Liens arising in the ordinary course ofbusiness, in each case so long as such Liens arise in the ordinary course ofbusiness and do not individually or in the aggregate have a Material AdverseEffect; (c) Liens arising from judgments or decrees in circumstances notconstituting an Event of Default under Section 11.14; (d) Liensincurred or deposits made in connection with workers’ compensation,unemployment insurance and other types of social security, or to secure theperformance of tenders, statutory obligations, surety and appeal bonds, bids,leases, government contracts, performance and return-of-money bonds and othersimilar obligations incurred in the ordinary course of business;(e) ground leases in respect of real property on which facilities owned orleased by the US Borrower or any of its Subsidiaries are located;(f) easements, rights-of-way, restrictions, minor defects orirregularities in title and other similar charges or encumbrances notinterfering in any material respect with the business of Holdings, the USBorrower and its Subsidiaries, taken as a whole; (g) any interest or titleof a lessor or secured by a lessor’s interest under any lease permitted by thisAgreement; (h) Liens in favor of customs and revenue authorities arisingas a matter of law to secure payment of customs duties in connection with theimportation of goods; (i) Liens on goods the purchase price of which isfinanced by a documentary letter of credit issued for the account of the USBorrower or any of its Subsidiaries; provided, that such Lien securesonly the obligations of the US Borrower or such Subsidiaries in respect of suchletter of credit to the extent permitted under Section 10.1;(j) leases or subleases and licenses or sub-licenses granted to others notinterfering in any material respect with the business of Holdings, the USBorrower and its Subsidiaries, taken as a whole; (k) Liens created in theordinary course of business in favor of banks and other financial institutionsover 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

 

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

 

“Permitted PIK Debt” shall mean (a) thePIK Notes and (b) the 2011 Senior Notes; provided, that theaggregate principal amount of such PIK Notes and 2011 Senior Notes (togetherwith the aggregate principal amount of the PIK Refinancing Indebtedness and theaggregate liquidation preference of PIK Refinancing Preferred Stock, in eachcase to the extent replacing the foregoing) outstanding at any time shall notexceed $170,000,000, plus accrued interest and dividends in accordancewith the PIK Notes Documents or the 2011 Senior Notes Indenture, as applicable.

 

“Permitted Sale Leaseback” shall mean anySale Leaseback consummated by the US Borrower or any of the RestrictedSubsidiaries after the Funding Date; provided, that such Sale Leasebackis consummated for fair value as determined at the time of consummation in goodfaith by the US Borrower and, in the case of any Sale Leaseback (or series ofrelated Sales Leasebacks) the aggregate proceeds of which exceed $20,000,000,the Board of Directors of the US Borrower (which such determination may takeinto account any retained interest or other investment of the US Borrower orsuch Restricted Subsidiary in connection with, and any other material economicterms of, such Sale Leaseback).

 

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

 

“Permitted Subordinated Debt” shall mean theSubordinated Notes, provided that the aggregate principal amount of suchSubordinated 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 SpecialtiesConsolidated, Inc., a Delaware corporation.

 

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“PIK Notes” shall mean pay-in-kind loans andnotes 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) thePIK Bridge Loan Agreement dated as of November 20, 2000, as amended,supplemented or otherwise modified from time to time, among PIK Holdco, asBorrower, the lenders from time to time parties thereto, Merrill Lynch CapitalCorporation, as agent, and Merrill Lynch International, as arranger, pursuantto which the PIK Notes were issued, (b) the PIK Note Purchase Agreementbetween PIK Holdco and Allianz Lebensversicherungs-AG, Stuttgart, dated as of February 7,2001, as the same may be amended, supplemented or otherwise modified from timeto time and (c) all agreements and instruments governing the issuance orterms of any PIK Refinancing Indebtedness or PIK Refinancing Preferred Stock.

 

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

 

“PIK Refinancing Indebtedness” shall mean anyIndebtedness of PIK Holdco or Holdings issued or given in exchange for, or theproceeds of which are used substantially simultaneously with the issuancethereof to refinance or replace, PIK Notes or Permitted Additional PIK Notesincurred pursuant to the terms of this Agreement, so long as (i) theaggregate principal amount of such Indebtedness does not exceed the aggregateprincipal amount of the PIK Notes or Permitted Additional PIK Notes for whichsuch Indebtedness is being exchanged, or to be refinanced or replaced with suchIndebtedness, plus accrued interest, redemption premiums or dividends inaccordance with the PIK Notes Documents, (ii) such Indebtedness has amaturity no earlier than the maturity of the PIK Notes or Permitted AdditionalPIK Notes being refinanced or replaced, (iii) such Indebtedness does notprovide for the payment of interest in cash on any date that is earlier thanthe date upon which interest or dividends may be paid in cash under the termsof 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 thosepreviously existing with respect to the PIK Notes or Permitted Additional PIKNotes being refinanced or replaced and (v) such refinancing or replacementIndebtedness shall bear a rate of interest determined by the Board of Directorsof PIK Holdco or Holdings, as applicable, to be a market rate of interest atthe date of such refinancing or replacement and have other terms customary forsimilar issuances under similar market conditions or otherwise be on termsreasonably acceptable to the Administrative Agent.

 

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

 

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the proceeds of which are used substantiallysimultaneously with the issuance thereof to refinance or replace, PIK Notes orPermitted Additional PIK Notes incurred pursuant to the terms of thisAgreement, so long as (i) the aggregate liquidation preference of suchpreferred capital stock or preferred equity interest does not exceed theaggregate principal amount of the PIK Notes or Permitted Additional PIK Notesfor which such preferred capital stock or preferred equity interest is beingexchanged, or to be refinanced or replaced with such preferred capital stock orpreferred equity interest, plus accrued interest or dividends in accordancewith the PIK Notes Documents, (ii) such capital stock or equity interesthas a maturity no earlier than the maturity of the PIK Notes or PermittedAdditional PIK Notes being refinanced or replaced, (iii) such capitalstock or equity interest does not provide for the payment of dividends in cashon any date that is earlier than the date upon which interest or dividends maybe paid in cash under the terms of the PIK Notes or Permitted Additional PIKNotes being refinanced or replaced, (iv) all other terms of suchrefinancing or replacement capital stock or equity interest are, taken as awhole, no more adverse to the interests of the Lenders than those previouslyexisting with respect to the PIK Notes or Permitted Additional PIK Notes beingrefinanced or replaced and (v) such refinancing or replacement capitalstock or equity interest shall bear a dividend rate determined by the Board ofDirectors of PIK Holdco or Holdings, as applicable, to be a market dividendrate at the date of such refinancing or replacement and have other termscustomary for similar issuances under similar market conditions or otherwise beon terms reasonably acceptable to the Administrative Agent.

 

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

 

“Pledge Agreement” shall mean the PledgeAgreement, entered into by Holdings, the US Borrower, the other pledgors partythereto 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 themeaning provided in Section 9.18.

 

“Prepayment Event” shall mean any Asset SalePrepayment Event, Debt Incurrence Prepayment Event or any Permitted SaleLeaseback.

 

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

 

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

 

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the Acquired EBITDA of the applicable AcquiredEntity or Business or the Consolidated EBITDA of the Borrower affected by suchacquisition, the proforma increase or decrease in such AcquiredEBITDA or such Consolidated EBITDA, as the case may be, projected by the USBorrower in good faith as a result of reasonably identifiable and supportablenet cost savings or additional net costs, as the case may be, realizable duringsuch period by combining the operations of such Acquired Entity or Businesswith the operations of the US Borrower and its Subsidiaries; provided,that so long as such net cost savings or additional net costs will berealizable at any time during such six-quarter period, it may be assumed, forpurposes of projecting such pro forma increase or decreaseto such Acquired EBITDA or such Consolidated EBITDA, as the case may be, thatsuch net cost savings or additional net costs will be realizable during theentire such period; providedfurther, that any such pro formaincrease or decrease to such Acquired EBITDA or such Consolidated EBITDA, asthe case may be, shall be without duplication for net cost savings oradditional net costs actually realized during such period and already includedin such Acquired EBITDA or such Consolidated EBITDA, as the case may be.

 

“Pro Forma Adjustment Certificate” shall meanany certificate of an Authorized Officer of the US Borrower delivered pursuantto Section 9.1(h) or setting forth the information described inclause (iv) to Section 9.1(d).

 

“Purchase Agreement” shall mean the Businessand Share Sale and Purchase Agreement dated September 25, 2000, betweenthe Original Seller and Parent pursuant to which Parent, the US Borrower andthe Subsidiaries (i) acquired from the Original Seller (x) all theOriginal Seller’s assets (including capital stock) primarily used in theconduct of the Original Seller’s Plastics & Compounding, WaterTechnologies, Timber Treatments, Water Treatments, GD Holmes, Electronics,Pigments and Additives business divisions and (y) all the outstandingcapital stock of Laporte Electronics France, S.A. and (ii) assumed certainliabilities 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 inaccordance with such purchase agreement).

 

“Qualified Preferred Stock” shall mean anypreferred capital stock or preferred equity interest of any of the ParentCompanies (a) that does not provide for any cash dividend payments orother cash distributions in respect thereof on or prior to the Tranche G TermLoan Maturity Date and (b) that by its terms (or by the terms of anysecurity into which it is convertible or for which it is exchangeable orexercisable) or upon the happening of any event does not (i)(x) mature orbecome mandatorily redeemable pursuant to a sinking fund obligation orotherwise, (y) become convertible or exchangeable at the option of theholder thereof for Indebtedness or preferred stock that is not QualifiedPreferred Stock or (z) become redeemable at the option of the holderthereof (other than as a result of a change of control event), in whole or inpart, in each case on or prior to the first anniversary of the Tranche GTerm Loan Maturity Date and (ii) provide holders thereunder with anyrights upon the occurrence of a “change of control” event prior to therepayment of the Obligations under the Credit Documents.

 

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

 

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

 

“Recalculation Date” shall have the meaningprovided in Section 1.2.

 

“Reference Lender” shall mean CS.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Reportable Event” shall mean an eventdescribed 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 amajority of the Dollar Equivalent of the Adjusted Total Extended RevolvingCredit Commitment at such date or (b) if the Total Extended RevolvingCredit Commitment has been terminated, the holders (excluding DefaultingLenders) of a majority of the outstanding principal amount of the DollarEquivalent of the Extended Revolving Credit Loans and Letter of CreditExposures relating to Letters of Credit issued under the Extended RevolvingCredit Commitment (excluding the Loans and Letter of Credit Exposures ofDefaulting 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 theDollar Equivalent of (i) the Adjusted Total Revolving Credit Commitment atsuch date, (ii) the Adjusted Total Extended Revolving Credit Commitment atsuch date, (iii) the Adjusted Total Term Loan Commitment at such date and(iv) the outstanding principal amount of the Term Loans (excluding theTerm Loans held by Defaulting Lenders) at such date or (b) if the TotalRevolving Credit Commitment, the Total Extended Revolving Credit Commitment andthe Total Term Loan Commitment have been terminated or for the purposes ofacceleration pursuant to Section 11, the holders (excluding Defaulting Lenders)of a majority of the Dollar Equivalent of the outstanding principal amount ofthe Loans and Letter of Credit Exposures (excluding the Loans and Letter ofCredit Exposures of Defaulting Lenders) in the aggregate at such date.

 

“Required Revolving Credit Lenders” shallmean, at any date, (a) Non-Defaulting Lenders having or holding a majorityof the Dollar Equivalent of the Adjusted Total Revolving Credit Commitmentat such date or (b) if the Total Revolving Credit Commitment has beenterminated, the holders (excluding Defaulting Lenders) of a majority of theoutstanding principal amount of the Dollar Equivalent of the Revolving CreditLoans and Letter of Credit Exposures relating to Letters of Credit issued underthe Revolving Credit Commitment (excluding the Loans and Letter of CreditExposure of Defaulting Lenders) in the aggregate at such date.

 

“Required Tranche A Lenders” shall mean, atany 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 toTranche A Term Loan Commitments at such date and (b) the outstandingprincipal 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 byDefaulting Lenders) in the aggregate at such date.

 

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“Required Tranche E Term Loan Lenders” shallmean, at any date, Non-Defaulting Lenders having or holding a majority of thesum of (a) the portion of the Adjusted Total Term Loan Commitment thatrelates to Tranche E Term Loan Commitments at such date and (b) theoutstanding principal amount of the Tranche E Term Loans (excluding the TrancheE Term Loans held by Defaulting Lenders) in the aggregate at such date.

 

“Required Tranche G Term Loan Lenders” shallmean, at any date, Non-Defaulting Lenders having or holding a majority of thesum of (a) the portion of the Adjusted Total Term Loan Commitment thatrelates to Tranche G Term Loan Commitments at such date and (b) theoutstanding principal amount of the Tranche G Term Loans (excluding the TrancheG Term Loans held by Defaulting Lenders) in the aggregate at such date.

 

“Required Tranche H Term Loan Lenders” shallmean, at any date, Non-Defaulting Lenders having or holding a majority of thesum of (a) the portion of the Adjusted Total Term Loan Commitment thatrelates to Tranche H Term Loan Commitments at such date and (b) theoutstanding principal amount of the Tranche H Term Loans (excluding the TrancheH Term Loans held by Defaulting Lenders) in the aggregate at such date.

 

“Required Tranche I Term Loan Lenders” shallmean, at any date, Non-Defaulting Lenders having or holding a majority of thesum of (a) the portion of the Adjusted Total Term Loan Commitment thatrelates to Tranche I Term Loan Commitments at such date and (b) theoutstanding principal amount of the Tranche I Term Loans (excluding the TrancheI Term Loans held by Defaulting Lenders) in the aggregate at such date.

 

“Requirement of Law” shall mean, as to anyPerson, the Certificate of Incorporation and By-Laws or other organizational orgoverning documents of such Person, and any law, treaty, rule orregulation or determination of an arbitrator or a court or other GovernmentalAuthority, in each case applicable to or binding upon such Person or any of itsproperty or assets or to which such Person or any of its property or assets issubject.

 

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

 

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

 

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

 

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

 

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

 

“Revolving Credit Commitment” shall mean,(a) with respect to each Lender that is a Lender on the Funding Date, theamount set forth opposite such Lender’s name on Schedule 1.1(c) assuch Lender’s “Revolving Credit Commitment” and (b) in the case of anyLender that becomes a Lender after the Funding Date, the amount specified assuch Lender’s “Revolving Credit Commitment” in the Assignment and Acceptancepursuant to which such Lender assumed a portion of the Total Revolving CreditCommitment, in each case as the same may be changed from time to time pursuantto 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 aggregateamount of the Revolving Credit Commitments; provided, that at any timewhen the Total Revolving Credit Commitment shall have been terminated, eachLender’s Revolving Credit Commitment Percentage shall be its Revolving CreditCommitment Percentage as in effect immediately prior to such termination.

 

“Revolving Credit Exposure” shall mean, withrespect to any Lender at any time, the sum of (a) the aggregate principalamount of the Dollar Equivalent of the Revolving Credit Loans of such Lenderthen outstanding and (b) such Lender’s Letter of Credit Exposure at suchtime.

 

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

 

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

 

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

 

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

 

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

 

“Sale and Purchase Agreement” shall mean theSale and Purchase Agreement, notarized on April 19, 2004, between mgtechnologies ag, MG North America Holdings Inc., Knight ErsteBeteiligungs-GmbH, Knight Zweite Beteiligungs-GmbH, Knight DritteBeteiligungs-GmbH, Knight Vierte Beteiligungs-GmbH, Knight FünfteBeteiligungs-GmbH and RW Holding Corp. as the same may be amended, supplementedor otherwise modified from time to time in accordance with the terms of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Security Agreement” shall mean the SecurityAgreement entered into by the US Borrower, the other grantors party thereto andthe Administrative Agent for the benefit of the Lenders and the other SecuredParties named therein, substantially in the form of Exhibit I, as the samemay 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 otherinstrument or document executed and delivered pursuant to Section 9.11 or9.12 or pursuant to any of the Security Documents to secure any of theObligations.

 

“Seller” shall mean any Original Seller orNew Seller.

 

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

 

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

 

“Senior Subordinated Loan Agreement” shallmean the Senior Subordinated Loan Agreement dated as of the Funding Date amongthe US Borrower, as borrower, the several lenders from time to time partythereto, CS, as administrative agent, Goldman Sachs Credit Partners L.P., assyndication agent, UBS AG, Stamford Branch, as documentation agent, CS, UBS LoanFinance 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 totime to the extent permitted by Section 10.7(b).

 

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

 

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

 

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

 

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

 

“Series” shall havethe meaning provided in Section 2.14.

 

“Singapore Guarantee” shall mean theSingapore Guarantee Agreement, made by each of the Singapore Guarantors infavor of the Administrative Agent for the benefit of the Lenders to the UKBorrower and the other Secured Parties named therein, substantially in the formof Exhibit J-1, as the same may be amended, supplemented or otherwisemodified from time to time.

 

“Singapore Guarantors” shall mean(a) each Subsidiary of the US Borrower (other than an UnrestrictedSubsidiary) on the Funding Date that is a member of the Rockwood Group and thatis incorporated under the laws of Singapore P.O.C. and is a party to theSingapore Guarantee and (b) each Subsidiary of the US Borrower that isincorporated under the laws of Singapore P.O.C. and that becomes a party to theSingapore 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 andthe Administrative Agent for the benefit of the Lenders to the UK Borrower andthe other Secured Parties named therein and (b) the Singapore PledgeAgreement entered into by the US Borrower and the Administrative Agent for thebenefit of the Lenders to the US Borrower and the other Secured Parties namedtherein, in each case, substantially in the form of Exhibit J-2(a) or(b), as applicable, as the same may be amended, supplemented or otherwisemodified from time to time.

 

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

 

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

 

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

 

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

 

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

 

“Status” shall mean, as to the US Borrower asof any date, the existence of Level I Status, Level II Status, Level III Statusor Level IV Status on such date.  Changesin Status resulting from changes in the Consolidated Total Debt to ConsolidatedEBITDA Ratio shall become effective (the date of such effectiveness, the “EffectiveDate”) as of the first day following the last day of the most recent fiscalyear or period for which (a) Section 9.1 Financials are delivered tothe Lenders under Section 9.1 and (b) an officer’s certificate isdelivered by the US Borrower to the Lenders setting forth, with respect to suchSection 9.1 Financials, the then-applicable Status, and shall remain ineffect 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 ofinterest or commitment fees during the period (the “Interim Period”)from and including the Effective Date to but excluding the day any change inStatus is determined as provided above, then the amount of the next suchpayment due on or after such day shall be increased or decreased by an amountequal to any underpayment or overpayment so made by the US Borrower during suchInterim Period and (ii) each determination of the Consolidated Total Debtto Consolidated EBITDA Ratio or the Senior Secured Debt to Consolidated EBITDARatio, as applicable, pursuant to this definition shall be made with respect tothe Test Period ending at the end of the fiscal period covered by the relevantfinancial statements.

 

“Statutory Reserve Rate” shall mean for anyday as applied to any Eurodollar Loan, a fraction (expressed as a decimal), thenumerator of which is the number one and the denominator of which is the numberone minus the aggregate of the maximum reserve percentages that are ineffect on that day (including any marginal, special, emergency or supplementalreserves), expressed as a decimal, as prescribed by the Board and to which theAdministrative Agent is subject, for eurocurrency funding (currently referredto as “Eurocurrency Liabilities” in Regulation D of the Board).  Such reserve percentages shall include thoseimposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding andto be subject to such reserve requirements without benefit of or credit forproration, exemptions or offsets that may be available from time to time to anyLender under such Regulation D or any 

 

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comparable regulation.  The Statutory Reserve Rate shall be adjustedautomatically on and as of the effective date of any change in any reservepercentage.

 

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

 

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

 

“Subordinated Notes” shall mean (a) the10 5/8% Senior Subordinated Notes due 2011 of the US Borrower issued pursuantto the Subordinated Note Indenture and (b) any replacement or refinancingthereof having terms no more materially adverse to the interests of the Lendersthan the terms thereof; provided, that any such amendment, replacementor refinancing shall bear a rate of interest determined by the Board of Directorsof the US Borrower to be a market rate of interest at the date of suchamendment, replacement or refinancing and have other terms customary forsimilar issuances under similar market conditions or otherwise be on termsreasonably acceptable to the Administrative Agent.

 

“Subsidiary” of any Person shall mean andinclude (a) any corporation more than 50% of whose stock of any class orclasses having by the terms thereof ordinary voting power to elect a majorityof the directors of such corporation (irrespective of whether or not at thetime stock of any class or classes of such corporation shall have or might havevoting power by reason of the happening of any contingency) is at the timeowned by such Person directly or indirectly through Subsidiaries and (b) anypartnership, association, joint venture or other entity in which such Persondirectly or indirectly through Subsidiaries has more than a 50% equity interestat the time.  Unless otherwise expresslyprovided, all references herein to a “Subsidiary” shall mean a Subsidiary ofthe US Borrower.

 

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

 

“Successor UK Borrower” shall have themeaning 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 anytime shall mean the sum of (a) the aggregate principal amount of SwinglineLoans then outstanding in respect of which such Lender has made (or is requiredto have made) payments to the Swingline Lender pursuant to Section 2.1(d) and(b) such Lender’s Extended Revolving Credit Commitment Percentage of theaggregate Swingline Exposure at such time (excluding the portion thereofconsisting of Swingline Loans in respect of which the Lenders have made (or arerequired to have made) payments to the Swingline Lender pursuant to Section 2.1(d)).

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Total Credit Exposure” shall mean, at anydate, 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) theoutstanding principal amount of all Term Loans at such date.

 

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

 

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

 

“Total Term Loan Commitment” shall mean thesum of the Term Loan Commitments, New Tranche H Term Loan Commitments (ifapplicable), New Tranche I Term Loan Commitments (if applicable) and theIncremental Refinancing Term Loan Commitment (if applicable) of all theLenders.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Tranche A-2 Term Loan” shall have themeaning 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, theamount set forth opposite such Lender’s name on Schedule 1.1(c) assuch Lender’s “Tranche A Term Loan Commitment” and (b) in the case of anyLender that becomes a Lender after the Funding Date, the amount specified assuch Lender’s “Tranche A Term Loan Commitment” in the Assignment andAcceptance pursuant to which such Lender assumed a portion of the Total TermLoan Commitment, in each case as the same may be changed from time to timepursuant to the terms hereof.  Theaggregate Tranche A Term Loan Commitment on the Funding Date is€209,538,177.86.  It is understood andagreed that any Lender having a Tranche A Term Loan Commitment or holdingTranche A-1 Term Loans or Tranche A-2 Term Loans shall have (or hold) a prorata share of the Tranche A Term Loan Commitment, Tranche A-1 Term Loansand Tranche A-2 Term Loans, as the case may be.

 

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“Tranche A-1 Term Loan Maturity Date” shallmean the date that is seven years after the Funding Date, or, if such date isnot a Business Day, the next preceding Business Day; provided, however,that the Tranche A-1 Term Loan Maturity Date will automatically become theRefinancing Date in the event that on or prior to the Refinancing Date either(a) the Subordinated Notes shall not have been extended, renewed, replacedor otherwise refinanced in full in accordance with the terms hereof byIndebtedness which shall have a final maturity no earlier than (and which shallnot 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 morematerially adverse to the interests of the Lenders than those relating to theSubordinated Notes as in effect on the date hereof) any earlier than) the datethat is 182 days following the date that is seven years after the Funding Dateor (b) legal defeasance or similar arrangements reasonably satisfactory tothe Administrative Agent shall not have been made for the repayment orredemption of the Subordinated Notes in full.

 

“Tranche A-2 Term Loan Maturity Date” shallmean the date that is seven years after the Funding Date, or, if such date isnot a Business Day, the next preceding Business Day; provided, however,that the Tranche A-2 Term Loan Maturity Date will automatically become theRefinancing Date in the event that on or prior to the Refinancing Date either(a) the Subordinated Notes shall not have been extended, renewed, replacedor otherwise refinanced in full in accordance with the terms hereof byIndebtedness which shall have a final maturity no earlier than (and which shallnot 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 morematerially adverse to the interests of the Lenders than those relating to theSubordinated Notes as in effect on the date hereof) any earlier than) the datethat is 182 days following the date that is seven years after the Funding Dateor (b) legal defeasance or similar arrangements reasonably satisfactory tothe Administrative Agent shall not have been made for the repayment orredemption of the Subordinated Notes in full.

 

“Tranche C Term Loan Lender” shall mean eachLender with a Tranche C Term Loan Commitment or with outstanding Tranche C TermLoans.

 

“Tranche D Term Loan Lender” shall mean eachLender with a Tranche D Term Loan Commitment or with outstanding Tranche D TermLoans.

 

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

 

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

 

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

 

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

 

“Tranche E Term Loan Lender” shall mean eachLender with a Tranche E Term Loan Commitment or with outstanding Tranche E TermLoans.

 

“Tranche E Term Loan Maturity Date”shall mean the date that is eight years after the Funding Date, or, if suchdate is not a Business Day, the next preceding Business Day; provided, however,that the Tranche E Term Loan Maturity Date will automatically become theRefinancing Date in the event that on or prior to the Refinancing Date either(a) the Subordinated Notes shall not have been extended, renewed, replacedor otherwise refinanced in full in accordance with the terms hereof byIndebtedness which shall have a final maturity no earlier than (and which shallnot 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 morematerially adverse to the interests of the Lenders than those relating to theSubordinated Notes as in effect on the date hereof) any earlier than) the datethat is 182 days following the date that is eight years after the Funding Dateor (b) legal defeasance or similar arrangements reasonably satisfactory tothe Administrative Agent shall not have been made for the repayment orredemption of the Subordinated Notes in full.

 

“Tranche F Term Loan Lender” shall mean eachLender with a Tranche F Term Loan Commitment or with outstanding Tranche F TermLoans.

 

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

 

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

 

“Tranche G Term Loan” shall mean a Loanmade to the US Borrower in Euro on the Fourth Amendment Effective Date pursuantto Section 3 of the Fourth Amendment. On the Fourth Amendment Effective Date, the aggregate principal amountof 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 GTerm Loans hereunder pursuant to Section 3 of the Fourth Amendment on theFourth Amendment Effective Date.  Theamount of each Lender’s Tranche G Term Loan Commitment is set forth on ScheduleA to the Fourth Amendment (as appended to the Fourth Amendment on the 

 

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

 

“Tranche G Term Loan Lender” shall mean eachLender with a Tranche G Term Loan Commitment or with outstanding Tranche G TermLoans.

 

“Tranche G Term Loan Maturity Date”shall mean the date that is eight years after the Funding Date, or, if suchdate is not a Business Day, the next preceding Business Day; provided, however,that the Tranche G Term Loan Maturity Date will automatically become theRefinancing Date in the event that on or prior to the Refinancing Date either(a) the Subordinated Notes shall not have been extended, renewed, replacedor otherwise refinanced in full in accordance with the terms hereof byIndebtedness which shall have a final maturity no earlier than (and which shallnot 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 morematerially adverse to the interests of the Lenders than those relating to the SubordinatedNotes as in effect on the date hereof) any earlier than) the date that is 182days following the date that is eight years after the Funding Date or(b) legal defeasance or similar arrangements reasonably satisfactory tothe Administrative Agent shall not have been made for the repayment orredemption of the Subordinated Notes in full.

 

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

 

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

 

“Tranche H Term Loan” shall mean a Loan madeto the US Borrower in Dollars on the Restatement Date pursuant to Section 3of the Amendment Agreement.  On theRestatement Date, the aggregate principal amount of the Tranche H Term Loansshall 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 HTerm Loans hereunder pursuant to Section 3 of the Amendment Agreement onthe Restatement Date.  The amount of eachLender’s Tranche H Term Loan Commitment is set forth on Schedule A to theAmendment Agreement (as appended to the Amendment Agreement on the RestatementDate) or in the Assignment and Acceptance pursuant to which such Lender assumedits Tranche H Term Loan Commitment, in each case as the same may be changedfrom time to time pursuant to the terms hereof.

 

“Tranche H Term Loan Lender” shall mean eachLender with a Tranche H Term Loan Commitment or with outstanding Tranche H TermLoans.

 

“Tranche H Term Loan Maturity Date” shallmean May 15, 2014, or, if such date is not a Business Day, the nextpreceding Business Day.

 

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

 

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

 

“Tranche I Term Loan” shall mean a Loan madeto the US Borrower in Euro on the Restatement Date pursuant to Section 4of the Amendment Agreement.  On theRestatement Date, the aggregate principal amount of the Tranche I Term Loansshall 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 ITerm Loans hereunder pursuant to Section 4 of the Amendment Agreement onthe Restatement Date.  The amount of eachLender’s Tranche I Term Loan Commitment is set forth on Schedule B to theAmendment Agreement (as appended to the Amendment Agreement on the RestatementDate) or in the Assignment and Acceptance pursuant to which such Lender assumedits Tranche I Term Loan Commitment, in each case as the same may be changedfrom time to time pursuant to the terms hereof.

 

“Tranche I Term Loan Lender” shall mean eachLender with a Tranche I Term Loan Commitment or with outstanding Tranche I TermLoans.

 

“Tranche I Term Loan Maturity Date” shallmean May 15, 2014, or, if such date is not a Business Day, the nextpreceding Business Day.

 

“Transactions” shall mean, collectively,(a) the execution, delivery and performance by the Credit Parties of theCredit Documents, the Senior Subordinated Loan Agreement and the SeniorSubordinated Notes Indenture, in each case, to the extent they are a partythereto, (b) the Borrowings hereunder, the borrowings under the SeniorSubordinated Loan Agreement, the issuance of the Senior Subordinated Notes, theissuance 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) theAcquisition, (e) the refinancing of the 2003 Credit Agreement and ofcertain existing Indebtedness of the Target and (f) any other transactionrelated to or entered into in connection with any of the foregoing.

 

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

 

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

 

“Treaty on European Union” shall mean theTreaty of Rome of March 25, 1957, as amended by the Single European Act1986 and the Maastricht Treaty (which was signed in Maastricht on February 7,1992 and came into force on November 1, 1993).

 

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“Treaty Lender” shall mean a Person who, byvirtue of a double taxation agreement between the United Kingdom and thecountry of residence of that Person, is (subject only to a prior directiongiven to the UK Borrower by the United Kingdom Inland Revenue following anapplication by that Person) eligible to receive payments from the UK Borrowerunder this Agreement, (a) in the case of an original Lender under thisAgreement, without any deduction in respect of taxes or (b) in the case ofa Transferee, subject to a deduction in respect of taxes to an extent nogreater than that which applied to the original Lender from which theTransferee acquired its Commitments.

 

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

 

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

 

“2011 Senior Notes Indenture” shall mean anyIndenture (including the Indenture dated as of July 23, 2003) issued byHoldings, pursuant to which the 2011 Senior Notes are issued, as the same maybe amended, supplemented or otherwise modified from time to time to the extentpermitted by Section 10.7(b).

 

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

 

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

 

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

 

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“UK Borrower Debt Escrow Account” shall meanEuro Account Number 8371059780 established by the Financing Escrow Agent, to beadministered pursuant to the terms of the Financing Escrow Agreement.

 

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

 

“UK Guarantee” shall mean the UK GuaranteeAgreement, made by the US Borrower and each of the UK Guarantors in favor ofthe Administrative Agent for the benefit of the Lenders to the UK Borrower andthe 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 totime.

 

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

 

“UK Lender” shall mean a Person who is(a) a company resident in the United Kingdom for tax purposes, (b) apartnership each of whose members is a company so resident or (c) acompany not so resident in the United Kingdom for tax purposes, but whichcarries on a trade in the United Kingdom through a branch or agency and issubject 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 theAdministrative Agent for the benefit of the Lenders to the UK Borrower and theother Secured Parties named therein and (b) the Charge Over Shares,entered into by the US Borrower and the Administrative Agent for the benefit ofthe Lenders to the US Borrower and the other Secured Parties named therein, ineach case substantially in the form of Exhibit L-3(a) or (b), asapplicable, as the same may be amended, supplemented or otherwise modified fromtime to time.

 

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

 

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

 

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investment on the date of such re-designation in anUnrestricted Subsidiary in an amount equal to the sum of (i) the net worthof such re-designated Restricted Subsidiary immediately prior to suchre-designation (such net worth to be calculated without regard to any guaranteeprovided by such re-designated Restricted Subsidiary) and (ii) theaggregate principal amount of any Indebtedness owed by such re-designatedRestricted Subsidiary to the US Borrower or any other Restricted Subsidiaryimmediately prior to such re-designation, all calculated, except as set forthin the parenthetical to clause (i), on a consolidated basis in accordance withGAAP and (y) no Default or Event of Default would result from suchre-designation and (c) each Subsidiary of an Unrestricted Subsidiary; provided,however, that at the time of any written re-designation by the USBorrower to the Administrative Agent that any Unrestricted Subsidiary shall nolonger constitute an Unrestricted Subsidiary, such Unrestricted Subsidiaryshall cease to be an Unrestricted Subsidiary to the extent no Default or Eventof Default would result from such re-designation.  On or promptly after the date of itsformation, acquisition or re-designation, as applicable, each UnrestrictedSubsidiary (other than an Unrestricted Subsidiary that is a Foreign Subsidiary)shall have entered into a tax sharing agreement containing terms that, in thereasonable judgment of the Administrative Agent, provide for an appropriateallocation of tax liabilities and benefits.

 

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

 

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

 

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

 

“Yield Differential” shall have the meaninggiven 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 thisAgreement as a whole and not to any particular provision of this Agreement, andSection references are to Sections of this Agreement unless otherwisespecified.  The words “include,” “includes”and “including” shall be deemed to be followed by the phrase “withoutlimitation”.

 

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

 

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of this Agreement (otherthan any provision expressly requiring the use of a current Exchange Rate) bethe Exchange Rates employed in converting any amounts between Dollars andForeign Currencies.

 

(b)  Not later than 5:00 p.m.(New York time) on each Recalculation Date and each date on which ForeignCurrency Revolving Credit Loans or Foreign Currency Extended Revolving CreditLoans are made, the Administrative Agent shall (i) determine the aggregateamount of the Dollar Equivalents of (A) the principal amounts of theForeign Currency Revolving Credit Loans then outstanding (after giving effectto any Foreign Currency Revolving Credit Loans or Foreign Currency ExtendedRevolving 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 theUK Borrower) of the results of such determination.

 

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

 

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

 

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

 

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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 LoanCommitment severally agrees to make a loan or loans (each a “Tranche A-1Term Loan” and, collectively, the “Tranche A-1 Term Loans”) to theUS Borrower on the Funding Date in Euro, which Tranche A-1 Term Loans shall notexceed for any such Lender such Lender’s prorata share of allTranche A-1 Term Loans to be made on the Funding Date (based on the percentagewhich such Lender’s Tranche A Term Loan Commitment represents of the aggregateTranche A Term Loan Commitments of all Lenders); provided, that theaggregate principal amount of all Tranche A-1 Term Loans made on the FundingDate shall not exceed €39,129,762.71;

 

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

 

(iii)  each Lender having a Tranche A Term LoanCommitment severally agrees to make a loan or loans on a single date on orprior to September 30, 2004 to the US Borrower and/or the UK Borrower, asdirected by the US Borrower in a Notice of Borrowing delivered in accordancewith Section 2.3, the amount of which loans shall not exceed for any suchLender such Lender’s prorata share of all such loans to be madeon the applicable date of borrowing (based on the percentage which such Lender’sTranche A Term Loan Commitment represents of the aggregate Tranche A Term LoanCommitments of all Lenders); provided, that the aggregate principalamount 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 onthe 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 tothe UK Borrower shall be “Tranche A-2 Term Loans” for all purposes under thisAgreement.  In the event that the USBorrower shall not deliver a Notice of Borrowing with respect to such loans onor prior to September 30, 2004 in accordance with Section 2.3, the USBorrower shall be deemed to have requested on behalf of itself a Tranche A-1Term Loan in the amount of €41,907,635.58 (and such Tranche A-1 Term Loan shallbe funded on September 30, 2004 as stated above), unless the US Borrowershall give the Administrative Agent at the Administrative Agent’s Officewritten notice (or telephonic notice promptly confirmed in writing) prior to12:00 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 LoanCommitment severally agrees, pursuant to the Third Amendment, to make a TrancheE Term Loan or 

 

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TrancheE Term Loans on the Third Amendment Effective Date to the US Borrower inDollars, which Tranche E Term Loans shall not exceed for any such Lender theTranche E Term Loan Commitment of such Lender as of the Third AmendmentEffective Date; provided, that each Continuing Tranche D Term LoanLender having a Tranche E Term Loan Commitment shall make Tranche E Term Loanson the Third Amendment Effective Date by exchanging its existing term loansdesignated as “Tranche D Term Loans” under the Credit Agreement immediatelyprior to the Third Amendment Effective Date for Tranche E Term Loans in themanner contemplated by Section 3 of the Third Amendment;

 

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

 

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

 

(vii)  each Lender having a Tranche I Term LoanCommitment severally agrees, pursuant to the Amendment Agreement, to be deemedto have made a Tranche I Term Loan or Tranche I Term Loans on the RestatementDate to the US Borrower in Euro, which Tranche I Term Loans shall not exceedfor any such Lender the Tranche I Term Loan Commitment of such Lender as of theRestatement Date, by converting its existing term loans designated as “TrancheG Term Loans” under the Existing Credit Agreement immediately prior to theRestatement Date for Tranche I Term Loans in the manner contemplated by Section 4of 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) orclause (vii) above).  On theRestatement Date, the US Borrower shall pay all amounts owing under Section 2.11as a result of the repayment or conversion of Tranche E Term Loans and TrancheG Term Loans as required above in this Section 2.1(a).  Such Term Loans (i) may, in respect ofTranche E Term Loans or Tranche H Term Loans and at the option of the USBorrower, be incurred and maintained as, and/or converted into, ABR Loans orEurodollar Term 

 

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Loans, provided that all such Term Loans madeby each of the Lenders pursuant to the same Borrowing shall, unless otherwisespecifically 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 asEurodollar Term Loans, (iii) may be repaid or prepaid in accordance withthe 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 TermLoan Commitments, Tranche E Term Loan Commitments, Tranche G Term LoanCommitments, Tranche H Term Loan Commitments or Tranche I Term LoanCommitments, as applicable.  On theTranche A-1 Term Loan Maturity Date, all Tranche A-1 Term Loans shall be repaidin full.  On the Tranche A-2 Term LoanMaturity Date, all Tranche A-2 Term Loans shall be repaid in full.  On the Tranche E Term Loan Maturity Date, allTranche E Term Loans shall be repaid in full. On the Tranche G Term Loan Maturity Date, all Tranche G Term Loans shallbe repaid in full.  On the Tranche H TermLoan Maturity Date, all Tranche H Term Loans shall be repaid in full.  On the Tranche I Term Loan Maturity Date, allTranche I Term Loans shall be repaid in full.

 

(b)  (i)  Subject to and upon the termsand conditions herein set forth, each Lender having a Revolving CreditCommitment severally agrees to make a loan or loans denominated in Dollars(each a “Dollar Revolving Credit Loan” and, collectively, the “DollarRevolving Credit Loans” and, together with the Foreign Currency RevolvingCredit Loans, the “Revolving Credit Loans”) and each Lender having anExtended Revolving Credit Commitment severally agrees to make a loan or loansdenominated 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 “ExtendedRevolving Credit Loans”) to the US Borrower or the UK Borrower, as the casemay be, which Dollar Revolving Credit Loans or Dollar Extended Revolving CreditLoans (A) shall be made at any time and from time to time on and after theFunding Date and prior to the Revolving Credit Maturity Date or the ExtendedRevolving Credit Maturity Date, as applicable, (B) may, at the option of theUS Borrower or the UK Borrower, as the case may be, be incurred and maintainedas, and/or converted into, ABR Loans, Eurodollar Revolving Credit Loans orEurodollar Extended Revolving Credit Loans; provided, that all DollarRevolving Credit Loans and all Dollar Extended Revolving Credit Loans made byeach of the Lenders pursuant to the same Borrowing shall, unless otherwisespecifically provided herein, consist entirely of Dollar Revolving Credit Loansor Dollar Extended Revolving Credit Loans of the same Type, (C) may berepaid and reborrowed in accordance with the provisions hereof, (D) shallnot, for any such Lender at any time, after giving effect thereto and to theapplication of the proceeds thereof, result in such Lender’s Revolving CreditExposure or Extended Revolving Credit Exposure, as applicable, at such timeexceeding such Lender’s Revolving Credit Commitment or Extended RevolvingCredit Commitment, as applicable, at such time and (E) shall not, aftergiving effect thereto and to the application of the proceeds thereof, result atany time in the aggregate amount of the Lenders’ Revolving Credit Exposures orExtended Revolving Credit Exposures, as applicable, at such time exceeding theTotal Revolving Credit Commitment or the Total Extended Revolving CreditCommitment, as applicable, then in effect; providedfurther, that(x) as of the Restatement Date there shall be no Dollar Revolving CreditLoans outstanding and 

 

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(y) fromand after the Restatement Date, no Dollar Revolving Credit Loans may berequested of or made by any Lender having a Revolving Credit Commitment untilthe Extended Revolving Credit Exposures shall be equal to no less than theTotal Extended Revolving Credit Commitment; provided, however,that if, at such time that the Extended Revolving Credit Exposure equals orexceeds the Total Extended Revolving Credit Commitment, the US Borrower or theUK Borrower requests a Dollar Letter of Credit otherwise permitted inaccordance with Section 3, a portion of the outstanding Dollar ExtendedRevolving Credit Loans shall be automatically deemed to be refinanced andreplaced by Revolving Credit Loans under the Revolving Credit Commitment in anamount sufficient to allow such Letter of Credit to be issued at such timeunder the Extended Revolving Credit Commitments so long as such refinancingshall not result in any Lender’s Revolving Credit Exposure exceeding suchLender’s Revolving Credit Commitment.

 

(ii)  Subject to and upon the terms and conditionsherein set forth, each Lender having a Revolving Credit Commitment severallyagrees to make a loan or loans denominated in a Foreign Currency (each a “ForeignCurrency Revolving Credit Loan” and, collectively, the “Foreign CurrencyRevolving Credit Loans”) or an Extended Revolving Credit Commitmentseverally 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”) tothe US Borrower or the UK Borrower, as the case may be, which Foreign CurrencyRevolving Credit Loans or Foreign Currency Extended Revolving Credit Loans(A) shall be made at any time and from time to time on and after theFunding Date and prior to the Revolving Credit Maturity Date or the ExtendedRevolving Credit Maturity Date, as applicable, (B) shall be incurred andmaintained entirely as Eurodollar Foreign Currency Revolving Credit Loans orEurodollar Foreign Currency Extended Revolving Credit Loans, (C) may berepaid and reborrowed in accordance with the provisions hereof, (D) shallnot, for any such Lender at any time, after giving effect thereto and to theapplication of the proceeds thereof, result in such Lender’s Revolving CreditExposure or Extended Revolving Credit Exposure, as applicable, at such timeexceeding such Lender’s Revolving Credit Commitment or Extended RevolvingCredit Commitment, as applicable, at such time and (E) shall not, aftergiving effect thereto and to the application of the proceeds thereof, result atany time in the aggregate amount of the Lenders’ Revolving Credit Exposures orExtended Revolving Credit Exposures, as applicable, at such time exceeding theTotal Revolving Credit Commitment or the Total Extended Revolving CreditCommitment, as applicable, then in effect; providedfurther, that (x) as of the Restatement Date there shall be no ForeignCurrency Revolving Credit Loans outstanding and (y) from and after theRestatement Date, no Foreign Currency Revolving Credit Loans may berequested of or made by any Lender having a Revolving Credit Commitment untilthe Extended Revolving Credit Exposures shall be equal to no less then than theTotal Extended Revolving Credit Commitment; provided, however,that if, at such time that the Extended Revolving Credit Exposure equals orexceeds the Total Extended Revolving Credit Commitment, the US Borrower or theUK Borrower requests a Foreign Currency Letter of Credit otherwise permitted inaccordance with Section 3, a portion of the outstanding Foreign CurrencyExtended Revolving Credit Loans shall be automatically deemed to be refinancedand replaced by Revolving Credit Loans under the Revolving Credit 

 

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Commitmentin an amount sufficient to allow such Letter of Credit to be issued at suchtime under the Extended Revolving Credit Commitments so long as suchrefinancing shall not result in any Lender’s Revolving Credit Exposureexceeding such Lender’s Revolving Credit Commitment.

 

(iii)  Each Lender may at its option make anyEurodollar Loan by causing any domestic or foreign branch or Affiliate of suchLender to make such Loan; provided, that (A) any exercise of suchoption shall not affect the obligation of the US Borrower or the UK Borrower asthe 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 tothe US Borrower or the UK Borrower as the case may be, resulting therefrom (whichobligation 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 willnot be compensated hereunder or that it determines would be otherwisedisadvantageous to it and in the event of such request for costs for whichcompensation is provided under this Agreement, the provisions ofSection 3.5 shall apply).  On theRevolving Credit Maturity Date, all Revolving Credit Loans shall be repaid infull.  On the Extended Revolving CreditMaturity Date, all Extended Revolving Credit Loans shall be repaid in full.

 

(c)  Subject to and upon the terms andconditions herein set forth, the Swingline Lender in its individual capacityagrees, at any time and from time to time on and after the Funding Date andprior to the Swingline Maturity Date, to make a loan or loans (each a “SwinglineLoan” and, collectively, the “Swingline Loans”) to the US Borrowerin Dollars, which Swingline Loans (i) shall be ABR Loans, (ii) shallhave the benefit of the provisions of Section 2.1(d), (iii) shall notexceed 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 CreditExposures at such time exceeding the Total Extended Revolving Credit Commitmentthen in effect and (v) may be repaid and reborrowed in accordance with theprovisions hereof.  On the Swingline MaturityDate, each outstanding Swingline Loan shall be repaid in full.  The Swingline Lender shall not make anySwingline Loan after receiving a written notice from the US Borrower, the UKBorrower or any Lender stating that a Default or Event of Default exists and iscontinuing until such time as the Swingline Lender shall have received writtennotice of (i) rescission of all such notices from the party or partiesoriginally delivering such notice or (ii) the waiver of such Default orEvent of Default in accordance with the provisions of Section 14.1.

 

(d)  On any Business Day, the Swingline Lendermay, in its sole discretion, give notice to the Lenders that allthen-outstanding Swingline Loans shall be funded with a Borrowing of ExtendedRevolving Credit Loans, in which case Extended Revolving Credit Loansconstituting ABR Loans (each such Borrowing, a “Mandatory Borrowing”)shall be made on the immediately succeeding Business Day by all Lenders prorata based on each Lender’s Extended Revolving Credit CommitmentPercentage, as applicable, and the proceeds thereof shall be applied directlyto the Swingline Lender to repay the Swingline Lender for such outstandingSwingline Loans.  Each Lender herebyirrevocably agrees to make such Extended Revolving Credit Loans upon oneBusiness 

 

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Day’snotice pursuant to each Mandatory Borrowing in the amount and in the mannerspecified in the preceding sentence and on the date specified to it in writingby the Swingline Lender notwithstanding (i) that the amount of theMandatory Borrowing may not comply with the minimum amount for each Borrowingspecified in Section 2.2, (ii) whether any conditions specified in Section 7are then satisfied, (iii) whether a Default or an Event of Default hasoccurred and is continuing, (iv) the date of such Mandatory Borrowing or(v) any reduction in the Total Commitment after any such Swingline Loanswere made.  In the event that, in thesole judgment of the Swingline Lender, any Mandatory Borrowing cannot for anyreason be made on the date otherwise required above (including as a result ofthe commencement of a proceeding under the Bankruptcy Code in respect of theBorrower), each Lender hereby agrees that it shall forthwith purchase from theSwingline Lender (without recourse or warranty) such participation of theoutstanding Swingline Loans as shall be necessary to cause the Lenders to sharein such Swingline Loans ratably based upon their respective Extended RevolvingCredit Commitment Percentages, as applicable; provided, that all principaland interest payable on such Swingline Loans shall be for the account of theSwingline Lender until the date the respective participation is purchased and,to the extent attributable to the purchased participation, shall be payable tothe 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 amountof each Borrowing of Term Loans, Revolving Credit Loans, Extended RevolvingCredit Loans or Swingline Loans shall be in a multiple of the Dollar Equivalentof $100,000 and shall not be less than the Minimum Borrowing Amount withrespect thereto (except that Mandatory Borrowings shall be made in the amountsrequired by Section 2.1(d)).  Morethan one Borrowing may be incurred on any date; provided, that at notime shall there be outstanding more than 20 Borrowings of EurodollarLoans 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 Officewritten notice (or telephonic notice promptly confirmed in writing) of theBorrowing of Term Loans (i) prior to 12:00 Noon (Local Time) at leastthree Business Days prior to the date of Borrowing of Term Loans if all or anyof such Term Loans are to be initially Eurodollar Loans and (ii) prior to10:00 a.m.(New York time) on the date of the Borrowing of Term Loans ifall such Term Loans are to be ABR Loans. Such notice (together with each notice of a Borrowing of RevolvingCredit Loans or Extended Revolving Credit Loans pursuant to Section 2.3(b) andeach 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 Borroweror the UK Borrower, (ii) the currency in which the Borrowing is to bemade, which shall be either Dollars or Euro, (iii) the aggregate principalamount of the Term Loans to be made, (iv) the date of the borrowing (whichshall be a Business Day and (other than in the case of the Term Loans madeavailable pursuant to Section 2.1(a)(iii), (iv), (v) and (vi)) shallbe the Funding Date) and (v) whether the Term Loans shall consist of ABRLoans and/or Eurodollar Term Loans and, if the Term Loans are to includeEurodollar Term Loans, the Interest Period to be initially applicablethereto.  The 

 

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Administrative Agent shallpromptly give each Lender written notice (or telephonic notice promptlyconfirmed in writing) of each proposed Borrowing of Term Loans, of such Lender’sproportionate share thereof and of the other matters covered by the relatedNotice of Borrowing.

 

(b)  Whenever the US Borrower or the UKBorrower desires to incur Revolving Credit Loans or Extended Revolving CreditLoans hereunder (other than Mandatory Borrowings or borrowings to repay UnpaidDrawings), it shall give the Administrative Agent at the Administrative Agent’sOffice as specified in Section 14.2, (i) prior to 12:00 Noon (LocalTime) at least three Business Days’ prior written notice (or telephonic noticepromptly confirmed in writing) of each Borrowing of Eurodollar Revolving CreditLoans or Eurodollar Extended Revolving Credit Loans and (ii) prior to12:00 Noon (New York time) at least one Business Day’s prior writtennotice (or telephonic notice promptly confirmed in writing) of each Borrowingof ABR Loans; provided that for any deemed borrowing of Revolving CreditLoans pursuant to Section 2.1(b)(i) and (ii) such notice willnot be required.  Each such Notice ofBorrowing, except as otherwise expressly provided in Section 2.10, shallbe irrevocable and shall specify (i) the borrower of the Revolving CreditLoans or Extended Revolving Credit Loans, as applicable, which shall be eitherthe US Borrower or the UK Borrower, (ii) the currency in which theRevolving Credit Loans or Extended Revolving Credit Loans, as applicable, areto be made, which shall be Dollars or a Foreign Currency, (iii) theaggregate principal amount of the Revolving Credit Loans or Extended RevolvingCredit Loans, as applicable, to be made pursuant to such Borrowing (which, inthe case of a Foreign Currency Borrowing, shall be stated in both theapplicable Foreign Currency and the Dollar Equivalent thereof), (iii) thedate of Borrowing (which shall be a Business Day), (iv) whether therespective Borrowing shall consist of ABR Loans, Eurodollar Revolving CreditLoans or Eurodollar Extended Revolving Credit Loans and, if EurodollarRevolving Credit Loans or Eurodollar Extended Revolving Credit Loans, theInterest Period to be initially applicable thereto and (v) the number andlocation of the account to which funds are to be disbursed.  The Administrative Agent shall promptly giveeach Lender written notice (or telephonic notice promptly confirmed in writing)of each proposed Borrowing of Revolving Credit Loans or Extended RevolvingCredit Loans, as applicable, of such Lender’s proportionate share thereof andof the other matters covered by the related Notice of Borrowing.

 

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

 

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

 

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

 

(f)  Without in any way limiting the obligationof the US Borrower or the UK Borrower, as the case may be, to confirm inwriting any notice it may give hereunder by telephone, the Administrative Agentmay act prior to receipt of written confirmation without liability upon thebasis of such telephonic notice believed by the Administrative Agent in goodfaith 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 theAdministrative 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 eachNotice of Borrowing (including Mandatory Borrowings), each Lender will makeavailable its prorata portion, if any, of each Borrowingrequested 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 bythe Swingline Lender no later than 3:00 p.m. (New York time) on the daterequested.

 

(b)  Each Lender shall make available allamounts it is to fund under any Borrowing in Dollars or in the applicableForeign Currency, as the case may be, and in immediately available funds to theAdministrative Agent at the Administrative Agent’s Office and theAdministrative Agent will (except in the case of Mandatory Borrowings andBorrowings to repay Unpaid Drawings) make available to (i) the US Borrowerby depositing to the US Borrower’s account that is designated to theAdministrative Agent the aggregate of the amounts so made available in Dollarsor in the applicable Foreign Currency, as the case may be, and the type offunds received and (ii) the UK Borrower, by depositing to the UK Borrower’saccount that is designated to the Administrative Agent the aggregate of theamounts so made available in Dollars or in the applicable Foreign Currency, asthe case may be, and the type of funds received.  Unless the Administrative Agent shall havebeen notified by any Lender prior to the date of any such Borrowing that suchLender does not intend to make available to the Administrative Agent itsportion of the Borrowing or Borrowings to be made on such date, theAdministrative Agent may assume that such Lender has made such amount availableto the Administrative Agent on such date of Borrowing, and the AdministrativeAgent, in reliance upon such assumption, may (in its sole discretion andwithout any obligation to do so) make available to the US Borrower or the UKBorrower, as the case may be, a corresponding amount.  If such corresponding amount is not in factmade available to the Administrative Agent by such Lender and theAdministrative Agent has made available same to the US Borrower or the UKBorrower, as the case may be, the Administrative Agent shall be entitled torecover such corresponding amount from such Lender.  If such Lender does not pay suchcorresponding amount forthwith upon the Administrative Agent’s demand thereforthe Administrative Agent shall promptly notify the US Borrower or the UKBorrower, as the case may be, and the US Borrower or the UK Borrower, as thecase may be, shall immediately pay such corresponding amount to theAdministrative Agent.  The AdministrativeAgent shall also be entitled to recover from such Lender or the US Borrower or theUK Borrower, as the case may be, interest on

 

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

 

(c)  Nothing in this Section 2.4 shall bedeemed to relieve any Lender from its obligation to fulfill its commitmentshereunder 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 bysuch Lender hereunder (it being understood, however, that no Lender shall beresponsible for the failure of any other Lender to fulfill its commitmentshereunder).

 

2.5.                            Repayment of Loans; Evidence of Debt.  (a)   The US Borrower shall repay to the Administrative Agent, for the benefitof the Lenders, on the Tranche A-1 Term Loan Maturity Date, thethen-unpaid Tranche A-1 Term Loans, in Euro.  The UK Borrower shall repay to theAdministrative Agent, for the benefit of the Lenders, on the Tranche A-2Term Loan Maturity Date, the then-unpaid Tranche A-2 Term Loans, inEuro.  The US Borrower shall repay to theAdministrative Agent, for the benefit of the Lenders, on the Tranche E TermLoan Maturity Date, the then-unpaid Tranche E Term Loans, in Dollars.  The US Borrower shall repay to theAdministrative Agent, for the benefit of the Lenders, on the Tranche G TermLoan Maturity Date, the then-unpaid Tranche G Term Loans, in Euro.  The US Borrower shall repay to theAdministrative Agent, for the benefit of the Lenders, on the Tranche H TermLoan Maturity Date, the then-unpaid Tranche H Term Loans, in Dollars.  The US Borrower shall repay to theAdministrative Agent, for the benefit of the Lenders, on the Tranche I TermLoan Maturity Date, the then-unpaid Tranche I Term Loans, in Euro.  The US Borrower and the UK Borrower, as thecase may be, shall repay to the Administrative Agent in Dollars or theapplicable Foreign Currency, as the case may be, for the benefit of theLenders, on the Revolving Credit Maturity Date, the then-unpaid RevolvingCredit Loans.  The US Borrower and the UKBorrower, as the case may be, shall repay to the Administrative Agent inDollars or the applicable Foreign Currency, as the case may be, for the benefitof the Lenders, on the Extended Revolving Credit Maturity Date, the then-unpaidExtended Revolving Credit Loans.  The USBorrower shall repay to the Administrative Agent in Dollars, for the account ofthe Swingline Lender, on the Swingline Maturity Date, the then-unpaid SwinglineLoans.

 

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

 

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belowopposite such Tranche A-1 Repayment Date (each a “Tranche A-1Repayment 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 theAdministrative Agent, in Euro, for the benefit of the Lenders ofTranche A-2 Term Loans, on each date set forth below (each a “Tranche A-2Repayment Date”), the principal amount of the Tranche A-2 Term Loansequal to (x) the sum of the outstanding principal amount of Tranche A-2Term Loans immediately after funding on the Funding Date and, if applicable,the outstanding principal amount of additional Tranche A-2 Term Loans fundedafter the Funding Date pursuant to Section 2.1(a)(iii) multiplied by(y) the percentage set forth below opposite such Tranche A-2Repayment Date (each a “Tranche A-2 Repayment Amount”):

 

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| **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 theAdministrative Agent, in Dollars, for the benefit of the Lenders ofTranche E Term Loans, on each date set forth below (each a “Tranche ERepayment Date”), the principal amount of the Tranche E Term Loansequal to (x) the outstanding principal amount of Tranche E Term Loansimmediately after funding on the Restatement Date multiplied by (y) thepercentage set forth below opposite such Tranche E Repayment Date (each a “Tranche ERepayment 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 theAdministrative Agent, in Euro, for the benefit of the Lenders of Tranche GTerm Loans, on each date set forth below (each a “Tranche G RepaymentDate”), the principal amount of the Tranche G Term Loans equal to(x) the outstanding principal amount of Tranche G Term Loans immediatelyafter funding on the Restatement Date multiplied by (y) the percentage setforth below opposite such Tranche G Repayment Date (each a “Tranche GRepayment Amount”):

 
| **Number of Months********From Funding Date** | ** ** | **Tranche G********Repayment Amount** |
|-------------------------------------------------------------------|------------|-------------------------------------------------|
|                                                              |       |                                            |
| 60                                                                |       |                                            | 0.5% |

 

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| **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 theAdministrative Agent, in Dollars, for the benefit of the Lenders ofTranche H Term Loans, on each date set forth below (each a “Tranche HRepayment Date”), the principal amount of the Tranche H Term Loansequal to (x) the outstanding principal amount of Tranche H Term Loansimmediately after funding on the Restatement Date multiplied by (y) thepercentage set forth below opposite such Tranche H Repayment Date (each a “Tranche HRepayment 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 theAdministrative Agent, in Euro, for the benefit of the Lenders of Tranche ITerm Loans, on each date set forth below (each a “Tranche I RepaymentDate”), the principal amount of the Tranche I Term Loans equal to(x) the outstanding principal amount of Tranche I Term Loans immediatelyafter funding on the Restatement Date multiplied by (y) the percentage setforth below opposite such Tranche I Repayment Date (each a “Tranche IRepayment Amount”):

 

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| **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 accordancewith its usual practice an account or accounts evidencing the Indebtedness ofthe US Borrower and the UK Borrower, as the case may be, to the appropriatelending office of such Lender resulting from each Loan made by such lendingoffice of such Lender from time to time, including the amounts of principal andinterest payable and paid to such lending office of such Lender from time totime under this Agreement.

 

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

 

(e)  The entries made in the Register andaccounts and subaccounts maintained pursuant to paragraphs (c) and (d) ofthis Section 2.5 shall, to the extent permitted by applicable law, beprima facie evidence of the existence and amounts of the obligations of the USBorrower and the UK Borrower therein recorded; provided, however,that the failure of any Lender or the Administrative Agent to maintain suchaccount, 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 UKBorrower to repay (with applicable interest) the Loans made to the US Borroweror the UK Borrower by such Lender in accordance with the terms of thisAgreement.

 

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

 

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Borrowing Amount of theoutstanding principal amount of Tranche E Term Loans, Tranche H Term Loans,Dollar Revolving Credit Loans or Dollar Extended Revolving Credit Loans of oneType into a Borrowing or Borrowings of another Type and the US Borrower or theUK Borrower, as the case may be, shall have the option on any Business Day tocontinue the outstanding principal amount of any Eurodollar Term Loans,Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit Loansas Eurodollar Term Loans, Eurodollar Revolving Credit Loans or EurodollarExtended Revolving Credit Loans, as the case may be, for an additional InterestPeriod; provided, that (i) no partial conversion of Eurodollar TermLoans, Eurodollar Revolving Credit Loans or Eurodollar Extended RevolvingCredit Loans shall reduce the outstanding principal amount of Eurodollar TermLoans, Eurodollar Revolving Credit Loans or Eurodollar Extended RevolvingCredit Loans made pursuant to a single Borrowing to less than the MinimumBorrowing Amount, (ii) ABR Loans may not be converted into Eurodollar TermLoans, Eurodollar Revolving Credit Loans or Eurodollar Extended RevolvingCredit Loans if a Default or Event of Default is in existence on the date ofthe conversion and the Administrative Agent has or the Required Lenders havedetermined 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 Loansfor an additional Interest Period if a Default or Event of Default is inexistence on the date of the proposed continuation and the Administrative Agenthas or the Required Lenders have determined in its or their sole discretion notto permit such continuation and (iv) Borrowings resulting from conversionspursuant to this Section 2.6 shall be limited in number as provided in Section 2.2.  Each such conversion or continuation shall beeffected by the US Borrower or the UK Borrower, as the case may be, by givingthe Administrative Agent at the Administrative Agent’s Office prior to 12:00Noon (Local Time) at least three Business Days’ (or one Business Day’s noticein the case of a conversion into ABR Loans) prior written notice (or telephonicnotice promptly confirmed in writing) (each a “Notice of Conversion orContinuation”) specifying the Term Loans, Revolving Credit Loans orExtended Revolving Credit Loans to be so converted or continued, the Type ofTerm Loans, Revolving Credit Loans or Extended Revolving Credit Loans to beconverted or continued into and, if such Term Loans, Revolving Credit Loans orExtended Revolving Credit Loans are to be converted into or continued asEurodollar Term Loans, Eurodollar Revolving Credit Loans or Eurodollar ExtendedRevolving Credit Loans, the Interest Period to be initially applicablethereto.  The Administrative Agent shallgive each Lender notice as promptly as practicable of any such proposedconversion or continuation affecting any of its Term Loans, Revolving CreditLoans or Extended Revolving Credit Loans.

 

(b)  If any Default or Event of Default is inexistence at the time of any proposed continuation of any Eurodollar TermLoans, Eurodollar Revolving Credit Loans or Eurodollar Extended RevolvingCredit Loans and the Administrative Agent has or the Required Lenders havedetermined in its or their sole discretion not to permit such continuation,such Eurodollar Term Loans, Eurodollar Revolving Credit Loans or EurodollarExtended Revolving Credit Loans shall be automatically converted on the lastday of the then-current Interest Period (i) in respect of Tranche ETerm Loans, Tranche H Term Loans, Dollar Revolving Credit Loans and DollarExtended Revolving Credit

 

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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 RevolvingCredit Loans, into Eurodollar Loans with an Interest Period of one month.  If upon the expiration of any Interest Periodin respect of Eurodollar Term Loans, Eurodollar Revolving Credit Loans or EurodollarExtended Revolving Credit Loans, the US Borrower or the UK Borrower, as thecase may be, has failed to elect a new Interest Period to be applicable theretoas provided in paragraph (a) above, (i) the US Borrower or theUK Borrower, as the case may be, shall be deemed to have elected to convertsuch Dollar Borrowing of Eurodollar Term Loans, Eurodollar Revolving CreditLoans or Eurodollar Extended Revolving Credit Loans, as the case may be, into aBorrowing of ABR Loans effective as of the expiration date of such currentInterest Period and (ii) the US Borrower or the UK Borrower, as the casemay be, shall be deemed to have elected to convert such Foreign CurrencyBorrowing of Eurodollar Term Loans, Eurodollar Revolving Credit Loans orEurodollar Extended Revolving Credit Loans, as the case may be, into aBorrowing of Eurodollar Loans with an Interest Period of one month effective asof the expiration date of such then-current Interest Period.

 

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

 

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

 

(b)  The unpaid principal amount of eachEurodollar Term Loan, Eurodollar Revolving Credit Loan or Eurodollar ExtendedRevolving Credit Loan shall bear interest from the date of the Borrowingthereof until maturity thereof (whether by acceleration or otherwise) at a rateper annum that shall at all times be the Applicable Eurodollar Margin in effectfrom time to time plus the relevant Eurodollar Rate plus, in thecase of Foreign Currency Loans, any Additional Cost incurred by such Lender inrespect of such Foreign Currency Loans from time to time.

 

(c)  If all or a portion of (i) theprincipal amount of any Loan or (ii) any interest payable thereon shallnot be paid when due (whether at the stated maturity, by acceleration orotherwise), 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 beapplicable thereto plus 2% or (y) in the case of any overdueinterest, to the extent permitted by

 

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

 

(d)  Interest on each Loan shall accrue fromand including the date of any Borrowing to but excluding the date of anyrepayment thereof and shall be payable (i) in respect of each ABR Loan,quarterly in arrears on the last day of each March, June, September andDecember, (ii) in respect of each Eurodollar Term Loan, EurodollarRevolving Credit Loan or Eurodollar Extended Revolving Credit Loan, on the lastday of each Interest Period applicable thereto and, in the case of an InterestPeriod in excess of three months, on each date occurring at three-monthintervals after the first Business Day of such Interest Period, (iii) inrespect of each Loan (except, other than in the case of prepayments, any ABRLoan), on any prepayment (on the amount prepaid), at maturity (whether byacceleration or otherwise) and, after such maturity, on demand.  It is understood and agreed that, in theevent that the Acquisition is not consummated on July 31, 2004 and theLoans are prepaid, interest on each Loan made on the Funding Date shall accruefrom and including the Funding Date to but excluding the date of the repaymentthereof in accordance with this Agreement and such interest shall be payable onthe date of such prepayment.

 

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

 

(f)  The Administrative Agent, upon determiningthe interest rate for any Borrowing of Eurodollar Loans, shall promptly notifythe US Borrower (on its own behalf and on behalf of the UK Borrower) and therelevant Lenders thereof.  Each suchdetermination shall, absent clearly demonstrable error, be final and conclusiveand binding on all parties hereto.

 

2.9.                            Interest Periods.  At the time the US Borrower or the UKBorrower, as the case may be, gives a Notice of Borrowing or Notice ofConversion or Continuation in respect of the making of, or conversion into orcontinuation as, a Borrowing of Eurodollar Term Loans, Eurodollar RevolvingCredit Loans or Eurodollar Extended Revolving Credit Loans (in the case of theinitial Interest Period applicable thereto) or prior to 10:00 a.m. (LocalTime) on the third Business Day prior to the expiration of an Interest Periodapplicable to a Borrowing of Eurodollar Term Loans, Eurodollar Revolving CreditLoans or Eurodollar Extended Revolving Credit Loans, the US Borrower or the UKBorrower, as the case may be, shall have the right to elect by giving theAdministrative Agent written notice (or telephonic notice promptly confirmed inwriting) the Interest Period applicable to such Borrowing, which InterestPeriod shall, at the option of the US Borrower or the UK Borrower, as the casemay be, be a one, two, three, six or (in the case of Revolving Credit Loans orExtended Revolving Credit Loans, if available to all the Lenders making suchloans as determined by such Lenders in good faith based on prevailing marketconditions) a nine or twelve month period; provided, that the initialInterest Period may be for a period less than one month if agreed upon by theUS Borrower and the Administrative Agent. Notwithstanding anything to the contrary contained above:

 

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

 

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

 

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

 

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

 

2.10.                        Increased Costs, Illegality, etc.  (a)    In the event that (x) in the case ofclause (i) below, the Administrative Agent or (y) in the case ofclauses (ii) and (iii) below, any Lender shall have reasonablydetermined (which determination shall, absent clearly demonstrable error, befinal and conclusive and binding upon all parties hereto):

 

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

 

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

 

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

 

(iii)  at any time, that the making orcontinuance of any Eurodollar Loan has become unlawful by compliance by suchLender in good faith with any law, governmental rule, regulation, guideline ororder (or would conflict with any such governmental rule, regulation, guidelineor order not having the force of law even though the failure to complytherewith would not be unlawful), or has become impracticable as a result of acontingency occurring after the Funding Date that materially and adverselyaffects the interbank Eurodollar market;

 

then, and in any such event, such Lender (or theAdministrative Agent, in the case of clause (i) above) shall within areasonable 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 tothe Administrative Agent of such determination (which notice the AdministrativeAgent shall promptly transmit to each of the other Lenders).  Thereafter (x) in the case ofclause (i) above, Eurodollar Term Loans, Eurodollar Revolving CreditLoans and Eurodollar Extended Revolving Credit Loans shall no longer beavailable 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 thecircumstances giving rise to such notice by the Administrative Agent no longerexist (which notice the Administrative Agent agrees to give at such time whensuch circumstances no longer exist), and any Notice of Borrowing or Notice ofConversion given by the US Borrower or the UK Borrower with respect toEurodollar Term Loans, Eurodollar Revolving Credit Loans or Eurodollar ExtendedRevolving Credit Loans that have not yet been incurred shall be deemedrescinded by the US Borrower or the UK Borrower, (y) in the case ofclause (ii) above, the US Borrower or the UK Borrower, as the casemay be, shall pay to such Lender, promptly after receipt of written demandtherefor such additional amounts (in the form of an increased rate of, or adifferent method of calculating, interest or otherwise as such Lender in itsreasonable discretion shall determine) as shall be required to compensate suchLender for such increased costs or reductions in amounts receivable hereunder(it being agreed that a written notice as to the additional amounts owed tosuch Lender, showing in reasonable detail the basis for the calculationthereof, submitted to the US Borrower or the UK Borrower, as the case may be,by such Lender shall, absent clearly demonstrable error, be final andconclusive and binding upon all parties hereto) and (z) in the case ofclause (iii) above, the US Borrower or the UK Borrower, as the casemay be, shall take one of the actions specified in Section 2.10(b) aspromptly as possible and, in any event, within the time period required by law.

 

(b)  At any time that any Eurodollar Loan isaffected 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 thecase 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 toa Borrowing, cancel said Borrowing by giving the Administrative Agenttelephonic notice (confirmed promptly in writing) thereof on the same date thatthe US Borrower or the UK Borrower, as the case may be, was notified by aLender pursuant to Section

 

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2.10(a)(ii) or(iii) or (y) if the affected Eurodollar Loan is a Tranche E TermLoan, a Tranche H Term Loan, a Dollar Revolving Credit Loan or a DollarExtended Revolving Credit Loan and is then outstanding, upon at least threeBusiness Days’ notice to the Administrative Agent, require the affected Lenderto convert each such Eurodollar Revolving Credit Loan, Eurodollar ExtendedRevolving 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 Lendersmust be treated in the same manner pursuant to this Section 2.10(b).

 

(c)  If, after the Funding Date, the adoptionof any applicable law, rule or regulation regarding capital adequacy, orany change therein, or any change in the interpretation or administrationthereof by any governmental authority, the National Association of InsuranceCommissioners, central bank or comparable agency charged with theinterpretation or administration thereof, or compliance by a Lender or itsparent with any request or directive made or adopted after the Funding Dateregarding capital adequacy (whether or not having the force of law) of any suchauthority, association, central bank or comparable agency, has or would havethe effect of reducing the rate of return on such Lender’s or its parent’scapital or assets as a consequence of such Lender’s commitments or obligationshereunder to a level below that which such Lender or its parent could haveachieved but for such adoption, effectiveness, change or compliance (takinginto consideration such Lender’s or its parent’s policies with respect tocapital 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 amountsas will compensate such Lender or its parent for such reduction, it beingunderstood and agreed, however, that a Lender shall not be entitled to suchcompensation as a result of such Lender’s compliance with, or pursuant to anyrequest or directive to comply with, any such law, rule or regulation asin effect on the Funding Date.  EachLender, upon determining in good faith that any additional amounts will bepayable pursuant to this Section 2.10(c), will give prompt written noticethereof to the US Borrower (on its own behalf and on behalf of the UKBorrower), which notice shall set forth in reasonable detail the basis of thecalculation of such additional amounts, although the failure to give any suchnotice shall not, subject to Section 2.13, release or diminish any of theUS Borrower’s or the UK Borrower’s, as the case may be, obligations to payadditional amounts pursuant to this Section 2.10(c) upon receipt ofsuch notice.

 

(d)  Notwithstanding the foregoing, in the caseof Foreign Currency Revolving Credit Loans or Foreign Currency ExtendedRevolving Credit Loans affected by the circumstances described inSection 2.10(a)(i), as promptly as practicable but in no event later thanthree Business Days after the giving of the required notice by theAdministrative Agent with respect to such circumstances, the AdministrativeAgent (in consultation with the Lenders) shall negotiate with the US Borrowerin good faith in order to ascertain whether a substitute interest rate (a “SubstituteRate”) may be agreed upon for the maintaining of existing Foreign CurrencyRevolving Credit Loans or Foreign Currency Extended Revolving CreditLoans.  If a Substitute Rate is agreedupon by the US Borrower and all the Lenders, such Substitute Rate shallapply.  If a Substitute Rate is not soagreed upon by the US Borrower and all the Lenders within such time,

 

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eachLender’s Foreign Currency Revolving Credit Loans or Foreign Currency ExtendedRevolving Credit Loans, as applicable, shall thereafter bear interest at a rateequal to the sum of (i) the rate certified by such Lender to be its costsof funds (from such sources as it may reasonably select out of those sources thenavailable to it) for such Foreign Currency Revolving Credit Loans or ForeignCurrency Extended Revolving Credit Loans, as applicable, plus(ii) the Applicable Eurodollar Margin plus (iii), in the case ofForeign Currency Loans denominated in Sterling only, any Additional Costincurred by such Lender in respect of such Sterling Foreign Currency Loans fromtime to time.

 

2.11.                        Compensation.  If (a) any payment of principal of anyEurodollar Term Loan, Eurodollar Revolving Credit Loan or Eurodollar ExtendedRevolving Credit Loan is made by the US Borrower or the UK Borrower, as thecase may be, to or for the account of a Lender other than on the last day ofthe Interest Period for such Eurodollar Loan as a result of a payment orconversion pursuant to Section 2.5, 2.6, 2.10, 5.1, 5.2 or 14.7, as aresult of acceleration of the maturity of the Loans pursuant to Section 11or for any other reason, (b) any Borrowing of Eurodollar Term Loans,Eurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit Loansis not made as a result of a withdrawn Notice of Borrowing, (c) any ABRLoan is not converted into a Eurodollar Term Loan, Eurodollar Revolving CreditLoan or Eurodollar Extended Revolving Credit Loan as a result of a withdrawnNotice of Conversion or Continuation, (d) any Eurodollar Loan is notcontinued as a Eurodollar Term Loan, Eurodollar Revolving Credit Loan orEurodollar Extended Revolving Credit Loan as a result of a withdrawn Notice ofConversion or Continuation or (e) any prepayment of principal of anyEurodollar Term Loan, Eurodollar Revolving Credit Loan or Eurodollar ExtendedRevolving Credit Loan is not made as a result of a withdrawn notice ofprepayment pursuant to Section 5.1 or 5.2, the US Borrower or the UKBorrower, as the case may be, shall, after receipt of a written request by suchLender (which request shall set forth in reasonable detail the basis forrequesting such amount), pay to the Administrative Agent for the account ofsuch Lender any amounts required to compensate such Lender for any additionallosses, costs or expenses that such Lender may reasonably incur as a result ofsuch 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 orother funds acquired by any Lender to fund or maintain such Eurodollar Loan.

 

2.12.                        Change of Lending Office.  Each Lender agrees that, upon the occurrenceof 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, ifrequested by the US Borrower or the UK Borrower, as the case may be, usereasonable efforts (subject to overall policy considerations of such Lender) todesignate another lending office for any Loans affected by such event; provided,that such designation is made on such terms that such Lender and its lendingoffice suffer no economic, legal or regulatory disadvantage, with the object ofavoiding the consequence of the event giving rise to the operation of any suchSection.  Nothing in this Section 2.12shall affect or postpone any of the obligations of the US Borrower or the UKBorrower, as the case may be, or the right of any Lender provided in Section 2.10,3.5 or 5.4.

 

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2.13.                        Notice of Certain Costs.  Notwithstanding anything in this Agreement tothe contrary, to the extent any notice required by Section 2.10, 2.11, 3.5or 5.4 is given by any Lender more than 180 days after such Lender hasknowledge (or should have had knowledge) of the occurrence of the event givingrise to the additional cost, reduction in amounts, loss, tax or otheradditional amounts described in such Sections, such Lender shall not beentitled to compensation under Section 2.10, 2.11, 3.5 or 5.4, as the casemay be, for any such amounts incurred or accruing prior to the giving of suchnotice 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 theAdministrative Agent elect to request the establishment of one or more(x) new Tranche H Term Loan Commitments (the “New Tranche H Term LoanCommitments”) and/or new Tranche I Term Loans Commitments (the “NewTranche I Term Loan Commitments”) and/or (y) new Revolving CreditCommitments (the “New Revolving Credit Commitment”) and/or new ExtendedRevolving Credit Commitments (the “New Extended Revolving Loan Commitments”and, together with the New Tranche H Term Loan Commitments, the New Tranche ITerm Loan Commitment and the New Revolving Credit Commitments, the “New LoanCommitments”), by an aggregate amount not less than $25,000,000individually (or such lesser amount which shall be approved by theAdministrative Agent or such lesser amount that shall constitute the differencebetween $250,000,000 and all such New Loan Commitments obtained prior to suchdate), and integral multiples of $5,000,000 in excess of that amount, and inany event, by an aggregate amount which, when taken together with the principalamount of any Permitted Additional Notes, shall not exceed $250,000,000 in theaggregate.  Each such notice shallspecify the date (each, an “Increased Amount Date”) on which the USBorrower proposes that the New Loan Commitments shall be effective, which shallbe a date not less than 10 Business Days after the date on which such notice isdelivered to the Administrative Agent; provided, that the US Borrowershall first offer the Lenders to provide all of the New Loan Commitments priorto offering any other Person that is an eligible assignee pursuant to Section 14.6(b);providedfurther, that any Lender offered or approached toprovide all or a portion of the New Loan Commitments may elect or decline, inits sole discretion, to provide a New Loan Commitment.  Such New Loan Commitments shall becomeeffective, as of such Increased Amount Date; provided, that (1) noDefault or Event of Default shall exist on such Increased Amount Date before orafter giving effect to such New Loan Commitments, as applicable; (2) bothbefore and after giving effect to the making of any Series of New TrancheH Term Loans, New Tranche I Term Loans, New Revolving Loans, or New ExtendedRevolving Loans, each of the conditions set forth in Section 7.1 and 7.2shall be satisfied; (3) the US Borrower and its Subsidiaries shall be in proforma compliance with each of the covenants set forth in Sections 10.9and 10.10 as of the last day of the most recently ended fiscal quarter aftergiving effect to such New Loan Commitments and any investment to be consummatedin connection therewith; (4) the New Loan Commitments shall be effectedpursuant to one or more Joinder Agreements executed and delivered by the USBorrower and Administrative Agent, and each of which shall be recorded in theRegister by the US Borrower and Administrative Agent, and shall be subject tothe requirements set forth in Section 5.4(b); (5) the US Borrowershall make any payments required pursuant to Section 2.11 in connectionwith the New Loan Commitments, as applicable; and (6) the US Borrower

 

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shall deliver or cause tobe delivered (i) a certificate of the US Borrower and Holdings dated theIncreased Amount Date, substantially in the form of Exhibit P, withappropriate insertions, executed by the President or any Vice President and theSecretary or any Assistant Secretary of such Credit Party, and attaching thedocuments referred to in Section 6.7 and 6.8 and, where applicable,certifying as to the incumbency and specimen signature of each officerexecuting any Credit Document or any other document delivered in connectiontherewith on behalf of such Credit Party, (ii) the executed legal opinionsof Simpson Thacher and Bartlett LLP and Tom Riordan, general counsel of theCredit Parties, in each case, substantially in the forms previously deliveredin connection with this Agreement and (iii) any other applicable documentsreasonably required by the Administrative Agent in connection with any suchtransaction.  Any New Tranche H TermLoans or New Tranche I Term Loans made on an Increased Amount Date shall bedesignated a separate series (a “Series”) of New Tranche H Term Loans orNew Tranche H Term Loans, as applicable, for all purpose of this Agreement.

 

On any Increased Amount Date on which New RevolvingLoan 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 ExtendedRevolving Credit Commitments, as applicable, shall assign to each Lender with aNew Revolving Credit Commitment (each, a “New Revolving Loan Lender”) ora New Extended Revolving Loan Commitments (each, a “New Extended RevolvingLoan Lender”), as applicable, and each of the New Revolving Loan Lenders orNew Extended Revolving Loan Lenders shall purchase from each of the Lenderswith Revolving Credit Commitments or Extended Revolving Credit Commitments, asapplicable, at the principal amount thereof (together with accrued interest),such interests in the Revolving Credit Loans or Extended Revolving CreditLoans, as applicable, outstanding on such Increased Amount Date as shall benecessary in order that, after giving effect to all such assignments andpurchases, such Revolving Credit Loans or Extended Revolving Credit Loans, asapplicable, will be held by existing Lenders with Revolving Credit Loans orExtended Revolving Credit Loans, as applicable, and New Revolving Loan Lendersor New Extended Revolving Loan Lenders, as applicable, ratably in accordancewith their Revolving Credit Commitments or Extended Revolving CreditCommitments after giving effect to the addition of such New Revolving CreditCommitments or New Extended Revolving Credit Commitments to the New RevolvingCredit Commitments or Extended Revolving Credit Commitments, (b) each NewRevolving Credit Commitment or New Extended Revolving Credit Commitment shallbe deemed for all purposes a Revolving Credit Commitment or an ExtendedRevolving Credit Commitment, as applicable, and each Loan made thereunder (a “NewRevolving Loan” or a “New Extended Revolving Loan”, as applicable)shall be deemed, for all purposes, a Revolving Credit Loan or an Extended RevolvingCredit Loan and (c) each New Revolving Loan Lender and New ExtendedRevolving Loan Lender shall become a Lender with respect to the New RevolvingLoan Commitment or New Extended Revolving Loan Commitment, as applicable, andall matters relating thereto.

 

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

 

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subject to the satisfaction of the foregoing termsand 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 LoanCommitment (each, a “New Tranche I Term Loan Lender”) of any Series shallmake a Loan to the US Borrower (a “New Tranche H Term Loan” or a “NewTranche I Term Loan”, as applicable) in an amount equal to its New TrancheH Term Loan Commitment or New Tranche I Term Loan Commitment, as applicable, ofsuch Series, and (ii) each New Tranche H Term Loan Lender and New TrancheI Term Loan Lender of any Series shall become a Lender hereunder withrespect to the New Tranche H Term Loan Commitment or New Tranche I Term LoanCommitment, as applicable, of such Series and the New Tranche H Term Loansor New Tranche I Term Loans, as applicable, of such Series made pursuantthereto.

 

The terms and provisions of the New Tranche H TermLoans, New Tranche I Term Loans, New Tranche H Term Loan Commitments and NewTranche I Term Loan Commitments of any Series shall be, except as otherwiseset forth herein or in the Joinder Agreement, identical to the Tranche H TermLoans or the Tranche I Term Loans, as applicable; provided, however,that (i) the applicable maturity date of each Series shall be noshorter than the final maturity of the Extended Revolving Credit Loans and theTranche H Term Loans and (ii) the rate of interest applicable to the NewTranche H Term Loans and the New Tranche H Term Loans of each Series shallbe determined by the US Borrower and the applicable new Lenders and shall beset forth in each applicable Joinder Agreement. The terms and provisions of theNew Revolving Loans, New Extended Revolving Loans, New Revolving CreditCommitments and New Extended Revolving Credit Commitments shall be identical tothe Revolving Credit Loans, the Extended Revolving Credit Loans, the RevolvingCredit Commitments and the Extended Revolving Credit Commitments.

 

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

 

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

 

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Borrower proposes that theIncremental Refinancing Term Loan Commitments or Incremental RefinancingRevolving Credit Commitments shall be effective, which shall be a date not lessthan 10 Business Days after the date on which such notice is delivered to theAdministrative Agent; provided, that the US Borrower shall first offerthe Lenders to provide all of the Incremental Refinancing Term Loan Commitmentsor 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);providedfurther, that any Lender offered or approached toprovide all or a portion of the Incremental Refinancing Term Loan Commitmentsor the Incremental Refinancing Revolving Credit Commitments may elect ordecline, in its sole discretion, to provide an Incremental Refinancing TermLoan Commitment or Incremental Refinancing Revolving Credit Commitment, asapplicable.  Such Incremental RefinancingTerm Loan Commitments and such Incremental Refinancing Revolving CreditCommitments, as applicable, shall become effective, as of such IncrementalRefinancing Amount Date; provided, that (1) no Default or Event ofDefault shall exist on such Incremental Refinancing Amount Date before or aftergiving effect to such Incremental Refinancing Term Loan Commitments or suchIncremental Refinancing Revolving Credit Commitments, as applicable;(2) both before and after giving effect to the making of any Series ofIncremental Refinancing Term Loans or any Incremental Refinancing RevolvingCredit Commitments, each of the conditions set forth in Section 7.1 and7.2 shall be satisfied; (3) the US Borrower and its Subsidiaries shall bein proforma compliance with each of the covenants set forth inSections 10.9 and 10.10 as of the last day of the most recently ended fiscalquarter after giving effect to such Incremental Refinancing Term LoanCommitments or such Incremental Refinancing Revolving Credit Commitments;(4) the Incremental Refinancing Term Loan Commitments and the IncrementalRefinancing Revolving Credit Commitments, as applicable, shall be effected pursuantto one or more Joinder Agreements executed and delivered by the US Borrower andAdministrative Agent, and each of which shall be recorded in the Register bythe US Borrower and Administrative Agent, and shall be subject to therequirements set forth in Section 5.4(b); (5) the US Borrower shallmake any payments required pursuant to Section 2.11 in connection with theIncremental Refinancing Term Loan Commitments or Incremental RefinancingRevolving Credit Commitments, as applicable; and (6) the US Borrower shalldeliver or cause to be delivered (i) a certificate of the US Borrower andHoldings dated the Incremental Refinancing Amount Date, substantially in theform of Exhibit P, with appropriate insertions, executed by the Presidentor any Vice President and the Secretary or any Assistant Secretary of suchCredit Party, and attaching the documents referred to in Section 6.7 and6.8 and, where applicable, certifying as to the incumbency and specimensignature of each officer executing any Credit Document or any other documentdelivered in connection therewith on behalf of such Credit Party, (ii) theexecuted legal opinions of Simpson Thacher and Bartlett LLP and Tom Riordan,general counsel of the Credit Parties, in each case, substantially in the formspreviously delivered in connection with this Agreement and (iii) any otherapplicable documents reasonably required by the Administrative Agent inconnection with any such transaction. Any Incremental Refinancing Term Loans or Incremental RefinancingRevolving Credit Commitments made on an Incremental Refinancing Amount Dateshall be designated a separate series (a “Refinancing Series”) ofIncremental Refinancing Term Loans or

 

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

 

The terms and provisions of any Term Loans madeunder the Incremental Refinancing Term Loan Commitments shall be, except asotherwise set forth herein or in the Joinder Agreement, identical to those ofthe Tranche H Term Loans; provided, however, that (i) theapplicable maturity date of each Refinancing Series shall be no shorterthan the final maturity of the Tranche H Term Loans and (ii) the rate ofinterest applicable to the Incremental Refinancing Term Loans of eachRefinancing Series shall be determined by the US Borrower and theapplicable new Lenders and shall be set forth in each applicable JoinderAgreement; providedfurther, that if the initial yield on anyIncremental Refinancing Term Loans (as determined by the Administrative Agentto be equal to the sum of (x) the Eurodollar Rate (including anyapplicable Eurodollar Rate floor) plus the Applicable Eurodollar Marginapplicable to the Incremental Refinancing Term Loans and (y) if theIncremental Refinancing Term Loans are initially made at a discount or theLenders 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, beingreferred to herein as “OID”), the amount of such OID divided by thelesser of (A) the average life to maturity of such Incremental RefinancingTerm Loans and (B) four) exceeds by more than 50 basis points (the amountof such excess above 50 basis points being referred to herein as the “YieldDifferential”) the Eurodolloar Rate plus the Applicable Eurodollar Marginthen in effect for any Eurodollar Rate Tranche H Term Loan or Tranche I TermLoan, then the Applicable Margin then in effect for Term Loans shallautomatically be increased by the Yield Differential, effective upon the makingof the Incremental Refinancing Term Loans (and if the Eurodollar Rate marginson the Incremental Refinancing Term Loans are subject to a leveraged-basedpricing grid, appropriate increases to the other Applicable Margins for theTerm Loans, consistent with the foregoing, shall be made).

 

On any Incremental Refinancing Amount Date on whichany Incremental Refinancing Term Loan Commitments of any Refinancing Series areeffective, 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 shallmake a Loan to the US Borrower (a “Incremental Refinancing Term Loan”)in an amount equal to its Incremental Refinancing Term Loan Commitment of suchRefinancing Series, and (ii) each Incremental Refinancing Term Loan Lenderof any Refinancing Series shall become a Lender hereunder with respect tothe Incremental Refinancing Term Loan Commitment of such Refinancing Series andthe Incremental Refinancing Term Loans of such Refinancing Series madepursuant thereto.

 

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

 

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be no shorter than the final maturity of theRevolving Credit Commitments or Extended Revolving Credit Commitments, asapplicable and (ii) the rate of interest applicable to the IncrementalRefinancing Revolving Credit Loans of each Refinancing Series shall bedetermined by the US Borrower and the applicable new Lenders and shall be setforth in each applicable Joinder Agreement.

 

On any Incremental Refinancing Amount Date on whichany Incremental Refinancing Revolving Credit Commitments of any Refinancing Series areeffective, 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 anyRefinancing Series shall commit to make Extended Revolving Credit Loans tothe US Borrower (“Incremental Refinancing Revolving Credit Loans”) in anamount equal to its Incremental Refinancing Revolving Credit Commitment of suchRefinancing Series, and (ii) each Incremental Refinancing Revolving CreditLender of any Refinancing Series shall become a Lender hereunder withrespect to the Incremental Refinancing Revolving Credit Commitment of suchRefinancing Series.

 

Each Joinder Agreement may, without the consent ofany other Lenders, effect such amendments to this Agreement and the otherCredit Documents as may be necessary or appropriate, in the opinion of theAdministrative 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 timeon or after the Funding Date and prior to the L/C Maturity Date, may requestthat the Letter of Credit Issuer issue for the account of the US Borrower orthe UK Borrower, as the case may be, a standby letter of credit or letters ofcredit in Dollars (each a “Dollar Letter of Credit” and, collectively,the “Dollar Letters of Credit”) in such form as may be approved by theLetter of Credit Issuer in its reasonable discretion and (ii) the US Borroweror the UK Borrower, at any time and from time to time on or after the FundingDate and prior to the L/C Maturity Date, may request that the Letter of CreditIssuer issue for the account of the US Borrower or the UK Borrower, as the casemay be, a standby letter of credit or letters of credit in a Foreign Currency(each a “Foreign Currency Letter of Credit” and, collectively, the “ForeignCurrency Letters of Credit” and, together with the Dollar Letters ofCredit, the “Letters of Credit”) in such form as may be approved by theLetter of Credit Issuer in its reasonable discretion.  Notwithstanding anything contained herein tothe contrary, it is acknowledged and agreed that, from and after theRestatement Date, (a) all Letter of Credit Exposure with respect toConverting Letters of Credit and any related Unpaid Drawings shall be deemedfor all purposes hereunder to be issued under the Extended Revolving CreditCommitment, (b) there shall be an automatic adjustment to theparticipations held by each Lender thereunder pursuant to Section 3.3 sothat the undivided participation and interest of the Lenders in each suchConverting Letter of Credit and any related Unpaid Drawing is deemed to be madein respect of the Extended Revolving Credit Commitment as if such

 

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

 

(b)  Notwithstanding the foregoing, (i) noLetter of Credit shall be issued the Dollar Equivalent of the Stated Amount ofwhich, when added to the Letter of Credit Outstanding at such time, wouldexceed the Letter of Credit Commitment then in effect; (ii) no Letter ofCredit shall be issued the Dollar Equivalent of the Stated Amount of whichwould cause (A) the aggregate amount of the Lenders’ Revolving CreditExposures at such time to exceed the Total Revolving Credit Commitment then ineffect or (B) the aggregate amount of the Lenders’ Extended RevolvingCredit Exposures at such time to exceed the Total Extended Revolving CreditCommitment then in effect; (iii) each Letter of Credit shall have anexpiration date occurring no later than one year after the date of issuancethereof, unless otherwise agreed upon by the Administrative Agent and theLetter of Credit Issuer; provided, that any Letter of Credit may, uponrequest of the US Borrower or the UK Borrower, as the case may be, provide forthe automatic renewal thereof for additional consecutive periods of one year orless (which in no event shall extend beyond the L/C Maturity Date), subject toany conditions specified in such Letter of Credit; and providedfurther,that in no event shall such expiration date occur later than theL/C Maturity Date; (iv) each Letter of Credit shall be denominated inDollars or in a Foreign Currency; (v) no Letter of Credit shall be issuedif it would be illegal under any applicable law for the beneficiary of theLetter 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 Issuerafter it has received a written notice from the US Borrower, the UK Borrower orany Lender stating that a Default or Event of Default has occurred and iscontinuing until such time as the Letter of Credit Issuer shall have received awritten notice of (x) rescission of such notice from the party or partiesoriginally delivering such notice or (y) the waiver of such Default orEvent of Default in accordance with the provisions of Section 14.1.

 

(c)  Upon at least one Business Day’s priorwritten notice (or telephonic notice promptly confirmed in writing) to theAdministrative Agent and the Letter of Credit Issuer (which notice theAdministrative Agent shall promptly transmit to each of the Lenders), the USBorrower (on its own behalf and on behalf of the UK Borrower) shall have theright, on any day, permanently to terminate or reduce the Letter of CreditCommitment in whole or in part; provided, that, after giving effect tosuch termination or reduction, the Letter of Credit Outstanding shall notexceed the Letter of Credit Commitment.

 

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

 

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Business Days’ writtennotice thereof.  Each notice shall beexecuted by the US Borrower or the UK Borrower, as the case may be, and shallbe 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 CreditRequest shall be deemed to be a representation and warranty by the US Borroweror the UK Borrower, as the case may be, that the Letter of Credit may be issuedin 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 anyLetter of Credit, the Letter of Credit Issuer shall be deemed to have sold andtransferred to each other Lender that has a Revolving Credit Commitment or anExtended Revolving Credit Commitment, as applicable (each such other Lender, inits capacity under this Section 3.3, an “L/C Participant”), andeach such L/C Participant shall be deemed irrevocably and unconditionally tohave purchased and received from the Letter of Credit Issuer, without recourseor warranty, an undivided interest and participation (each an “L/CParticipation”), to the extent of such L/C Participant’s Revolving CreditCommitment Percentage or Revolving Credit Commitment Percentage, as applicable,in such Letter of Credit, each substitute letter of credit, each drawing madethereunder and the obligations of the US Borrower or the UK Borrower, as thecase may be, under this Agreement with respect thereto, and any securitytherefor or guaranty pertaining thereto (although Letter of Credit Fees will bepaid directly to the Administrative Agent for the ratable account of the L/CParticipants as provided in Section 4.1(c) and the L/C Participantsshall have no right to receive any portion of any Fronting Fees).

 

(b)  In determining whether to pay under anyLetter of Credit, the Letter of Credit Issuer shall have no obligation otherthan to confirm that any documents required to be delivered under such Letterof Credit have been delivered and that they appear to comply on their face withthe requirements of such Letter of Credit. Any action taken or omitted to be taken by the Letter of Credit Issuerunder or in connection with any Letter of Credit issued by it, if taken oromitted in the absence of gross negligence or willful misconduct, shall notcreate for the Letter of Credit Issuer any resulting liability.

 

(c)  In the event that the Letter of CreditIssuer makes any payment under any Letter of Credit issued by it and the USBorrower or the UK Borrower, as the case may be, shall not have repaid suchamount 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 whowill notify each applicable L/C Participant of such failure, and each such L/CParticipant shall promptly and unconditionally pay to the Administrative Agent,for the account of the Letter of Credit Issuer, the amount of such L/CParticipant’s Revolving Credit Commitment Percentage or Extended RevolvingCredit Commitment Percentage, as applicable, of such unreimbursed payment inDollars or in the applicable Foreign Currency, as the case may be, and inimmediately available funds; provided, however, that no L/CParticipant shall be obligated to pay to the Administrative Agent for theaccount of the Letter of Credit Issuer its Revolving Credit CommitmentPercentage or

 

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ExtendedRevolving Credit Commitment Percentage, as applicable, of such unreimbursedamount arising from any wrongful payment made by the Letter of Credit Issuerunder a Letter of Credit as a result of acts or omissions constituting willfulmisconduct 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 Participantrequired to fund a payment under a Letter of Credit, such L/C Participant shallmake available to the Administrative Agent for the account of the Letter ofCredit Issuer such L/C Participant’s Revolving Credit Commitment Percentage orExtended Revolving Credit Commitment Percentage, as applicable, of the amountof such payment on such Business Day in immediately available funds (or, ifsuch notification is given after 11:00 a.m. (Local Time) on any BusinessDay, such amount shall be made available on the immediately following BusinessDay).  If and to the extent such L/CParticipant shall not have so made its Revolving Credit Commitment Percentageor Extended Revolving Credit Commitment Percentage, as applicable, of theamount of such payment available to the Administrative Agent for the account ofthe Letter of Credit Issuer, such L/C Participant agrees to pay to theAdministrative Agent for the account of the Letter of Credit Issuer, forthwithon demand, such amount, together with interest thereon for each day from suchdate until the date such amount is paid to the Administrative Agent for theaccount of the Letter of Credit Issuer at the Federal Funds EffectiveRate.  The failure of any L/C Participantto make available to the Administrative Agent for the account of the Letter ofCredit Issuer its Revolving Credit Commitment Percentage or Extended RevolvingCredit Commitment Percentage, as applicable, of any payment under any Letter ofCredit shall not relieve any other L/C Participant of its obligation hereunderto make available to the Administrative Agent for the account of the Letter ofCredit Issuer its Revolving Credit Commitment Percentage or Extended RevolvingCredit Commitment Percentage, as applicable, of any payment under such Letterof Credit on the date required, as specified above, but no L/C Participantshall be responsible for the failure of any other L/C Participant to makeavailable to the Administrative Agent such other L/C Participant’s RevolvingCredit Commitment Percentage or Extended Revolving Credit Commitment Percentage,as applicable, of any such payment.

 

(d)  Whenever the Letter of Credit Issuerreceives a payment in respect of an unpaid reimbursement obligation as to whichthe Administrative Agent has received for the account of the Letter of CreditIssuer any payments from the L/C Participants pursuant to paragraph (c) above,the Letter of Credit Issuer shall pay to the Administrative Agent and theAdministrative Agent shall promptly pay to each L/C Participant that has paidits Revolving Credit Commitment Percentage or Extended Revolving CreditCommitment Percentage, as applicable, of such reimbursement obligation, inDollars or the applicable Foreign Currency, as the case may be, and inimmediately available funds, an amount equal to such L/C Participant’s share(based upon the proportionate aggregate amount originally funded by such L/CParticipant to the aggregate amount funded by all L/C Participants) of theprincipal amount of such reimbursement obligation and interest thereon accruingafter the purchase of the respective L/C Participations.

 

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

 

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ofCredit shall be irrevocable and not subject to counterclaim, set-off or otherdefense or any other qualification or exception whatsoever and shall be made inaccordance with the terms and conditions of this Agreement under allcircumstances, including under any of the following circumstances:

 

(i)  any lack of validity or enforceability ofthis 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 maybe, may have at any time against a beneficiary named in a Letter of Credit, anytransferee of any Letter of Credit (or any Person for whom any such transfereemay be acting), the Administrative Agent, the Letter of Credit Issuer, anyLender or any other Person, whether in connection with this Agreement, anyLetter of Credit, the transactions contemplated herein or any unrelatedtransactions (including any underlying transaction between the US Borrower orthe UK Borrower and the beneficiary named in any such Letter of Credit);

 

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

 

(iv)  the surrender or impairment of anysecurity for the performance or observance of any of the terms of any of theCredit Documents; or

 

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

 

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

 

3.4.                              Agreement to Repay Letter of Credit Drawings.  (a)    The US Borrower or the UK Borrower, as thecase may be, hereby agrees to reimburse the Letter of Credit Issuer, by makingpayment to the Administrative Agent in Dollars or in the applicable ForeignCurrency, as the case may be, in immediately available funds at theAdministrative Agent’s Office, for any payment or disbursement made by theLetter of Credit Issuer under any Letter of Credit (each such amount (includingthe Dollar Equivalent thereof) so paid until reimbursed, an “Unpaid Drawing”)immediately after, and in any event on the date of, such payment, with intereston the amount so paid or disbursed by the Letter of Credit Issuer, to theextent not reimbursed prior to 5:00 p.m. (Local Time) on the date of suchpayment or disbursement, from and including the date paid or disbursed to butexcluding the date the Letter of Credit Issuer is reimbursed therefor at a rateper annum that shall at all times be the Applicable ABR Margin plus theABR as in effect from time to time; provided, that, notwithstanding anythingcontained in this Agreement to the contrary, (i) unless the US Borrower orthe UK Borrower, as the

 

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case may be, shall havenotified 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 UKBorrower, as the case may be, intends to reimburse the Letter of Credit Issuerfor the amount of such drawing with funds other than the proceeds of Loans, theUS Borrower or the UK Borrower, as the case may be, shall be deemed to havegiven a Notice of Borrowing to the Administrative Agent requesting that theLenders make Dollar Revolving Credit Loans or Dollar Extended Revolving CreditLoans, as applicable, (each of which shall initially be ABR Loans) or ForeignCurrency Revolving Credit Loans or Foreign Currency Extended Revolving CreditLoans (each of which shall be Eurodollar Loans with an Interest Period of onemonth denominated in Sterling or Euro), as the case may be, on the date onwhich such drawing is honored in an amount equal to the amount of such drawingand (ii) the Administrative Agent shall promptly notify each L/CParticipant of such drawing and the amount of its Revolving Credit Loan orExtended Revolving Credit Loan, as applicable, to be made in respect thereof,and (x) in respect of Dollar Letters of Credit, each L/C Participant shallbe irrevocably obligated to make a Dollar Revolving Credit Loan or a DollarExtended Revolving Credit Loan, as applicable, in each case that is an ABR Loanto the US Borrower or the UK Borrower, as the case may be, in the amount of itsRevolving Credit Commitment Percentage or Extended Revolving Credit CommitmentPercentage, as applicable, of the applicable Unpaid Drawing by 12:00 noon(Local Time) on such Business Day by making the amount of such Dollar RevolvingCredit Loan or Dollar Extended Revolving Credit Loan, as applicable, availableto the Administrative Agent at the Administrative Agent’s Office and(y) in respect of Foreign Currency Letters of Credit, each L/C Participantshall be irrevocably obligated to make a Foreign Currency Revolving Credit Loanor a Foreign Currency Extended Revolving Credit Loan, as applicable, in eachcase that is a Eurodollar Loan with an Interest Period of one month to the USBorrower or the UK Borrower, as the case may be, denominated in Sterling orEuro, as the case may be, in the amount of its Revolving Credit CommitmentPercentage or Extended Revolving Credit Commitment Percentage, as applicable,of the applicable Unpaid Drawing by 12:00 noon (London time) on such BusinessDay by making the amount of such Foreign Currency Revolving Credit Loan orForeign Currency Extended Revolving Credit Loan, as applicable, available tothe Administrative Agent at the Administrative Agent’s Office.  Such Dollar Revolving Credit Loans or DollarExtended Revolving Credit Loans, Foreign Currency Revolving Credit Loans orForeign Currency Extended Revolving Credit Loans, as the case may be, shall bemade without regard to the Minimum Borrowing Amount.  The Administrative Agent shall use theproceeds of such Revolving Credit Loans or Extended Revolving Credit Loans, asapplicable, solely for the purpose of reimbursing the Letter of Credit Issuerfor the related Unpaid Drawing.

 

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

 

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

 

3.5.                              Increased Costs.  If after the Funding Date, the adoption ofany applicable law, rule or regulation, or any change therein, or anychange in the interpretation or administration thereof by any GovernmentalAuthority, central bank or comparable agency charged with the interpretation oradministration thereof, or actual compliance by the Letter of Credit Issuer orany L/C Participant with any request or directive made or adopted after theFunding Date (whether or not having the force of law), by any such authority,central bank or comparable agency shall either (a) impose, modify or makeapplicable any reserve, deposit, capital adequacy or similar requirementagainst letters of credit issued by the Letter of Credit Issuer, or any L/CParticipant’s L/C Participation therein, or (b) impose on the Letter ofCredit Issuer or any L/C Participant any other conditions affecting itsobligations under this Agreement in respect of Letters of Credit or L/CParticipations therein or any Letter of Credit or such L/C Participant’s L/CParticipation therein, and the result of any of the foregoing is to increasethe 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 amountof any sum received or receivable by the Letter of Credit Issuer or such L/CParticipant hereunder (other than any such increase or reduction attributableto 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, asthe case may be, (a copy of which notice shall be sent by the Letter of CreditIssuer or such L/C Participant to the Administrative Agent), the US Borrower orthe UK Borrower, as the case may be, shall pay to the Letter of Credit Issueror such L/C Participant such additional amount or amounts as will compensatethe Letter of Credit Issuer or such L/C Participant for such increased cost orreduction, it being understood and agreed, however, that the Letter of CreditIssuer or an L/C Participant shall not be entitled to such compensation as aresult of such Person’s compliance with, or pursuant to any request ordirective to comply with, any such law, rule or regulation as in effect onthe Funding Date.  A certificatesubmitted to the US Borrower or the UK Borrower, as the case may be, by theLetter of Credit Issuer or a L/C Participant, as the case may be, (a copyof which certificate shall be sent by the Letter of Credit Issuer or suchL/C Participant to the Administrative Agent) setting forth in reasonabledetail the basis for the determination of such additional amount or amountsnecessary to compensate the Letter of Credit Issuer or such L/C Participant asaforesaid shall be conclusive and binding on the US Borrower and the UKBorrower absent clearly demonstrable error.

 

3.6.                              Successor Letter of Credit Issuer.  The Letter of Credit Issuer may resign asLetter of Credit Issuer upon 60 days’ prior written notice to theAdministrative Agent, the Lenders and the US Borrower.  If the Letter of Credit Issuer shall resignas Letter of Credit Issuer under this Agreement, then the US Borrower shallappoint from among the Lenders with Extended Revolving Credit Commitments asuccessor issuer of

 

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Letters of Credit,whereupon such successor issuer shall succeed to the rights, powers and dutiesof the Letter of Credit Issuer, and the term “Letter of Credit Issuer” shallmean such successor issuer effective upon such appointment.  At the time such resignation shall becomeeffective, the US Borrower and the UK Borrower shall pay to the resigningLetter of Credit Issuer all accrued and unpaid fees pursuant to Sections 4.1(d) and(e).  The acceptance of any appointmentas the Letter of Credit Issuer hereunder by a successor Lender shall beevidenced by an agreement entered into by such successor, in a formsatisfactory to the US Borrower and the Administrative Agent and, from andafter the effective date of such agreement, such successor Lender shall haveall the rights and obligations of the previous Letter of Credit Issuer underthis Agreement and the other Credit Documents. After the resignation of the Letter of Credit Issuer hereunder, theresigning Letter of Credit Issuer shall remain a party hereto and shallcontinue to have all the rights and obligations of a Letter of Credit Issuerunder this Agreement and the other Loan Documents with respect to Letters ofCredit issued by it prior to such resignation, but shall not be required toissue additional Letters of Credit. After any retiring Letter of Credit Issuer’s resignation as Letter ofCredit Issuer, the provisions of this Agreement relating to the Letter ofCredit Issuer shall inure to its benefit as to any actions taken or omitted tobe taken by it (a) while it was Letter of Credit Issuer under thisAgreement or (b) at any time with respect to Letters of Credit issued bysuch Letter of Credit Issuer.

 

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

 

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

 

(b)  if the reallocation described in clause (a) abovecannot, or can only partially, be effected, the US Borrower shall within oneBusiness Day following notice by the Administrative Agent cash collateralizesuch Defaulting Lender’s Letter of Credit Exposure (after giving effect to anypartial reallocation pursuant to clause (a) above) in accordance with theprocedures set forth in Section 5.2(b) for so long as such Letter ofCredit Exposure is outstanding;

 

(c)  if the US Borrower cash collateralizes anyportion 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 Lenderwith respect to such Defaulting Lender’s Letter of Credit Exposure during theperiod such Defaulting Lender’s Letter of Credit Exposure is cashcollateralized;

 

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

 

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Sections4.1(c) or (d) shall be adjusted in accordance with suchnon-Defaulting Lenders’ Extended Revolving Credit Commitment Percentages; or

 

(e)  if any Defaulting Lender’s LC Exposure isneither cash collateralized nor reallocated pursuant to Section 3.7(a),then, without prejudice to any rights or remedies of the Letter of CreditIssuer or any Lender hereunder, all facility fees that otherwise would havebeen payable to such Defaulting Lender (solely with respect to the portion ofsuch Defaulting Lender’s Commitment that was utilized by such LC Exposure) andLetter of Credit Fees payable under Sections 4.1(c) or (d) withrespect to such Defaulting Lender’s Letter of Credit Exposure shall be payableto the Letter of Credit Issuer until such Letter of Credit Exposure is cashcollateralized and/or reallocated.

 

So long as any Lender is a Defaulting Lender, theIssuing Bank shall not be required to issue, amend or increase any Letter ofCredit, unless it is reasonably satisfied that the related exposure will be100% covered by the Commitments of the non-Defaulting Lenders and/or cashcollateral 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 payto the Administrative Agent in Dollars, for the account of each Lender having aRevolving Credit Commitment (in each case prorata according tothe respective Revolving Credit Commitments of all such Lenders), a commitmentfee for each day from and including the Funding Date to but excluding the FinalDate.  Such commitment fee shall bepayable in arrears (i) on the last day of each March, June, September andDecember (for the three-month period (or portion thereof) ended on suchday 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 receivedpursuant to clause (i) above), and shall be computed for each dayduring such period at a rate per annum equal to the Commitment Fee Rate ineffect on such day on the Available Commitments in effect on such day.  In addition, the US Borrower (on behalf ofitself 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 eachcase prorata according to the respective Tranche A Term LoanCommitments of all such Lenders), a commitment fee for each day from andincluding 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-2Term Loans pursuant to Section 2.1(a)(iii).  Such commitment fee shall be payable inarrears on the earlier of September 30, 2004 and the date of any Borrowingof 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 equalto 0.50% on the Available Tranche A Commitment in effect on such day.  Notwithstanding the foregoing, the USBorrower shall not be obligated to pay any amounts to any Defaulting Lenderpursuant to this Section 4.1.

 

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

 

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ExtendedRevolving Credit Commitment (in each case prorata according to the respective Extended Revolving Credit Commitments ofall such Lenders), a commitment fee for each day from and including theRestatement Date to but excluding the Final Extended Date.  Such commitment fee shall be payable inarrears (i) on the last day of each March, June, September and December (forthe three-month period (or portion thereof) ended on such day for which nopayment has been received) and (ii) on the Final Extended Date (for theperiod ended on such date for which no payment has been received pursuant toclause (i) above), and shall be computed for each day during such periodat a rate per annum equal to the Extended Commitment Fee Rate on the AvailableExtended Commitments in effect on such day. Notwithstanding the foregoing, the US Borrower shall not be obligated topay any amounts to any Defaulting Lender pursuant to this Section 4.1.

 

(c)  The US Borrower (on behalf of itself andthe UK Borrower) agrees to pay to the Administrative Agent in Dollars for theaccount of the Lenders prorata on the basis of their respectiveLetter of Credit Exposure, a fee in respect of each Letter of Credit (the “Letterof Credit Fee”), for the period from and including the date of issuance ofsuch Letter of Credit to but excluding the termination date of such Letter ofCredit computed at the per annum rate for each day equal to the ApplicableEurodollar Margin for Extended Revolving Credit Loans, or with respect toLetters of Credit issued under the Revolving Credit Commitments, the ApplicableEurodollar 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 andpayable quarterly in arrears on the last day of each March, June, September andDecember and on the date upon which the Total Extended Revolving CreditCommitment terminates and the Letter of Credit Outstandings shall have beenreduced to zero.

 

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

 

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

 

4.2.                              Voluntary Reduction of Revolving Credit Commitments and ExtendedRevolving Credit Commitments.  Upon at least one Business Day’s priorwritten notice (or telephonic notice promptly confirmed in writing) to theAdministrative

 

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Agent at theAdministrative Agent’s Office (which notice the Administrative Agent shallpromptly transmit to each of the Lenders), the US Borrower (on behalf of itselfand the UK Borrower) shall have the right, without premium or penalty, on anyday, permanently to terminate or reduce (i) the Revolving CreditCommitments and/or the Foreign Currency Revolving Commitments in whole or inpart; provided, that (a) any such reduction shall applyproportionately and permanently to reduce the Revolving Credit Commitment orthe Foreign Currency Revolving Commitment, as the case may be, of each of theLenders, (b) any partial reduction pursuant to this Section 4.2 shallbe in the amount of at least the Dollar Equivalent of $1,000,000 and inintegral multiples of the Dollar Equivalent of $100,000 and (c) aftergiving effect to such termination or reduction and to any prepayments of theLoans made on the date thereof in accordance with this Agreement, the aggregateamount of the Lenders’ Revolving Credit Exposures shall not exceed the TotalRevolving Credit Commitment or (ii) the Extended Revolving CreditCommitments and/or the Foreign Currency Extended Revolving Commitments in wholeor in part; provided, that (a) any such reduction shall applyproportionately and permanently to reduce the Extended Revolving CreditCommitment or the Foreign Currency Extended Revolving Commitment, as the casemay be, of each of the Lenders, (b) any partial reduction pursuant to thisSection 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 anyprepayments of the Loans made on the date thereof in accordance with thisAgreement, the aggregate amount of the Lenders’ Extended Revolving CreditExposures 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 terminateat 5:00 p.m. (New York time) on the Funding Date.  €41,907,635.58 of the Tranche A Term LoanCommitments 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 Commitmentsshall terminate at 5:00 p.m. (New York time) on the Fourth AmendmentEffective Date.  All of the Tranche HTerm Loan Commitments shall terminate at 5:00 p.m. (New York time) on theRestatement Date.  All of the Tranche ITerm Loan Commitments shall terminate at 5:00 p.m. (New York time) on theRestatement Date.

 

(b)  The Total Revolving Credit Commitment,including the Total Foreign Currency Revolving Commitment, shall terminate at5:00 p.m. (New York time) on the Revolving Credit Maturity Date.

 

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

 

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

 

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

 

SECTION 5.                                Payments

 

5.1.                              Voluntary Prepayments.  The US Borrower and the UK Borrower shallhave the right to prepay Term Loans, Revolving Credit Loans, Extended RevolvingCredit Loans and Swingline Loans, without premium or penalty, in whole or inpart from time to time on the following terms and conditions: (a) the USBorrower (on its own behalf and on behalf of the UK Borrower) shall give theAdministrative Agent at the Administrative Agent’s Office (or, in the case of aSwingline Loan, the Swingline Lender) written notice (or telephonic noticepromptly confirmed in writing) of its intent to make such prepayment, theamount of such prepayment and (in the case of Eurodollar Term Loans, EurodollarRevolving Credit Loans and Eurodollar Extended Revolving Credit Loans) thespecific Borrowing(s) pursuant to which such prepayment shall be applied,which notice shall be given by the US Borrower no later than (i) in thecase 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 thecase of Swingline Loans, 10:00 a.m. (Local Time) on, the date of suchprepayment and shall promptly be transmitted by the Administrative Agent toeach of the Lenders or the Swingline Lender, as the case may be; (b) eachpartial prepayment of any Borrowing of Term Loans, Revolving Credit Loans orExtended Revolving Credit Loans shall be in a multiple of the Dollar Equivalentof $100,000 and in an aggregate principal amount of the Dollar Equivalent of atleast $1,000,000 and each partial prepayment of Swingline Loans shall be in amultiple of the Dollar Equivalent of $100,000 and in an aggregate principalamount of at least the Dollar Equivalent of $100,000; provided, that nopartial prepayment of Eurodollar Term Loans, Eurodollar Revolving Credit Loansor Eurodollar Extended Revolving Credit Loans made pursuant to a singleBorrowing shall reduce the outstanding Eurodollar Term Loans, EurodollarRevolving Credit Loans or Eurodollar Extended Revolving Credit Loans madepursuant to such Borrowing to an amount less than the Minimum Borrowing Amountfor Eurodollar Term Loans, Eurodollar Revolving Credit Loans or EurodollarExtended Revolving Credit Loans; and (c) any prepayment of Eurodollar TermLoans, Eurodollar Revolving Credit Loans or Eurodollar Extended RevolvingCredit Loans pursuant to this Section 5.1 on any day other than the lastday of an Interest Period applicable thereto shall be subject to compliance bythe US Borrower or the UK Borrower, as the case may be, with the applicableprovisions of Section 2.11.  Eachprepayment in respect of any tranche of Term Loans pursuant to thisSection 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 HTerm Loans or Tranche I Term Loans in such manner as the US Borrower (on itsown behalf and on behalf of the UK Borrower) may determine and (b) appliedto reduce Tranche A-1 Repayment Amounts, Tranche A-2 Repayment Amounts,Tranche E Repayment Amounts, Tranche G Repayment Amounts,

 

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Tranche H RepaymentAmounts or Tranche I Repayment Amounts in such order as the US Borrower (on itsown 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 shallbe applied on a prorata basis collectively to both such tranchesand (ii) Tranche G Term Loans or Tranche I Term Loans shall be applied ona prorata basis collectively to both such tranches; providedfurther, that with respect to any prepayment of Term Loans pursuant tothis Section 5.1 made with the Net Cash Proceeds from any incurrence ofIndebtedness pursuant to clause (ii) of Section 10.1(n) whichare not required to be applied in accordance with Section 5.2, the USBorrower (on its own behalf and on the behalf of the UK Borrower) may applysuch proceeds, at its election, to the Tranche A-1 Term Loans, the Tranche A-2Term Loans, the Tranche E Term Loans and/or the Tranche G Term Loans in suchmanner as it may determine and, following the repayment of the Tranche A-1 TermLoans, the Tranche A-2 Term Loans, the Tranche E Term Loans and the Tranche GTerm Loans in full, in such manner as it may determine.  At the US Borrower’s election (on its ownbehalf and on behalf of the UK Borrower) in connection with any prepaymentpursuant to this Section 5.1, such prepayment shall not be applied to anyTerm Loan, Revolving Credit Loan or Extended Revolving Credit Loan of aDefaulting Lender.  All voluntaryprepayments of all but not less than all of the Tranche H Term Loans and/or theTranche I Term Loans effected on or prior to the first anniversary of theRestatement Date with the proceeds of a substantially concurrent issuance orincurrence of new bank loans which (x) are incurred for the primarypurpose of refinancing the Tranche H Term Loans or Tranche I Term Loans, as thecase may be, and decreasing the Applicable ABR Margin or Applicable EurodollarMargin with respect thereto, (y) otherwise have terms and conditions (andare in an aggregate principal amount) substantially the same as those of theTranche H Term Loans or Tranche I Term Loans, as the case may be, as in effectprior to the prepayment thereof and (z) are not otherwise in connectionwith a transaction and any transactions related thereto not permitted by thisAgreement (as determined prior to giving effect to any amendment or waiver ofthis Agreement being adopted in connection with such transaction and relatedtransactions), shall be accompanied by a prepayment fee equal to 1.00% of theaggregate 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 UKBorrower shall, within five Business Days after the occurrence of suchPrepayment 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 CashProceeds from such Prepayment Event; provided that if such PrepaymentEvent is a Debt Incurrence Prepayment Event arising pursuant to clause (ii) ofSection 10.1(n), a prepayment pursuant to this Section 5.2(a)(i) shallonly be required from and after such time as there is $250,000,000 ofIndebtedness outstanding under such clause and such prepayment shall be in anamount equal to 50% of the Net Cash Proceeds from such Prepayment Event.  For avoidance of doubt, no prepayment shallbe required pursuant to this Section 5.2(a)(i) for any PrepaymentEvents that have occurred prior to the Fourth Amendment Effectiveness Date.

 

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(ii)  Not later than the date that is sixmonths after the last day of any fiscal year (commencing with the fiscal yearending December 31, 2004), if the Consolidated Total Debt to ConsolidatedEBITDA Ratio as of the end of such fiscal year is greater than or equal to 3.50to 1.00, the US Borrower and the UK Borrower shall offer to prepay, inaccordance with paragraph (c) below, the principal of Term Loans inan 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 thebusiness of the US Borrower or any of its Subsidiaries (subject toSection 9.14), minus (y) the principal amount of Term Loansvoluntarily 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 Outstandingsand Aggregate Extended Revolving Credit Outstandings.  If on any date the aggregate amount of theLenders’ Revolving Credit Exposures (all the foregoing, collectively, the “AggregateRevolving Credit Outstandings”) exceeds 103% of the Total Revolving CreditCommitment as then in effect or the aggregate amount of the Lenders’ ExtendedRevolving Credit Exposures (all the foregoing, collectively, the “AggregateExtended Revolving Credit Outstandings”) exceeds 103% of the Total ExtendedRevolving Credit Commitment as then in effect, the US Borrower and/or the UKBorrower, as the case may be, shall forthwith repay on such date the principalamount of Swingline Loans and, after all Swingline Loans have been paid infull, 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 andRevolving Credit Loans or Extended Revolving Credit Loans, as applicable, theAggregate Revolving Credit Outstandings exceed the Total Revolving CreditCommitment then in effect or the Aggregate Extended Revolving CreditOutstandings exceed the Total Extended Revolving Credit Commitment then ineffect, as applicable, the US Borrower and/or the UK Borrower, as the case maybe, shall pay to the Administrative Agent an amount in cash equal to suchexcess and the Administrative Agent shall hold such payment for the benefit ofthe Lenders as security for the obligations of the US Borrower and the UKBorrower hereunder (including obligations in respect of Letter of CreditOutstandings) pursuant to a cash collateral agreement to be entered into inform and substance satisfactory to the Administrative Agent (which shall permitcertain investments in Permitted Investments satisfactory to the AdministrativeAgent, until the proceeds are applied to the secured obligations).

 

(c)  Application to Repayment Amounts.  Each prepayment of Term Loans required bySection 5.2(a) shall (unless otherwise indicated below) be initiallyallocated prorata among the Tranche A-1 Term Loans, theTranche A-2 Term Loans, the Tranche E Term Loans, the Tranche G Term Loans, theTranche H Term Loans and the Tranche I Term Loans and each such prepayment ofTerm Loans (including those prepayments described below) shall be applied toreduce the applicable Repayment Amounts in such order as the US Borrower (onits own behalf and on behalf of the UK Borrower) may determine up to an amountequal to the aggregate amount of the applicable Repayment Amounts required tobe 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 yearperiod

 

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immediatelyfollowing the date of the prepayment (such amount being, the “AmortizationAmount”); provided, that to the extent that the amount of theprepayment exceeds the Amortization Amount, such excess shall be appliedratably to reduce the then remaining Repayment Amounts under such TermFacility; providedfurther, that, notwithstanding anything to thecontrary contained herein, with respect to any prepayment of Term Loansrequired by Section 5.2(a) that results from a Debt IncurrencePrepayment Event in respect of any incurrence of Incremental Refinancing TermLoans pursuant to Section 2.15, any incurrence of Indebtedness pursuant toclause (ii) of Section 10.1(n) and any incurrence ofIndebtedness pursuant to Section 10.1(q), such prepayment shall beinitially allocated prorata among the Tranche A-1 Term Loans,the Tranche A-2 Term Loans, the Tranche E Term Loans and the Tranche G TermLoans 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 anyincurrence of Indebtedness pursuant to Section 10.1(q), thereafter, prorata among the remaining Term Loans. With respect to each such prepayment, (i) the US Borrower (on itsown behalf and on behalf of the UK Borrower) will, not later than the datespecified 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 toeach Term Loan Lender, (ii) each Tranche E Term Loan Lender, each TrancheG Term Loan Lender, each Tranche H Term Loan Lender and each Tranche I TermLoan Lender will have the right to refuse any such prepayment by giving writtennotice of such refusal to the Administrative Agent within fifteen Business Daysafter such Lender’s receipt of notice from the Administrative Agent of suchprepayment (and the US Borrower and the UK Borrower shall not prepay any suchTranche E Term Loans, Tranche G Term Loan, Tranche H Term Loans and Tranche ITerm Loans until the date that is specified in the immediately followingclause), (iii) the US Borrower and the UK Borrower will make all suchprepayments not so refused upon the earlier of (x) such fifteenth BusinessDay and (y) such time as the Administrative Agent has received notice fromeach Lender that it consents to or refuses such prepayment and (iv) anyprepayment so refused may be retained by the US Borrower or the UK Borrower, asthe case may be; provided, that any prepayment so refused that relatesto Net Cash Proceeds from a Debt Incurrence Prepayment Event in respect of theissuance of Permitted Additional Subordinated Notes shall be allocated prorata to the then outstanding Tranche A-1 Term Loans and Tranche A-2Term Loans and shall be applied as set forth above in this paragraph (c).

 

(d)  Application to Term Loans.  Withrespect to each prepayment of Term Loans required by Section 5.2(a), theUS Borrower (on its own behalf and on behalf of the UK Borrower) may, subjectto Section 5.2(c), designate the Types of Loans that are to be prepaid andthe specific Borrowing(s) pursuant to which made; provided, that(i) Eurodollar Term Loans may be designated for prepayment pursuant tothis Section 5.2 only on the last day of an Interest Period applicablethereto unless all Eurodollar Term Loans with Interest Periods ending on suchdate of required prepayment and all Term Loans that are ABR Loans have beenpaid in full; (ii) if any prepayment of Eurodollar Term Loans madepursuant to a single Borrowing shall reduce the outstanding Term Loans madepursuant to such Borrowing to an amount less than the Minimum Borrowing Amountfor Eurodollar Term Loans, such Borrowing shall immediately be converted intoABR Loans; and (iii) in the case of a prepayment of Tranche E Term Loansor Tranche G

 

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TermLoans required by Section 5.2(a), the prepayment amount shall be appliedon a prorata basis to the then outstanding Loans of theapplicable Class, regardless of Type and, in the case of Eurodollar Term Loansof the applicable Class, the Interest Period therefor.  In the absence of a designation by the USBorrower as described in the preceding sentence, the Administrative Agentshall, subject to the above, make such designation in its reasonable discretionwith a view, but no obligation, to minimize breakage costs owing underSection 2.11.

 

(e)  Application to Revolving Credit Loansand Extended Revolving Credit Loans. With respect to each prepayment of Revolving Credit Loans or ExtendedRevolving Credit Loans elected by the US Borrower pursuant to Section 5.1or required by Section 5.2(b), the US Borrower (on its own behalf and onbehalf of the UK Borrower) may designate (i) the Types of Loans that areto be prepaid and the specific Borrowing(s) pursuant to which made and(ii) the Dollar Revolving Credit Loans, Foreign Currency Revolving CreditLoans, Dollar Extended Revolving Credit Loans or Foreign Currency ExtendedRevolving Credit Loans to be prepaid; provided, that (w) EurodollarRevolving Credit Loans or Eurodollar Extended Revolving Credit Loans may bedesignated for prepayment pursuant to this Section 5.2 only on the lastday of an Interest Period applicable thereto unless all Eurodollar RevolvingCredit Loans or all Eurodollar Extended Revolving Credit Loans, as applicable,with Interest Periods ending on such date of required prepayment and all ABRLoans have been paid in full; (x) if any prepayment by the US Borrower ofEurodollar Revolving Credit Loans or Eurodollar Extended Revolving Credit Loansmade pursuant to a single Borrowing shall reduce the outstanding DollarEquivalent of the Revolving Credit Loans or Extended Revolving Credit Loans, asapplicable, made pursuant to such Borrowing to an amount less than the MinimumBorrowing Amount for Eurodollar Revolving Credit Loans or Eurodollar ExtendedRevolving Credit Loans, as applicable, such Borrowing shall immediately beconverted into ABR Loans; (y) each prepayment of any Loans made pursuantto a Borrowing shall be applied prorata among such Loans; and(z) notwithstanding the provisions of the preceding clause (y), noprepayment made pursuant to Section 5.2(a) or Section 5.2(b) ofRevolving Credit Loans or Extended Revolving Credit Loans shall be applied tothe Revolving Credit Loans or Extended Revolving Credit Loans of any DefaultingLender.  In the absence of a designationby the US Borrower as described in the preceding sentence, the AdministrativeAgent shall, subject to the above, make such designation in its reasonablediscretion with a view, but no obligation, to minimize breakage costs owing underSection 2.11.

 

(f)  Eurodollar Interest Periods.  In lieu of making any payment pursuant tothis Section 5.2 in respect of any Eurodollar Loan other than on the lastday of the Interest Period therefor so long as no Default or Event of Defaultshall have occurred and be continuing, the US Borrower or the UK Borrower, asthe case may be, at its option may deposit with the Administrative Agent anamount equal to the amount of the Eurodollar Loan to be prepaid and suchEurodollar Loan shall be repaid on the last day of the Interest Period thereforin the required amount.  Such depositshall be held by the Administrative Agent in a corporate time deposit accountestablished 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 collateralfor the Obligations;

 

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

 

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

 

(h)  Foreign Asset Sales.  Notwithstanding any other provisions of thisSection 5.2, (i) to the extent that any of or all the Net CashProceeds of any asset sale by a Restricted Foreign Subsidiary giving rise to anAsset Sale Prepayment Event (a “Foreign Asset Sale”) are prohibited ordelayed by applicable local law from being repatriated to the United States orthe United Kingdom, the portion of such Net Cash Proceeds so affected will notbe required to be applied to repay Term Loans at the times provided in this Section 5.2but may be retained by the applicable Restricted Foreign Subsidiary so long,but only so long, as the applicable local law will not permit repatriation tothe United States or the United Kingdom (the US Borrower and the UKBorrower hereby agreeing to cause the applicable Restricted Foreign Subsidiaryto promptly take all actions required by the applicable local law to permitsuch repatriation), and once such repatriation of any of such affected Net CashProceeds is permitted under the applicable local law, such repatriation will beimmediately effected and such repatriated Net Cash Proceeds will be promptly(and in any event not later than two Business Days after suchrepatriation) applied (net of additional taxes payable or reserved against as aresult thereof) to the repayment of the Term Loans pursuant to thisSection 5.2 and (ii) to the extent that the US Borrower (on its ownbehalf and on behalf of the UK Borrower) has determined in good faith thatrepatriation of any of or all the Net Cash Proceeds of any Foreign Asset Salewould have a material adverse tax cost consequence with respect to such NetCash Proceeds, the Net Cash Proceeds so affected may be retained by theapplicable Restricted Foreign Subsidiary; provided, that, in the case ofthis clause (ii), on or before the date on which any Net Cash Proceeds soretained would otherwise have been required to be applied to reinvestments orprepayments pursuant to Section 5.2(a), (x) the US Borrower or the UKBorrower, as the case may be, applies an amount equal to such Net Cash Proceedsto such reinvestments or prepayments as if such Net Cash Proceeds had beenreceived by the US Borrower or the UK Borrower, as the case may be, rather thansuch Restricted Foreign Subsidiary, less the amount of additional taxes thatwould have been payable or reserved against if such Net Cash Proceeds had beenrepatriated (or, if less, the Net Cash Proceeds that would be calculated ifreceived by such Foreign Subsidiary) or (y) such Net Cash Proceeds are appliedto 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 underthis 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 theratable account of the Lenders entitled thereto, the Letter of Credit Issuer orthe Swingline Lender, as the case may be, not later than

 

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12:00 Noon (LocalTime) on the date when due and shall be made (i) in the case of amountspayable in Dollars, in immediately available funds at the Administrative Agent’sOffice and (ii) in the case of amounts payable in a Foreign Currency, inimmediately available funds at the Administrative Agent’s Office or at suchother office as the Administrative Agent shall specify for such purpose bynotice to the Borrower, it being understood that written or facsimile notice bythe US Borrower or the UK Borrower, as the case may be, to the AdministrativeAgent 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 shallconstitute the making of such payment to the extent of such funds held in suchaccount.  All payments under each CreditDocument (whether of principal, interest or otherwise) shall be made(i) in the case of the principal of and interest on each Loan, in thecurrency in which such Loan is denominated, (ii) in the case ofreimbursement obligations in respect of Letters of Credit, in the currency inwhich such Letter of Credit is denominated, (iii) in the case of anyindemnification or expense reimbursement payment, in Dollars or Euro, as requestedby the Person entitled to receive such payment, or (iv) in all othercases, in Dollars, in each case except as otherwise expressly providedherein.  The Administrative Agent willthereafter cause to be distributed on the same day (if payment was actually receivedby 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 tothe Lenders entitled thereto.

 

(b)  Any payments under this Agreement that aremade later than 2:00 p.m. (Local Time) shall be deemed to have been madeon the next succeeding Business Day at the Administrative Agent’sdiscretion.  Whenever any payment to bemade 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 suchextension 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 thisAgreement shall be made free and clear of, and without deduction or withholdingfor or on account of, any current or future income, stamp or other taxes,levies, imposts, duties, charges, fees, deductions or withholdings, now orhereafter imposed, levied, collected, withheld or assessed by any GovernmentalAuthority, excluding (i) net income taxes and franchise taxes (imposed inlieu 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 aresult of a current or former connection between the Administrative Agent orsuch Lender and the jurisdiction of the Governmental Authority imposing suchtax or any political subdivision or taxing authority thereof or therein (otherthan any such connection arising solely from the Administrative Agent or suchLender having executed, delivered or performed its obligations or received apayment under, or enforced, this Agreement).  If any such non-excluded taxes, levies,imposts, duties, charges, fees, deductions or withholdings (“Non-ExcludedTaxes”) are required to be withheld from any amounts payable to theAdministrative Agent or any Lender hereunder, the amounts so payable to theAdministrative Agent or such Lender shall be increased to the extent necessaryto yield to the Administrative Agent or such Lender (after payment of allNon-Excluded Taxes)

 

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interest or any such otheramounts payable hereunder at the rates or in the amounts specified in thisAgreement; provided, however, that the US Borrower shall not berequired to increase any such amounts payable to any Lender that is notorganized 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) ofthis Section 5.4.  Whenever anyNon-Excluded Taxes are payable by the US Borrower or the UK Borrower, as thecase may be, as promptly as possible thereafter such US Borrower or UK Borrowershall send to the Administrative Agent for its own account or for the accountof such Lender, as the case may be, a certified copy of an original officialreceipt (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 UKBorrower, as the case may be, fails to pay any Non-Excluded Taxes when due tothe appropriate taxing authority or fails to remit to the Administrative Agentthe required receipts or other required documentary evidence, the US Borroweror the UK Borrower, as the case may be, shall indemnify the AdministrativeAgent and the Lenders for any incremental taxes, interest, costs or penaltiesthat may become payable by the Administrative Agent or any Lender as a resultof any such failure.  The agreements inthis Section 5.4(a) shall survive the termination of this Agreementand 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 theAdministrative Agent two copies of either (x) in the case of Non-U.S.Lender claiming exemption from U.S. Federal withholding tax underSection 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 abank for purposes of Section 881(c) of the Code, is not a 10-percentshareholder (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 theUS Borrower (within the meaning of Section 864(d)(4) of the Code)),or (y) Internal Revenue Service Form W-8BEN or Form W-8ECI, ineach case properly completed and duly executed by such Non-U.S. Lender claimingcomplete exemption from, or reduced rate of, U.S. Federal withholding tax onpayments by the US Borrower under this Agreement;

 

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

 

(iii)  obtain such extensions of time forfiling and complete such forms or certifications as may reasonably be requestedby the US Borrower or the Administrative Agent;

 

unless in any such case any change in treaty, law orregulation has occurred prior to the date on which any such delivery wouldotherwise be required that renders any such form

 

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inapplicable or would prevent such Lender from dulycompleting and delivering any such form with respect to it and such Lender soadvises the US Borrower and the Administrative Agent.  Each Person that shall become a Participantpursuant 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 theforms and statements required pursuant to this Section 5.4(b); provided,that in the case of a Participant such Participant shall furnish all such requiredforms and statements to the Lender from which the related participation shallhave been purchased.  Notwithstandinganything to the contrary, no Lender or Participant shall be required to deliverany form or certification that it is not legally able to deliver.

 

(c)  The US Borrower shall not be required toindemnify 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) aboveto the extent that (i) the obligation to withhold amounts with respect toU.S. Federal withholding tax existed on the date such Non-U.S. Lender became aparty to this Agreement (or, in the case of a Participant that is not organizedunder 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 Participanthereunder); provided, however, that this clause (i) shallnot apply to the extent that (x) the indemnity payments or additionalamounts any Lender (or Participant) would be entitled to receive (withoutregard to this clause (i)) do not exceed the indemnity payment oradditional amounts that the person making the assignment, participation ortransfer to such Lender (or Participant) would have been entitled to receive inthe absence of such assignment, participation or transfer, or (y) suchassignment, participation or transfer had been requested by the US Borrower orthe UK Borrower, (ii) the obligation to pay such additional amounts wouldnot 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 incorrectat the time a payment hereunder is made, other than by reason of any change intreaty, law or regulation having effect after the date such representations orcertifications were made.

 

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

 

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

 

(ii)  where that Lender had been a TreatyLender before ceasing to be an Eligible Lender, the Lender had remained aTreaty Lender and an appropriate direction had been given by the United KingdomInland Revenue authorizing the UK Borrower to make payment with deduction oftax at a reduced rate in accordance with the provisions of the relevant doubletaxation agreement; or

 

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

 

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

 

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

 

(e)  If the US Borrower or the UK Borrowerdetermines in good faith that a reasonable basis exists for contesting anytaxes for which indemnification has been demanded hereunder, the relevantLender or the Administrative Agent, as applicable, shall cooperate with such USBorrower or UK Borrower in challenging such taxes at such US Borrower’s or UKBorrower’s expense if so requested by such US Borrower or UK Borrower.  If any Lender or the Administrative Agent, asapplicable, receives a refund of a tax for which a payment has been made by theUS Borrower or the UK Borrower pursuant to this Agreement, which refund in thegood 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, thenthe Lender or the Administrative Agent, as the case may be, shall reimbursesuch US Borrower or UK Borrower for such amount (together with any interestreceived 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 suchreimbursement, in no better or worse position than it would have been in if thepayment had not been required.  A Lenderor Administrative Agent shall claim any refund that it determines is availableto it, unless it concludes in its reasonable discretion that it would beadversely affected by making such a claim. Neither any Lender nor the Administrative Agent shall be obliged to discloseany information regarding its tax affairs or computations to the US Borrower orthe UK Borrower in connection with this paragraph (e) or any otherprovision of this Section 5.4.

 

(f)  Each Lender represents and agrees that, onthe Funding Date and at all times during the term of this Agreement, it is notand will not be a conduit entity participating in a conduit financingarrangement (as defined in Section 7701(1) of the Code and theregulations thereunder) with respect to the Borrowings hereunder unless the USBorrower 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 nextsucceeding sentence, ABR Loans shall be calculated on the basis of a 360-dayyear for the actual days elapsed.  Intereston (i) Foreign Currency Revolving Credit Loans and Foreign CurrencyExtended Revolving Credit Loans denominated in Sterling and (ii) ABR Loansin respect of which the rate of interest is calculated on the basis of thePrime Rate and interest on overdue interest shall be calculated on the basis ofa 365- (or 366-, as the case may be) day year for the actual days elapsed.

 

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

 

SECTION 6.                                Conditions Precedent toInitial Borrowing

 

Subject to Section 7.3 and, in the case of Sections6.1(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 aborrower hereunder on the Funding Date) and Sections 6.6 to 6.8 inclusive (ineach case, to the extent they relate to the UK Borrower (unless the UK Borrowershall be a borrower hereunder on the Funding Date) and/or any ForeignSubsidiary Guarantor), subject to Section 9.18 (but only to the extent setforth on Schedule 9.18), the earlier of the initial Borrowing and the initialissuance of any Letter of Credit under this Agreement is subject to thesatisfaction of the following conditions precedent:

 

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

 

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

 

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

 

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

 

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

 

(e)  a Mortgage in respect of each MortgagedProperty, executed and delivered by a duly authorized officer of each mortgagorparty thereto;

 

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

 

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

 

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

 

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

 

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

 

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

 

(l)  the German Pledge Agreement, executed anddelivered 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 partythereto;

 

(n)  [Reserved];

 

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

 

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

 

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

 

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

 

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

 

(t)  the Italian Guarantee, executed anddelivered 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 partythereto;

 

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

 

(w)  the Luxembourg Pledge Agreements, executedand 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 andeach Restricted Subsidiary owned by or on behalf of any Credit Party (otherthan a Restricted Foreign Subsidiary) shall have been pledged pursuant to thePledge Agreement (except that the Restricted Subsidiaries shall not be requiredto pledge more than 65% of the outstanding equity interests of any RestrictedForeign Subsidiary) and all certificates representing securities pledged underthe Pledge Agreement, accompanied by instruments of transfer and undated stockpowers endorsed in blank, shall have been delivered to the Collateral EscrowAgent and shall be held in escrow pursuant to the terms of the Financing EscrowAgreement.

 

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

 

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

 

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

 

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

 

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

 

(g)  All outstanding equity interests inwhatever form owned by or on behalf of each pledgor under the Italian SharePledge Agreements shall have been pledged pursuant to the Italian Share PledgeAgreements and all certificates representing securities pledged under theItalian Share Pledge Agreements, accompanied by instruments of transfer andundated stock powers endorsed in blank, shall have been delivered to theCollateral Escrow Agent and shall be held in escrow pursuant to the terms ofthe Financing Escrow Agreement.

 

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(h)  All outstanding equity interests inwhatever form owned by or on behalf of each pledgor under the Luxembourg PledgeAgreements shall have been pledged pursuant to the Luxembourg Pledge Agreementsand all certificates representing securities pledged under the LuxembourgPledge Agreements, accompanied by instruments of transfer and undated stockpowers endorsed in blank, shall have been delivered to the Collateral EscrowAgent and shall be held in escrow pursuant to the terms of the Financing EscrowAgreement.

 

(i)  All Indebtedness of Holdings, the USBorrower and each Subsidiary that is owing to any Credit Party party to thePledge Agreement shall be evidenced by one or more global promissory notes andshall have been pledged pursuant to the Pledge Agreement, and all suchpromissory notes, together with instruments of transfer with respect theretoendorsed in blank, shall have been delivered to the Collateral Escrow Agent andshall be held in escrow pursuant to the terms of the Financing EscrowAgreement.

 

(j)  All documents and instruments, includingUniform Commercial Code financing statements, required by law or reasonablyrequested by the Administrative Agent to be filed, registered or recorded tocreate the Liens intended to be created by the Security Agreement and toperfect such Liens to the extent required by, and with the priority requiredby, the Security Agreement shall have been delivered to the AdministrativeAgent for filing, registration or recording pending the Closing Date.

 

(k)  All documents and instruments required bylaw or reasonably requested by the Administrative Agent to be filed, registeredor recorded to create the Liens intended to be created by each of the ForeignSecurity Documents and to perfect such Liens to the extent required by, andwith the priority required by, each of the Foreign Security Documents shallhave been delivered to the Administrative Agent for filing, registration orrecording pending the Closing Date.

 

(l)  The Administrative Agent shall havereceived, in respect of each Mortgaged Property owned by the US Borrower or aUS Subsidiary Guarantor a policy or policies of title insurance issued by anationally recognized title insurance company insuring the Lien of eachMortgage as a valid first Lien on the Mortgaged Property described therein,free of any other Liens except as expressly permitted by Section 10.2 (andsubject to the release on the Closing Date of the liens thereon in respect ofthe Existing Credit Agreement), together with such endorsements, coinsuranceand reinsurance as the Administrative Agent may reasonably request.

 

It is understood and agreed that the pledgesdescribed in clauses (a) through (i) inclusive of this Section 6.2shall become effective immediately and automatically upon the occurrence of theClosing Date, but that prior to the Closing Date, such pledges (and the Lienscreated thereby) shall not be effective.

 

6.3.                              Legal Opinions.  TheAdministrative Agent shall have received the executed legal opinions of(a) Simpson Thacher & Bartlett LLP, special New York counsel tothe US Borrower, substantially in the form of Exhibit O-1, (b) TomRiordan,

 

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General Counsel to the USBorrower, substantially in the form of Exhibit O-2, (c) Latham &Watkins LLP, English legal counsel to the Administrative Agent, substantiallyin the form of Exhibit O-3, (d) Latham & Watkins LLP, Germanlegal 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 inthe form of Exhibit O-6, (g) Lee and Li, Taiwan legal counsel to theAdministrative Agent, substantially in the form of Exhibit O-7,(h) Norton Rose Milan, Italian legal counsel to the AdministrativeAgent, substantially in the form of Exhibit O-8, (i) Burness,Scotland legal counsel to the Administrative Agent, substantially in the formof Exhibit O-9, (j) Arendt & Medernach, Luxembourg legal counsel to the AdministrativeAgent, substantially in the form of Exhibit O-10 and (k) localcounsel to the US Borrower in each jurisdiction where a Mortgaged Property inthe United States of America is located, substantially in the form of Exhibit O-11.  The US Borrower, the UK Borrower, the otherCredit Parties and the Administrative Agent hereby instruct such counsel todeliver such legal opinions.

 

6.4.                              Receipt of Senior Subordinated Notes and Senior Subordinated LoanAgreement Proceeds.  Gross proceeds of not less than $350,000,000and Є419,076,355.71 from the issuance of the Senior Subordinated Notesunder the Senior Subordinated Notes Indenture in a public offering or in a Rule 144Aor other private placement and/or borrowings under the Senior Subordinated LoanAgreement shall have been deposited on the Funding Date in the RSGI Dollar DebtEscrow Account and the RSGI Euro Debt Escrow Account, respectively, to be heldby the Financing Escrow Agent pursuant to the terms of the Financing EscrowAgreement.

 

6.5.                              Equity Contributions.  The Acquisition Equity Contribution shallhave been made and the full amount of the proceeds thereof shall have beendeposited on the Funding Date in escrow accounts held by the Financing EscrowAgent pursuant to the terms of the Financing Escrow Agreement.

 

6.6.                              Closing Certificates.  The Administrative Agent shall have receiveda certificate of each Credit Party (other than the Singapore Guarantors), datedthe Funding Date, substantially in the form of Exhibit P, with appropriateinsertions, executed by the President or any Vice President and the Secretaryor any Assistant Secretary of such Credit Party, and attaching the documentsreferred to in Sections 6.7 and 6.8 and, where applicable, certifying as to theincumbency and specimen signature of each officer executing any Credit Documentor any other document delivered in connection herewith on behalf of such CreditParty.

 

6.7.                              Corporate Proceedings of Each Credit Party.  The Administrative Agent shallhave received a copy of the resolutions, in form and substance satisfactory tothe Administrative Agent, of the Board of Directors (or equivalent governingbody) of each Credit Party (or a duly authorized committee thereof) authorizing(a) the execution, delivery and performance of the Credit Documents (andany agreements relating thereto) to which it is a party, (b) in the caseof the US Borrower and the UK Borrower, the

 

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extensions of creditcontemplated hereunder and (c) the granting of the Liens contemplated tobe granted under the Security Documents.

 

6.8.                              Corporate Documents.  The Administrative Agent shall have receivedtrue and complete copies of the certificate of incorporation and by-laws (orequivalent organizational documents) of each Credit Party.

 

6.9.                              Fees.  The fees in the amounts previously agreed inwriting by the Agents and the Lenders to be received by the Lenders on theClosing Date and all expenses (including the reasonable fees, disbursements andother charges of counsel to the Administrative Agent) for which invoices havebeen presented on or prior to the Funding Date shall, in each case, have beendeposited on the Funding Date in an escrow account held by the Financing EscrowAgent on behalf and for the account of the Administrative Agent (or itsnominee) pursuant to the terms of the Financing Escrow Agreement.

 

6.10.                        Escrow Agreements; Acquisition.  The full amount of the proceeds of theTranche A-1 Term Loans made on the Funding Date funded pursuant to Section 2.1(a)(v)(x) shallbe deposited on the Funding Date in the RSGI Euro Debt Escrow Account to beheld by the Financing Escrow Agent pursuant to the terms of the FinancingEscrow Agreement.  The full amount of theproceeds of the Tranche A-2 Term Loans made on the Funding Date shall bedeposited on the Funding Date in the UK Borrower Debt Escrow Account to be heldby the Financing Escrow Agent pursuant to the terms of the Financing EscrowAgreement.  The Administrative Agentshall have received the Financing Escrow Agreement executed and delivered by aduly authorized officer of each Person party thereto, which shall provide,among other things, that as a condition precedent to the release of all fundsheld in the RSGI Euro Debt Escrow Account, the RSGI Dollar Debt Account and theUK Borrower Debt Escrow Account the Acquisition shall have been, orsimultaneously with the initial release of funds thereunder shall be,consummated in accordance in all material respects with applicable law and theSale and Purchase Agreement without any amendment or waiver of any provisionrelating to conditionality to closing thereunder.  The Administrative Agent shall have receivedthe Acquisition Escrow Agreement executed and delivered by a duly authorized officerof 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 otherinformation required by bank regulatory authorities under applicable “know yourcustomer” and anti-money laundering rules and regulations, including thePatriot Act and requested by the Administrative Agent at least ten BusinessDays prior to the Funding Date.

 

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SECTION 7.                                Conditions Precedent to AllCredit Events; Certain Funds Period; Clean-Up Period; Conditions Precedent toRestatement Date

 

The agreement of each Lender to make any Loanrequested to be made by it on any date (excluding Mandatory Borrowings) and theobligation of the Letter of Credit Issuer to issue Letters of Credit on anydate 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 continuingand (b) all representations and warranties made by any Credit Partycontained herein or in the other Credit Documents shall be true and correct inall material respects with the same effect as though such representations andwarranties had been made on and as of the date of such Credit Event (exceptwhere such representations and warranties expressly relate to an earlier date,in which case such representations and warranties shall have been true andcorrect in all material respects as of such earlier date) (it being understoodthat no such representation or warranty made on the Funding Date shall bedeemed to be not true and correct solely as a result of the fact that the FundingDate shall not occur simultaneously with the Closing Date).

 

7.2.                              Notice of Borrowing; Letter of Credit Request.  (a)  Prior to the making ofeach Term Loan, each Revolving Credit Loan (other than any Revolving CreditLoan made pursuant to Section 3.4(a)), each Extended Revolving Credit Loan(other than any Extended Revolving Credit Loan made pursuant toSection 3.4(a))  and each SwinglineLoan, 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 ofCredit, the Administrative Agent and the Letter of Credit Issuer shall havereceived a Letter of Credit Request meeting the requirements of Section 3.2(a).

 

The acceptance of the benefits of each Credit Eventshall constitute a representation and warranty by each Credit Party to each ofthe Lenders that all the applicable conditions specified above exist as of thattime.

 

7.3.                              Certain Funds Period.  Once each of the conditions precedent setforth in Section 6.1(a), 6.4, 6.5 and 6.10 shall have been satisfied andif each of the conditions precedent set forth in Sections 6.2(m) and 6.9shall be satisfied contemporaneously with the initial Borrowings hereunder, theLenders shall only be entitled to (a) decline to make available any TermLoan to be made on the Funding Date or any Revolving Credit Loan to be made onthe Funding Date or (b) exercise any right to cancel or terminate any TermLoan Commitment to make a Term Loan on the Funding Date or any Revolving CreditCommitment to make a Revolving Credit Loan on the Funding Date, in each case tofinance the Acquisition, the refinancing of the 2003 Credit Agreement, therefinancing of certain existing Indebtedness of the Target, the payment of

 

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Transaction Expenses andany other transactions relating to the foregoing, if any of the followingevents, circumstances or conditions shall be present:

 

(i)  all outstanding equity interests inwhatever form of each Restricted Subsidiary owned directly by the US Borrower(after giving effect to the Acquisition) shall not have been pledged pursuantto the Pledge Agreement pending the Closing Date (except that the US Borrowershall not be required to pledge more than 65% of the equity interests of anyRestricted Foreign Subsidiary to support the obligations of the US Borrower) orall certificates representing such pledged securities, accompanied byinstruments of transfer and undated stock powers endorsed in blank, shall nothave been delivered to the Collateral Escrow Agent to be held in escrowpursuant to the terms of the Financing Escrow Agreement;

 

(ii)  any failure of any condition precedentset 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 tobe taken by a Foreign Subsidiary), 6.2(i), 6.2(j), 6.3(a), 6.3(b), 6.3(c) (inthe case of Section 6.3(c), only if the UK Borrower shall be a borrowerhereunder on the Funding Date), 6.6, 6.7, 6.8 (except, in the case of Sections6.6, 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 onthe Funding Date) or 6.11 to be satisfied to the extent that such conditionrelates directly to (x) the US Borrower or (y) any RestrictedSubsidiary that is a member of the Rockwood Group that is legally able tosatisfy such condition, provided that, in the case of this clause (y),each Restricted Subsidiary that is a member of the Rockwood Group shall haveused reasonable efforts to avoid any such legal prohibition;

 

(iii)  any default of any covenant in the firstsentence of Section 9.17;

 

(iv)  any event described in Section 11.5shall occur with respect to the US Borrower or the UK Borrower, providedthat, in the case of any such event with respect to the UK Borrower, theLenders shall not be required to make any Loan to the UK Borrower but insteadshall be required to make such Loan to the US Borrower subject to the terms of Section 6and this Section 7.3;

 

(v)  the US Borrower or the UK Borrower shallfail to pay any amounts due and payable under this Agreement, any other CreditDocument or the Fee Letter;

 

(vi)  any Credit Document or any materialprovision thereof shall cease to be in full force and effect with respect tothe US Borrower or any Restricted Subsidiary that is a member of the RockwoodGroup (other than (x) pursuant to the terms hereof or thereof, (y) asa result of acts or omissions of the Administrative Agent or any Lender or(z) as a result of any legal prohibition affecting any RestrictedSubsidiary that is a member of the Rockwood Group; provided, that, inthe case of this clause (z), each Restricted Subsidiary that is a member of theRockwood Group shall have used reasonable efforts to avoid any such legalprohibition) or any of the US Borrower or any

 

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RestrictedSubsidiary that is a member of the Rockwood Group shall deny or disaffirm inwriting its obligations under any Credit Document (other than pursuant to theterms hereof or thereof);

 

(vii)  any breach by the US Borrower (withrespect to itself) or by any Restricted Subsidiary that is a member of theRockwood Group (other than, in the case of any Restricted Subsidiary that is amember of the Rockwood Group, as a result of any legal prohibition affectingsuch Restricted Subsidiary; provided, that such Restricted Subsidiaryshall have used reasonable efforts to avoid any such legal prohibition) of anycovenant in Section 10.1, 10.2, 10.6 or 10.7; or

 

(viii)  any breach by the US Borrower (withrespect to itself) or by any Restricted Subsidiary that is a member of theRockwood Group (other than, in the case of any Restricted Subsidiary that is amember of the Rockwood Group, as a result of any legal prohibition affectingsuch Restricted Subsidiary; provided, that such Restricted Subsidiaryshall have used reasonable efforts to avoid any such legal prohibition) of anyrepresentation or warranty in Section 8.1 or 8.2.

 

Further, the Lenders shall not be entitled toexercise any right of set-off against the proceeds of the Term Loans or anyRevolving Credit Loan made on the Funding Date to finance the Acquisition, therefinancing of the 2003 Credit Agreement, the refinancing of certain existingIndebtedness of the Target, the payment of Transaction Expenses and any othertransaction related to any of the foregoing.

 

Notwithstanding the foregoing, if any condition precedentto the initial Borrowing set forth in Section 6 of this Agreement is notsatisfied but as a result of the foregoing provisions of this Section 7.3the Lenders are nonetheless required to make Loans on the Funding Date, thereshall be, subject to Section 7.4, an Event of Default under Section 11on the day following the Closing Date and all rights and remedies shall beavailable to the Lenders to the extent they would have been available but forthis 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 untilthe date which falls (a) 25 days after the Funding Date, in the case ofcircumstances affecting the US Borrower and any Subsidiary that is a member ofthe Rockwood Group or (b) 90 days after the Funding Date, in the case ofcircumstances affecting any other Subsidiary (such period described inclauses (a) and (b), the “Clean-Up Period”), a breach ofrepresentation or warranty or a breach of covenant or a Default or an Event ofDefault hereunder shall not be deemed to be a breach of representation orwarranty 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, thecircumstances giving rise to the relevant breach of representation or warrantyor breach of covenant or Default or Event of Default:

 

(i)  are capable of being cured and, ifHoldings, the US Borrower or any Subsidiary that is a member of the RockwoodGroup or (after the date that is 30 days after the Funding Date) any otherRestricted Subsidiary is aware of the relevant

 

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circumstancesat the time and there exists no legal prohibition affecting any RestrictedSubsidiary which would prevent such cure, reasonable efforts are being made tocure the same;

 

(ii)  have not been procured by or approved byHoldings, the US Borrower or any Subsidiary that is a member of the RockwoodGroup or (if arising after the date that is 30 days after the Funding Date) anyother Restricted Subsidiary that is not a member of the Rockwood Group unlesssuch 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 applicableClean-Up Period there shall be a breach of representation or warranty, breachof covenant, Default or Event of Default, as the case may be, on such date.

 

7.5.                              UK Borrower.  Notwithstanding any of the foregoingprovisions 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 dateand the obligation of the Letter of Credit Issuer to issue Letters of Creditfor the account of the UK Borrower on any date is subject to the satisfactionof the conditions set forth in Section 6.3(c) and Sections 6.6 to 6.8inclusive (in each case, to the extent they relate to the UK Borrower) on orprior to such date.

 

7.6.                              Revolving Credit Loans and Extended Revolving Credit Loans.  In the case of any RevolvingCredit Loan, at the time of the applicable Credit Event the Extended RevolvingCredit Exposures shall be equal to no less than the Total Extended RevolvingCredit Commitment.

 

7.7.                              Conditions Precedent to Restatement Date.  The effectiveness of the amendment andrestatement of the Existing Credit Agreement in the form of this Agreement issubject to the satisfaction of the conditions set forth in Section 6 ofthe Amendment Agreement.

 

SECTION 8.                                Representations, Warrantiesand Agreements

 

In order to induce the Lenders to enter into thisAgreement, to make the Loans and issue or participate in Letters of Credit asprovided for herein, each of Holdings, the US Borrower and the UK Borrower makethe following representations and warranties to, and agreements with, theLenders, all of which shall survive the execution and delivery of thisAgreement and the making of the Loans and the issuance of the Letters ofCredit:

 

8.1.                              Corporate Status.  Each of Holdings, the US Borrower, the UKBorrower and each Material Subsidiary (a) is a duly organized and validlyexisting corporation or other entity in good standing under the laws of thejurisdiction of its organization and has the corporate or other organizationalpower and authority to own its property and assets and to transact the businessin which it is engaged and (b) has duly

 

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qualified and isauthorized to do business and is in good standing in all jurisdictions where itis required to be so qualified, except where the failure to be so qualifiedcould not reasonably be expected to result in a Material Adverse Effect.

 

8.2.                              Corporate Power and Authority.  Each Credit Party has the corporate or otherorganizational power and authority to execute, deliver and carry out the termsand provisions of the Credit Documents to which it is a party and has taken allnecessary 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 anddelivered each Credit Document to which it is a party and each such CreditDocument constitutes the legal, valid and binding obligation of such CreditParty enforceable in accordance with its terms, except as the enforceabilitythereof may be limited by bankruptcy, insolvency or similar laws affectingcreditors’ rights generally and subject to general principles of equity.

 

8.3.                              No Violation.  Neither the execution, delivery orperformance by any Credit Party of the Credit Documents to which it is a partynor compliance with the terms and provisions thereof nor the consummation ofthe 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 orgovernmental instrumentality, (b) result in any breach of any of theterms, covenants, conditions or provisions of, or constitute a default under,or result in the creation or imposition of (or the obligation to create orimpose) any Lien upon any of the property or assets of any of Holdings, the USBorrower, the UK Borrower or any of the Restricted Subsidiaries (other thanLiens created under the Credit Documents) pursuant to, the terms of anymaterial indenture (including the Senior Subordinated Notes Indenture, theSenior Subordinated Loan Agreement, the Subordinated Note Indenture, and the2011 Senior Notes Indenture), loan agreement, lease agreement, mortgage, deedof trust, agreement or other material instrument to which any of Holdings, theUS Borrower, the UK Borrower or any of the Restricted Subsidiaries is a partyor by which it or any of its property or assets is bound or (c) violateany provision of the certificate of incorporation, By-Laws or otherconstitutional documents of Holdings, the US Borrower, the UK Borrower or anyof the Restricted Subsidiaries.

 

8.4.                              Litigation.  There are no actions, suits or proceedings(including Environmental Claims) pending or, to the knowledge of any ofHoldings, the US Borrower or the UK Borrower, threatened with respect to any ofHoldings, the US Borrower, the UK Borrower or any of the Subsidiaries thatcould reasonably be expected to result in a Material Adverse Effect.

 

8.5.                              Margin Regulations.  Neither the making of any Loan hereunder northe use of the proceeds thereof will violate the provisions of Regulation T, Uor X of the Board.

 

8.6.                              Governmental Approvals.  No order, consent, approval, license,authorization, or validation of, or filing, recording or registration with, orexemption by, any Governmental Authority is required to authorize or is requiredin connection with

 

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(a) the execution,delivery and performance of any Credit Document or (b) the legality,validity, binding effect or enforceability of any Credit Document, except anyof the foregoing the failure of which to obtain or make could not reasonably beexpected to have a Material Adverse Effect.

 

8.7.                              Investment Company Act.  Neither Holdings nor the US Borrower is an “investmentcompany” within the meaning of the Investment Company Act of 1940, as amended.

 

8.8.                              True and Complete Disclosure.  (a)  None of the factual information anddata (taken as a whole) heretofore or contemporaneously furnished by any ofHoldings, the US Borrower, the UK Borrower, any of the Subsidiaries or any of theirrespective authorized representatives in writing to the Administrative Agentand/or any Lender on or before the Funding Date (including (i) theConfidential Information Memorandum and (ii) all information contained inthe Credit Documents) for purposes of or in connection with this Agreement orany transaction contemplated herein contained any untrue statement or omittedto state any material fact necessary to make such information and data (takenas a whole) not misleading at such time in light of the circumstances underwhich such information or data was furnished, it being understood and agreedthat for purposes of this Section 8.8(a), such factual information anddata shall not include projections and proforma financialinformation.

 

(b)  The projections and proformafinancial information contained in the information and data referred to inparagraph (a) above were based on good faith estimates and assumptionsbelieved by such Persons to be reasonable at the time made, it being recognizedby the Lenders that such projections as to future events are not to be viewedas facts and that actual results during the period or periods covered by anysuch projections may differ from the projected results.

 

8.9.                              Financial Condition; Financial Statements.  The (a) unaudited andaudited historical consolidated financial information of the US Borrower as setforth in the Confidential Information Memorandum, (b) audited financialstatements of the Target for each of the fiscal years ended September 30,2001 and September 30, 2002, the three months ended December 31, 2002and the twelve months ended December 31, 2003 and (c) audited balancesheet of the US Borrower and the related audited statements of operations andcash 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 allmaterial respects the combined financial position of each of the US Borrowerand the Target (as applicable) at the respective dates of said information,statements and results of operations for the respective periods coveredthereby.  The audited financialstatements referred to in this Section 8.9 have been prepared inaccordance with GAAP consistently applied except to the extent provided in thenotes 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 UKBorrower and the Subsidiaries has filed all federal income tax returns and all

 

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other material taxreturns, domestic and foreign, required to be filed by it and has paid allmaterial taxes and assessments payable by it that have become due, other thanthose not yet delinquent or contested in good faith.  Each of, Holdings, the US Borrower, the UKBorrower and each of the Subsidiaries have paid, or have provided adequatereserves (in the good faith judgment of the management of the US Borrower) inaccordance with GAAP for the payment of, all material federal, state andforeign income taxes applicable for all prior fiscal years and for the currentfiscal year to the Closing Date.  To theextent that any breach of any of the representations or warranties in thisSection 8.10 relates to a period, event or action prior to the ClosingDate in respect of which Holdings, the US Borrower and/or the RestrictedSubsidiaries are indemnified to the extent of the breach by any Seller pursuantto either Acquisition Agreement, there shall be deemed to be no breach thereof;provided, that such a breach will exist if the applicable Seller doesnot satisfy its indemnification obligations to the extent and in respect of thecircumstances giving rise to such breach within a reasonable time of beingnotified by Holdings, the US Borrower and/or the Restricted Subsidiaries ofsuch circumstances (such Persons hereby agreeing to so notify the applicableSeller promptly of such circumstances).

 

8.11.                        Compliance with ERISA.  Each Plan is in compliance with ERISA, theCode and any applicable Requirement of Law; no Reportable Event has occurred(or is reasonably likely to occur) with respect to any Plan; no Plan isinsolvent or in reorganization (or is reasonably likely to be insolvent or inreorganization), and no written notice of any such insolvency or reorganizationhas been given to any of Holdings, the US Borrower, any Subsidiary or any ERISAAffiliate; no Plan (other than a multiemployer plan) has an accumulated orwaived funding deficiency (or is reasonably likely to have such a deficiency);none of Holdings, the US Borrower, any Subsidiary or any ERISA Affiliate hasincurred (or is reasonably likely expected to incur) any liability to or onaccount 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 theCode or has been notified in writing that it will incur any liability under anyof the foregoing Sections with respect to any Plan; no proceedings have beeninstituted (or are reasonably likely to be instituted) to terminate or toreorganize any Plan or to appoint a trustee to administer any Plan, and nowritten notice of any such proceedings has been given to any of Holdings, theUS Borrower, any Subsidiary or any ERISA Affiliate; and no lien imposed underthe Code or ERISA on the assets of any of Holdings, the US Borrower or anySubsidiary or any ERISA Affiliate exists (or is reasonably likely to exist) norhas any of Holdings, the US Borrower, any Subsidiary or any ERISA Affiliatebeen notified in writing that such a lien will be imposed on the assets of anyof Holdings, the US Borrower, any Subsidiary or any ERISA Affiliate on accountof any Plan, except to the extent that a breach of any of therepresentations, warranties or agreements in this Section 8.11 would notresult, individually or in the aggregate, in an amount of liability that wouldbe reasonably likely to have a Material Adverse Effect or relates to any matterdisclosed in the financial statements of the US Borrower contained in theConfidential Information Memorandum.  NoPlan (other than a multiemployer plan) has an Unfunded Current Liability thatwould, individually or when taken together with any other liabilitiesreferenced in this Section 8.11, be reasonably likely to have a MaterialAdverse Effect.  With respect to Plansthat are multiemployer plans (as defined in Section 3(37) of ERISA), therepresentations and warranties in this Section 8.11, other than any madewith respect to

 

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(a) liability under Section 4201or 4204 of ERISA or (b) liability for termination or reorganization ofsuch Plans under ERISA, are made to the best knowledge of the US Borrower.  To the extent that any breach of any of therepresentations 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 USBorrower and/or the Restricted Subsidiaries are indemnified to the extent ofthe breach by any Seller pursuant to either Acquisition Agreement, there shallbe deemed to be no breach thereof; provided, that such a breach willexist if the applicable Seller does not satisfy its indemnification obligationsto the extent and in respect of the circumstances giving rise to such breachwithin a reasonable time of being notified by Holdings, the US Borrower and/orthe Restricted Subsidiaries of such circumstances (such Persons hereby agreeingto so notify the applicable Seller promptly of such circumstances).

 

8.12.                        Subsidiaries.  Holdings does not have any Subsidiaries otherthan the US Borrower and its Subsidiaries. Schedule 8.12 lists each Subsidiary of the US Borrower (and the directand indirect ownership interest of the US Borrower therein), in each caseexisting on the Funding Date (after giving effect to the Acquisition).  To the knowledge of the US Borrower, afterdue enquiry, each Material Subsidiary as of the Funding Date (after givingeffect to the Acquisition) has been so designated on Schedule 8.12.

 

8.13.                        Patents, etc.  Holdings, the US Borrower, the UKBorrower 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 oftheir respective businesses as currently conducted and as proposed to beconducted, except where the failure to obtain any such rights could notreasonably be expected to have a Material Adverse Effect.

 

8.14.                        Environmental Laws.  (a)   Except as could not reasonably be expected to have a Material AdverseEffect: (i) each of Holdings, the US Borrower, the UK Borrower and each ofthe Subsidiaries are in compliance with all Environmental Laws in alljurisdictions in which Holdings, the US Borrower and each of the Subsidiariesare currently doing business (including having obtained all material permitsrequired under Environmental Laws); (ii) each of Holdings, the US Borrowerand the UK Borrower will comply and cause each of the Subsidiaries to complywith all such Environmental Laws (including all permits required underEnvironmental Laws); and (iii) none of Holdings, the US Borrower, the UKBorrower and each of the Subsidiaries has become subject to any EnvironmentalClaim or any other liability under any Environmental Law.

 

(b)  None of Holdings, the US Borrower, the UKBorrower or any of the Subsidiaries has treated, stored, transported, releasedor disposed of Hazardous Materials at or from any currently or formerly ownedReal Estate or facility relating to its business in a manner that couldreasonably be expected to have a Material Adverse Effect.

 

8.15.                        Properties.  Each of Holdings, the US Borrower, the UKBorrower and each of the Subsidiaries have good title to or leasehold interestin all properties that

 

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are necessary for theoperation of their respective businesses as currently conducted and as proposedto be conducted, free and clear of all Liens (other than any Liens permitted bythis Agreement) and except where the failure to have such good title could notreasonably 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, herebycovenants and agrees that on the Funding Date and thereafter, for so long asthis Agreement is in effect and until the Commitments, the Swingline Commitmentand each Letter of Credit have terminated and the Loans and Unpaid Drawings,together with interest, Fees and all other Obligations incurred hereunder, arepaid in full:

 

9.1.                              Information Covenants.  The US Borrower will furnish to each Lenderand the Administrative Agent:

 

(a)  Annual Financial Statements.  As soon as available and in any event on orbefore the date on which such financial statements are required to be filedwith the SEC (or, if such financial statements are not required to be filedwith the SEC, on or before the date that is 90 days after the end of eachsuch fiscal year), the consolidated balance sheet of (i) the US Borrowerand the Restricted Subsidiaries and (ii) the US Borrower and itsSubsidiaries, in each case as at the end of such fiscal year prepared inaccordance with GAAP, and the related consolidated statement of operations andcash flows for such fiscal year, each prepared in accordance with GAAP, settingforth comparative consolidated figures for the preceding fiscal year, andcertified by independent certified public accountants of recognized nationalstanding whose opinion shall not be qualified as to the scope of audit or as tothe status of the US Borrower, the UK Borrower or any of the MaterialSubsidiaries as a going concern, together in any event with a certificate ofsuch accounting firm stating that in the course of its regular audit of thebusiness 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 ofDefault relating to Section 10.9 or 10.10 that has occurred and iscontinuing or, if in the opinion of such accounting firm such a Default orEvent of Default has occurred and is continuing, a statement as to the naturethereof.

 

(b)  Quarterly Financial Statements.  As soon as available and in any event on orbefore the date on which such financial statements are required to be filedwith the SEC with respect to each of the first three quarterly accountingperiods in each fiscal year of the US Borrower (or, if such financialstatements are not required to be filed with the SEC, on or before the datethat is 45 days after the end of each such quarterly accounting period),the consolidated balance sheet of (i) the US Borrower and the RestrictedSubsidiaries and (ii) the US Borrower and its Subsidiaries, in each caseas at the end of such quarterly period and the related consolidated statementof operations for such quarterly accounting period and for the elapsed portionof the fiscal year ended with the last day of such quarterly period, and therelated consolidated statement of cash flows for

 

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theelapsed portion of the fiscal year ended with the last day of such quarterlyperiod, and setting forth comparative consolidated figures for the relatedperiods in the prior fiscal year or, in the case of such consolidated balancesheet, for the last day of such quarterly period in the prior fiscal year, eachprepared in accordance with GAAP, all of which shall be certified by anAuthorized Officer of the US Borrower, subject to changes resulting from auditand normal year-end audit adjustments.

 

(c)  Budgets.  Within 60 days after the commencement ofeach fiscal year of the US Borrower, consolidated budgets of each of the USBorrower, the US Borrower and its Restricted Subsidiaries, the UK Borrower andthe UK Borrower and its Restricted Subsidiaries in reasonable detail for thefiscal year as customarily prepared by management of the US Borrower and the UKBorrower for their internal use, setting forth the principal assumptions uponwhich such budgets are based.

 

(d)  Officer’s Certificates.  At the time of the delivery of the financialstatements provided for in Sections 9.1(a) and (b), a certificate of anAuthorized Officer of the US Borrower to the effect that no Default or Event ofDefault exists or, if any Default or Event of Default does exist, specifyingthe nature and extent thereof, which certificate shall set forth (i) thecalculations required to establish whether the US Borrower and the Subsidiarieswere in compliance with the provisions of Sections 10.9 and 10.10 as atthe end of such fiscal year or period, as the case may be, (ii) aspecification of any change in the identity of the Restricted Subsidiaries,Unrestricted Subsidiaries and Foreign Subsidiaries as at the end of such fiscalyear or period, as the case may be, from the Restricted Subsidiaries,Unrestricted Subsidiaries and Foreign Subsidiaries, respectively, provided tothe Lenders on the Funding Date or the most recent fiscal year or period, asthe case may be, (iii) the then applicable Status and (iv) the amountof any Pro Forma Adjustment not previously set forth in a Pro Forma AdjustmentCertificate or any change in the amount of a Pro Forma Adjustment set forth inany 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 financialstatements provided for in Section 9.1(a), (i) a certificate of anAuthorized Officer of the US Borrower setting forth in reasonable detail theAvailable Amount as at the end of the fiscal year to which such financialstatements relate and (ii) a certificate of an Authorized Officer and thechief legal officer of the US Borrower (x) setting forth the informationrequired pursuant to Section 2 of the Perfection Certificate or confirmingthat there has been no change in such information since the Funding Date or thedate of the most recent certificate delivered pursuant to this subsection(d)(ii), as the case may be, and (y) certifying that all UniformCommercial Code financing statements (including fixture filings, as applicable)or other appropriate filings, recordings or registrations, including allrefilings, rerecordings and reregistrations, containing a description of theCollateral have been filed of record in each governmental, municipal or otherappropriate office in each jurisdiction identified pursuant toclause (x) above to the extent necessary to protect and perfect thesecurity interests under the Security Documents.

 

(e)  Notice of Default or Litigation.  Promptly after an Authorized Officer of anyof the US Borrower, the UK Borrower or any of the Subsidiaries obtainsknowledge thereof, notice of (i) the occurrence of any event thatconstitutes a Default or

 

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Eventof Default, which notice shall specify the nature thereof, the period ofexistence thereof and what action any of the US Borrower or the UK Borrowerproposes to take with respect thereto, and (ii) any litigation orgovernmental proceeding pending against any of the US Borrower, the UK Borroweror any of the Subsidiaries that could reasonably be expected to result in aMaterial Adverse Effect.

 

(f)  Environmental Matters.  The US Borrower and the UK Borrower willpromptly advise the Lenders in writing after obtaining knowledge of any one ormore of the following environmental matters, unless such environmental matterswould not, individually or when aggregated with all other such matters, bereasonably expected to result in a Material Adverse Effect:

 

(i)  any pending or threatened EnvironmentalClaim against any of the US Borrower, the UK Borrower or any of theSubsidiaries or any Real Estate;

 

(ii)  any condition or occurrence on any RealEstate that (x) results in noncompliance by any of the US Borrower, the UKBorrower or any of the Subsidiaries with any applicable Environmental Law or(y) could reasonably be anticipated to form the basis of an EnvironmentalClaim against any of Holdings, the US Borrower, the UK Borrower or any of theSubsidiaries or any Real Estate;

 

(iii)  any condition or occurrence on any RealEstate that could reasonably be anticipated to cause such Real Estate to besubject to any restrictions on the ownership, occupancy, use or transferabilityof such Real Estate under any Environmental Law; and

 

(iv)  the taking of any removal or remedialaction in response to the actual or alleged presence of any Hazardous Materialon any Real Estate.

 

All such notices shall describe in reasonable detailthe nature of the claim, investigation, condition, occurrence or removal orremedial action and the response thereto. The term “Real Estate” shall mean land, buildings andimprovements owned or leased by any of the US Borrower, the UK Borrower or anyof the Subsidiaries, but excluding all operating fixtures and equipment,whether or not incorporated into improvements.

 

(g)  Other Information.  Promptly upon filing thereof, copies of anyfilings (including on Form 10-K, 10-Q or 8-K) or registration statementswith, and reports to, the SEC or any analogous Government Authority in anyrelevant jurisdiction by any of the US Borrower, the UK Borrower or any of theSubsidiaries (other than amendments to any registration statement (to theextent such registration statement, in the form it becomes effective, isdelivered to the Lenders), exhibits to any registration statement and, ifapplicable, any registration statements on Form S-8) and copies of allfinancial statements, proxy statements, notices and reports that any of the USBorrower, the UK Borrower or any of the Subsidiaries shall send to the holdersof any publicly issued debt of any of Holdings, the US Borrower, the UKBorrower and/or any of the Subsidiaries (including any Senior SubordinatedNotes and Subordinated Notes, (in each case whether publicly issued or not)) intheir capacity as such holders (in each case to the extent not

 

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theretoforedelivered to the Lenders pursuant to this Agreement) and, with reasonablepromptness, such other information (financial or otherwise) as theAdministrative Agent on its own behalf or on behalf of any Lender mayreasonably request in writing from time to time.

 

(h)  Pro Forma Adjustment Certificate.  Not later than the consummation of theacquisition of any Acquired Entity or Business by the US Borrower or any RestrictedSubsidiary for which there shall be a Pro Forma Adjustment and not later thanany date on which financial statements are delivered with respect to anyfour-quarter period in which a Pro Forma Adjustment is made as a result of theconsummation of the acquisition of any Acquired Entity or Business by the USBorrower or any Restricted Subsidiary for which there shall be a Pro FormaAdjustment, a certificate of an Authorized Officer of the US Borrower settingforth the amount of such Pro Forma Adjustment and, in reasonable detail, thecalculations and basis therefor.

 

(i)  Collection of Accounts Receivable.  Promptly following written request of thesame from the Administrative Agent, but no more frequently than on one occasionduring each 10-Business Day period following the delivery of each officer’scertificate referred to in Section 9.1(d), such information regarding thecollection by the US Borrower or any of the Restricted Subsidiaries or, to theextent that such information is available to the US Borrower or any of theRestricted Subsidiaries with the use of commercially reasonable efforts, anyother Person of accounts receivable that have been subjected to a transactionconsummated pursuant to Section 10.4(e).

 

9.2.                              Books, Records and Inspections.  Each of the US Borrower and the UK Borrowerwill, and will cause each of the Subsidiaries to, permit officers anddesignated representatives of the Administrative Agent or the Required Lendersto visit and inspect any of the properties or assets of the US Borrower, the UKBorrower and any such Subsidiary in whomsoever’s possession to the extent thatit is within such party’s control to permit such inspection, and to examine thebooks of account of the US Borrower, the UK Borrower and any such Subsidiary anddiscuss the affairs, finances and accounts of the US Borrower, the UK Borrowerand of any such Subsidiary with, and be advised as to the same by, its andtheir officers and independent accountants, all at such reasonable times andintervals and to such reasonable extent as the Administrative Agent or theRequired Lenders may desire.

 

9.3.                              Maintenance of Insurance.  Each of the US Borrower and the UK Borrowerwill, and will cause each of the Material Subsidiaries to, at all timesmaintain in full force and effect, with insurance companies that the USBorrower believes (in the good faith judgment of the management of the USBorrower) are financially sound and responsible at the time the relevantcoverage is placed or renewed, insurance in at least such amounts and againstat least such risks (and with such risk retentions) as are usually insuredagainst in the same general area by companies engaged in the same or a similarbusiness; and will furnish to the Lenders, upon written request from theAdministrative Agent, information presented in reasonable detail as to theinsurance so carried.

 

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9.4.                              Payment of Taxes.  Each of the US Borrower and the UK Borrowerwill pay and discharge, and will cause each of the Subsidiaries to pay anddischarge, all material taxes, assessments and governmental charges or leviesimposed upon it or upon its income or profits, or upon any properties belongingto it, prior to the date on which material penalties attach thereto, and alllawful material claims that, if unpaid, could reasonably be expected to becomea material Lien upon any properties of the US Borrower, the UK Borrower or anyof the Restricted Subsidiaries; provided, that neither the US Borrower,the UK Borrower nor any of the Subsidiaries shall be required to pay any suchtax, assessment, charge, levy or claim that is being contested in good faithand by proper proceedings if it has maintained adequate reserves (in the goodfaith judgment of the management of the US Borrower) with respect thereto inaccordance with GAAP.

 

9.5.                              Consolidated Corporate Franchises.  Each of the US Borrower and the UK Borrowerwill 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 itsexistence, corporate rights and authority, except to the extent that thefailure to do so could not reasonably be expected to have a Material AdverseEffect; provided, however, that the US Borrower and itsSubsidiaries 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 theUK Borrower will, and will cause each Subsidiary to, comply with all applicablelaws, rules, regulations and orders, except to the extent the failure to do socould not reasonably be expected to have a Material Adverse Effect.

 

9.7.                              ERISA.  Promptly after any of the US Borrower or anySubsidiary or any ERISA Affiliate knows or has reason to know of the occurrenceof any of the following events that, individually or in the aggregate(including in the aggregate such events previously disclosed or exempt fromdisclosure hereunder, to the extent the liability therefor remainsoutstanding), would be reasonably likely to have a Material Adverse Effect, theUS Borrower will deliver to each of the Lenders a certificate of an AuthorizedOfficer or any other senior officer of the US Borrower setting forth details asto such occurrence and the action, if any, that the US Borrower, suchSubsidiary or such ERISA Affiliate is required or proposes to take, togetherwith any notices (required, proposed or otherwise) given to or filed with or byUS Borrower, such Subsidiary, such ERISA Affiliate, the PBGC, a Planparticipant (other than notices relating to an individual participant’sbenefits) or the Plan administrator with respect thereto: that a ReportableEvent has occurred; that an accumulated funding deficiency has been incurred oran application is to be made to the Secretary of the Treasury for a waiver ormodification of the minimum funding standard (including any requiredinstallment payments) or an extension of any amortization period under Section 412of the Code with respect to a Plan; that a Plan having an Unfunded CurrentLiability has been or is to be terminated, reorganized, partitioned or declaredinsolvent under Title IV of ERISA (including the giving of written noticethereof); that a Plan has an Unfunded Current Liability that has or will resultin a lien under ERISA or the Code; that proceedings will be or have beeninstituted to terminate a Plan having an Unfunded Current Liability

 

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(including the giving ofwritten notice thereof); that a proceeding has been instituted against the USBorrower, a Subsidiary or an ERISA Affiliate pursuant to Section 515 ofERISA to collect a delinquent contribution to a Plan; that the PBGC hasnotified the US Borrower, any Subsidiary or any ERISA Affiliate of its intentionto appoint a trustee to administer any Plan; that the US Borrower, anySubsidiary or any ERISA Affiliate has failed to make a required installment orother 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 orwill 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 Planpursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201or 4204 of ERISA or Section 4971 or 4975 of the Code.

 

9.8.                              Good Repair.  Each of the US Borrower and the UK Borrowerwill, and will cause each of the Restricted Subsidiaries to, ensure that itsproperties and equipment used or useful in its business in whomsoever’spossession they may be to the extent that it is within the control of suchparty 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 suchproperties and equipment all needful and proper repairs, renewals,replacements, extensions, additions, betterments and improvements thereto, tothe extent and in the manner customary for companies in similar businesses andconsistent with third party leases, except in each case to the extent thefailure to do so could not be reasonably expected to have a Material AdverseEffect.

 

9.9.                              Transactions with Affiliates.  Each of the US Borrower and the UK Borrowerwill conduct, and cause each of the Restricted Subsidiaries to conduct, alltransactions with any of its Affiliates on terms that are substantially asfavorable to the US Borrower, the UK Borrower or such Restricted Subsidiary asit would obtain in a comparable arm’s-length transaction with a Person that isnot an Affiliate; provided, that the foregoing restrictions shall notapply to (a) the payment of customary annual fees to KKR, DLJ MerchantBanking and/or their respective Affiliates for management, consulting andfinancial 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 renderedto the Parent Companies, Holdings, the US Borrower, the UK Borrower and theSubsidiaries in connection with divestitures, acquisitions, financings andother transactions, (b) customary fees paid to members of the Board ofDirectors (in their capacity as such) of the Parent Companies, Holdings, the USBorrower, the UK Borrower and the Subsidiaries and (c) transactionspermitted by Section 10.6.

 

9.10.                        End of Fiscal Years; Fiscal Quarters.  The US Borrower will, for financial reportingpurposes, cause (a) its, and each of its Subsidiaries’, fiscal years toend on December 31 of each year and (b) its, and each of itsSubsidiaries’, fiscal quarters to end on dates consistent with such fiscalyear-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 otherfinancial reporting convention reasonably acceptable to the AdministrativeAgent, in which case the US Borrower and the Administrative Agent will, and arehereby authorized by the

 

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Lenders to, make anyadjustments to this Agreement that are necessary in order to reflect suchchange in financial reporting.

 

9.11.                        Additional Guarantors and Grantors.  (a)   Except as provided in Section 10.1(j) or (k), the US Borrowerwill, except to the extent prohibited by applicable law or to the extent thatit would result in material adverse tax consequences for Parent and itsSubsidiaries, taken as a whole, cause (i) any direct or indirect DomesticSubsidiary (other than any Unrestricted Subsidiary) formed or otherwisepurchased or acquired after the Funding Date (including pursuant to a PermittedAcquisition) and (ii) any Subsidiary (other than any UnrestrictedSubsidiary) that is not a Domestic Subsidiary on the Funding Date but subsequentlybecomes a Domestic Subsidiary (other than any Unrestricted Subsidiary), in eachcase to execute a supplement to each of the Guarantee and the SecurityAgreement, substantially in the form of Annex B or Annex 1, as applicable, tothe respective agreement in order to become a Guarantor under the Guarantee anda grantor under the Security Agreement. The US Borrower will, and will cause each of the Restricted Subsidiariesto, use commercially reasonable efforts to structure the ownership of any suchDomestic Subsidiary so as to avoid any such legal prohibition or materialadverse tax consequences described in the immediately preceding sentence thatmay result from such ownership structure.

 

(b)  Each of the US Borrower and the UKBorrower will, except to the extent prohibited by applicable law or to theextent that it would result in material adverse tax consequences for Parent andits Subsidiaries, taken as a whole, cause (i) any direct or indirectSubsidiary of the US Borrower (other than any Unrestricted Subsidiary orForeign Joint Venture) incorporated under the laws of any of England and Wales,Scotland, Germany, Italy, Canada or Singapore that is formed or otherwisepurchased or acquired after the Closing Date (including pursuant to a PermittedAcquisition) and (ii) any member of the Rockwood Group (other than anUnrestricted Subsidiary or Foreign Joint Venture) that is not incorporatedunder the laws of any such country on the Closing Date but subsequently becomesincorporated under such laws, in each case to execute a supplement to theapplicable Foreign Security Documents in form and substance reasonablysatisfactory to the Administrative Agent (or guarantee and securityarrangements in relation to the Obligations of the UK Borrower, as the case maybe, in a form and to an extent agreed between the US Borrower and theAdministrative Agent, but to be substantially consistent (taking into accountthe scope of customary collateral arrangements in the applicable jurisdiction)with the scope of the guarantee and collateral arrangements entered intopursuant to the Foreign Subsidiary Guarantees and the Foreign SecurityDocuments), in order to become a Foreign Subsidiary Guarantor and a grantorunder the applicable Foreign Security Documents; provided, that the USBorrower and the UK Borrower shall not be required to comply with therequirements of subclause (i) above with respect to any PermittedAcquisition of such direct or indirect Subsidiary of the US Borrower to theextent that the aggregate amount of (x) all Indebtedness incurred pursuantto Section 10.1(j) and (k) and outstanding at such time pursuantto 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) or10.1(k)(i)(y), respectively, and (y) the fair market value at the timesuch investment was made of all investments made pursuant to Section 10.5(j) asto which the US Borrower or the UK Borrower, as the case

 

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maybe, has utilized (and at such time continues to utilize) the proviso thereto,does not exceed the Guarantee and Collateral Exception Amount in effect at suchtime.

 

(c)  Each of the US Borrower and the UKBorrower will cause each Foreign Subsidiary that is a Restricted ForeignSubsidiary or that is required to become a Restricted Foreign Subsidiary for aninvestment to constitute a Permitted Acquisition, in each case that makes aninvestment constituting a Permitted Acquisition pursuant to Section 10.5(j) toenter into guarantee and security arrangements in relation to the Obligationsof the UK Borrower in respect of the capital stock and/or assets acquiredpursuant to such Permitted Acquisition to the extent the target of suchPermitted Acquisition is incorporated under the laws of (or has assets locatedin) any of England and Wales, Scotland, Germany, Italy, Canada orSingapore, in a form and to an extent agreed between the US Borrower and theAdministrative Agent, but to be substantially consistent (taking into accountthe scope of customary collateral arrangements in the applicable jurisdiction)with the scope of the guarantee and collateral arrangements entered intopursuant 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 enterinto such arrangements to the extent that such arrangements would (x) beprohibited by the law of the jurisdiction of incorporation or formation of suchRestricted Subsidiary or of the entity whose capital stock is acquired or(y) have material adverse tax consequences for any of the ParentCompanies, Holdings, the US Borrower or any of the Restricted Subsidiaries and(ii) the US Borrower and the UK Borrower shall not be required to complywith the requirements of this clause (c) with respect to any PermittedAcquisition of any such Restricted Foreign Subsidiary to the extent that theaggregate 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 theUK Borrower, as the case may be, has utilized (and at such time continues toutilize) 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 investmentwas made of all investments made pursuant to Section 10.5(j) as towhich the US Borrower or the UK Borrower, as the case may be, has utilized (andat such time continues to utilize) the proviso thereto, does not exceed theGuarantee 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 extentprohibited by applicable law or to the extent that it would result in materialadverse tax consequences for Parent and its Subsidiaries, taken as a whole,pledge, and, if applicable, will cause each Domestic Subsidiary to pledge, tothe Administrative Agent, for the benefit of the Secured Parties, (i) allthe capital stock of each Domestic Subsidiary (other than any UnrestrictedSubsidiary) and each Foreign Subsidiary (other than an Unrestricted Subsidiaryor any capital stock representing in excess of 65% of the issued and outstandingcapital stock in any Foreign Subsidiary) held by the US Borrower or a DomesticSubsidiary, in each case, formed or otherwise purchased or acquired after theFunding Date, in each case pursuant to a supplement to the Pledge Agreement inform and substance reasonably satisfactory to the Administrative Agent,(ii) all evidences of Indebtedness in excess of $5,000,000 received by theUS Borrower or any of the Domestic Subsidiaries (other than any Unrestricted

 

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Subsidiary) in connectionwith any disposition of assets pursuant to Section 10.4(b), in each casepursuant to a supplement to the Pledge Agreement, substantially in the form ofAnnex A thereto and (iii) any global promissory notes executed after theFunding Date evidencing Indebtedness of any of Holdings, the US Borrower andeach Subsidiary that is owing to any of the US Borrower or any DomesticSubsidiary (other than any Unrestricted Subsidiary), in each case pursuant to asupplement to the Pledge Agreement, substantially in the form of Annex Athereto; provided, that the US Borrower and any such Domestic Subsidiaryshall not be required to comply with the requirements of this clause (a) withrespect to any Permitted Acquisition of (1) any such Foreign Subsidiary or(2) any such Domestic Subsidiary to the extent in the case of thissubclause (2) that Indebtedness is incurred pursuant to Section 10.1(j) or(k) in connection therewith, in each case, to the extent that theaggregate 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 theUK Borrower, as the case may be, has utilized (and at such time continues toutilize) 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 investmentwas made of all investments made pursuant to Section 10.5(j) as towhich the US Borrower or the UK Borrower, as the case may be, has utilized (andat such time continues to utilize) the proviso thereto, does not exceed theGuarantee and Collateral Exception Amount in effect at such time.  The US Borrower will, and will cause each ofthe Restricted Subsidiaries to, use commercially reasonable efforts tostructure the ownership of any such Domestic Subsidiary so as to avoid any suchlegal prohibition or material adverse tax consequences described in theimmediately 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 anySubsidiary of such a Foreign Joint Venture) to pledge, to the AdministrativeAgent, for the benefit of the Lenders to the UK Borrower, (i) all thecapital stock of each Subsidiary of the UK Borrower and of any ForeignSubsidiary Guarantor owned or held by the US Borrower or any RestrictedSubsidiary, in each case formed or otherwise purchased or acquired after theClosing Date to the extent such Subsidiary is incorporated under the laws ofany of England and Wales, Scotland, Germany, Italy, Canada or Singapore,in each case pursuant to a supplement to the applicable Foreign SecurityDocuments in form and substance reasonably satisfactory to the AdministrativeAgent (or pledge arrangements in relation to the Obligations of the UKBorrower, in a form and to an extent agreed between the US Borrower and theAdministrative Agent, but to be substantially consistent (taking into accountthe scope of customary collateral arrangements in the applicable jurisdiction)with the scope of the pledge arrangements entered into pursuant to the ForeignSecurity Documents) and (ii) all evidences of Indebtedness with a DollarEquivalent in excess of $5,000,000 received by any of the Foreign SubsidiaryGuarantors in connection with any disposition of assets pursuant toSection 10.4(b), in each case pursuant to a supplement to the applicableForeign Security Documents in form and substance reasonably satisfactory to theAdministrative Agent (or pledge arrangements in relation to the Obligations ofthe UK Borrower, in a form and to an extent agreed between the US Borrower andthe Administrative Agent, but to be substantially consistent (taking intoaccount the scope of customary collateral arrangements in the applicablejurisdiction) with the scope of the pledge arrangements entered into pursuantto the Foreign Security Documents); provided,

 

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thatthe US Borrower and any such Subsidiary shall not be required to comply withthe requirements of subclause (i) above with respect to any PermittedAcquisition of any such Subsidiary of the UK Borrower or of any such ForeignSubsidiary Guarantor to the extent that the aggregate amount of (x) allIndebtedness incurred pursuant to Section 10.1(j) and (k) andoutstanding 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) theproviso 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 allinvestments made pursuant to Section 10.5(j) as to which the USBorrower or the UK Borrower, as the case may be, has utilized (and at such timecontinues to utilize) the proviso thereto, does not exceed the Guarantee andCollateral Exception Amount in effect at such time.

 

(c)  Holdings will pledge to the AdministrativeAgent, for the benefit of the Lenders, all capital stock of the US Borroweracquired by it after the Funding Date (including any capital stock issued inconnection with (i) PIK Proceeds Equity Contributions, (ii) loans andadvances made pursuant to Section 10.5(c)(i) and (iii) dividendspaid 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 ofthe Secured Parties, pursuant to the Pledge Agreement or the UK PledgeAgreements, as the case may be, all capital stock of the UK Borrower acquiredby it after the Funding Date.

 

(d)  The US Borrower and the UK Borrower agreethat all Indebtedness in excess of $5,000,000 of any of the US Borrower andeach Subsidiary that is owing to any Credit Party party to the Pledge Agreementshall be evidenced by one or more global promissory notes.

 

9.13.                        Use of Proceeds.  The US Borrower and the UK Borrower will usethe Letters of Credit and the proceeds of all Revolving Credit Loans, allExtended Revolving Credit Loans and Swingline Loans solely for generalcorporate purposes.  The US Borrower andthe UK Borrower will use the proceeds of all Term Loans (other than any TermLoans funded under the Tranche A Term Loan Commitment pursuant to Section 2.1(a)(i) orSection 2.1(a)(ii), as applicable, after the Funding Date, any Tranche ETerm Loans funded pursuant to Section 2.1(a)(iv) on the ThirdAmendment Effective Date, any Tranche G Term Loans funded pursuant to Section 2.1(a)(v) onthe Fourth Amendment Effective Date, any Tranche H Term Loans deemed madepursuant to Section 2.1(a)(vi) on the Restatement Date and anyTranche I Term Loans deemed made pursuant to Section 2.1(a)(vii) onthe Restatement Date), together with the proceeds of the Acquisition EquityContribution and the borrowings under the Senior Subordinated Loan Agreement,to pay the consideration for the Acquisition, to refinance the 2003 CreditAgreement, PIK Notes (and related fees and prepayment premiums) of PIK Holdcoand certain existing Indebtedness of the Target and to pay TransactionExpenses.  The US Borrower and the UKBorrower will use the proceeds of all Tranche A-1 Term Loans and/or Tranche A-2Term Loans that are funded after the Funding Date pursuant to Section 2.1(a)(iii) solelyfor general corporate purposes.  The USBorrower will (i) use the proceeds of all Tranche E Term Loans funded onthe Third Amendment Effective Date solely to repay in full the outstandingprincipal amount of those existing term loans designated as “Tranche D TermLoans” under the Credit Agreement immediately prior to

 

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the Third AmendmentEffective Date and to pay fees and expenses in connection with such prepaymentsand with the Third Amendment, (ii) use the proceeds of all Tranche G TermLoans funded on the Fourth Amendment Effective Date solely to repay in full theoutstanding principal amount of those existing term loans designated as “TrancheF Term Loans” under the Credit Agreement immediately prior to the FourthAmendment Effective Date and to pay fees and expenses in connection with suchprepayments and with the Fourth Amendment, (iii) use the aggregate amountof all Tranche H Term Loans deemed made on the Restatement Date solely toconvert a portion of the outstanding principal amount of those existing termloans designated as “Tranche E Term Loans” under the Credit Agreementimmediately prior to the Restatement Date, (iv) use the aggregate amountof all Tranche I Term Loans deemed made on the Restatement Date solely toconvert a portion of the outstanding principal amount of those existing termloans designated as “Tranche G Term Loans” under the Credit Agreementimmediately prior to the Restatement Date and (v) use the proceeds of allIncremental 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 asrequired by Section 5.2.

 

9.14.                        Changes in Business.  The US Borrower, the UK Borrower and theSubsidiaries, taken as a whole, will not fundamentally and substantively alterthe character of their business, taken as a whole, from the business conductedby the US Borrower, the UK Borrower and the Subsidiaries, taken as a whole, onthe Funding Date and other business activities incidental or related to any ofthe foregoing.

 

9.15.                        Further Assurances.  (a)   Each of Holdings, the US Borrower and the UK Borrower will, and willcause each other Credit Party to, execute any and all further documents,financing statements, agreements and instruments, and take all such furtheractions (including the filing and recording of financing statements, fixturefilings, mortgages, deeds of trust and other documents), which may be requiredunder any applicable law, or which the Administrative Agent or the RequiredLenders may reasonably request, in order to effectuate the transactionscontemplated by the Credit Documents and in order to grant, preserve, protectand perfect the validity and priority of the security interests created orintended to be created by the Security Agreement, the Pledge Agreement, anyForeign Security Document or any Mortgage, all at the expense of Holdings, theUS Borrower and the Restricted Subsidiaries.

 

(b)  If any assets (including any realestate or improvements thereto or any interest therein) with a book value orfair market value in excess of $5,000,000 are acquired by the US Borrower, theUK Borrower or any other Credit Party after the Closing Date (other than assetsconstituting Collateral under the Security Agreement or any Foreign SecurityDocument that become subject to the Lien of the Security Agreement or theapplicable Foreign Security Documents, as the case may be, upon acquisitionthereof) that are of the nature secured by the Security Agreement, any ForeignSecurity Document or any Mortgage, as the case may be, the US Borrower willnotify the Administrative Agent and the Lenders thereof, and, if requested bythe Administrative Agent or the Required Lenders, the US Borrower will causesuch assets to be subjected to a Lien securing the applicable Obligations andwill take, and cause the other Credit Parties to take, such actions as shall benecessary or reasonably requested by the

 

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Administrative Agent to grant and perfect suchLiens, including actions described in paragraph (a) of this Section, allat the expense of the Credit Parties. Any Mortgage delivered to the Administrative Agent in accordance withthe preceding sentence shall be accompanied by (x) a policy or policies oftitle insurance issued by a nationally recognized title insurance companyinsuring the Lien of each Mortgage as a valid first Lien on the MortgagedProperty described therein, free of any other Liens except as expresslypermitted by Section 10.2, together with such endorsements, coinsuranceand reinsurance as the Administrative Agent may reasonably request and(y) an opinion of local counsel to the Borrower (or in the event aSubsidiary of the Borrower is the Mortgagor, to such Subsidiary) substantiallyin the form of Exhibit O-12.

 

(c)  The US Borrower further agrees that, aspromptly as practicable after the Funding Date it shall cause Brockhues toenter into the German Conditional Security Agreements substantially in the formattached hereto as Exhibit C-6 immediately upon satisfaction of either ofthe following conditions:

 

(i)  Silo Pigmente GmbH and Rockwood PigmenteHolding GmbH hold together 100% of the partners’ interests (or, following thechange of legal status of Brockhues to a stock corporation, 100% of the shares)in Brockhues; or

 

(ii)  the legal obligation in the FederalRepublic of Germany changes to the effect that in the reasonable judgment ofthe US Borrower, in consultation with the Administrative Agent, the executionof the German Conditional Security Agreements by Brockhues is possible withoutrunning material legal risks under German law.

 

9.16.                        UK Borrower.  The US Borrower shall ensure that the UKBorrower is on the Funding Date, and shall at all times thereafter be, a directwholly owned Subsidiary of the US Borrower, and Holdings and the US Borroweragree that the UK Borrower is not permitted to be sold, transferred orotherwise disposed of pursuant to Section 10.4.

 

9.17.                        Sale and Purchase Agreement.  The US Borrower and any applicable RestrictedSubsidiary shall not amend or waive any of the terms of the Sale and PurchaseAgreement in any way that would reasonably be expected to be materially adverseto the interests of the Lenders.  The USBorrower and any applicable Restricted Subsidiary shall consult with the Agentsin connection with any litigation or arbitration proceeding to which it is aparty 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 6.8inclusive shall not be delivered on or prior to the Funding Date or any of theother documents or actions required to be delivered or taken pursuant to Section 6shall not be delivered or taken on or prior to the Funding Date, each of the USBorrower and the UK Borrower (as applicable) shall, on or prior to the FundingDate, prepare a schedule (the “Post-Closing Schedule”), substantially inthe form of Exhibit T, identifying such

 

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documents that are notdelivered and/or actions that are not taken and shall (i) deliver, orcause the applicable Subsidiaries to deliver, the documents listed on thePost-Closing Schedule to the Administrative Agent within 30 days following theFunding Date and (ii) take, or cause the applicable Subsidiaries to take,each of the actions specified in Section 6.2 within 30 days following theFunding Date; provided, that, without the consent of any Lender, the AdministrativeAgent and/or the Collateral Agent may (in their respective sole discretion)within 30 days following the Funding Date extend such 30 day period on aone-time basis for an additional period not to exceed 30 days.  It is understood and agreed that any periodavailable for the delivery of documents and the taking of actions provided bythis Section 9.18 shall not be in addition to, and shall run concurrentlywith, any Clean-Up Period provided in Section 7.4.

 

(b)  Each of Holdings, the US Borrower and theUK Borrower shall, as promptly as practicable after the Funding Date (but inany event, no later than October 31, 2004), cause (i) the SingaporeGuarantee and the Singapore Security Agreement to be executed by the Singapore Guarantorsand the other Restricted Subsidiaries party thereto, (ii) the SingaporePledge Agreements to be executed by the US Borrower and (iii) Section 9.15(a) tobe complied with in respect of such collateral. Concurrently with the delivery of the Singapore Guarantee, the SingaporeSecurity Agreement and the Singapore Pledge Agreements, the AdministrativeAgent shall have received an executed legal opinion of Allen &Gledhill (or such other counsel acceptable to the Administrative Agent, actingreasonably), in form and substance acceptable to the Administrative Agent,acting reasonably, delivered to the Administrative Agent and for the benefit ofthe Lenders to the US Borrower and the UK Borrower.  Concurrently with the delivery of theSingapore Pledge Agreements, all outstanding equity interests in whatever formowned by or on behalf of each pledgor under the Singapore Pledge Agreementsshall have been pledged pursuant to the Singapore Pledge Agreements and theAdministrative Agent shall have received all certificates representingsecurities pledged under the Singapore Pledge Agreements, accompanied byinstruments of transfer and undated stock powers endorsed in blank.

 

(c)  The US Borrower agrees that, as promptlyas 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 rightsin each of Silo Pigmente GmbH and Rockwood Pigmente Holding GmbH to the effectthat:

 

(i)  a partners’ resolution of Brockhues shallbe passed to resolve that Silo Pigmente GmbH and Rockwood Pigmente Holding GmbHmay pledge all of the partners’ interests in Brockhues owned by them in favorof the Administrative Agent; and

 

(ii)  Silo Pigmente GmbH and Rockwood PigmenteHolding GmbH shall pledge all of the partners’ interests in Brockhues owned bythem in the form substantially set forth in Exhibit C-7 hereto followingthe partners’ resolution described in clause (i) above.

 

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SECTION 10.                          Negative Covenants

 

Each of Holdings (with respect to Section 10.3(B) andSection 10.6 only), the US Borrower and the UK Borrower hereby covenantand agree that on the Funding Date and thereafter, for so long as thisAgreement is in effect and until the Commitments, the Swingline Commitment andeach Letter of Credit have terminated and the Loans and Unpaid Drawings,together with interest, Fees and all other Obligations incurred hereunder, arepaid 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 RevolverRefinancing Indebtedness;

 

(b) Indebtedness of (i) the US Borrower to any Subsidiary of the US Borrowerand (ii) any Subsidiary to the US Borrower or any other RestrictedSubsidiary of the US Borrower;

 

(c) Indebtedness in respect of any bankers’ acceptance, letter of credit, warehousereceipt or similar facilities entered into in the ordinary course of business;

 

(d) except as provided in clauses (j) and (k) below, GuaranteeObligations incurred by (i) Restricted Subsidiaries in respect ofIndebtedness of the US Borrower or other Restricted Subsidiaries that ispermitted to be incurred under this Agreement and (ii) the US Borrower inrespect of Indebtedness of the Restricted Subsidiaries that is permitted to beincurred under this Agreement; provided, that there shall be noGuarantee Obligations (a) by a Restricted Foreign Subsidiary of anyIndebtedness of the US Borrower and (b) in respect of the PermittedSubordinated Debt, Permitted Senior Subordinated Debt or Permitted AdditionalNotes, unless such Guarantee Obligations are made by a Guarantor (other thanHoldings) and such Guarantee is unsecured and subordinated (other than in thecase of Permitted Additional Notes which are senior notes) to the Obligationsto the same extent as the applicable Permitted Subordinated Debt or PermittedSenior Subordinated Debt, as the case may be;

 

(e) Guarantee Obligations incurred in the ordinary course of business in respect ofobligations 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 improvementof fixed or capital assets to finance the acquisition, construction orimprovement of such fixed or capital assets or otherwise incurred in respect ofCapital Expenditures permitted by Section 10.11, (ii) Indebtednessarising under Capital Leases entered into in connection with Permitted SaleLeasebacks and (iii) Indebtedness arising under Capital Leases, other thanCapital Leases in effect on the Fourth Amendment Effective Date and CapitalLeases entered into pursuant to

 

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subclauses (i) and(ii) above; provided, that the aggregate amount of Indebtednessincurred 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; providedfurther, that the principal amountthereof is not increased above the principal amount thereof outstandingimmediately 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 principalamount 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 Indebtednessare 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) PermittedAdditional Notes, in each case, subject, in the case of any GuaranteeObligations in respect thereof, to clause (d) above;

 

(j) (i) Indebtedness of a Person or Indebtedness attaching to assets of aPerson that, in either case, becomes a Restricted Subsidiary or Indebtednessattaching to assets that are acquired by the US Borrower or any RestrictedSubsidiary, in each case after the Closing Date as the result of a PermittedAcquisition; provided, that (w) such Indebtedness existed at thetime such Person became a Restricted Subsidiary or at the time such assets wereacquired and, in each case, was not created in anticipation thereof,(x) such Indebtedness is not guaranteed in any respect by the US Borroweror any Restricted Subsidiary (other than any such Person that so becomes aRestricted Subsidiary), (y)(A) the capital stock of such Person is pledgedto the Administrative Agent to the extent required under Section 9.11 orSection 9.12 and (B) such Person executes a supplement to each of theGuarantee, the Security Agreement, the applicable Foreign Guarantee and/or theapplicable Foreign Security Documents and the Pledge Agreement (or alternativeguarantee and security arrangements in relation to the Obligations) to theextent required under Sections 9.11 or 9.12, as applicable; provided,that the requirements of this subclause (y) shall not apply to anaggregate amount at any time outstanding of up to (and including) the Guaranteeand Collateral Exception Amount at such time of the aggregate of (1) such Indebtednessand (2) all Indebtedness as to which the proviso to clause (k)(i)(y) belowthen applies, and (z) in respect of any such Indebtedness incurred on andafter the Fourth Amendment Effective Date, the aggregate amount of suchIndebtedness and all Indebtedness incurred under clause (k) below,when taken together, does not exceed $450,000,000 in the aggregate at any timeoutstanding, and (ii) any refinancing, refunding, renewal or extension ofany Indebtedness specified in

 

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subclause (i) above;provided, that except to the extent otherwise permitted hereunder,(x) the principal amount of any such Indebtedness is not increased abovethe principal amount thereof outstanding immediately prior to such refinancing,refunding, renewal or extension and (y) the direct and contingent obligorswith respect to such Indebtedness are not changed;

 

(k) (i) Indebtedness of the US Borrower or any Restricted Subsidiary incurredto finance a Permitted Acquisition; provided, that (x) suchIndebtedness is not guaranteed in any respect by any Restricted Subsidiary(other than any Person acquired (the “acquired Person”) as a result ofsuch Permitted Acquisition or the Restricted Subsidiary so incurring suchIndebtedness) or, in the case of Indebtedness of any Restricted Subsidiary, bythe US Borrower, (y)(A) the US Borrower or such Restricted Subsidiarypledges the capital stock of such acquired Person to the Administrative Agentto the extent required under Section 9.11 or Section 9.12 and(B) such acquired Person executes a supplement to the Guarantee, theSecurity Agreement, the applicable Foreign Guarantee and/or the applicableForeign Security Documents and the Pledge Agreement (or alternative guaranteeand security arrangements in relation to the Obligations) to the extentrequired under Sections 9.11 or 9.12, as applicable; provided, thatthe requirements of this subclause (y) shall not apply to anaggregate amount at any time outstanding of up to (and including) the amount ofthe Guarantee and Collateral Exception Amount at such time of the aggregate of(1) such Indebtedness and (2) all Indebtedness as to which theproviso to clause (j)(i)(y) above then applies, and (z) inrespect of any such Indebtedness incurred on and after the Fourth AmendmentEffective Date, the aggregate amount of such Indebtedness and all Indebtednessassumed or permitted to exist under clause (j) above, when takentogether, does not exceed $450,000,000 in the aggregate at any timeoutstanding, and (ii) any refinancing, refunding, renewal or extension ofany Indebtedness specified in subclause (i) above; provided,that (x) the principal amount of any such Indebtedness is not increasedabove the principal amount thereof outstanding immediately prior to suchrefinancing, refunding, renewal or extension and (y) the direct andcontingent obligors with respect to such Indebtedness are not changed, exceptto the extent otherwise permitted hereunder;

 

(l) (i) Indebtedness of Restricted Foreign Subsidiaries existing as of theFourth Amendment Effective Date and any refinancing, refunding, renewal orextension thereof; provided, that the principal amount thereof is notincreased above the principal amount thereof outstanding as of the FourthAmendment Effective Date and (ii)(x) Indebtedness of Restricted ForeignSubsidiaries incurred after the Fourth Amendment Effective Date in an aggregateamount at any time outstanding not to exceed $150,000,000;

 

(m) (i) Indebtedness incurred in connection with any Permitted Sale Leasebackand (ii) any refinancing, refunding, renewal or extension of anyIndebtedness specified in subclause (i) above; provided, that,except to the extent otherwise permitted hereunder, (x) the principalamount of any such Indebtedness is not increased above the principal amountthereof outstanding immediately prior

 

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to such refinancing,refunding, renewal or extension and (y) the direct and contingent obligorswith respect to such Indebtedness are not changed;

 

(n) (i) additional Indebtedness incurred and outstanding pursuant to thisclause (n) prior to the Restatement Date, (ii) additionalIndebtedness incurred after the Restatement Date in an aggregate amount not toexceed $1,000,000,000 at any time outstanding; provided, that withrespect to any Indebtedness incurred pursuant to this subclause (ii) ofthis clause (n) on or after the Restatement Date the Net Cash Proceedstherefrom are (A) applied, immediately after the receipt thereof, to theprepayment of Term Loans in accordance with Section 5.2 to the extentrequired thereby or (B) to the extent not required to be so applied, usedsolely for Permitted Acquisitions or other general corporate purposes of theBorrowers and the Subsidiaries; provided, further that any NetCash Proceeds of such Indebtedness applied, immediately after the receiptthereof, to the prepayment of Term Loans in accordance with Section 5.2will not reduce the portion of such $1,000,000,000 available pursuant to thissubclause (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 amountthereof outstanding as of the Restatement Date;

 

(o) Indebtedness in respect of Permitted Additional Subordinated Notes to theextent that the Net Cash Proceeds therefrom are, immediately after the receiptthereof, 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 Indebtednessrepresented by letters of credit, bank guarantees or other similar instruments;provided, that such Indebtedness shall not exceed $50,000,000 in theaggregate at any time outstanding; and

 

(q) Indebtedness incurred by the US Borrower to the extent that the Net CashProceeds therefrom are, immediately after the receipt thereof, applied solelyto the prepayment of Tranche A-1 Term Loans, Tranche A-2 Term Loans, Tranche ETerm 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 scheduledrepayment, mandatory redemption or sinking fund obligations prior to theTranche I Term Loan Maturity Date (other than customary offers to repurchaseupon a change of control, asset sale or event of loss and customaryacceleration rights after an event of default) and (B) no Subsidiary ofthe US Borrower (other than the UK Borrower) is a borrower or guarantor withrespect to such Indebtedness unless such Subsidiary is a Credit Party whichshall 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

 

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suffer to exist any Lienupon any property or assets of any kind (real or personal, tangible orintangible) of the US Borrower or any Restricted Subsidiary, whether now ownedor 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 uponor 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 orcontingent obligor except to the extent otherwise permitted hereunder) of theIndebtedness secured thereby;

 

(f) Liens existing on the assets of any Person that becomes a RestrictedSubsidiary, or existing on assets acquired, pursuant to a Permitted Acquisitionto the extent the Liens on such assets secure Indebtedness permitted bySection 10.1(j); provided, that such Liens attach at all times onlyto the same assets that such Liens attached to, and secure only the sameIndebtedness that such Liens secured, immediately prior to such PermittedAcquisition;

 

(g) (i) Liens placed upon the capital stock of any Restricted Subsidiaryacquired pursuant to a Permitted Acquisition to secure Indebtedness of the USBorrower or any other Restricted Subsidiary incurred pursuant toSection 10.1(k) in connection with such Permitted Acquisition and(ii) Liens placed upon the assets of such Restricted Subsidiary to securea guarantee by such Restricted Subsidiary or any such Indebtedness of the USBorrower or any other Restricted Subsidiary;

 

(h) (i) Liens existing as of the Fourth Amendment Effective Date and anyreplacement, extension or renewal (without increase in the amount or change inany direct or contingent obligor except to the extent otherwise permittedhereunder) of the Indebtedness secured thereby and (ii) additional Liensincurred after the Fourth Amendment Effective Date so long as the aggregateprincipal amount of the obligations so secured does not exceed $75,000,000 atany 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 (oran agent on their behalf) shall have entered into an intercreditor agreementwith the Collateral Agent that is reasonably satisfactory to the CollateralAgent;

 

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(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 Collateralthat is pari passu with the Lien securing the Obligations or a Lien rankingjunior to the Lien on the Collateral securing the Obligations (but may not besecured by any other assets that are not Collateral) and, in any such case, thebeneficiaries thereof (or an agent on their behalf) shall have entered into anintercreditor agreement with the Collateral Agent that is reasonablysatisfactory to the Collateral Agent.

 

10.3.                        Limitation on Fundamental Changes.  (A) Except as expressly permitted by Section 10.4or 10.5, each of the US Borrower and the UK Borrower will not, and will notpermit any of the Restricted Subsidiaries to, enter into any merger,consolidation or amalgamation, or liquidate, wind up or dissolve itself (orsuffer 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 orconsolidated with or into the US Borrower; provided, that (i) theUS Borrower shall be the continuing or surviving corporation or the Personformed by or surviving any such merger or consolidation (if other than the USBorrower) shall be an entity organized or existing under the laws of the UnitedStates, 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 toas the “Successor Borrower”), (ii) the Successor Borrower (if otherthan the US Borrower) shall expressly assume all the obligations of the USBorrower under this Agreement and the other Credit Documents pursuant to asupplement hereto or thereto in form reasonably satisfactory to theAdministrative Agent, (iii) no Default or Event of Default would resultfrom the consummation of such merger or consolidation, (iv) the SuccessorBorrower shall be in compliance, on a proforma basis aftergiving effect to such merger or consolidation, with the covenants set forth inSections 10.9 and 10.10, as such covenants are recomputed as at the lastday of the most recently ended Test Period under such Section as if suchmerger or consolidation had occurred on the first day of such Test Period,(v) each Guarantor, unless it is the other party to such merger orconsolidation, shall have by a supplement to the Guarantee confirmed that itsGuarantee shall apply to the Successor Borrower’s obligations under thisAgreement, (vi) each Subsidiary grantor and each Subsidiary pledgor,unless it is the other party to such merger or consolidation, shall have by asupplement to the Security Agreement or the Pledge Agreement, as applicable,confirmed that its obligations thereunder shall apply to the Successor Borrower’sobligations under this Agreement, (vii) each mortgagor of a MortgagedProperty, unless it is the other party to such merger or consolidation, shallhave by an amendment to or restatement of the applicable Mortgage confirmedthat its obligations thereunder shall apply to the Successor Borrower’sobligations under this Agreement, and (viii) the US Borrower shall havedelivered to the Administrative Agent an officer’s certificate and an opinion

 

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of counsel, each statingthat such merger or consolidation and such supplement to this Agreement or anySecurity Document comply with this Agreement; providedfurther,that if the foregoing are satisfied, the Successor Borrower (if other than theUS Borrower) will succeed to, and be substituted for, the US Borrower underthis Agreement;

 

(b) any Subsidiary of the UK Borrower or any other Person may be merged orconsolidated with or into the UK Borrower, provided, that (i) theUK Borrower shall be the continuing or surviving corporation or the Person formedby or surviving any such merger or consolidation (if other than the UKBorrower) shall be a corporation organized or existing under the laws ofEngland and Wales (the UK Borrower or such Person, as the case may be, beingherein referred to as the “Successor UK Borrower”), (ii) theSuccessor UK Borrower (if other than the UK Borrower) shall expressly assumeall the obligations of the UK Borrower under this Agreement and the otherCredit Documents pursuant to a supplement hereto or thereto in form reasonablysatisfactory to the Administrative Agent, (iii) no Default or Event ofDefault would result from the consummation of such merger or consolidation,(iv) the US Borrower shall be in compliance, on a proformabasis after giving effect to such merger or consolidation, with the covenantsset forth in Sections 10.9 and 10.10, as such covenants are recomputed asat the last day of the most recently ended Test Period under such Section asif such merger or consolidation had occurred on the first day of such TestPeriod, (v) the US Borrower, each Guarantor and each Foreign SubsidiaryGuarantor, unless it is the other party to such merger or consolidation, shallhave by a supplement to the Guarantee or Foreign Subsidiary Guarantee, as thecase may be, confirmed that its Guarantee or Foreign Subsidiary Guarantee, asthe case may be, shall apply to the Successor UK Borrower’s obligations underthis Agreement, (vi) each grantor and each pledgor, unless it is the otherparty to such merger or consolidation, shall have by a supplement to theapplicable Security Document confirmed that its obligations thereunder shallapply to the Successor UK Borrower’s obligations under this Agreement,(vii) each mortgagor of a Mortgaged Property, unless it is the other partyto such merger or consolidation, shall have by an amendment to or restatementof the applicable Mortgage confirmed that its obligations thereunder shallapply to the Successor UK Borrower’s obligations under this Agreement, and(viii) the UK Borrower shall have delivered to the Administrative Agent anofficer’s certificate and an opinion of counsel, each stating that such mergeror consolidation, such supplement to this Agreement or any Security Documentand such amendment or restatement to any applicable Mortgage, as the case maybe, comply with this Agreement; providedfurther, that if theforegoing are satisfied, the Successor UK Borrower (if other than the UKBorrower) will succeed to, and be substituted for, the UK Borrower under thisAgreement;

 

(c) any Subsidiary of the US Borrower (other than the UK Borrower) or any otherPerson may be merged or consolidated with or into any one or more Subsidiariesof the US Borrower (other than the UK Borrower); provided, that(i) in the case of any merger or consolidation involving one or moreRestricted Subsidiaries, (A) a Restricted Subsidiary shall be thecontinuing or surviving

 

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corporation or(B) the US Borrower shall take all steps necessary to cause the Person formedby or surviving any such merger or consolidation (if other than a RestrictedSubsidiary) to become a Restricted Subsidiary, (ii) in the case of anymerger or consolidation involving one or more Guarantors and/or ForeignSubsidiary Guarantors, as the case may be, a Guarantor or Foreign SubsidiaryGuarantor, as the case may be, shall be the continuing or surviving corporationor the Person formed by or surviving any such merger or consolidation (if otherthan a Guarantor or Foreign Subsidiary Guarantor, as the case may be) shallexecute a supplement to the Guarantee Agreement, the Pledge Agreement and theSecurity Agreement and any applicable Mortgage or the analogous ForeignSecurity Documents, as the case may be, in form and substance reasonably satisfactoryto the Administrative Agent in order to become a Guarantor or ForeignSubsidiary Guarantor, as the case may be, and pledgor, mortgagor and grantor ofCollateral for the benefit of the Secured Parties, (iii) no Default orEvent of Default would result from the consummation of such merger orconsolidation, (iv) the US Borrower shall be in compliance, on a proforma basis after giving effect to such merger or consolidation, withthe covenants set forth in Sections 10.9 and 10.10, as such covenants arerecomputed as at the last day of the most recently ended Test Period under suchSection as if such merger or consolidation had occurred on the first dayof such Test Period, and (v) the US Borrower shall have delivered to theAdministrative Agent an Officers’ Certificate stating that such merger orconsolidation and such supplements to any Security Document comply with thisAgreement;

 

(d) any Restricted Subsidiary that is not a Guarantor or a Foreign SubsidiaryGuarantor may sell, lease, transfer or otherwise dispose of any or all of itsassets (upon voluntary liquidation or otherwise) to the US Borrower, the UKBorrower, a Guarantor, a Foreign Subsidiary Guarantor or any other RestrictedSubsidiary of the US Borrower;

 

(e) any Guarantor or any Foreign Subsidiary Guarantor may sell, lease, transfer orotherwise dispose of any or all of its assets (upon voluntary liquidation orotherwise) to the US Borrower, the UK Borrower or any other Guarantor orForeign Subsidiary Guarantor; and

 

(f) any Restricted Subsidiary (other than the UK Borrower) may liquidate ordissolve if (x) the US Borrower determines in good faith that suchliquidation or dissolution is in the best interests of the US Borrower and isnot materially disadvantageous to the Lenders and (y) to the extent such Restricted Subsidiary is a Credit Party, anyassets or business not otherwise disposed of or transferred in accordance with Section 10.4or 10.5, or, in the case of any such business, discontinued, shall betransferred to, or otherwise owned or conducted by, another Credit Party aftergiving effect to such liquidation or dissolution.

 

(B) Holdings will not engage in any business oractivity other than (a) the ownership of all the outstanding shares ofcapital stock of the US Borrower, (b) maintaining its corporate existence,(c) participating in tax, accounting and other

 

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administrative matters as a member of theconsolidated group of Parent, (d) the performance of the Credit Documentsto which it is a party, (e) making any Dividend permitted bySection 10.6 or holding any cash received in connection with Dividendsmade by the US Borrower in accordance with Section 10.6 pendingapplication thereof by Holdings in the manner contemplated by Section 10.6,(f) the performance of the 2011 Senior Notes Indenture, (g) theissuance of PIK Refinancing Indebtedness or PIK Refinancing Preferred Stock andthe performance under such PIK Refinancing Indebtedness or PIK RefinancingPreferred Stock, (h) so long as no Default or Event of Default hasoccurred and is continuing, the prepayment, repurchase, retirement orredemption of the 2011 Senior Notes, PIK Refinancing Indebtedness and/or PIKRefinancing Preferred Stock (x) from the proceeds of Dividends received inaccordance with Section 10.6(g) and (y) from the amount of anycapital contributions made in cash to Holdings from and including the BusinessDay immediately following the Closing Date through and including the date ofsuch redemption, repurchase or retirement, including contributions with theproceeds from any issuance of equity securities by any of the Parent Companiesor Holdings and (i) activities incidental to the businesses or activitiesdescribed 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 PermittedInvestments) or incur any liabilities (other than liabilities under the CreditDocuments, liabilities under its guarantee of the Subordinated Notes and theSenior Subordinated Notes (provided, that Holdings shall not guaranteethe Subordinated Notes or the Senior Subordinated Notes unless(x) Holdings also has guaranteed the Obligations pursuant to theGuarantee, (y) such guarantee of the Subordinated Notes or the SeniorSubordinated Notes is unsecured and subordinated to such guarantee of theObligations on terms no less favorable to the Lenders than the subordinationprovisions of the Subordinated Notes or the Senior Subordinated Notes, as thecase may be, and (z) such guarantee of the Subordinated Notes or theSenior Subordinated Notes provides for the release and termination thereof,without action by any party, upon any release and termination of such guaranteeof the Obligations), liabilities under the 2011 Senior Notes Indenture,liabilities in respect of PIK Refinancing Indebtedness or PIK RefinancingPreferred Stock and liabilities imposed by law, including tax liabilities, andother liabilities incidental to its existence and business and activitiespermitted by this Agreement).

 

10.4.                        Limitation on Sale of Assets.  Each of the US Borrower and the UK Borrowerwill not, and will not permit any of the Restricted Subsidiaries to,(i) convey, sell, lease, assign, transfer or otherwise dispose of any ofits property, business or assets (including receivables and leaseholdinterests), whether now owned or hereafter acquired (other than any such sale,transfer, assignment or other disposition resulting from any casualty orcondemnation 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 aRestricted Foreign Subsidiary) any shares owned by it of any RestrictedSubsidiary’s capital stock, except that:

 

(a) the US Borrower and the Restricted Subsidiaries may sell, transfer or otherwisedispose of used or surplus equipment, vehicles, inventory and other assets inthe ordinary course of business;

 

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(b) the US Borrower and the Restricted Subsidiaries may sell, transfer or otherwisedispose 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 afterthe Restatement Date (i) the amount of any such sale, transfer ordisposal, together with the aggregate amount of any previous sales, transfersand disposals made by the US Borrower and the Restricted Subsidiaries, taken asa whole, pursuant to this clause (b) on and after the RestatementDate, shall not exceed in the aggregate an amount equal to 20% of ConsolidatedTotal Assets as of March 31, 2009, (ii) any consideration in excessof $5,000,000 received by the US Borrower or any Guarantor in connection withsuch sales, transfers and other dispositions of assets pursuant to thisclause (b) that is in the form of Indebtedness shall be pledged tothe Administrative Agent pursuant to Section 9.12, (iii) with respectto any such sale, transfer or disposition (or series of related sales,transfers or dispositions) in an aggregate amount in excess of $25,000,000 theUS Borrower shall be in compliance, on a proforma basis aftergiving effect to such sale, transfer or disposition, with the covenants setforth in Sections 10.9 and 10.10, as such covenants are recomputed as atthe last day of the most recently ended Test Period under such Sections as ifsuch sale, transfer or disposition had occurred on the first day of such TestPeriod and (iv) after giving effect to any such sale, transfer ordisposition, no Default or Event of Default shall have occurred and becontinuing;

 

(c) the US Borrower and the Restricted Subsidiaries may make sales of assets to theUS Borrower or to any Restricted Subsidiary; provided, that any suchsales to Restricted Foreign Subsidiaries shall be for fair value;

 

(d) any Restricted Subsidiary may effect any transaction permitted bySection 10.3;

 

(e) in addition to selling or transferring accounts receivable pursuant to theother provisions hereof, the US Borrower and the Restricted Subsidiaries may(i) sell or discount without recourse accounts receivable arising in theordinary course of business in connection with the compromise or collectionthereof and (ii) sell or transfer accounts receivable and related rightspursuant to customary receivables financing facilities or factoringarrangements; provided, that the aggregate amount of accounts receivablesubject to such receivables financing facilities or factoring arrangements atany one time shall not exceed $200,000,000 or any greater amount so long as anyNet Cash Proceeds in respect of accounts receivable in excess of $200,000,000subject to such receivables financing facilities or factoring arrangements atany one time are promptly applied to prepay the Term Loans in the manner setforth 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 permitany of the Restricted Subsidiaries to, make any advance, loan, extensions of

 

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credit or capitalcontribution to, or purchase any stock, bonds, notes, debentures or othersecurities 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 ofbusiness;

 

(b) Permitted Investments;

 

(c) loans and advances to officers, directors and employees of Parent or any of itsSubsidiaries (i) to finance the purchase of capital stock of Parent (provided,that the amount of such loans and advances used to acquire such capital stockshall be contributed by Holdings to the US Borrower in cash as common equityusing the proceeds of prior contributions of common equity by Parent to PIKHoldco and by PIK Holdco to Holdings, respectively) and (ii) foradditional purposes not contemplated by subclause (i) above in anaggregate principal amount at any time outstanding with respect to thisclause (ii) not exceeding $25,000,000;

 

(d) investments existing on the Closing Date and listed on Schedule 10.5, andany extensions, renewals or reinvestments thereof, so long as the aggregateamount of all investments pursuant to this clause (d) is notincreased at any time above the amount of such investments existing on theClosing Date;

 

(e) investments in Hedge Agreements permitted by Section 10.1(h);

 

(f) investments received in connection with the bankruptcy or reorganization ofsuppliers or customers and in settlement of delinquent obligations of, andother disputes with, customers arising in the ordinary course of business;

 

(g) investments to the extent that payment for such investments is made solely withcapital stock of any of the Parent Companies;

 

(h) investments constituting non-cash proceeds of sales, transfers and otherdispositions of assets to the extent permitted by Section 10.4;

 

(i) investments in any Guarantor (other than Holdings), the US Borrower, the UKBorrower or any Foreign Subsidiary Guarantor, and investments (other thaninvestments representing a Permitted Acquisition or any other acquisition, bymerger or otherwise, of any assets or capital stock or other equity interestsof any Person who is not, immediately prior to such acquisition, a RestrictedSubsidiary) by any Restricted Subsidiary that is not a US Subsidiary Guarantoror a Foreign Subsidiary Guarantor in another Restricted Subsidiary that is nota US Subsidiary Guarantor or a Foreign Subsidiary Guarantor;

 

(j) investments constituting Permitted Acquisitions; provided, that, in thecase of any Permitted Acquisition on or after the Restatement Date theaggregate amount of any such investment, as valued at the fair market value ofsuch

 

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investment at the timeeach such investment is made, made by the US Borrower or any RestrictedSubsidiary in any Restricted Foreign Subsidiary, to the extent that suchRestricted Foreign Subsidiary does not become a Foreign Subsidiary Guarantorpursuant to Section 9.11 and does not enter into the guarantee andcollateral arrangements contemplated thereby, shall not exceed the AvailableAmount at the time of such investment plus an amount equal to anyrepayments, interest, returns, profits, distributions, income and similaramounts actually received in cash in respect of any such investment (whichamount shall not exceed the amount of such investment valued at the fair marketvalue of such investment at the time such investment was made);

 

(k) investments in the equity interests of one or more newly formed persons thatare received in consideration of the contribution by the US Borrower or itsapplicable Restricted Subsidiaries of assets (including capital stock) to suchperson or persons; provided, that, in the case of any such investmentmade on or after the Fourth Amendment Effective Date (i) the fair marketvalue of such assets, determined on arms-length basis, so contributed pursuantto this paragraph (k) shall not in the aggregate exceed $150,000,000,(ii) with respect to investments in Foreign Joint Ventures, the sum of allinvestments in Foreign Joint Ventures made pursuant to this Section 10.5(k) priorto the date thereof and all investment in Foreign Joint Ventures made pursuantto Section 10.5(m)(ii) below prior to the date thereof, when takentogether, as valued at the fair market value of such investment at the timeeach such investment is made, does not exceed $250,000,000 plus anamount equal to any repayments, interest, returns, profits, distributions,income and similar amounts actually received in cash in respect of any suchinvestment (which amount shall not exceed the amount of such investment valuedat the fair market value of such investment at the time such investment wasmade) in the aggregate and (iii) in respect of each such contribution, anAuthorized Officer of the US Borrower shall certify, in a form to beagreed upon by the US Borrower and the Administrative Agent (x) aftergiving effect to such contribution, no Default or Event of Default shall haveoccurred and be continuing, (y) the fair market value of the assets socontributed and (z) that the requirements of paragraph (i) ofthis proviso remain satisfied;

 

(l) investments made to repurchase or retire common stock of Parent owned by anyemployee stock ownership plan or key employee stock ownership plan of theParent Companies, Holdings or the US Borrower;

 

(m) (i) additional investments (including investments in Minority Investmentsand Unrestricted Subsidiaries) made under this clause (m) prior to theRestatement Date or (ii) such additional investments (includinginvestments in Minority Investments and Unrestricted Subsidiaries) madethereafter, as valued at the fair market value of such investment at the timeeach such investment is made, in an aggregate amount at the time of suchinvestment not in excess of the Available Amount at such time plus anamount equal to any repayments, interest, returns, profits, distributions,income and similar amounts actually received in cash in respect of any suchinvestment (which amount shall not exceed the

 

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amount of such investmentvalued at the fair market value of such investment at the time such investmentwas made); provided, that with respect to investments in Foreign Joint Venturesmade on or after the Restatement Date, the sum of all investments in ForeignJoint Ventures made pursuant to Section 10.5 (k) above prior to thedate thereof and all investment in Foreign Joint Ventures made pursuant to thisSection 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 suchinvestment is made, does not exceed $250,000,000 plus an amount equal toany repayments, interest, returns, profits, distributions, income and similaramounts actually received in cash in respect of any such investment (whichamount shall not exceed the amount of such investment valued at the fair marketvalue of such investment at the time such investment was made) in theaggregate;

 

(n) investments permitted under Section 10.6; and

 

(o) contributions to a “rabbi” trust withinthe meaning of Revenue Procedure 92-64 or contributions to a trust which isqualified under Section 401(a) of the Code or other grantor trustsubject to the claims of creditors in the case of a bankruptcy of the USBorrower.

 

10.6.                        Limitation on Dividends.  Neither Holdings nor the US Borrower willdeclare or pay any dividends (other than, (a) in respect of Holdings,dividends payable solely in its capital stock or rights, warrants or options topurchase its capital stock and (b) in respect of the US Borrower,dividends payable solely in its capital stock) or return any capital to itsstockholders or make any other distribution, payment or delivery of property orcash to its stockholders as such, or redeem, retire, purchase or otherwiseacquire, directly or indirectly, for consideration, any shares of any class ofits capital stock or the capital stock of any direct or indirect parent now orhereafter outstanding (or any options or warrants or stock appreciation rightsissued with respect to any of its capital stock), or set aside any funds forany of the foregoing purposes, or permit any of the Restricted Subsidiaries topurchase or otherwise acquire for consideration (other than in connection withan investment permitted by Section 10.5) any shares of any class of thecapital stock of Holdings or the US Borrower, now or hereafter outstanding (orany options or warrants or stock appreciation rights issued with respect to anyof its capital stock) (all of the foregoing “Dividends”); provided,that, so long as no Default or Event of Default exists or would exist aftergiving effect thereto subject to the last sentence of this Section,(a) each of Holdings and the US Borrower may redeem in whole or in partany of its capital stock for another class of capital stock or rights toacquire its capital stock or with proceeds from substantially concurrent equitycontributions or issuances of new shares of its capital stock; provided,that such other class of capital stock contains terms and provisions at leastas advantageous to the Lenders in all respects material to their interests asthose contained in the capital stock redeemed thereby, (b) Holdings mayrepurchase shares of its capital stock (or any options or warrants or stockappreciation rights issued with respect to any of its capital stock) held byofficers, directors and employees of Parent and its Subsidiaries, with theproceeds of dividends from the US Borrower which shall also be permitted, solong as such repurchase is pursuant to, and in accordance with the terms of,management and/or

 

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employee stock plans,stock subscription agreements or shareholder agreements, (c) the USBorrower and the Restricted Subsidiaries may make investments permitted bySection 10.5, (d) each of Holdings and the US Borrower may paydividends to, seriatim, Holdings and any Parent Company; provided, that(i) the aggregate amount of such dividends (without duplication) paidpursuant to this clause (d) shall not at any time exceed 50% ofCumulative Consolidated Net Income Available to Stockholders at such time lessthe amount of dividends previously paid pursuant to this clause (d) followingthe last day of the most recent fiscal quarter for which Section 9.1Financials have been delivered to the Lenders under Section 9.1 and(ii) at the time of the payment of any such dividends and after givingeffect thereto, the Consolidated Total Debt to Consolidated EBITDA Ratio on thedate 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 dividendsand/or make distributions on its capital stock, as applicable, the proceeds ofwhich 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 taxfiling group, along with franchise taxes, administrative and similar expensesrelated to its existence and ownership of PIK Holdco, Holdings, the USBorrower, as applicable; provided, that the amount of such dividendsdoes not exceed in any fiscal year the amount of such taxes and expensespayable for such fiscal year (it being understood that such expenses shall inno event exceed $5,000,000 in the aggregate per fiscal year, except that suchexpenses may exceed $5,000,000 in fiscal year 2007; provided, that suchexpenses 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 USBorrower may declare and pay dividends and/or make distributions on its capitalstock, 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 tothe extent that payment of such interest in cash is required by the 2011 SeniorNotes Indenture, (g) the US Borrower and Holdings may declare and pay dividendsand/or make distributions on its capital stock, as applicable, from AvailableExcess Cash Flow, the proceeds of which will be used by Holdings and PIK Holdcosolely to redeem, repurchase or retire 2011 Senior Notes, PIK Notes, PIKRefinancing Preferred Stock or PIK Refinancing Indebtedness if (x) at thetime of the payment of such dividends and after giving effect thereto theConsolidated Total Debt to Consolidated EBITDA Ratio on the date of suchpayment of such dividends shall be less than 2.25 to 1.00 and (y) the USBorrower 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 PIKRefinancing Indebtedness to prepay Term Loans outstanding hereunder inaccordance 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 (exceptto the extent that the US Borrower has already applied not less than 50.0% ofthe cumulative amount of Excess Cash Flow for all fiscal years completed afterthe Closing Date and prior to the date of such redemption, repurchase orretirement of 2011 Senior Notes, PIK Notes, PIK Refinancing Preferred Stock or PIK Refinancing Indebtedness pursuant to Section 5.1 or Section 5.2hereof) and (h) Holdings may issuePIK Refinancing Indebtedness or PIK Refinancing Preferred Stock in exchangefor, or declare and pay dividends and/or make distributions on its capitalstock from the proceeds of the issuance by Holdings of any PIK RefinancingIndebtedness or PIK

 

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Refinancing PreferredStock to the extent such proceeds are utilized by PIK Holdco substantiallysimultaneously with such issuance to redeem, repurchase or retire, PIK Notes orPermitted Additional PIK Notes of PIK Holdco that are being refinanced orreplaced by such PIK Refinancing Indebtedness or PIK Refinancing PreferredStock.  Notwithstanding anythingcontained in this Section 10.6 to the contrary, on and after theRestatement Date until after the first anniversary of the Restatement Date,neither Holdings nor the US Borrower will be permitted to declare or pay anyDividends that would otherwise be permitted by subsections (d) and (g) describedabove.

 

10.7.                        Limitations on Debt Payments and Amendments.  (a)    Neither the US Borrower nor any RestrictedSubsidiary will prepay, repurchase or redeem or otherwise defease any SeniorSubordinated Notes or any Subordinated Notes as applicable (it being understoodthat any payment of principal prior to May 15, 2011, in the case ofSubordinated Notes shall be deemed a prepayment for purposes of thisSection 10.7); provided, however, that the US Borrower mayprepay, repurchase or redeem Senior Subordinated Notes and/or SubordinatedNotes (x) so long as no Default or Event of Default has occurred and iscontinuing, for an aggregate price not in excess of the Available Amount at thetime of such prepayment, repurchase or redemption; provided, that to theextent the Available Amount so utilized is attributable to Excess Cash Flow inaccordance with clause (a)(iii) of the definition of “Available Amount”,the US Borrower applies an amount equal to the proceeds used for suchprepayment, repurchase or redemption of Senior Subordinated Notes and/orSubordinated Notes to prepay Term Loans outstanding hereunder in accordancewith Section 5.1 hereof on the date of any such prepayment, repurchase orredemption of Senior Subordinated Notes and/or Subordinated Notes (except tothe extent that the US Borrower has already applied not less than 50.0% of thecumulative amount of Excess Cash Flow for all fiscal years completed after theClosing Date and prior to the date of such prepayment, repurchase or redemptionof Senior Subordinated Notes and/or Subordinated Notes pursuant to Section 5.1or Section 5.2 hereof), (y) so long as no Event of Default describedin Section 11.1 or 11.5 has occurred and is continuing,  with theproceeds of subordinated Indebtedness that (1) is permitted bySection 10.1 and (2) has terms material to the interests of theLenders not materially less advantageous to the Lenders than those of theSenior 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 iscontinuing, in the case of the Subordinated Notes only, at any time on or afterMay 15, 2007 (it being understood that any such prepayment, repurchase orredemption pursuant to this sub-clause (z) shall be made withoututilization of the Available Amount).

 

(b)  The US Borrower will not waive, amend,modify, terminate or release the Senior Subordinated Notes Indenture, theSenior Subordinated Loan Agreement or the Subordinated Note Indenture, to theextent that any such waiver, amendment, modification, termination or releasewould be adverse to the Lenders in any material respect; provided, thatthis clause (b) shall not prohibit the repayment of obligations under theSenior Subordinated Loan Agreement with the Net Cash Proceeds from the issuanceof the Senior Subordinated Notes.

 

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10.8.                        Limitations on Sale Leasebacks.  The US Borrower will not, and will not permitany of the Restricted Subsidiaries to, enter into or effect any SaleLeasebacks, other than Permitted Sale Leasebacks.

 

10.9.                        Senior Secured Debt to Consolidated EBITDA Ratio.  The US Borrower will not permitthe Senior Secured Debt to Consolidated EBITDA Ratio for any Test Period endingduring any period set forth below to be greater than the ratio set forth belowopposite 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 notpermit the Consolidated EBITDA to Consolidated Interest Expense Ratio forany Test Period ending during any period set forth below to be less than theapplicable 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 CapitalExpenditures (other than Permitted Acquisitions that constitute CapitalExpenditures), that would cause the aggregate amount of such CapitalExpenditures made by the US Borrower and the Restricted Subsidiaries in anyfiscal 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 belowopposite such fiscal year and (ii) an amount equal to 10% multiplied byConsolidated Net Sales for such fiscal year (such greater amount, the “PermittedCapital Expenditure Amount”) and (b) the Available Amount as of thelast day of such fiscal year (provided, that no portion of the AvailableAmount may be used for Capital Expenditures until the entire amount of the sumof (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 |   |

 

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| **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 thanPermitted Acquisitions that constitute Capital Expenditures) made by the USBorrower and the Restricted Subsidiaries during any fiscal year are less thanthe Permitted Capital Expenditure Amount for such fiscal year, 100% of suchunused amount (each such amount, a “carry-forward amount”) may becarried forward to the immediately succeeding fiscal year and utilized to makesuch Capital Expenditures in such succeeding fiscal year in the event theamount set forth above for such succeeding fiscal year has been used (it beingunderstood and agreed that (a) no carry-forward amount may be carriedforward beyond the first two fiscal years immediately succeeding the fiscalyear in which it arose, (b) no portion of the carry-forward amountavailable for any fiscal year may be used until the entire amount of thePermitted Capital Expenditure Amount for such fiscal year (without givingeffect to such carry-forward amount) shall have been used to make CapitalExpenditures and (c) if the carry-forward amount available for any fiscalyear is the sum of amounts carried forward from each of the two immediatelypreceding fiscal years, no portion of such carry-forward amount from theearlier of the two immediately preceding fiscal years may be used until theentire portion of such carry-forward amount from the more recent immediatelypreceding fiscal year shall have been used for such Capital Expenditures madein such fiscal year).

 

SECTION 11.                          Events of Default

 

Upon the occurrence of any of the followingspecified 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 thepayment when due of any interest on the Loans or any Fees or any UnpaidDrawings or of any other amounts owing hereunder or under any other CreditDocument; or

 

11.2.                        Representations, etc.  Any representation, warranty or statementmade or deemed made by any Credit Party herein or in any Security Document orany certificate delivered or required to be delivered pursuant hereto orthereto shall prove to be untrue in any material respect on the date as ofwhich made or deemed made; or

 

11.3.                        Covenants.  Any Credit Party shall (a) default inthe due performance or observance by it of any term, covenant or agreementcontained in Section 9.1(e), Section 9.16, Section 9.18 orSection 10 or (b) default in the due performance or observance by itof any term, covenant or agreement (other than those referred to in Section 11.1or 11.2 or clause (a) of this Section 11.3) contained in thisAgreement, or any Security Document and such default shall continue unremediedfor a period of at

 

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least 30 days afterreceipt of written notice by the US Borrower from the Administrative Agent orthe Required Lenders; or

 

11.4.                        Default Under Other Agreements.  Any of Holdings, the US Borrower, the UKBorrower or any of the Restricted Subsidiaries shall (i) default in anypayment with respect to any Indebtedness (other than the Obligations) in excessof $30,000,000 in the aggregate, for Holdings, the US Borrower, the UK Borrowerand such Subsidiaries, beyond the period of grace, if any, provided in theinstrument or agreement under which such Indebtedness was created or(ii) default in the observance or performance of any agreement orcondition relating to any such Indebtedness or contained in any instrument oragreement evidencing, securing or relating thereto, or (except in the case ofIndebtedness consisting of any Hedge Agreement) any other event shall occur orcondition exist, the effect of which default or other event or condition is tocause, or to permit the holder or holders of such Indebtedness (or a trustee oragent on behalf of such holder or holders) to cause, any such Indebtedness tobecome due prior to its stated maturity; or (b) without limiting theprovisions of clause (a) above, any such Indebtedness (other thanIndebtedness consisting of any Hedge Agreement) shall be declared to be due andpayable, or required to be prepaid other than by a regularly scheduled requiredprepayment or as a mandatory prepayment, prior to the stated maturity thereof;or

 

11.5.                        Bankruptcy, etc.  Any of Holdings, the US Borrower, the UKBorrower or any Specified Subsidiary shall commence a voluntary case concerningitself 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 aSpecified Subsidiary, the bankruptcy and/or insolvency legislation of itsjurisdiction of incorporation, in each case as now or hereafter in effect, orany successor thereto (collectively, the “Bankruptcy Code”); or aninvoluntary case is commenced against any of Holdings, the US Borrower, the UKBorrower or any Specified Subsidiary and the petition is not controvertedwithin 10 days after commencement of the case; or an involuntary case iscommenced against any of Holdings, the US Borrower, the UK Borrower or anySpecified Subsidiary and the petition is not dismissed within 60 days aftercommencement of the case; or a custodian (as defined in the Bankruptcy Code) orsimilar person is appointed for, or takes charge of, all or substantially allof the property of any of Holdings, the US Borrower, the UK Borrower or anySpecified Subsidiary; or any of Holdings, the US Borrower, the UK Borrower orany Specified Subsidiary commences any other proceeding under anyreorganization, arrangement, adjustment of debt, relief of debtors,dissolution, insolvency or liquidation or similar law of any jurisdictionwhether now or hereafter in effect relating to any of Holdings, the USBorrower, the UK Borrower or any Specified Subsidiary; or there is commencedagainst any of the US Borrower, the UK Borrower or any Specified Subsidiary anysuch proceeding that remains undismissed for a period of 60 days; or any of theHoldings, the US Borrower, the UK Borrower or any Specified Subsidiary isadjudicated insolvent or bankrupt; or any order of relief or other orderapproving any such case or proceeding is entered; or any of Holdings, the USBorrower, the UK Borrower or any Specified Subsidiary suffers any appointmentof any custodian or the like for it or any substantial part of its property tocontinue undischarged or unstayed for a period of 60 days; or any of theHoldings, the US Borrower, the UK Borrower or any

 

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Specified Subsidiary makesa general assignment for the benefit of creditors; or any corporate action istaken by any of Holdings, the US Borrower, the UK Borrower or any SpecifiedSubsidiary for the purpose of effecting any of the foregoing; or

 

11.6.                        ERISA.  Any Plan shall fail to satisfy the minimumfunding standard required for any plan year or part thereof or a waiver of suchstandard or extension of any amortization period is sought or granted under Section 412of the Code; any Plan is or shall have been terminated or is the subject oftermination proceedings under ERISA (including the giving of written noticethereof); an event shall have occurred or a condition shall exist in eithercase entitling the PBGC to terminate any Plan or to appoint a trustee toadminister any Plan (including the giving of written notice thereof); any Planshall have an accumulated funding deficiency (whether or not waived); any ofHoldings, the US Borrower or any Subsidiary or any ERISA Affiliate has incurredor 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 4971or 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) ofthis Section 11.6 the imposition of a lien, the granting of a securityinterest, or a liability, or the reasonable likelihood of incurring a lien,security interest or liability; and (c) such lien, security interest orliability will or would be reasonably likely to have a Material Adverse Effect;or

 

11.7.                        Guarantee.  The Guarantee or any material provisionthereof shall cease to be in full force or effect or any Guarantor thereunderor any Credit Party shall deny or disaffirm in writing any Guarantor’sobligations under the Guarantee (other than pursuant to the terms thereof); or

 

11.8.                        Pledge Agreement.  The Pledge Agreement or any materialprovision thereof shall cease to be in full force or effect (other thanpursuant to the terms hereof or thereof or as a result of acts or omissions ofthe Administrative Agent or any Lender) or any pledgor thereunder or any CreditParty shall deny or disaffirm in writing any pledgor’s obligations under thePledge Agreement (other than pursuant to the terms thereof); or

 

11.9.                        Security Agreement.  The Security Agreement or any materialprovision thereof shall cease to be in full force or effect (other thanpursuant to the terms hereof or thereof or as a result of acts or omissions ofthe Administrative Agent or any Lender) or any grantor thereunder or any CreditParty shall deny or disaffirm in writing any grantor’s obligations under theSecurity Agreement (other than pursuant to the terms thereof); or

 

11.10.                  Mortgages.  Any Mortgage or any material provision of anyMortgage shall cease to be in full force or effect (other than pursuant to theterms hereof or thereof or as a result of acts or omissions of theAdministrative Agent or any Lender) or any Mortgagor thereunder or any CreditParty shall deny or disaffirm in writing any Mortgagor’s obligations under anyMortgage (other than pursuant to the terms thereof); or

 

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11.11.                  Foreign Guarantees.  Any Foreign Guarantee or any materialprovision of any Foreign Guarantee shall cease to be in full force or effect orany grantor thereunder or any Credit Party shall deny or disaffirm in writingany grantor’s obligations under any Foreign Guarantee (other than pursuant tothe terms thereof); or

 

11.12.                  Foreign Security Documents.  Any Foreign Security Document or any materialprovision of any Foreign Security Document shall cease to be in full force oreffect (other than pursuant to the terms hereof or thereof or as a result ofacts or omissions of the Administrative Agent or any Lender) or any grantorthereunder or any Credit Party shall deny or disaffirm in writing any grantor’sobligations under any Foreign Security Document (other than pursuant to theterms thereof); or

 

11.13.                  Subordination.  The Obligations of the US Borrower and the UKBorrower, or the obligations of Holdings or any Subsidiaries pursuant to theGuarantee or any of the Foreign Subsidiary Guarantees, shall cease toconstitute senior Indebtedness under the subordination provisions of anydocument or instrument evidencing the Subordinated Notes, the SeniorSubordinated Notes, any loans under the Senior Subordinated Loan Agreement orany other permitted subordinated Indebtedness or such subordination provisionsshall be invalidated or otherwise cease to be legal, valid and bindingobligations of the parties thereto, enforceable in accordance with their terms;or

 

11.14.                  Judgments.  One or more judgments or decrees shall beentered against the US Borrower, the UK Borrower or any of the RestrictedSubsidiaries involving a liability of $30,000,000 or more in the aggregate forall such judgments and decrees for the US Borrower and the RestrictedSubsidiaries (to the extent not paid or fully covered by insurance provided bya carrier not disputing coverage) and any such judgments or decrees shall nothave been satisfied, vacated, discharged or stayed or bonded pending appealwithin 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 timethereafter, in each case subject to Section 7.4, if any Event of Defaultshall then be continuing, the Administrative Agent shall, upon the writtenrequest of the Required Lenders, by written notice to the US Borrower, take anyor all of the following actions, without prejudice to the rights of theAdministrative Agent or any Lender to enforce its claims against the USBorrower and the UK Borrower, except as otherwise specifically provided for inthis Agreement (provided, that, if an Event of Default specified in Section 11.5shall occur with respect to the US Borrower, the UK Borrower or any SpecifiedSubsidiary, the result that would occur upon the giving of written notice bythe Administrative Agent as specified in clauses (i), (ii) and (iv) belowshall occur automatically without the giving of any such notice):  (i) declare the Total Term LoanCommitment, the Total Revolving Credit Commitment and the Total ExtendedRevolving Credit Commitment terminated, whereupon the Commitments and SwinglineCommitment, if any, of each Lender or the Swingline Lender, as the case may be,shall forthwith terminate immediately and any Fees theretofore accrued shallforthwith become due and payable without any other notice of any kind;(ii) declare the principal of and any accrued interest in respect of all

 

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Loans and all Obligations owing hereunder andthereunder to be, whereupon the same shall become, forthwith due and payablewithout presentment, demand, protest or other notice of any kind, all of whichare hereby waived by the US Borrower and the UK Borrower; (iii) terminateany 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 USBorrower and the UK Borrower agree that upon receipt of such notice, or uponthe occurrence of an Event of Default specified in Section 11.5 withrespect to the US Borrower, the UK Borrower or any Specified Subsidiary, itwill pay) to the Administrative Agent at the Administrative Agent’s Office suchadditional amounts of cash, to be held as security for the US Borrower’s andthe UK Borrower’s respective reimbursement obligations for Drawings that maysubsequently occur thereunder, equal to the aggregate Stated Amount of allLetters of Credit issued and then outstanding.

 

SECTION 12.                          The Administrative Agent

 

12.1.                        Appointment.  Each Lender hereby irrevocably designates andappoints the Administrative Agent as the agent of such Lender under thisAgreement and the other Credit Documents, and each such Lender irrevocablyauthorizes the Administrative Agent, in such capacity, to take such action onits behalf under the provisions of this Agreement and the other CreditDocuments and to exercise such powers and perform such duties as are expressly delegatedto the Administrative Agent by the terms of this Agreement and the other CreditDocuments, together with such other powers as are reasonably incidentalthereto.  Notwithstanding any provisionto the contrary elsewhere in this Agreement, the Administrative Agent shall nothave 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 intothis Agreement or any other Credit Document or otherwise exist against theAdministrative Agent.  NeitherCo-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 ofits duties under this Agreement and the other Credit Documents by or throughagents or attorneys-in-fact and shall be entitled to advice of counselconcerning all matters pertaining to such duties.  The Administrative Agent shall not beresponsible for the negligence or misconduct of any agents or attorneys-in-factselected by it with reasonable care.

 

12.3.                        Exculpatory Provisions.  Neither the Administrative Agent nor any ofits officers, directors, employees, agents, attorneys-in-fact or Affiliatesshall be (a) liable for any action lawfully taken or omitted to be takenby it or such Person under or in connection with this Agreement or any otherCredit Document (except for its or such Person’s own gross negligence orwillful misconduct) or (b) responsible in any manner to any of the Lendersfor any recitals, statements, representations or warranties made by the USBorrower, the UK Borrower, any Guarantor, any Foreign Subsidiary Guarantor, anyother Credit Party or any officer thereof contained in this Agreement or anyother Credit Document or in any certificate, report, statement or otherdocument referred to or provided for in, or received by the AdministrativeAgent under or in

 

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connection with, thisAgreement or any other Credit Document or for the value, validity,effectiveness, genuineness, enforceability or sufficiency of this Agreement orany other Credit Document or for any failure of the US Borrower, the UKBorrower, any Guarantor, any Foreign Subsidiary Guarantor or any other CreditParty to perform its obligations hereunder or thereunder.  The Administrative Agent shall not be underany obligation to any Lender to ascertain or to inquire as to the observance orperformance of any of the agreements contained in, or conditions of, thisAgreement or any other Credit Document, or to inspect the properties, books orrecords of the US Borrower or the UK Borrower.

 

12.4.                        Reliance by Administrative Agent.  The Administrative Agent shall be entitled torely, and shall be fully protected in relying, upon any writing, resolution,notice, consent, certificate, affidavit, letter, telecopy, telex or teletypemessage, statement, order or other document or conversation believed by it tobe genuine and correct and to have been signed, sent or made by the properPerson or Persons and upon advice and statements of legal counsel (includingcounsel to the US Borrower and/or the UK Borrower), independent accountants andother experts selected by the Administrative Agent.  The Administrative Agent may deem and treatthe Lender specified in the Register with respect to any amount owing hereunderas the owner thereof for all purposes unless a written notice of assignment, negotiationor transfer thereof shall have been filed with the Administrative Agent.  The Administrative Agent shall be fullyjustified in failing or refusing to take any action under this Agreement or anyother Credit Document unless it shall first receive such advice or concurrenceof the Required Lenders as it deems appropriate or it shall first beindemnified to its satisfaction by the Lenders against any and all liabilityand expense that may be incurred by it by reason of taking or continuing totake any such action.  The AdministrativeAgent shall in all cases be fully protected in acting, or in refraining fromacting, under this Agreement and the other Credit Documents in accordance witha request of the Required Lenders, and such request and any action taken orfailure to act pursuant thereto shall be binding upon all the Lenders and allfuture holders of the Loans.

 

12.5.                        Notice of Default.  The Administrative Agent shall not be deemedto have knowledge or notice of the occurrence of any Default or Event ofDefault hereunder unless the Administrative Agent has received notice from aLender or the US Borrower referring to this Agreement, describing such Defaultor Event of Default and stating that such notice is a “notice of default”.  In the event that the Administrative Agentreceives such a notice, the Administrative Agent shall give notice thereof tothe Lenders.  The Administrative Agentshall take such action with respect to such Default or Event of Default asshall be reasonably directed by the Required Lenders; provided, thatunless 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 ofDefault as it shall deem advisable in the best interests of the Lenders (exceptto the extent that this Agreement requires that such action be taken only withthe approval of the Required Lenders or each of the Lenders, as applicable).

 

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12.6.                        Non-Reliance on Administrative Agent and Other Lenders.  Each Lender expresslyacknowledges that neither the Administrative Agent nor any of its officers,directors, employees, agents, attorneys-in-fact or Affiliates has made anyrepresentations or warranties to it and that no act by the Administrative Agenthereinafter taken, including any review of the affairs of the US Borrower, theUK Borrower, any Guarantor, any Foreign Subsidiary Guarantor or any otherCredit Party, shall be deemed to constitute any representation or warranty bythe 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 otherLender, and based on such documents and information as it has deemedappropriate, made its own appraisal of and investigation into the business,operations, property, financial and other condition and creditworthiness of theUS Borrower, the UK Borrower, any Guarantor, any Foreign Subsidiary Guarantorand any other Credit Party and made its own decision to make its Loanshereunder and enter into this Agreement. Each Lender also represents that it will, independently and withoutreliance upon the Administrative Agent or any other Lender, and based on suchdocuments and information as it shall deem appropriate at the time, continue tomake its own credit analysis, appraisals and decisions in taking or not takingaction under this Agreement and the other Credit Documents, and to make suchinvestigation as it deems necessary to inform itself as to the business,operations, property, financial and other condition and creditworthiness of theUS Borrower, the UK Borrower, any Guarantor, any Foreign Subsidiary Guarantorand any other Credit Party.  Except fornotices, reports and other documents expressly required to be furnished to theLenders by the Administrative Agent hereunder, the Administrative Agent shallnot have any duty or responsibility to provide any Lender with any credit orother information concerning the business, assets, operations, properties,financial condition, prospects or creditworthiness of the US Borrower, the UKBorrower, any Guarantor, any Foreign Subsidiary Guarantor or any other CreditParty that may come into the possession of the Administrative Agent or any ofits officers, directors, employees, agents, attorneys-in-fact or Affiliates.

 

12.7.                        Indemnification.  The Lenders agree to indemnify theAdministrative Agent in its capacity as such (to the extent not reimbursed bythe US Borrower or the UK Borrower and without limiting the obligation of theUS Borrower and the UK Borrower to do so), ratably according to theirrespective portions of the Total Credit Exposure in effect on the date on whichindemnification is sought (or, if indemnification is sought after the date uponwhich the Commitments shall have terminated and the Loans shall have been paidin full, ratably in accordance with their respective portions of the TotalCredit Exposure in effect immediately prior to such date), from and against anyand all liabilities, obligations, losses, damages, penalties, actions,judgments, suits, costs, expenses or disbursements of any kind whatsoever thatmay at any time (including at any time following the payment of the Loans) beimposed on, incurred by or asserted against the Administrative Agent in any wayrelating to or arising out of, the Commitments, this Agreement, any of theother Credit Documents or any documents contemplated by or referred to hereinor therein or the transactions contemplated hereby or thereby or any actiontaken or omitted by the Administrative Agent under or in connection with any ofthe foregoing; provided, that no Lender shall be liable for the paymentof any portion of such liabilities, obligations, losses, damages,

 

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penalties, actions,judgments, suits, costs, expenses or disbursements resulting from theAdministrative Agent’s gross negligence or willful misconduct.  The agreements in this Section 12.7shall survive the payment of the Loans and all other amounts payable hereunder.

 

12.8.        Administrative Agent in its Individual Capacity.  The Administrative Agent and itsAffiliates may make loans to, accept deposits from and generally engage in anykind of business with the US Borrower, the UK Borrower, any Guarantor, anyForeign Subsidiary Guarantor and any other Credit Party as though theAdministrative Agent were not the Administrative Agent hereunder and under theother Credit Documents.  With respect tothe Loans made by it, the Administrative Agent shall have the same rights andpowers under this Agreement and the other Credit Documents as any Lender andmay exercise the same as though it were not the Administrative Agent, and theterms “Lender” and “Lenders” shall include the Administrative Agent in itsindividual capacity.

 

12.9.        Successor Agent.  The Administrative Agent may resign asAdministrative Agent upon 20 days’ prior written notice to the Lenders and theUS Borrower.  If the Administrative Agentshall resign as Administrative Agent under this Agreement and the other CreditDocuments, then the Required Lenders shall appoint from among the Lenders asuccessor agent for the Lenders, which successor agent shall be approved by theUS Borrower (which approval shall not be unreasonably withheld), whereupon suchsuccessor agent shall succeed to the rights, powers and duties of theAdministrative Agent, and the term “Administrative Agent” shall mean suchsuccessor agent effective upon such appointment and approval, and the formerAdministrative Agent’s rights, powers and duties as Administrative Agent shallbe terminated, without any other or further act or deed on the part of suchformer Administrative Agent or any of the parties to this Agreement or anyholders of the Loans.  After any retiringAdministrative Agent’s resignation as Administrative Agent, the provisions ofthis Section 12 shall inure to its benefit as to any actions taken oromitted to be taken by it while it was Administrative Agent under thisAgreement 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 Lenderan amount equivalent to any applicable withholding tax.  If the Internal Revenue Service or any otherGovernmental Authority asserts a claim that the Administrative Agent did notproperly withhold tax from amounts paid to or for the account of any Lenderbecause the appropriate form was not delivered or was not properly executed orbecause such Lender failed to notify the Administrative Agent of a change incircumstance which rendered the exemption from, or reduction of, withholdingtax ineffective or for any other reason, such Lender shall indemnify theAdministrative Agent fully for all amounts paid, directly or indirectly, by theAdministrative Agent as tax or otherwise, including any penalties or interestand together with all expenses (including legal expenses, allocated internalcosts and out-of-pocket expenses) incurred. For the avoidance of doubt, the foregoing shall have no effect on anyobligations of the Borrowers hereunder.

 

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SECTION 13.         Collateral Allocation Mechanism

 

13.1.        Implementation of CAM.  (a)   On the CAM Exchange Date, (i) the Commitments shall automaticallyand without further act be terminated as provided in Section 11,(ii) the Lenders shall automatically and without further act (and withoutregard to the provisions of Section 14.6) be deemed to have exchangedinterests in the Credit Facilities such that in lieu of the interest of eachLender in each Credit Facility in which it shall participate as of such date(including such Lender’s interest in the Specified Obligations of each CreditParty in respect of each such Credit Facility), such Lender shall hold aninterest in every one of the Credit Facilities (including the SpecifiedObligations of each Credit Party in respect of each such Credit Facility andeach L/C Reserve Account established pursuant to Section 13.2 below),whether or not such Lender shall previously have participated therein, equal tosuch Lender’s CAM Percentage thereof and (iii) simultaneously with thedeemed exchange of interests pursuant to clause (ii) above, in the case ofany CAM Dollar Lender that has prior to the date thereof notified theAdministrative Agent and the US Borrower in writing that it has elected to havethis clause (iii) apply to it, the interests in the Loans to be receivedby such CAM Dollar Lender in such deemed exchange shall, automatically and withno further action required, be converted into the Dollar Equivalent, determinedusing the Exchange Rate calculated as of such date, of such amount and on andafter such date all amounts accruing and owed to such CAM Dollar Lender inrespect of such Obligations shall accrue and be payable in Dollars at the rateotherwise applicable hereunder; provided, that such CAM Exchange willnot affect the aggregate amount of the Obligations of the US Borrower and theUK Borrower to the Lenders under the Credit Documents.  Each Lender and each Credit Party herebyconsents and agrees to the CAM Exchange, and each Lender agrees that the CAMExchange shall be binding upon its successors and assigns and any person thatacquires a participation in its interests in any Credit Facility.  Each Credit Party agrees from time to time toexecute and deliver to the Administrative Agent all promissory notes and otherinstruments and documents as the Administrative Agent shall reasonably requestto evidence and confirm the respective interests of the Lenders after givingeffect to the CAM Exchange, and each Lender agrees to surrender any promissorynotes originally received by it in connection with its Loans hereunder to theAdministrative Agent against delivery of new promissory notes evidencing itsinterests in the Credit Facilities; provided, however, that thefailure of any Credit Party to execute or deliver or of any Lender to acceptany such promissory note, instrument or document shall not affect the validityor effectiveness of the CAM Exchange.

 

(b)  As a result of the CAM Exchange, upon andafter the CAM Exchange Date, each payment received by the Administrative Agentpursuant to any Credit Document in respect of the Specified Obligations, andeach distribution made by the Administrative Agent pursuant to any CreditDocument in respect of the Specified Obligations, shall be distributed to theLenders prorata in accordance with their respective CAMPercentages.  Any direct payment receivedby a Lender upon or after the CAM Exchange Date, including by way of setoff, inrespect of a Specified Obligation shall be paid over to the AdministrativeAgent for distribution to the Lenders in accordance herewith.

 

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13.2.        Letters of Credit.  (a)    In the event that on the CAM Exchange Dateany Letter of Credit shall be outstanding and undrawn in whole or in part, orany amount drawn under a Letter of Credit shall constitute an Unpaid Drawing,each Lender in respect of Unpaid Drawings on Letters of Credit shall, beforegiving effect to the CAM Exchange, promptly pay over to the AdministrativeAgent, in immediately available funds and in the currency that such Letters ofCredit are denominated, an amount equal to such Lender’s Revolving CreditCommitment Percentage or Extended Revolving Credit Commitment Percentage, asapplicable, (as notified to such Lender by the Administrative Agent), of suchLetter of Credit’s undrawn face amount or (to the extent it has not alreadydone so) such Letter of Credit’s Unpaid Drawing, as the case may be, togetherwith interest thereon from the CAM Exchange Date to the date on which suchamount shall be paid to the Administrative Agent at the rate that would beapplicable at the time to an Extended Revolving Credit Loan or, with respect toLetters of Credit issued under the Revolving Credit Commitments, a RevolvingCredit Loan, that is an ABR Loan in a principal amount equal to such amount, asthe case may be.  The Administrative Agentshall establish a separate account or accounts for each Lender (each, an “L/CReserve Account”) for the amounts received with respect to each such Letterof Credit pursuant to the preceding sentence. The Administrative Agent shall deposit in each Lender’s L/C ReserveAccount such Lender’s CAM Percentage of the amounts received from the Lendersas provided above.  The AdministrativeAgent shall have sole dominion and control over each L/C Reserve Account, andthe amounts deposited in each L/C Reserve Account shall be held in suchL/C Reserve Account until withdrawn as provided in paragraph (b), (c), (d) or(e) below.  The Administrative Agentshall maintain records enabling it to determine the amounts paid over to it anddeposited in the L/C Reserve Accounts in respect of each Letter of Credit andthe amounts on deposit in respect of each Letter of Credit attributable to eachLender’s CAM Percentage.  The amountsheld in each Lender’s L/C Reserve Account shall be held as a reserve againstthe Letter of Credit Exposure, shall be the property of such Lender, shall notconstitute Loans to or give rise to any claim of or against any Credit Partyand shall not give rise to any obligation on the part of the US Borrower or theUK Borrower to pay interest to such Lender, it being agreed that the reimbursementobligations in respect of Letters of Credit shall arise only at such times asdrawings are made thereunder, as provided in Section 3.

 

(b)  In the event that after the CAM ExchangeDate any drawing shall be made in respect of a Letter of Credit, theAdministrative Agent shall, at the request of the Letter of Credit Issuerwithdraw from the L/C Reserve Account of each Lender any amounts, up to theamount of such Lender’s CAM Percentage of such drawing, deposited in respect ofsuch Letter of Credit and remaining on deposit and deliver such amounts to theLetter of Credit Issuer in satisfaction of the reimbursement obligations of theLenders under Section 3 (but not of the US Borrower and the UK Borrowerunder Section 3, respectively).  Inthe event any Lender shall default on its obligation to pay over any amount tothe Administrative Agent in respect of any Letter of Credit as provided in thisSection 13.2, the Letter of Credit Issuer shall, in the event of a drawingthereunder, have a claim against such Lender to the same extent as if suchLender had defaulted on its obligations under Section 2.05(e), but shallhave no claim against any other Lender in respect of such defaulted amount,notwithstanding the exchange of interests in the reimbursement obligationspursuant to Section 13.1.  Eachother Lender shall have a

 

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claimagainst such defaulting Lender for any damages sustained by it as a result ofsuch default, including, in the event such Letter of Credit shall expireundrawn, its CAM Percentage of the defaulted amount.

 

(c)  In the event that after the CAM ExchangeDate any Letter of Credit shall expire undrawn, the Administrative Agent shallwithdraw from the L/C Reserve Account of each Lender the amount remaining ondeposit therein in respect of such Letter of Credit and distribute such amountto such Lender.

 

(d)  With the prior written approval of theAdministrative Agent and the Letter of Credit Issuer, any Lender may withdrawthe amount held in its L/C Reserve Account in respect of the undrawn amount ofany Letter of Credit.  Any Lender makingsuch a withdrawal shall be unconditionally obligated, in the event there shallsubsequently be a drawing under such Letter of Credit, to pay over to the  Administrative Agent, for the account of theLetter of Credit Issuer on demand, its CAM Percentage of such drawing.

 

(e)  Pending the withdrawal by any Lender ofany amounts from its L/C Reserve Account as contemplated by the aboveparagraphs, the Administrative Agent will, at the direction of such Lender andsubject to such rules as the Administrative Agent may prescribe for theavoidance of inconvenience, invest such amounts in Permitted Investments.  Each Lender that has not withdrawn theamounts in its L/C Reserve Account as provided in paragraph (d) aboveshall have the right, at intervals reasonably specified by the AdministrativeAgent, to withdraw the earnings on investments so made by the AdministrativeAgent with amounts in its L/C Reserve Account and to retain such earnings forits own account.

 

13.3.        Net Payments Upon Implementation of CAM Exchange.  Notwithstanding any otherprovision of this Agreement, if, as a direct result of the implementation ofthe CAM Exchange, the US Borrower or the UK Borrower is required to withholdNon-Excluded Taxes from amounts payable to the Administrative Agent, any Lenderor any Participant hereunder, the amounts so payable to the AdministrativeAgent, such Lender or such Participant shall be increased to the extentnecessary to yield to the Administrative Agent, such Lender or such Participant(after payment of all Non-Excluded Taxes) interest or any such other amountspayable 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 requiredto 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 suchLender or Participant to the extent required by Section 5.4) if suchLender or Participant was prior to or on the CAM Exchange Date already a Lenderor 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, orreduced rate of, U.S. Federal withholding tax on payments by the US Borrowerunder this Agreement, the US Borrower shall not be required to increase anysuch amounts payable to such Non-U.S. Lender (or Non-U.S. Participant) if suchNon-U.S. Lender (or Non-U.S. Participant) fails to comply with the requirementsof paragraph (b) of Section 5.4. Upon a CAM Exchange, a Lender (or Participant) will use commercially

 

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reasonable efforts, andcomplete any procedural formalities necessary, to become an Eligible Lenderwith respect to the UK Borrower and, if such Lender (or Participant) fails todo so, the UK Borrower shall not be required to increase any such amountspayable to such Lender (or Participant). If the US Borrower or the UK Borrower, as the case may be, fails to payany such Non-Excluded Taxes when due to the appropriate taxing authority orfails to remit to the Administrative Agent the required receipts or otherrequired documentary evidence, such US Borrower or UK Borrower shall indemnifythe Administrative Agent, the Lenders and the Participants for any incrementaltaxes, interest, costs or penalties that may become payable by theAdministrative Agent, such Lenders or such Participants as a result of any suchfailure.

 

SECTION 14.         Miscellaneous

 

14.1.        Amendments and Waivers.  Neither this Agreement nor any other CreditDocument, nor any terms hereof or thereof may be amended, supplemented ormodified except in accordance with the provisions of this Section 14.1.  The Required Lenders may, or, with thewritten consent of the Required Lenders, the Administrative Agent may, fromtime to time, (a) enter into with the relevant Credit Party or CreditParties written amendments, supplements or modifications hereto and to theother Credit Documents for the purpose of adding any provisions to thisAgreement or the other Credit Documents or changing in any manner the rights ofthe Lenders or of the Credit Parties hereunder or thereunder or (b) waive,on such terms and conditions as the Required Lenders or the AdministrativeAgent, as the case may be, may specify in such instrument, any of therequirements of this Agreement or the other Credit Documents or any Default orEvent of Default and its consequences; provided, however, that nosuch waiver and no such amendment, supplement or modification shall directly(i) forgive any portion of any Loan or extend the final scheduled maturitydate of any Loan or reduce the stated rate, or forgive any portion, or extendthe date for the payment, of any interest or fee payable hereunder (other thanas a result of waiving the applicability of any post-default increase ininterest rates) or extend the final expiration date of any Lender’s Commitmentor extend the final expiration date of any Letter of Credit beyond the L/CMaturity Date or increase the aggregate amount of the Commitments of anyLender, in each case without the written consent of each Lender directly andadversely affected thereby, or (ii) amend, modify or waive any provisionof this Section 14.1 or reduce the percentages specified in thedefinitions of the terms “Required Lenders”, “Required Revolving Credit Lenders”,“Required Extended Revolving Credit Lenders”, “Required Tranche A Lenders”, “RequiredTranche E Lenders”, “Required Tranche G Lenders”, “Required Tranche H Lenders”,“Required Tranche I Lenders” or consent to the assignment or transfer by the USBorrower or the UK Borrower of its rights and obligations under any CreditDocument to which it is a party (except as permitted pursuant toSection 10.3), in each case without the written consent of each Lenderdirectly and adversely affected thereby, or (iii) amend, modify or waiveany provision of Section 12 without the written consent of thethen-current Administrative Agent, or (iv) amend, modify or waive anyprovision of Section 3 without the written consent of the Letter of CreditIssuer, or (v) amend, modify or waive any provisions hereof relating toSwingline Loans without the written consent of the Swingline Lender, or(vi) change any Revolving Credit Commitment or Extended Revolving CreditCommitment to a Term

 

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Loan Commitment, or changeany Term Loan Commitment to a Revolving Credit Commitment or an ExtendedRevolving Credit Commitment, in each case without the prior written consent ofeach Lender directly and adversely affected thereby, or (vii) release allor substantially all of the Guarantors under the Guarantee (except as expresslypermitted by the Guarantee Agreement), release all or substantially all of theForeign Subsidiary Guarantors under any Foreign Subsidiary Guarantee (except aspermitted by any Foreign Subsidiary Guarantee) or release all or substantiallyall of the Collateral under the Pledge Agreement, the Security Agreement, theForeign Security Documents and the Mortgages, in each case without the priorwritten consent of each Lender, or (viii) decrease any Tranche A-1Repayment Amount, extend any scheduled Tranche A-1 Repayment Date ordecrease the amount or allocation of any mandatory prepayment to be received byany Lender holding any Tranche A-1 Loans (other than a decrease in suchmandatory prepayment amount that is accompanied by a proportionate decrease inmandatory prepayments to be allocated to other Term Loans pursuant toSection 5.2(c)), in each case without the written consent of the RequiredTranche A Lenders, or (ix) decrease any Tranche A-2 Repayment Amount,extend any scheduled Tranche A-2 Repayment Date or decrease the amount orallocation of any mandatory prepayment to be received by any Lender holding anyTranche A-2 Loans (other than a decrease in such mandatory prepaymentamount that is accompanied by a proportionate decrease in mandatory prepaymentsto be allocated to other Term Loans pursuant to Section 5.2(c)), in eachcase without the written consent of the Required Tranche A Lenders, or(x) decrease any Tranche E Repayment Amount, extend any scheduledTranche E Repayment Date or decrease the amount or allocation of anymandatory prepayment to be received by any Lender holding any Tranche ETerm Loans (other than a decrease in such mandatory prepayment amount that isaccompanied by a proportionate decrease in mandatory prepayments to beallocated to other Term Loans pursuant to Section 5.2(c)), in each casewithout the written consent of the Required Tranche E Term Loan Lenders,or (xi) decrease any Tranche G Repayment Amount, extend any scheduledTranche G Repayment Date or decrease the amount or allocation of anymandatory prepayment to be received by any Lender holding any Tranche GTerm Loans (other than a decrease in such mandatory prepayment amount that isaccompanied by a proportionate decrease in mandatory prepayments to beallocated to other Term Loans pursuant to Section 5.2(c)), in each casewithout the written consent of the Required Tranche G Term Loan Lenders,or (xii) decrease any Tranche H Repayment Amount, extend anyscheduled Tranche H Repayment Date or decrease the amount or allocation ofany mandatory prepayment to be received by any Lender holding anyTranche H Term Loans (other than a decrease in such mandatory prepaymentamount that is accompanied by a proportionate decrease in mandatory prepaymentsto be allocated to other Term Loans pursuant to Section 5.2(c)), in eachcase without the written consent of the Required Tranche H Term LoanLenders, (xiii) decrease any Tranche I Repayment Amount, extend anyscheduled Tranche I Repayment Date or decrease the amount or allocation ofany mandatory prepayment to be received by any Lender holding anyTranche I Term Loans (other than a decrease in such mandatory prepaymentamount that is accompanied by a proportionate decrease in mandatory prepaymentsto be allocated to other Term Loans pursuant to Section 5.2(c)), in eachcase without the written consent of the Required Tranche I Term LoanLenders; and; providedfurther, that at any time that no Defaultor

 

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Event of Default hasoccurred and is continuing, the Revolving Credit Commitment of any Lender maybe increased to finance a Permitted Acquisition, with the consent of suchLender, the US Borrower and the Administrative Agent (which consent, in thecase of the Administrative Agent, shall not be unreasonably withheld) andwithout the consent of the Required Lenders, so long as (i) the IncreasedCommitment Amount at such time, when added to the amount of Indebtednessincurred pursuant to Section 10.1(k) and outstanding at such time,does not exceed the limits set forth therein, (ii) the US Borrower or itsapplicable Restricted Subsidiary shall pledge the capital stock of any personacquired pursuant thereto to the Administrative Agent for the benefit of the Lendersto the extent required under Section 9.12 and (iii) to the extentdetermined by the Administrative Agent to be necessary to ensure prorataborrowings commencing with the initial borrowing after giving effect to suchincrease, the US Borrower shall prepay any Eurodollar Loans outstandingimmediately prior to such initial borrowing; as used herein, the “IncreasedCommitment Amount” means, at any time, the aggregate amount of allincreases pursuant to this proviso made at or prior to such time less theaggregate amount of all voluntary reductions of the Revolving CreditCommitments made prior to such time and providedfurther, thatwithout the consent of any Lender, the relevant Credit Party or Credit Partiesand the Administrative Agent and/or Collateral Agent may (in their respectivesole discretion, or shall, to the extent required by any other Credit Document)enter into any amendment, modification or waiver of any Credit Document, orenter into any new agreement or instrument, to effect the granting, perfection,protection, expansion or enhancement of any security interest in any Collateralor additional property to become Collateral for the benefit of the SecuredParties, or as required by local law to give effect to, or protect any securityinterest for the benefit of the Secured Parties, in any property or so that thesecurity interests therein comply with applicable law.  Any such waiver and any such amendment,supplement or modification shall apply equally to each of the affected Lendersand shall be binding upon the US Borrower, the UK Borrower, such Lenders, theAdministrative 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 formerpositions and rights hereunder and under the other Credit Documents, and anyDefault or Event of Default waived shall be deemed to be cured and notcontinuing, it being understood that no such waiver shall extend to anysubsequent or other Default or Event of Default or impair any right consequentthereon.  Upon any sale or other transferto any Person (other than the US Borrower and any Restricted DomesticSubsidiary) by any Credit Party of any Collateral that is permitted under theCredit Agreement, the relevant Credit Party, together with the AdministrativeAgent and/or Collateral Agent, shall be permitted, without consent of anyLender, to amend, modify or waive any provision of the Pledge Agreement, theSecurity Agreement, the Foreign Security Documents or the Mortgages, asapplicable, to the extent necessary to effect release of the security interestin such Collateral.

 

14.2.        Notices.  All notices, requests and demands to or uponthe respective parties hereto to be effective shall be in writing (including byfacsimile transmission), and, unless otherwise expressly provided herein, shallbe deemed to have been duly given or made when delivered, or three days afterbeing deposited in the mail, postage prepaid, or, in the case of telecopynotice, when received, addressed as follows in the case of the US Borrower, theUK Borrower and the Administrative Agent, and as set

 

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forth on Schedule 1.1(c) inthe case of the other parties hereto, or to such other address as may behereafter 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 theLenders pursuant to Sections 2.3, 2.6, 2.9, 4.2 and 5.1 shall not beeffective until received.

 

Notices and other communications to the Lenders andthe Letter of Credit Issuer hereunder may be delivered or furnished byelectronic communication (including e-mail and Internet or intranet websites)pursuant to procedures approved by the Administrative Agent and, with regard toLetters 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 electroniccommunications pursuant to procedures approved by it; provided, thatapproval of such procedures  may be limitedto particular notices or communications.

 

14.3.        No Waiver; Cumulative Remedies.  No failure to exercise and no delay inexercising, on the part of the Administrative Agent or any Lender, any right,remedy, power or privilege hereunder or under the other Credit Documents shalloperate as a waiver thereof, nor shall any single or partial exercise of anyright, remedy, power or privilege hereunder preclude any other or furtherexercise thereof or the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privilegesherein provided are cumulative and not exclusive of any rights, remedies,powers and privileges provided by law.

 

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14.4.        Survival of Representations and Warranties.  All representations andwarranties made hereunder, in the other Credit Documents and in any document,certificate or statement delivered pursuant hereto or in connection herewithshall survive the execution and delivery of this Agreement and the making ofthe 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-pocketcosts and expenses incurred in connection with the development, preparation andexecution of, and any amendment, supplement or modification to, this Agreementand the other Credit Documents and any other documents prepared in connectionherewith or therewith, and the consummation and administration of thetransactions contemplated hereby and thereby, including the reasonable fees,disbursements and other charges of counsel to the Agents, (b) to pay orreimburse each Lender and the Administrative Agent for all its reasonable anddocumented costs and expenses incurred in connection with the enforcement orpreservation of any rights under this Agreement, the other Credit Documents andany such other documents, including the reasonable fees, disbursements andother charges of counsel to each Lender and of counsel to the AdministrativeAgent, (c) to pay, indemnify, and hold harmless each Lender and theAdministrative Agent from, any and all recording and filing fees and any andall 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 bepayable in connection with the execution and delivery of, or consummation oradministration 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 theAdministrative Agent and their respective directors, officers, employees, trusteesand agents from and against any and all other liabilities, obligations, losses,damages, penalties, actions, judgments, suits, costs, expenses or disbursementsof 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, theother Credit Documents and any such other documents, including any of theforegoing relating to the violation of, noncompliance with or liability under,any Environmental Law or any actual or alleged presence of Hazardous Materialsapplicable to the operations of the US Borrower, any of its Subsidiaries or anyof the Real Estate (all the foregoing in this clause (d), collectively, the “indemnifiedliabilities”); provided, that the US Borrower and the UK Borrowershall have no obligation hereunder to the Administrative Agent or any Lendernor any of their respective directors, officers, employees, trustees and agentswith respect to indemnified liabilities arising from (i) the grossnegligence or willful misconduct of the party to be indemnified or(ii) disputes among the Administrative Agent, the Lenders and/or theirtransferees.  The agreements in this Section 14.5shall 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 bebinding upon and inure to the benefit of the parties hereto and theirrespective successors and assigns permitted hereby (including any Affiliate ofthe Letter of Credit Issuer that issues any Letter of Credit), except that

 

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(i) other than asprovided in Section 10.3, the US Borrower and the UK Borrower may notassign or otherwise transfer any of its rights or obligations hereunder withoutthe prior written consent of each Lender (and any attempted assignment ortransfer by the US Borrower or the UK Borrower without such consent shall benull and void) and (ii) no Lender may assign or otherwise transfer itsrights or obligations hereunder except in accordance with this Section.  Nothing in this Agreement, expressed orimplied, shall be construed to confer upon any Person (other than the partieshereto, their respective successors and assigns permitted hereby (including anyAffiliate 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 eachof the Administrative Agent, the Letter of Credit Issuer and the Lenders) anylegal or equitable right, remedy or claim under or by reason of this Agreement.

 

(b)  (i)  Subject to the conditions setforth in paragraph (b)(ii) below, any Lender may assign to one or moreassignees 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 owingto it) with the prior written consent (such consent not be unreasonablywithheld; it being understood that, without limitation, the US Borrower shallhave the right to withhold its consent to any assignment if, in order for suchassignment to comply with applicable law, the US Borrower would be required toobtain the consent of, or make any filing or registration with, anyGovernmental Authority) of:

 

(A) the US Borrower; provided,that no consent of the US Borrower shall be required for an assignment to aLender, an Affiliate of a Lender (unless increased costs would result therefromexcept if an Event of Default under Section 11.1 or Section 11.5 hasoccurred and is continuing), an Approved Fund or, if an Event of Default under Section 11.1or Section 11.5 has occurred and is continuing, any other assignee; and

 

(B) theAdministrative Agent and, in the case of an assignment of a Extended RevolvingCredit Commitment, the Letter of Credit Issuer; provided, that noconsent of the Administrative Agent shall be required for an assignment of anyTerm Loan to a Lender, an Affiliate of a Lender or an Approved Fund.

 

(ii) Assignments shall be subject to thefollowing additional conditions:

 

(A) except in thecase of an assignment to a Lender, an Affiliate of a Lender or an Approved Fundor an assignment of the entire remaining amount of the assigning Lender’sCommitment or Loans of any Class, the amount of the Commitment or Loans of theassigning Lender subject to each such assignment (determined as of the date theAssignment and Acceptance with respect to such assignment is delivered to theAdministrative 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 TermLoan Commitment, Tranche H Term Loan Commitment,

 

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Tranche I Term Loan Commitment, Tranche E Term Loan,Tranche G Term Loan, Tranche H Term Loan or Tranche I Term Loan, the DollarEquivalent of $1,000,000 unless each of the US Borrower and the AdministrativeAgent otherwise consents; provided, that no such consent of the USBorrower shall be required if an Event of Default under Section 11.1 or Section 11.5has occurred and is continuing;

 

(B) each partialassignment shall be made as an assignment of a proportionate part of all theassigning Lender’s rights and obligations under this Agreement; provided,that this clause shall not be construed to prohibit the assignment of aproportionate part of all the assigning Lender’s rights and obligations inrespect of one Class of Commitments or Loans; providedfurther,however, that any assignment of any right or interest in a Tranche A-1Term Loan, a Tranche A-2 Term Loan or a Tranche A Term Loan Commitment(collectively, “Tranche A Loans”) shall be accompanied by, and shall notbe permitted to be made independently of, an assignment of a proportionateamount of such Lender’s other Tranche A Loans;

 

(C) the parties toeach assignment shall execute and deliver to the Administrative Agent anAssignment and Acceptance (such Assignment and Acceptance to be(x) electronically executed and delivered to the Administrative Agent viaan 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 andrecordation fee of $3,500; provided, that only one such fee shall bepayable in the event of simultaneous assignments to or from two or moreApproved Funds); and

 

(D) the assignee, ifit shall not be a Lender, shall deliver to the Administrative Agent anAdministrative Questionnaire in a form approved by the Administrative Agent.

 

For the purpose of this Section 14.6(b), theterm “Approved Fund” has the following meaning:

 

“Approved Fund” means any Person (other thana natural person) that is engaged in making, purchasing, holding or investingin bank loans and similar extensions of credit in the ordinary course of itsbusiness and that is administered or managed by (a) a Lender, (b) anAffiliate of a Lender or (c) an entity or an Affiliate of an entity thatadministers or manages a Lender.

 

(iii)  Subject to acceptance and recordingthereof pursuant to paragraph (b)(v) of this Section, from and afterthe effective date specified in each Assignment and Acceptance, the assigneethereunder shall be a party hereto and, to the extent of the interest assignedby such Assignment and Acceptance, have the rights and obligations of a Lenderunder this Agreement, and the assigning Lender thereunder shall,

 

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to the extent of the interest assigned by suchAssignment and Acceptance, be released from its obligations under thisAgreement (and, in the case of an Assignment and Acceptance covering all of theassigning Lender’s rights and obligations under this Agreement, such Lendershall cease to be a party hereto but shall continue to be entitled to thebenefits of Sections 2.10, 2.11, 3.5, 5.4 and 14.5).  Any assignment or transfer by a Lender ofrights or obligations under this Agreement that does not comply with thisSection 14.6 shall be treated for purposes of this Agreement as a sale bysuch Lender of a participation in such rights and obligations in accordancewith paragraph (c) of this Section.

 

(iv)  The Administrative Agent, acting for thispurpose as an agent of the US Borrower and the UK Borrower, shall maintain atthe Administrative Agent’s Office a copy of each Assignment and Acceptancedelivered to it and a register for the recordation of the names and addressesof the Lenders, and the Commitments of, and principal amount of the Loans andany payment made by the Letter of Credit Issuer under any Letter of Creditowing 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 ofCredit Issuer and the Lenders may treat each Person whose name is recorded inthe Register pursuant to the terms hereof as a Lender hereunder for allpurposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available forinspection by the US Borrower, the UK Borrower, the Letter of Credit Issuer andby the Administrative Agent on behalf of any Lender, at any reasonable time andfrom time to time upon reasonable prior notice.

 

(v)  Upon its receipt of a duly completedAssignment and Acceptance executed by an assigning Lender and an assignee, theassignee’s completed Administrative Questionnaire (unless the assignee shallalready be a Lender hereunder), the processing and recordation fee referred toin paragraph (b) of this Section and any written consent to suchassignment required by paragraph (b) of this Section, the AdministrativeAgent shall accept such Assignment and Acceptance and record the informationcontained therein in the Register.  Noassignment shall be effective for purposes of this Agreement unless it has beenrecorded in the Register as provided in this paragraph.

 

(c)(i)  Any Lender may, without the consent ofthe US Borrower, the UK Borrower, the Administrative Agent, the Letter ofCredit Issuer or the Swingline Lender, sell participations to one or more banksor other entities (each, a “Participant”) in all or a portion of suchLender’s rights and obligations under this Agreement (including all or aportion 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 partieshereto for the performance of such obligations and (C) the US Borrower,the UK Borrower, the Administrative Agent, the Letter of Credit Issuer and theother Lenders shall continue to deal solely and directly with such Lender inconnection with such Lender’s rights and obligations under this Agreement.  Any agreement or instrument pursuant to whicha Lender sells such a participation shall provide that such Lender shall retainthe sole right to enforce this Agreement and to approve any amendment,modification or waiver of any provision of this Agreement or

 

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any other Credit Document; provided, thatsuch agreement or instrument may provide that such Lender will not, without theconsent of the Participant, agree to any amendment, modification or waiverdescribed in the first proviso to Section 14.1 that affects suchParticipant.  Subject toparagraph (c)(ii) of this Section, the US Borrower and the UKBorrower agree that each Participant shall be entitled to the benefits of Sections2.10, 2.11 and 5.4 to the same extent as if it were a Lender and had acquiredits interest by assignment pursuant to paragraph (b) of this Section.  To the extent permitted by law, eachParticipant also shall be entitled to the benefits of Section 14.8(b) asthough it were a Lender; provided, such Participant agrees to be subjectto Section 14.8(a) as though it were a Lender.

 

(ii)  A Participant shall not be entitled toreceive any greater payment under Section 2.10 or 5.4 than the applicableLender would have been entitled to receive with respect to the participationsold to such Participant, unless the sale of the participation to suchParticipant is made with the US Borrower’s prior written consent.  A Participant that would be a Non-U.S. Lenderif it were a Lender shall not be entitled to the benefits of Section 5.4unless the US Borrower is notified of the participation sold to suchParticipant and such Participant agrees, for the benefit of the US Borrower andthe UK Borrower, to comply with Section 5.4(b) as though it were aLender.

 

(d)  Any Lender may, without the consent of theBorrower or the Administrative Agent, at any time pledge or assign a securityinterest in all or any portion of its rights under this Agreement to secureobligations of such Lender, including any pledge or assignment to secureobligations to a Federal Reserve Bank, and this Section shall not apply toany such pledge or assignment of a security interest; provided, that nosuch pledge or assignment of a security interest shall release a Lender fromany of its obligations hereunder or substitute any such pledgee or assignee forsuch Lender as a party hereto.  In orderto facilitate such pledge or assignment, the US Borrower and the UK Borrowerhereby agree that, upon request of any Lender at any time and from time to timeafter the US Borrower has made its initial borrowing hereunder, the US Borroweror the UK Borrower, as the case may be, shall provide to such Lender, at the USBorrower’s or the UK Borrower’s own expense, a promissory note, substantiallyin the form of Exhibit R-1, R-2, R-3, R-4, R-5, R-6, R-7 or R-8, as thecase may be, evidencing the Tranche A-1 Term Loans, Tranche A-2 TermLoans, Tranche E Term Loans, Tranche G Term Loans, Tranche H Term Loans,Tranche I Term Loans, Revolving Credit Loans, Extended Revolving Credit Loansand Swingline Loans, respectively, owing to such Lender.

 

(e)  Subject to Section 14.16, the USBorrower and the UK Borrower authorize each Lender to disclose to anyParticipant, secured creditor of such Lender or assignee (each, a “Transferee”)and any prospective Transferee any and all financial information in such Lender’spossession concerning the US Borrower and its Affiliates that has beendelivered to such Lender by or on behalf of the US Borrower and its Affiliatespursuant to this Agreement or which has been delivered to such Lender by or onbehalf of the US Borrower and its Affiliates in connection with such Lender’scredit evaluation of the US Borrower and its Affiliates prior to becoming aparty to this Agreement; provided, that neither the Administrative Agentnor any Lender shall provide

 

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to any Transferee or prospective Transferee any ofthe Confidential Information unless such person shall have previously executeda Confidentiality Agreement in the form of Exhibit S.

 

14.7.        Replacements of Lenders under Certain Circumstances.  The US Borrower (on its ownbehalf and on behalf of the UK Borrower) shall be permitted to replace any Lenderthat (a) requests reimbursement for amounts owing pursuant toSection 2.10, 2.11, 3.5 or 5.4, (b) is affected in the mannerdescribed in Section 2.10(a)(iii) and as a result thereof any of theactions described in such Section is required to be taken or(c) becomes a Defaulting Lender, with a replacement bank or otherfinancial institution; provided, that (i) such replacement does notconflict with any Requirement of Law, (ii) no Event of Default shall haveoccurred and be continuing at the time of such replacement, (iii) the USBorrower and/or the UK Borrower, as applicable, shall repay (or the replacementbank or institution shall purchase, at par) all Loans and other amounts (otherthan any disputed amounts, pursuant to Section 2.10, 2.11, 3.5 or 5.4, asthe case may be) owing to such replaced Lender prior to the date ofreplacement, (iv) the replacement bank or institution, if not already aLender, and the terms and conditions of such replacement, shall be reasonablysatisfactory to the Administrative Agent, (v) the replaced Lender shall beobligated to make such replacement in accordance with the provisions of Section 14.6(provided, that the US Borrower shall be obligated to pay theregistration and processing fee referred to therein) and (vi) any suchreplacement shall not be deemed to be a waiver of any rights that the USBorrower, the UK Borrower, the Administrative Agent or any other Lender shallhave against the replaced Lender.

 

14.8.        Adjustments; Set-off.  (a)   If any Lender (a “benefited Lender”) shall at any time receiveany payment of all or part of its Loans, or interest thereon, or receive anycollateral in respect thereof (whether voluntarily or involuntarily, byset-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 collateralreceived 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 theother Lenders a participating interest in such portion of each such otherLender’s Loan, or shall provide such other Lenders with the benefits of anysuch collateral, or the proceeds thereof, as shall be necessary to cause suchbenefited Lender to share the excess payment or benefits of such collateral orproceeds ratably with each of the Lenders; provided, however,that if all or any portion of such excess payment or benefits is thereafterrecovered from such benefited Lender, such purchase shall be rescinded, and thepurchase price and benefits returned, to the extent of such recovery, butwithout interest.

 

(b)  After the occurrence and during thecontinuance of an Event of Default, in addition to any rights and remedies ofthe Lenders provided by law, each Lender shall have the right, without priornotice to the US Borrower or the UK Borrower, any such notice being expresslywaived by the US Borrower and the UK Borrower to the extent permitted byapplicable law, upon any amount becoming due and payable by the US Borrower orthe UK Borrower hereunder (whether at the stated maturity, by acceleration orotherwise) to set-off and appropriate and apply against such amount any

 

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andall deposits (general or special, time or demand, provisional or final), in anycurrency, and any other credits, indebtedness or claims, in any currency, ineach case whether direct or indirect, absolute or contingent, matured orunmatured, at any time held or owing by such Lender or any branch or agencythereof to or for the credit or the account of the US Borrower or the UKBorrower, as the case may be.  EachLender agrees promptly to notify the US Borrower or the UK Borrower, as thecase may be, and the Administrative Agent after any such set-off andapplication made by such Lender; provided, that the failure to give suchnotice shall not affect the validity of such set-off and application.

 

14.9.        Counterparts.  This Agreement may be executed by one or moreof the parties to this Agreement on any number of separate counterparts(including by facsimile or other electronic transmission), and all of saidcounterparts taken together shall be deemed to constitute one and the sameinstrument.  A set of the copies of thisAgreement signed by all the parties shall be lodged with the US Borrower andthe Administrative Agent.

 

14.10.      Severability.  Any provision of this Agreement that isprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability withoutinvalidating the remaining provisions hereof, and any such prohibition orunenforceability in any jurisdiction shall not invalidate or renderunenforceable such provision in any other jurisdiction.

 

14.11.      Integration.  This Agreement and the other Credit Documentsrepresent the agreement of the US Borrower, the UK Borrower, the AdministrativeAgent and the Lenders with respect to the subject matter hereof, and there areno promises, undertakings, representations or warranties by the AdministrativeAgent or any Lender relative to subject matter hereof not expressly set forthor referred to herein or in the other Credit Documents.

 

14.12.      GOVERNING LAW.  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONSOF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED INACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

14.13.      Submission to Jurisdiction; Waivers.  The US Borrower and the UK Borrower eachhereby irrevocably and unconditionally:

 

(a)  submits for itself and its property in anylegal action or proceeding relating to this Agreement and the other CreditDocuments to which it is a party, or for recognition and enforcement of anyjudgment in respect thereof, to the non-exclusive general jurisdiction of thecourts of the State of New York, the courts of the United States ofAmerica for the Southern District of New York and appellate courts fromany thereof;

 

(b)  consents that any such action orproceeding may be brought in such courts and waives any objection that it maynow or hereafter have to the venue of any

 

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suchaction or proceeding in any such court or that such action or proceeding wasbrought in an inconvenient court and agrees not to plead or claim the same;

 

(c)  agrees that service of process in any suchaction or proceeding may be effected by mailing a copy thereof by registered orcertified mail (or any substantially similar form of mail), postage prepaid, tothe US Borrower at its address set forth in Section 14.2 or at such otheraddress of which the Administrative Agent shall have been notified pursuantthereto;

 

(d)  agrees that nothing herein shall affectthe right to effect service of process in any other manner permitted by law orshall limit the right to sue in any other jurisdiction; and

 

(e)  waives, to the maximum extent notprohibited by law, any right it may have to claim or recover in any legalaction 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 eachhereby acknowledge that:

 

(a)  it has been advised by counsel in thenegotiation, execution and delivery of this Agreement and the other CreditDocuments;

 

(b)  neither the Administrative Agent nor anyLender has any fiduciary relationship with or duty to the US Borrower or the UKBorrower arising out of or in connection with this Agreement or any of theother Credit Documents, and the relationship between Administrative Agent andLenders, on one hand, and the US Borrower or the UK Borrower, on the otherhand, in connection herewith or therewith is solely that of debtor andcreditor; and

 

(c)  no joint venture is created hereby or bythe other Credit Documents or otherwise exists by virtue of the transactionscontemplated hereby among the Lenders or among the US Borrower, the UK Borrowerand the Lenders.

 

**14.15.****    ****WAIVERS OF JURY TRIAL****.  THE US BORROWER, THE UK BORROWER, THEADMINISTRATIVE AGENT AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLYWAIVE TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THISAGREEMENT OR ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.**

 

14.16.      Confidentiality.  The Administrative Agent and each Lendershall hold all non-public information furnished by or on behalf of the USBorrower or the UK Borrower in connection with such Lender’s evaluation ofwhether to become a Lender hereunder or obtained by such Lender or theAdministrative Agent pursuant to the requirements of this Agreement (“ConfidentialInformation”), confidential in accordance with its customary procedure forhandling confidential information of this nature and (in the case of a Lenderthat is a bank) in accordance with safe and sound banking practices

 

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and in any event may makedisclosure as required or requested by any governmental agency orrepresentative thereof or pursuant to legal process or to such Lender’s or theAdministrative Agent’s attorneys, professional advisors or independent auditorsor Affiliates; provided, that unless specifically prohibited byapplicable law or court order, each Lender and the Administrative Agent shallnotify the US Borrower of any request by any governmental agency orrepresentative thereof (other than any such request in connection with anexamination of the financial condition of such Lender by such governmentalagency) for disclosure of any such non-public information prior to disclosureof such information; and providedfurther, that in no event shallany Lender or the Administrative Agent be obligated or required to return anymaterials furnished by the US Borrower or any Subsidiary of the USBorrower.  Each Lender and theAdministrative Agent agrees that it will not provide to prospective Transfereesor to prospective direct or indirect contractual counterparties in swapagreements to be entered into in connection with Loans made hereunder any ofthe Confidential Information unless such Person shall have previously executeda Confidentiality Agreement in the form of Exhibit S.

 

14.17.      Judgment Currency.  (a)   The obligations of the US Borrower and the UK Borrower hereunder andunder the other Loan Documents to make payments in Dollars or in the ForeignCurrencies, as the case may be (the “Obligation Currency”), shall not bedischarged or satisfied by any tender or recovery pursuant to any judgmentexpressed in or converted into any currency other than the Obligation Currency,except to the extent that such tender or recovery results in the effectivereceipt by the Administrative Agent or a Lender of the full amount of theObligation Currency expressed to be payable to the Administrative Agent orLender under this Agreement or the other Credit Documents.  If, for the purpose of obtaining or enforcingjudgment against the US Borrower, the UK Borrower or any other Credit Party inany court or in any jurisdiction, it becomes necessary to convert into or fromany currency other than the Obligation Currency (such other currency beinghereinafter referred to as the “Judgment Currency”) an amount due in theObligation Currency, the conversion shall be made, at the Dollar Equivalent ofsuch amount, in each case, as of the date immediately preceding the day onwhich the judgment is given (such Business Day being hereinafter referred to asthe “Judgment Currency Conversion Date”).

 

(b)  If there is a change in the rate ofexchange prevailing between the Judgment Currency Conversion Date and the dateof actual payment of the amount due, the US Borrower and the UK Borrower eachcovenant 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 theamount paid in the Judgment Currency, when converted at the rate of exchangeprevailing on the date of payment, will produce the amount of the ObligationCurrency which could have been purchased with the amount of Judgment Currencystipulated in the judgment or judicial award at the rate of exchange prevailingon the Judgment Currency Conversion Date.

 

(c)  For purposes of determining the DollarEquivalent, such amounts shall include any premium and costs payable inconnection with the purchase of the Obligation Currency.

 

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14.18.      Permitted Amendments.  (a)   The US Borrower may, by written notice to the Administrative Agent fromtime to time, make one or more offers to all Lenders holding Extended RevolvingCredit Commitments to make one or more Permitted Amendments pursuant toprocedures reasonably specified by the Administrative Agent and reasonablyacceptable to the US Borrower.  Suchnotice shall set forth (i) the terms and conditions of the requestedPermitted Amendments and (ii) the date on which each such PermittedAmendment is requested to become effective (which shall not be less than 10Business Days no more than 30 Business Days after the date of suchnotice).  Only those Lenders holdingExtended Revolving Credit Commitments that consent to such Permitted Amendment(“Accepting Lenders”) will have the maturity of their Extended RevolvingCredit Commitments extended and be entitled to receive any increase in theApplicable ABR Margin or Applicable Eurodollar Margin and any fees, in eachcase, as provided therein.

 

(b)  The US Borrower, the UK Borrower, Holdingsand each Accepting Lender shall execute and deliver to the Administrative Agentsuch documentation as the Administrative Agent shall reasonably specify toevidence the acceptance of the Permitted Amendments and the terms andconditions thereof.  The AdministrativeAgent shall promptly notify each Lender as to the effectiveness of eachPermitted Amendment.  Each of the partieshereto 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 Amendmentevidenced thereby and only with respect to the Loans and Commitments of theAccepting Lenders (including any amendments necessary to treat the Loans andCommitments of the Accepting Lenders in a manner consistent with the otherLoans and Commitments under this Agreement). Notwithstanding the foregoing, no Permitted Amendment shall becomeeffective under this Section 14.18 unless the Administrative Agent, to theextent so reasonably requested by the Administrative Agent, shall have receivedlegal opinions, board resolutions and officer’s certificates consistent withthose delivered on the Restatement Date.

 

14.19.      Effect of the Amendment and Restatement.  (a)  On the Restatement Date, theExisting Credit Agreement shall be amended and restated in its entirety by thisAgreement, and the Existing Credit Agreement shall thereafter be of no furtherforce and effect and shall be deemed replaced and superseded in all respects bythis Agreement, except to evidence (i) the incurrence by the Borrowers ofthe Obligations under and as defined in the Existing Credit Agreement (whetheror not such Obligations are contingent as of the Restatement Date), (ii) therepresentations and warranties made by the Borrowers prior to the RestatementDate (which representations and warranties made prior to the Restatement Dateshall not be superseded or rendered ineffective by this Agreement as theypertain to the period prior to the Restatement Date) and (iii) any actionor omission performed or required to be performed pursuant to such ExistingCredit Agreement prior to the Restatement Date (including any failure, prior tothe Restatement Date, to comply with the covenants contained in Existing CreditAgreement).  The parties heretoacknowledge and agree that (a) this Agreement and the other CreditDocuments, whether executed and delivered in connection herewith or otherwise, donot constitute a novation or termination of the Obligations under the

 

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Existing Credit Agreementor the other Credit Documents as in effect prior to the Restatement Date andwhich remain outstanding as of the Restatement Date, (b) the Obligationsunder the Existing Credit Agreement and the other Security Documents are in allrespects continuing (as amended and restated hereby and which are in allrespects hereinafter subject to the terms herein) and (c) the Liens andsecurity interests as granted under the applicable Credit Documents securingpayment of such Obligations are in all respects continuing and in full forceand effect and are reaffirmed hereby.

 

(b)  On and after the Restatement Date, (i) allreferences to the Existing Credit Agreement or the Credit Agreement in theCredit Documents (other than this Agreement) shall be deemed to refer to theExisting Credit Agreement, as amended and restated hereby, (ii) allreferences to any section (or subsection) of the Existing Credit Agreement orthe Credit Agreement in any Credit Document (but not herein) shall be amendedto become, mutatismutandis, references to thecorresponding provisions of this Agreement and (iii) except as the contextotherwise provides, on or after the Restatement Date, all references to thisAgreement herein (including for purposes of indemnification and reimbursementof fees) shall be deemed to be reference to the Existing Credit Agreement asamended and restated hereby.

 

(c)  This amendment and restatement is limitedas written and is not a consent to any other amendment, restatement or waiveror other modification, whether or not similar and, except as expressly providedherein or in any other Credit Document, all terms and conditions of the CreditDocuments remain in full force and effect unless otherwise specifically amendedhereby or by any other Credit Document.

 

(d)  Except to the extent specifically amendedon the Restatement Date, this amendment and restatement shall not alter, modifyor in any way amend the schedules and exhibits to the Existing Credit Agreement(and such schedules and exhibits shall continue to be schedules and exhibitshereto).

 

[Signature pages follow]

 

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IN WITNESS WHEREOF, the parties hereto have causedthis Agreement to be duly executed by their respective officers as of the dayand 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 |

 

[SignaturePage to Amended and Restated Credit Agreement]

 

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**Schedule 1.1(a)**

 

**Additional Cost Formulae**

 

TheAdditional Cost is an addition to the interest rate to compensate Lenders forthe cost of compliance with (a) the requirements of the Bank of Englandand/or the Financial Services Authority (or, in either case, any otherauthority which replaces all or any of its functions) or (b) therequirement of the European Central Bank.

 

Onthe first day of each Interest Period (or as soon as possible thereafter) theAdministrative Agent shall calculate, as a percentage rate, a rate (the “AdditionalCost Rate”) for each Lender, in accordance with the paragraphs set outbelow.  The Additional Cost will becalculated by the Administrative Agent as a weighted average of the Lenders’Additional Cost Rates (weighted in proportion to the percentage participationof each Lender in the relevant Loan) and will be expressed as a percentage rateper annum.

 

TheAdditional Cost Rate for any Lender lending from a Facility Office in aParticipating Member State will be the percentage notified by that Lender tothe Administrative Agent.  Thispercentage will be certified by that Lender in its notice to the AdministrativeAgent to be its reasonable determination of the cost (expressed as a percentageof that Lender’s participation in all Loans made from that Facility Office) ofcomplying with the minimum reserve requirements of the European Central Bank inrespect of loans made from that Facility Office.

 

TheAdditional Cost Rate for any Lender lending from a Facility Office in theUnited Kingdom will be calculated by the Administrative Agent as follows:

 

Inrelation to a Sterling Loan:

 

AB + C(B - D) + E x 0.01

Percent. per annum

100 - (A + C)

 

inrelation to a Loan in any currency other than Sterling:

 

E x 0.01

Percent. per annum

300

 

Where:

 

A             is the percentage of Eligible Liabilities (assuming these to be in excessof any stated minimum) which that Lender is from time to time required tomaintain as 

 

[Signature Page to Amended and Restated CreditAgreement]

 

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an interest free cash ratio deposit with theBank of England to comply with cash ratio requirements.

 

B             is the percentage rate of interest (excluding the applicable ForeignCurrency Borrowing margin and the Additional Cost and, if the Loan is anoverdue 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 tomaintain as interest bearing Special Deposits with the Bank of England.

 

D                                       is the percentage rate perannum payable by the Bank of England to the Administrative Agent on interestbearing Special Deposits.

 

E                                         is designed to compensateLenders for amounts payable under the Fees Rules and is calculated by theAdministrative Agent as being the average of the most recent rates of chargesupplied by the Reference Lender to the Administrative Agent pursuant toparagraph 7 below and expressed in pounds per ₤1,000,000.

 

Forthe purposes of this Schedule:

 

(a)                                  “**Eligible Liabilities**” and “**Special Deposits**” have the meanings givento 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 theoffice or offices notified by a Lender to the Administrative Agent in writingon or before the date it becomes a Lender (or, following the date, by not lessthan five Business Days’ written notice) as the office or offices through whichit will perform its obligations under this Agreement;

 

(c)                                  “**Fees Rules**” means the rules onperiodic fees contained in the FSA Supervision Manual or such other law orregulation as may be in force from time to time in respect of the payment offees for the acceptance of deposits;

 

(d)                                 “**Fee Tariffs**” means the feetariffs specified in the Fees Rules under the activity group A.I.  Deposit acceptors (ignoring any minimum feeor zero rated fee required pursuant to the Fee rules but taking intoaccount any applicable discount rate);

 

(e)                                  “**Participating Member State**”means any member state of the European Communities that adopts or has adoptedthe Euro as its lawful currency in accordance with legislation of the EuropeanCommunity relating to Economic and Monetary Union; and

 

(f)                                    “**Tariff Base**” has themeaning given to it in, and will be calculated in accordance with, the FeesRules.

 

----

 

Inapplication of the above formulae, A, B, C and D will be included in theformulae as percentages (i.e. 5 per cent. will be included in the formula as 5and not as 0.05).  A negative resultobtained by subtracting D from B shall be taken as zero.  The resulting figures shall be rounded tofour decimal places.

 

Ifrequested by the Administrative Agent, the Reference Lender shall, as soon aspracticable after publication by the Financial Services Authority, supply tothe Administrative Agent, the rate of charge payable by the Reference Lender tothe Financial Services Authority pursuant to the Fees Rules in respect ofthe relevant financial year of the Financial Services Authority (calculated forthis purpose by the Reference Lender as being the average of the Fee Tariffsapplicable to the Reference Lender for that financial year) and expressed inpounds per £1,000,000 of the Tariff Base of the Reference Lender.

 

EachLender shall supply any information required by the Administrative Agent forthe purpose of calculating its Additional Cost Rate.  In particular, but without limitation, eachLender shall supply the following information on or prior to the date on whichit becomes a Lender:

 

thejurisdiction of its Facility Office; and

 

anyother information that the Administrative Agent may reasonably require for suchpurpose.

 

EachLender shall promptly notify the Administrative Agent of any change to theinformation provided by it pursuant to this paragraph.

 

Thepercentages of each Lender for the purpose of A and C above and the rates ofcharge of the Reference Lender for the purposes of E above shall be determinedby the Administrative Agent based upon the information supplied to it pursuantto paragraphs 7 and 8 above and on the assumption that, unless a Lendernotifies the Administrative Agent to the contrary, each Lender’s obligations inrelation to cash ratio deposits and Special Deposits are the same as those of atypical bank from its jurisdiction of incorporation with a Facility Office inthe same jurisdiction as its Facility Office.

 

TheAdministrative Agent shall have no liability to any person if suchdetermination results in an Additional Cost Rate which over or undercompensates any Lender and shall be entitled to assume that the informationprovided by any Lender including the Reference Lender pursuant to paragraphs 3,7 and 8 above is true and correct in all respects.

 

TheAdministrative Agent shall distribute the additional amounts received as aresult of the Additional Cost to the Lenders on the basis of the AdditionalCost Rate for each Lender based on the information provided by each Lender andthe Reference Lender pursuant to paragraphs 3, 7 and 8 above.

 

Anydetermination by the Administrative Agent pursuant to this Schedule in relationto a formula, the Additional Cost, an Additional Cost Rate or any amountpayable to a Lender shall, in the absence of manifest error, be conclusive andbinding on all parties to this Agreement.

 

----

 

TheAdministrative Agent may from time to time, after consultation with the USBorrower (on behalf of itself and the UK Borrower) and the Lenders, determineand notify to all parties to this Agreement any amendments which are requiredto 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 ofEngland, the Financial Services Authority or the European Central Bank (or, inany case, any other authority which replaces all or any of its functions) andany such determination shall, in the absence of manifest error, be conclusiveand binding on all parties to this Agreement.

 

----

 

**Schedule 1.1(b)**

 

**to the Credit Agreement**

 

**MORTGAGED PROPERTIES**

 

1.             3700E. Olympic Blvd.

Los Angeles, CA 90023

(Los Angeles County)

 

USA

 

Owner:Rockwood Pigments N.A., Inc.

 

2.             170Pioneer Drive

Leominster, MA 01453

(WorcesterCounty)

 

USA

 

Owner:AlphaGary Corporation

 

3.             5910Pharr Mill Road

Harrisburg, NC 28075

(CabarrusCounty)

USA

 

Owner: Chemical Specialties, Inc.

 

4.             5630Pioneer Creek Drive

Maple Plain, MN 55359

(HennepinCounty)

USA

Owner:Electrochemicals Inc.

 

5.             15Clarkson Street

Providence, RI 02908

(ProvidenceCounty)

 

----

 

USA

 

Owner: Exsil, Inc.

 

6.             7011Muirkirk Road

Beltsville, MD 20705

(PrinceGeorge’s County)

USA

Owner:Rockwood Pigments N.A., Inc.

 

7.             303East Hoffmeister

Lemay, MO 63125

(St. Louis County)

USA

Owner: Rockwood Pigments N.A., Inc.

 

8.             1 &7 Swisher Drive

 

Cartersville, GA 30120

(BartowCounty)

USA

Owner:Southern Color N.A., Inc.

 

9.             13177 Huran River Drive

Romulus,MI 48174

(WayneCounty)

USA

Owner:Oakite Products, Inc.

 

10.           50 Valley Road

BerkeleyHeights, NJ 07922

(UnionCounty)

USA

Owner:Oakite Products, Inc.

 

11.           1033 State Route 20

NewLebanon, NY 12125

(ColumbiaCounty)

USA

Owner:CeramTec North America Innovative Ceramic Engineering Corporation

 

12.           One Technology Place —Highway 14

Laurens,SC 29360

 

----

 

(LaurensCounty)

USA

Owner:CeramTec North America Innovative Ceramic Engineering Corporation

 

13.           9635 Industrial Drive

Pineville,NC 28134

(MecklenburgCounty)

USA

Owner:AlphaGary Corporation

 

14.           348 Holiday Inn Drive

KingsMountain, NC 28086

(ClevelandCounty)

USA

Owner:Chemetall Foote Corp.

 

**15.****         **BelerWay

LeicesterRoad Industrial Estate

MeltonMowbray

LeicestershireB60 1BS

UnitedKingdom

(registeredat HM Land Registry under Title Number LT303692)

 

16.           Property in Widnes

UnitedKingdom

 

17.           Units B, F and G West

NewarkRoad North

EastfieldIndustrial Estate,

Glenrothes

Scotland

 

18.           Netherfield Chemical Works

DukeStreet

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**

 

CreditSuisse First Boston, acting through its Cayman Islands branch

ElevenMadison Avenue

NewYork, New York 10011

 

GoldmanSachs Credit Partners L.P.

85Broad Street

NewYork, New York 10004

 

UBSLoan Finace LLC

677Washington 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%                                                                                                           |

 

----

**           Theremaining 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)           Eachof Compugraphics U.S.A., Inc., Cyantek Corp.oration, Southern Clay Products,Inc.., Exsil, Inc.., Eletrochemicals, Inc.. and Rockwood Specialties, Inc.. owna 0.0002% interest in Rockwood Electrochemicals Asia Limited.

 

(2)           RockwoodSpecialties Group, Inc.. holds 275,514 of the 275,520 issued and outstandingordinary shares of Rockwood Electronic Materials SA. Under French law, asociété anonyme type of company, such as the Company is required to have atleast 7 shareholders. Therefore, 6 minority shareholders hold 1 ordinary shareeach.

 

----

 
| **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)  Theremaining 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 Rockwoodproperty**:

 
| 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 ownedby 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 DefenceGmbH                            |   | 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)  **Lettersof 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  DifesaRom, Italien                                                                                    |   | Commerzbank Köln                      |   | EUR731,120.00             |   | Unlimited           |
| 1/31/2003          |   | Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik |   | Ministerio della  DifesaRom, Italien                                                                                    |   | Commerzbank Köln                      |   | EUR458,957.89             |   | unlimited           |
| 4/8/2003           |   | Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik |   | Ministerio della  DifesaRom, Italien                                                                                    |   | Commerzbank Köln                      |   | EUR258,768.00             |   | unlimited           |
| 4/8/2003           |   | Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik |   | Defence ProcurementKorea                                                                                                     |   | Commerzbank Köln                      |   | EUR100,632.00             |   | unlimited           |
| 1/10/2002          |   | Dynamit Nobel GmbH Explosivstoff- uns Systemtechnik |   | Ministero della Difesa  Rom, Italien                                                                                    |   | Commerzbank Köln                      |   | EUR6,120.00               |   | unlimited           |
| 11/14/2000         |   | Dynamit Nobel GmbH Explosivstoff- uns               |   | Defence ProcurementKorea                                                                                                     |   | Deutsche Bank Köln                    |   | EUR177,950.03             |   | 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 |   | EUR8,208.24       |   | 6/12/2005  |
| 1/21/2000 |   | CeramTec AG Innovative Ceramic Engineering |   | The Israel Electric Corporation Ltd.       |   | Dresdner Bank AG |   | EUR29,754.87      |   | 2/20/2005  |

 

(oooooo)

 

**Bank Debt Non-Consolidated Entities (not required to beconsolidated 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                                    |       | GBP30,000.00             |       | N/A          |       | unlimited              |       | Bank guarantees              |
| Chemetall PLC                                       |       | Barclays Bank                                    |       | GBP10,000.00             |       | N/A          |       | unlimited              |       | Bank guarantees              |

 

----

 
| **Company**                                                 | ** ** | **Bank**                                | ** ** | **Facility Amount** | ** ** | **Revolver**      | ** ** | **Maturity Date** | ** ** | **Type**                                |
|-------------------------------------------------------------|------------|-----------------------------------------|------------|--------------------------|------------|-------------------|------------|------------------------|------------|-----------------------------------------|
| Chemetall PLC                                               |       | Barclays Bank                           |       | GBP2,000,000.00          |       | 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              |       | EURno 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 (notrequired 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-ConsolidatedEntities****:**

** **
| **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 theClosing Date.

* To be released as of 24:00 (German time) on theClosing 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)           Thisinvestment was written off for accounting purposes at the initial funding.

(5)           Thisinvestment 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 accountingpurposes.

(7)           This investment was written-off due for accountingpurposes.

(8)           This investment was written-off due for accountingpurposes.

(9)           This investment was written-off due for accountingpurposes.

 

----

 
| 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 |

 

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|                                               |   | 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 CapitalContribution

 
| Chemetall GmbH & Shanghai Chemetall  Chemicals Co., Ltd. |   | 57% Investment in Changchun Chemetall Chemicals  Co., Ltd. (approximately $2.3 million) |
|------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|

 

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| 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)  |

 

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EXHIBIT A-1

 

[FORM OF]

 

CANADIAN GUARANTEE

 

CANADIAN GUARANTEE datedas of July 30, 2004, made by each of the Canadian subsidiaries of ROCKWOODSPECIALTIES 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, actingthrough its Cayman Islands Branch, acting as administrative agent (in suchcapacity, the “Administrative  Agent”)for the lenders (the “Lenders”) from time to time parties to the CreditAgreement dated as of July 30, 2004 (as the same may be amended,supplemented or otherwise modified or restated from time to time, the “CreditAgreement”), among the US Borrower, Rockwood Specialties Limited, a companyincorporated under the laws of England and Wales (the “UK Borrower” and,together with the US Borrower, the “Borrowers”), Rockwood SpecialtiesInternational, Inc., a Delaware corporation (“Holdings”), the Lenders, theAdministrative Agent, and UBS Securities LLC and Goldman Sachs Credit PartnersL.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 theLetter of Credit Issuer has agreed to issue Letters of Credit for the accountof the UK Borrower (collectively, the “Extensions of Credit”)  upon the terms and subject to the conditionsset forth therein, and (b) one or more Lenders or Affiliates of Lendersmay from time to time enter into Hedge Agreements with the UK Borrower or anyof the Restricted Subsidiaries of the UK Borrower;

 

WHEREAS, each Guarantor is a Subsidiary of the USBorrower and is incorporated under the laws of Canada or a province orterritory thereof;

 

WHEREAS, the proceeds of the Extensions of Creditwill be used in part to enable the UK Borrower to make valuable transfers tothe Guarantors in connection with the operation of their respective businesses;

 

WHEREAS, each Guarantor acknowledges that it willderive substantial direct and indirect benefit from the making of theExtensions of Credit; and

 

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WHEREAS, it is a condition precedent to theobligation of the Lenders and the Letter of Credit Issuer to make theirrespective Extensions of Credit to the UK Borrower under the Credit Agreementthat the Guarantors shall have executed and delivered this Guarantee to theAdministrative Agent for the ratable benefit of the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises andto induce the Administrative Agent, the Co-Syndication Agents, the Lenders andthe Letter of Credit Issuer to enter into the Credit Agreement and to inducethe Lenders and the Letter of Credit Issuer to make their respective Extensionsof Credit to the UK Borrower under the Credit Agreement and to induce one ormore Lenders or Affiliates of Lenders to enter into Hedge Agreements with theUK Borrower and/or the Restricted Subsidiaries of the UK Borrower, theGuarantors hereby agree with the Administrative Agent, for the ratable benefitof the Secured Parties, as follows:

 

1.             DefinedTerms.

 

Unless otherwise defined herein, terms defined inthe Credit Agreement and used herein shall have the meanings given to them inthe Credit Agreement.

 

As used herein, the term “Closing Time” means 24:00(German time) on the Closing Date.

 

As used herein, the term “Obligations” meansthe collective reference to (i) the due and punctual payment of (x) theprincipal of and premium, if any, and interest at the applicable rate providedin the Credit Agreement (including interest accruing during the pendency of anybankruptcy, insolvency, receivership or other similar proceeding, regardless ofwhether allowed or allowable in such proceeding) on the Loans extended to theUK Borrower, when and as due, whether at maturity, by acceleration, upon one ormore dates set for prepayment or otherwise, (y) each payment required tobe made by the UK Borrower under the Credit Agreement in respect of any Letterof Credit, when and as due, including payments in respect of reimbursement ofdisbursements, interest thereon and obligations to provide cash collateral, and(z) all other monetary obligations, including fees, costs, expenses andindemnities, 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 whetherallowed or allowable in such proceeding), of the UK Borrower or any otherCredit Party that is a Foreign Subsidiary to any of the Secured Parties underthe Credit Agreement and the other Credit Documents, (ii) the due andpunctual performance of all covenants, agreements, obligations and liabilitiesof the UK Borrower under or pursuant to the Credit Agreement and the otherCredit Documents, (iii) the due and punctual payment and performance ofall the covenants, agreements, obligations and liabilities of each other CreditParty that is a Foreign Subsidiary under or pursuant to this GuaranteeAgreement or the other Credit Documents, (iv) the due and punctual paymentand performance of all obligations of the UK Borrower and each Borrower orRestricted Subsidiary that is a Foreign Subsidiary under each Hedge Agreementthat (x) is in effect on the Closing Date with a counterparty that is aLender or an Affiliate of a Lender as of the Closing Date or (y) isentered into after the Closing Date with any counterparty that is a Lender oran Affiliate of a Lender at the time such Hedge Agreement is entered into and (v) thedue and punctual payment and performance of all obligations in respect ofoverdrafts and related liabilities owed to the

 

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Administrative Agent or its Affiliates by theUK Borrower or any other Credit Party that is a Foreign Subsidiary arising fromor in connection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds.

 

As used herein, the term “Secured Parties”  means (i) the Lenders, (ii) theLetter of Credit Issuer, (iii) the Swingline Lender, (iv) theAdministrative Agent, (v) the Co-Syndication Agents, (vi) eachcounterparty to a Hedge Agreement the obligations under which constituteObligations, (vii) the beneficiaries of each indemnification obligationundertaken by any Credit Party under any Credit Document and (viii) anysuccessors, indorsees, transferees and assigns of each of the foregoing.

 

References to “Lenders” in this Guarantee shall bedeemed to include Affiliates of Lenders that may from time to time enter intoHedge Agreements with the UK Borrower or any Restricted Subsidiary of the UKBorrower.

 

The words “hereof,” “herein” and “hereunder” andwords of similar import when used in this Guarantee shall refer to thisGuarantee as a whole and not to any particular provision of this Guarantee, andSection references are to Sections of this Guarantee unless otherwisespecified. The words “include”, “includes” and “including” shall be deemed tobe followed by the phrase “without limitation”.

 

The meanings given to terms defined herein shall beequally 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 andirrevocably, guarantees to the Administrative Agent, for the ratable benefit ofthe Secured Parties, the prompt and complete payment and performance when due(whether at the stated maturity, by acceleration or otherwise) of theObligations.

 

Each Guarantor further agrees to pay any andall expenses (including all fees and disbursements of counsel) that may be paidor incurred by the Administrative Agent or any other Secured Party inenforcing, or obtaining advice of counsel in respect of, any rights withrespect to, or collecting, any or all of the Obligations and/or enforcing anyrights with respect to, or collecting against, such Guarantor under thisGuarantee.

 

No payment or payments made by the UKBorrower, any of the Guarantors, any other guarantor or any other Person orreceived or collected by the Administrative Agent or any other Secured Partyfrom the UK Borrower, any of the Guarantors, any other guarantor or any otherPerson by virtue of any action or proceeding or any set-off or appropriation orapplication at any time or from time to time in reduction of or in payment ofthe Obligations shall be deemed to modify, reduce, release or otherwise affectthe liability of any Guarantor hereunder, which shall, notwithstanding any suchpayment or payments other than payments made by such Guarantor in respect ofthe Obligations or payments received or collected from such Guarantor inrespect of the Obligations, remain liable for the Obligations up to the maximumliability of such Guarantor hereunder until the Obligations under the CreditDocuments are paid in full, the

 

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Commitments are terminated and no Letters ofCredit drawn by the UK Borrower shall be outstanding.

 

Each Guarantor agrees that whenever, at anytime, or from time to time, it shall make any payment to the AdministrativeAgent or any other Secured Party on account of its liability hereunder, it willnotify the Administrative Agent in writing that such payment is made under thisGuarantee for such purpose.

 

If any amount in respect of the Obligationsis not recoverable from a Guarantor hereunder on the basis of a guarantee,then, notwithstanding any other provision hereof, each Guarantor shall beliable hereunder as principal obligor and shall indemnify the Administrative inrespect of the due payment of such amount, and shall pay such amount to theAdministrative after demand as herein provided.

 

Right of Contribution. Each Guarantor hereby agreesthat to the extent that a Guarantor shall have paid more than its proportionateshare of any payment made hereunder, such Guarantor shall be entitled to seekand receive contribution from and against any other Guarantor hereunder who hasnot paid its proportionate share of such payment. Each Guarantor’s right ofcontribution shall be subject to the terms and conditions of Section 5hereof. The provisions of this Section 3 shall in no respect limit theobligations and liabilities of any Guarantor to the Administrative Agent andthe other Secured Parties, and each Guarantor shall remain liable to the AdministrativeAgent and the other Secured Parties for the full amount guaranteed by suchGuarantor hereunder.

 

Right of Set-off. In addition to any rights andremedies of the Secured Parties provided by law, each Guarantor herebyirrevocably authorizes each Secured Party at any time and from time to timefollowing the occurrence and during the continuance of an Event of Defaultwithout notice to such Guarantor or any other Guarantor, any such notice beingexpressly waived by each Guarantor, upon any amount becoming due and payable bysuch Guarantor hereunder (whether at stated maturity, by acceleration orotherwise) to set-off and appropriate and apply against such amount any and alldeposits (general or special, time or demand, provisional or final), in anycurrency, and any other credits, indebtedness or claims, in any currency, ineach case whether direct or indirect, absolute or contingent, matured orunmatured, at any time held or owing by such Secured Party to or for the creditor the account of such Guarantor. Each Secured Party shall notify suchGuarantor promptly of any such set -off and the appropriation and applicationmade by such Secured Party, provided that the failure to give such notice shallnot affect the validity of such set-off and application.

 

No Subrogation. Notwithstanding any paymentor payments made by any of the Guarantors hereunder or any set-off orappropriation and application of funds of any of the Guarantors by theAdministrative Agent or any other Secured Party, no Guarantor shall be entitledto be subrogated to any of the rights of the Administrative Agent or any otherSecured Party against the UK Borrower or any other Guarantor or any collateralsecurity or guarantee or right of offset held by the Administrative Agent orany other Secured Party for the payment of the Obligations, nor shall anyGuarantor seek or be entitled to seek any contribution or reimbursement fromthe UK Borrower or any other Guarantor in respect of payments made by suchGuarantor hereunder, until all amounts owing to the Administrative Agent andthe other

 

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Secured Parties by the Credit Parties onaccount of the Obligations under the Credit Documents are paid in full, theCommitments are terminated and no Letters of Credit drawn by the UK Borrowershall be outstanding. If any amount shall be paid to any Guarantor on accountof such subrogation rights at any time when all the Obligations shall not havebeen paid in full, such amount shall be held by such Guarantor in trust for theAdministrative Agent and the other Secured Parties, segregated from other fundsof such Guarantor, and shall, forthwith upon receipt by such Guarantor, beturned over to the Administrative Agent in the exact form received by suchGuarantor (duly indorsed by such Guarantor to the Administrative Agent, ifrequired), 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 obligatedhereunder notwithstanding that, without any reservation of rights against anyGuarantor and without notice to or further assent by any Guarantor, (a) anydemand for payment of any of the Obligations made by the Administrative Agentor any other Secured Party may be rescinded by such party and any of theObligations continued, (b) the Obligations, or the liability of any otherparty upon or for any part thereof, or any collateral security or guaranteetherefor or right of offset with respect thereto, may, from time to time, inwhole or in part, be renewed, extended, amended, modified, accelerated,compromised, waived, surrendered or released by the Administrative Agent or anyother Secured Party, (c) the Credit Agreement, the other Credit Documents,the Letters of Credit and any other documents executed and delivered inconnection therewith and the Hedge Agreements and any other documents executedand delivered in connection therewith and any documents entered into with theAdministrative Agent or any of its Affiliates in connection with treasury,depositary or cash management services or in connection with any automatedclearinghouse transfer of funds may be amended, modified, supplemented orterminated, in whole or in part, as the Administrative Agent (or the RequiredLenders, as the case may be, or, in the case of any Hedge Agreement or anydocuments entered into with the Administrative Agent or any of its Affiliatesin connection with treasury, depositary or cash management services or in connectionwith any automated clearinghouse transfer of funds, the party thereto) may deemadvisable from time to time, and (d) any collateral security, guarantee orright of offset at any time held by the Administrative Agent or any otherSecured Party for the payment of the Obligations may be sold, exchanged,waived, surrendered or released. Neither the Administrative Agent nor any otherSecured Party shall have any obligation to protect, secure, perfect or insureany Lien at any time held by it as security for the Obligations or for thisGuarantee or any property subject thereto. When making any demand hereunderagainst any Guarantor, the Administrative Agent may, but shall be under noobligation to, make a similar demand on the UK Borrower or any Guarantor orguarantor, and any failure by the Administrative Agent to make any such demandor to collect any payments from the UK Borrower or any Guarantor or guarantoror any release of the UK Borrower or any Guarantor or guarantor shall notrelieve any Guarantor in respect of which a demand or

 

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collection is not made or any Guarantor not soreleased of its several obligations or liabilities hereunder, and shall notimpair or affect the rights and remedies, express or implied, or as a matter oflaw, of the Administrative Agent or any other Secured Party against anyGuarantor. For the purposes hereof, “demand” shall include the commencement andcontinuance of any legal proceedings.

 

7.             GuaranteeAbsolute and Unconditional. Each Guarantor waives any and all notice of thecreation, contraction, incurrence, renewal, extension, amendment, waiver oraccrual of any of the Obligations, and notice of or proof of reliance by theAdministrative Agent or any other Secured Party upon this Guarantee oracceptance of this Guarantee, the Obligations or any of them, shallconclusively be deemed to have been created, contracted or incurred, orrenewed, extended, amended, waived or accrued, in reliance upon this Guarantee;and all dealings between the UK Borrower and any of the Guarantors, on the onehand, and the Administrative Agent and the other Secured Parties, on the otherhand, likewise shall be conclusively presumed to have been had or consummatedin reliance upon this Guarantee. Each Guarantor waives diligence, presentment,protest, demand for payment and notice of default or nonpayment to or upon the UKBorrower or any of the Guarantors with respect to the Obligations. EachGuarantor understands and agrees that this Guarantee shall be construed as acontinuing, absolute and unconditional guarantee without regard to (a) thevalidity, regularity or enforceability of the Credit Agreement, any otherCredit Document, any Letter of Credit or any Hedge Agreement, any of theObligations or any other collateral security therefor or guarantee or right ofoffset with respect thereto at any time or from time to time held by theAdministrative Agent or any other Secured Party, (b) any defense, set-offor counterclaim (other than a defense of payment or performance) that may atany time be available to or be asserted by the UK Borrower against theAdministrative Agent or any other Secured Party or (c) any othercircumstance whatsoever (with or without notice to or knowledge of the UKBorrower or such Guarantor) that constitutes, or might be construed toconstitute, an equitable or legal discharge, defence or limitation of the UKBorrower for the Obligations, or of such Guarantor under this Guarantee, inbankruptcy or in any other instance. When pursuing its rights and remedieshereunder against any Guarantor, the Administrative Agent or and any otherSecured Party may, but shall be under no obligation to, pursue such rights andremedies as it may have against the UK Borrower or any other Person or againstany collateral security or guarantee for the Obligations or any right of offsetwith respect thereto, and any failure by the Administrative Agent or any otherSecured Party to pursue such other rights or remedies or to collect anypayments from the UK Borrower or any such other Person or to realize upon anysuch 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 suchcollateral security, guarantee or right of offset, shall not relieve suchGuarantor of any liability hereunder, and shall not impair or affect the rightsand remedies, whether express, implied or available as a matter of law, of theAdministrative Agent and the other Secured Parties against such Guarantor. ThisGuarantee shall remain in full force and effect and be binding in accordancewith and to the extent of its terms upon each Guarantor and the successors andassigns thereof, and shall inure to the benefit of the Administrative Agent andthe other Secured Parties, and their respective successors, indorsees,transferees and

 

----

 

assigns, until all the Obligations under the CreditDocuments shall have been satisfied by payment in full, the Commitments shallbe terminated and no Letters of Credit drawn by the UK Borrower shall beoutstanding, notwithstanding that from time to time during the term of theCredit Agreement and any Hedge Agreement the Credit Parties may be free fromany Obligations. A Guarantor shall automatically be released from itsobligations hereunder and the Guarantee of such Guarantor shall beautomatically released upon the consummation of any transaction permitted bythe Credit Agreement as a result of which such Guarantor ceases to be aSubsidiary of the US Borrower. In connection with any such release, theAdministrative Agent shall execute and deliver to any Guarantor, at suchGuarantor’s expense, all documents that such Guarantor shall reasonably requestto evidence such termination or release. Any execution and delivery ofdocuments pursuant to the preceding sentence of this Section 7 shall bewithout recourse to or warranty by the Administrative Agent.

 

8.             Reinstatement.This Guarantee shall continue to be effective, or be reinstated, as the casemay be, if at any time payment, or any part thereof, of any of the Obligationsis rescinded or must otherwise be restored or returned by the AdministrativeAgent or any other Secured Party upon the insolvency, bankruptcy, dissolution,liquidation or reorganization of the UK Borrower or any Guarantor, or upon oras a result of the appointment of a receiver, intervenor or conservator of, ortrustee or similar officer for, the UK Borrower or any other Guarantor or anysubstantial part of its property, or otherwise, all as though such payments hadnot been made.

 

9.             Payments.Each Guarantor hereby guarantees that payments hereunder will be paid to theAdministrative Agent in Dollars at the Administrative Agent’s Office, withoutset-off or counterclaim and without deduction for any taxes, levies, duties,fees, deductions, withholdings, restrictions or conditions of any naturewhatsoever (excluding taxes imposed on the net income or capital of theAdministrative Agent and Secured Parties). If at any time any applicable law,regulation or international agreement requires any Guarantor to make any suchdeduction or withholding from any such payment, the sum due from such Guarantorwith respect to such payment will be increased to the extent necessary toensure that, after the making of such deduction or withholding, theAdministrative Agent receives a net sum equal to the sum which it would havereceived had no deduction or withholding been required.

 

10.           Representationsand Warranties; Covenants.

 

Each Guarantor hereby represents and warrantsthat the representations and warranties set forth in Section 8 of theCredit Agreement as they relate to such Guarantor or in the other CreditDocuments to which such Guarantor is a party, each of which is herebyincorporated herein by reference, are true and correct, and the AdministrativeAgent and each other Secured Party shall be entitled to rely on each of them asif they were fully set forth herein.

 

Each Guarantor hereby covenants and agreeswith the Administrative Agent and each other Secured Party that, from and afterthe date of this Guarantee until the Obligations under the Credit Documents arepaid in full, the Commitments are terminated and no Letter of Credit drawn bythe UK Borrower remains outstanding, such Guarantor shall take, or shallrefrain from taking, as the case may be, all actions that are necessary to betaken or not taken so

 

----

 

that no violation of any provision, covenantor agreement contained in Section 9 or 10 of the Credit Agreement, and sothat no Default or Event of Default, is caused by any act or failure to act ofsuch Guarantor or any of its Subsidiaries.

 

11.           Authorityof Agent. Each Guarantor acknowledges that the rights andresponsibilities ofthe Administrative Agent under this Guarantee with respect to any action takenby the Administrative Agent or the exercise or non-exercise by theAdministrative Agent of any option, right, request, judgment or other right orremedy provided for herein or resultingor arising out of this Guarantee shall,as between the Administrative Agent and the other Secured Parties, be governedby the Credit Agreement and by such other agreements with respect thereto asmay exist from time to time among them, but, as between the AdministrativeAgent and such Guarantor, the Administrative Agent shall be conclusivelypresumed to be acting as agent for the Secured Parties with full and validauthority so to act or refrain from acting, and no Guarantor shall be under anyobligation, or entitlement, to make any inquiry respecting such authority.

 

Notices. All notices, requests and demandspursuant hereto shall be made in accordance with Section 14.2 of theCredit Agreement. All communications and notices hereunder to each Guarantorshall be given to it in care of the UK Borrower at the UK Borrower’s addressset forth in Section 14.2 of the Credit Agreement.

 

Counterparts. This Guarantee may be executed by oneor more of the parties to this Guarantee on any number of separate counterparts(including by facsimile or other electronic transmission), and all of saidcounterparts taken together shall be deemed to constitute one and the sameinstrument. A set of the copies of this Guarantee signed by all the partiesshall be lodged with the Administrative Agent and the UK Borrower.

 

Severabilitv. Any provision of this Guarantee thatis prohibited or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall not invalidateor render unenforceable such provision in any other jurisdiction. The partieshereto shall endeavor in good-faith negotiations to replace the invalid,illegal or unenforceable provisions with valid provisions the economic effectof which comes as close as possible to that of the invalid, illegal orenforceable provisions.

 

Integration. This Guarantee represents the agreementof each Guarantor and the Administrative Agent with respect to the subjectmatter hereof, and there are no promises, undertakings, representations orwarranties by the Administrative Agent or any other Secured Party relative tothe subject matter hereof not expressly set forth or referred to herein or inthe other Credit Documents.

 

Amendments in Writing; No Waiver; Cumulative Remedies.

 

None of the terms or provisions of this Guaranteemay be waived, amended, supplemented or otherwise modified except by a writteninstrument executed by the affected

 

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Guarantor(s) and the Administrative Agent inaccordance with Section 14.1 of the Credit Agreement.

 

Neither the Administrative Agent nor any otherSecured 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 orremedy hereunder or to have acquiesced in any Default or Event of Default or inany 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 anyother Secured Party, any right, power or privilege hereunder shall operate as awaiver thereof. No single or partial exercise of any right, power or privilegehereunder shall preclude any other or further exercise thereof or the exerciseof any other right, power or privilege. A waiver by the Administrative Agent orany other Secured Party of any right or remedy hereunder on any one occasionshall not be construed as a bar to any right or remedy that the AdministrativeAgent or any Secured Party would otherwise have on any future occasion.

 

The rights, remedies, powers and privileges hereinprovided are cumulative, may be exercised singly or concurrently and are notexclusive of any other rights or remedies provided by law.

 

Section Headings. The Section headingsused in this Guarantee are for convenience of reference only and are not toaffect the construction hereof or be taken into consideration in theinterpretation hereof.

 

Successors and Assigns. This Guarantee shall bebinding upon the successors and assigns of each Guarantor and shall inure tothe benefit of the Administrative Agent and the other Secured Parties and theirrespective successors and assigns except that no Guarantor may assign, transferor delegate any of its rights or obligations under this Guarantee without theprior written consent of the Administrative Agent.

 

Additional Guarantors.  Each Subsidiary of the US Borrower that isrequired to become a party to this Guarantee pursuant to Section 9.11 ofthe Credit Agreement shall become a Guarantor, with the same force and effectas if originally named as a Guarantor herein, for all purposes of thisGuarantee upon execution and delivery by such Subsidiary of a Supplement in theform of Annex B hereto. The execution and delivery of any instrument adding anadditional Guarantor as a party to this Guarantee shall not require the consentof any other Guarantor hereunder. The rights and obligations of each Guarantorhereunder shall remain in full force and effect notwithstanding the addition ofany new Guarantor as a party to this Guarantee.

 

WAIVER OF JURY TRIAL. EACH GUARANTOR HEREBYIRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION ORPROCEEDING RELATING TO THIS GUARANTEE, ANY OTHER CREDIT DOCUMENT AND FOR ANYCOUNTERCLAIM THEREIN.

 

21.           Submissionto Jurisdiction; Waivers.  Each Guarantorhereby irrevocably and unconditionally:

 

(a)   submitsfor itself and its property in any legal action or proceeding relating to thisGuarantee and the other Credit Documents to which it is a party, or for

 

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recognition and enforcement of any judgementin respect thereof, to the non-exclusive general jurisdiction of the courts ofthe Province of Ontario, the courts of the State of New York, the courts of theUnited States of America for the Southern District of New York and appellatecourts from any thereof;

 

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

 

(c)   agreesthat service of process in any such action or proceeding may be effected bymailing a copy thereof by registered or certified mail (or any substantiallysimilar form of mail), postage prepaid, to such Guarantor at its addressreferred to in Section 12 or at such other address of which theAdministrative Agent shall have been notified pursuant thereto;

 

(d)   agreesthat nothing herein shall affect the right of the Administrative Agent or anyother Secured Party to effect service of process in any other manner permittedby law or shall limit the right of the Administrative Agent or any otherSecured 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 orrecover in any legal action or proceeding referred to in this Section 21any special, exemplary, punitive or consequential damages.

 

22.           GOVERNINGLAW. THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDERSHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWOF THE PROVINCE OF ONTARIO.

 

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IN WITNESS WHEREOF, each of the undersigned hascaused this Guarantee to be duly executed and delivered by its duly authorizedofficer as of the day and year first above written, with effect from and aftermidnight (German time) on July 31, 2004.

 

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SUPPLEMENT NO. [  ] dated as of [   ], to the

 

Canadian Guarantee dated as of July 30, 2004(the “Guarantee”), among each of the Canadian subsidiaries of ROCKWOODSPECIALTIES GROUP, INC., a Delaware corporation (the “US Borrower”) listedon Annex A thereto (each such subsidiary individually, a “Guarantor”, and,collectively, the “Guarantors”) in favour of CREDIT SUISSE FIRST BOSTON, actingthrough 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             Referenceis 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 SpecialtiesLimited, a company incorporated under the laws of England and Wales, RockwoodSpecialities International Inc., a Delaware corporation, the Lenders from timeto time party thereto, and UBS Securities LLC and Goldman Sachs Credit PartnersL.P., as co-syndication agents (in such capacity, the “Co-Syndication Agents”).

 

Capitalized terms used herein and not otherwisedefined 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 inorder to induce the Administrative Agent, the Co-Syndication Agents, theLenders and the Letter of Credit Issuer to enter into the Credit Agreement andto induce the Lenders and the Letter of Credit Issuer to make their respectiveExtensions of Credit to the UK Borrower under the Credit Agreement and toinduce one or more Lenders or Affiliates of Lenders to enter into HedgeAgreements with the UK Borrower. Section 9.11 of the Credit Agreement and Section 19of the Guarantee provide that additional Subsidiaries may become Guarantorsunder the Guarantee by execution and delivery of an instrument in the form ofthis Supplement. Each undersigned Subsidiary (each a “New Guarantor”) isexecuting this Supplement in accordance with the requirements of the CreditAgreement to become a Guarantor under the Guarantee in order to induce theLenders and the Letter of Credit Issuer to make additional Extensions of Creditto the UK Borrower and as consideration for Extensions of Credit to the UKBorrower previously made.

 

Accordingly, the Administrative Agent and the NewGuarantors agree as follows:

 

SECTION 1. In accordance with Section 19of the Guarantee, each New Guarantor by its signature below becomes a Guarantorunder the Guarantee with the same force and effect as if originally namedtherein as a Guarantor and each New Guarantor hereby

 

(a) agrees to all the terms and provisions ofthe Guarantee applicable to it as a Guarantor thereunder and (b) representsand warrants that the representations and warranties made by it as a Guarantorthereunder are true and correct on and as of the date hereof. Each reference toa Guarantor in the Guarantee shall be deemed to include each New Guarantor. TheGuarantee is hereby incorporated herein by reference.

 

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SECTION 2. Each New Guarantor represents andwarrants to the Administrative Agent and the other Secured Parties that thisSupplement has been duly authorized, executed and delivered by it andconstitutes its legal, valid and binding obligation, enforceable against it inaccordance with its terms, subject to limitations which might result frombankruptcy, insolvency, moratorium and other similar laws affecting creditors’rights generally and subject to limitations on the availability of equitableremedies.

 

SECTION 3. This Supplement may be executed byone or more of the parties to this Supplement on any number of separatecounterparts (including by facsimile or other electronic transmission), and allof said counterparts taken together shall be deemed to constitute one and thesame instrument. A set of the copies of this Supplement signed by all theparties shall be lodged with the UK Borrower and the Administrative Agent. ThisSupplement shall become effective as to each New Guarantor when theAdministrative Agent shall have received counterparts of this Supplement that,when taken together, bear the signatures of such New Guarantor and theAdministrative Agent.

 

SECTION 4. Except as expressly supplementedhereby, the Guarantee shall remain in full force and effect.

 

SECTION 5. THIS SUPPLEMENT AND THE RIGHTS ANDOBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED ANDINTERPRETED IN ACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO.

 

SECTION 6. Any provision of this Supplementthat is prohibited or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof and inthe Guarantee, and any such prohibition or unenforceability in any jurisdictionshall not invalidate or render unenforceable such provision in any otherjurisdiction. The parties hereto shall endeavor in good-faith negotiations toreplace the invalid, illegal or unenforceable provisions with valid provisionsthe economic effect of which comes as close as possible to that of the invalid,illegal or enforceable provisions.

 

SECTION 7. All notices, requests and demandspursuant hereto shall be made in accordance with Section 14.2 of theCredit Agreement. All communications and notices hereunder to each NewGuarantor shall be given to it in care of the UK Borrower at the UK Borrower’saddress set forth in Section 14.2 of the Credit Agreement.

 

SECTION 8. Each New Guarantor agrees toreimburse the Administrative Agent for its out-of-pocket expenses in connectionwith this Supplement, including the fees, disbursements and other charges ofcounsel for the Administrative Agent.

 

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IN WITNESS WHEREOF, each New Guarantor and theAdministrative Agent have duly executed this Supplement to the Guarantee as ofthe day and year first above written.

 

[NAME OF NEW GUARANTOR]

 

By:

 

Name:

 

Title:

 

CREDIT SUISSE FIRST BOSTON, acting through itsCayman Islands Branch, as Administrative Agent

 

By:

 

Name:

 

Title:

 

By:

 

Name:

 

Title:

 

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EXHIBIT A-2

 

[FORM OF]

 

**CANADIAN PLEDGE AGREEMENT**

 

THIS CANADIAN PLEDGEAGREEMENT (US OBLIGATIONS) dated as of July 30, 2004 is made betweenROCKWOOD SPECIALTIES GROUP, INC., a Delaware corporation (the “Pledgor”)and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch asadministrative agent (in such capacity, the “Administrative Agent”) forthe lenders (the “Lenders”) from time to time parties to the CreditAgreement 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 underthe laws of England and Wales (the “UK Borrower” and, together with thePledgor, the “Borrowers”), Rockwood Specialties International, Inc.,a Delaware corporation (“Holdings”), the Lenders, theAdministrative Agent, and UBS Securities LLC and Goldman Sachs Credit PartnersL.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 Letterof Credit Issuer has agreed to issue Letters of Credit for the account of theBorrowers (collectively, the “Extensions of Credit”) upon the terms andsubject to the conditions set forth therein and (b) one or more Lenders orAffiliates of Lenders may from time to time enter into Hedge Agreements withthe Borrowers or any of the Restricted Subsidiaries;

 

WHEREAS, the Pledgor acknowledges that it willderive substantial direct and indirect benefit from the making of theExtensions of Credit;

 

WHEREAS, it is a condition precedent to theobligation of the Lenders and the Letter of Credit Issuer to make theirrespective Extensions of Credit to the Borrowers under the Credit Agreementthat the Pledgor shall have executed and delivered this Pledge Agreement to theAdministrative Agent for the ratable benefit of the Secured Parties; and

 

WHEREAS, the Pledgor is the legal and beneficial ownerof the Equity Interests described under Schedule 1 hereto and issued by theentities named therein (such pledged Equity Interests are, together with anyEquity Interests obtained in the future of the issuer of such Pledged Sharesrequired to be pledged hereunder (the “After-acquired Shares”), referredto collectively herein as the “Pledged Shares”);

 

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NOW, THEREFORE, in consideration of the premises andto induce the Administrative Agent, the Co-Syndication Agents, the Lenders andthe Letter of Credit Issuer to enter into the Credit Agreement and to inducethe Lenders and the Letter of Credit Issuer to make their respective Extensionsof Credit to the Borrowers under the Credit Agreement and to induce one or moreLenders or Affiliates of Lenders to enter into Hedge Agreements with theBorrowers and/or Restricted Subsidiaries, the Pledgor hereby agrees with theAdministrative Agent, for the ratable benefit of the Secured Parties, asfollows:

 

1.               DefinedTerms.

 

(a)           Unless otherwise defined herein, terms defined in the Credit Agreementand used herein shall have the meanings given to them in the Credit Agreementand all terms defined in the *PersonalProperty Security Act*from time to time in effect in the Province ofOntario (the “Ontario PPSA”) and not defined herein shall have themeanings specified therein.

 

(b)           As used herein, the *term*“ClosingTime” means 24:00 (German time) on the Closing Date.

 

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

 

(d)           As used herein, the term “Obligations” means the collectivereference to (i) the due and punctual payment of (x) the principal ofand premium, if any, and interest at the applicable rate provided in the CreditAgreement (including interest accruing during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding) on the Loans, when and as due, whetherat maturity, by acceleration, upon one or more dates set for prepayment orotherwise, (y) each payment required to be made by the Borrowers under theCredit Agreement in respect of any Letter of Credit, when and as due, includingpayments in respect of reimbursement of disbursements, interest thereon and obligationsto 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 incurredduring the pendency of any bankruptcy, insolvency, receivership or othersimilar proceeding, regardless of whether allowed or allowable in suchproceeding), of the Borrowers or any other Credit Party to any of the SecuredParties under the Credit Agreement and the other Credit Documents, (ii) thedue and punctual performance of all covenants, agreements, obligations andliabilities of the Pledgor under or pursuant to the Credit Agreement and theother Credit Documents, (iii) the due and punctual payment and performanceof all the covenants, agreements, obligations and liabilities of each otherCredit Party under or pursuant to this Pledge Agreement or the other CreditDocuments, (iv) the due and punctual payment and performance of allobligations of each Borrower or Restricted Subsidiary under each HedgeAgreement that (x) is in effect on the Closing Date with a counterpartythat is a Lender or an Affiliate of a Lender as of the Closing Date or (y) isentered into after the Closing Date with any counterparty that is a Lender oran Affiliate of a Lender at the time such Hedge Agreement is entered into and (v) thedue and punctual payment and performance of all obligations in respect

 

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of overdrafts and relatedliabilities owed to the Administrative Agent or its Affiliates arising from orin connection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds.

 

(e)   Asused herein, the term “Proceeds” means all “proceeds” as such term isdefined in the Ontario PPSA and, in any event, shall include any considerationreceived from the sale, exchange, license, lease or other disposition of anyasset or property that constitutes Collateral, any value received as aconsequence of the possession of any Collateral and any payment received fromany insurer or other person or entity as a result of the destruction, loss,theft, damage or other involuntary conversion of whatever nature of any assetor property that constitutes Collateral, and shall include (a) all cashand negotiable instruments received by or held on behalf of the AdministrativeAgent and (b) any and all other amounts from time to time paid or payableunder or in connection with any of the Collateral.

 

(f)    Asused herein, the term “Secured Parties” means (i) the Lenders, (ii) theLetter of Credit Issuer, (iii) the Swingline Lender, (iv) theAdministrative Agent, (v) the Co-Syndication Agents, (vi) eachcounterparty to a Hedge Agreement the obligations under which constituteObligations, (vii) the beneficiaries of each indemnification obligationundertaken by any Credit Party under any Credit Document and (viii) anysuccessors, indorsees, transferees and assigns of each of the foregoing.

 

(g)   Referencesto “Lenders” in this Pledge Agreement shall be deemed to include Affiliates ofLenders that may from time to time enter into Hedge Agreements with anyBorrower or Restricted Subsidiary.

 

(h)   Thewords “hereof,” “herein” and “hereunder” and words of similar import when usedin this Pledge Agreement shall refer to this Pledge Agreement as a whole andnot to any particular provision of this Pledge Agreement, and Section referencesare to Sections of this Pledge Agreement unless otherwise specified. The words “include”,“includes” and “including” shall be deemed to be followed by the phrase “withoutlimitation”.

 

(i)    Themeanings given to terms defined herein shall be equally applicable to both thesingular and plural forms of such terms.

 

2.             Grantof Security. As collateral securityfor the prompt and complete payment and performance when due (whether at thestated maturity, by acceleration or otherwise) of the Obligations, the Pledgorhereby transfers, assigns and pledges to the Administrative Agent for theratable benefit of the Secured Parties, and hereby grants to the AdministrativeAgent for the ratable benefit of the Secured Parties, a security interest,which security interest shall attach immediately upon the Closing Time, in allof the Pledgor’s right, title and interest in the following, whether now ownedor existing or hereafter acquired or existing (collectively, the “Collateral”):

 

(a)             thePledged Shares held by the Pledgor and the certificates representing suchPledged Shares and any interest of the Pledgor in the entries on the books ofthe issuer of the

 

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Pledged Shares or any financial intermediarypertaining 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 allof the Pledged Shares, provided that the Pledged Shares under thisPledge Agreement shall not include more than 65 percent of the issued andoutstanding Equity Interests in any issuer of the Pledged Shares; and

 

(b)           tothe extent not covered by clause (a) above, all Proceeds of any or all ofthe foregoing Collateral.

 

3.             Security for Obligations.This Pledge Agreement secures the payment of all Obligations. Without limitingthe generality of the foregoing, this Pledge Agreement secures the payment ofall amounts that constitute part of the Obligations and would be owed by thePledgor to the Administrative Agent or the Lenders under the Credit Documentsbut for the fact that they are unenforceable or not allowable due to theexistence of a bankruptcy, reorganization or similar proceeding involving thePledgor.

 

4.             Delivery of the Collateral.All certificates or instruments, if any, representing or evidencing theCollateral shall be promptly delivered to and held by or on behalf of theAdministrative Agent pursuant hereto and shall be in suitable form for transferby delivery, or shall be accompanied by duly executed instruments of transferor assignment in blank, all in form and substance reasonably satisfactory tothe Administrative Agent. If the constating documents of any issuer of anyPledged Shares restrict the transfer of the securities of such issuer, then thePledgor will also deliver to the Administrative Agent a certified copy of aresolution of the directors or shareholders of such issuer consenting to thetransfer(s) contemplated by this Pledge Agreement, including anyprospective transfer of the Collateral by the Administrative Agent upon arealization on the security constituted hereby in accordance with this PledgeAgreement. The Administrative Agent shall have the right, at any time after theoccurrence and during the continuance of an Event of Default and without noticeto the Pledgor, to transfer to or to register in the name of the AdministrativeAgent or any of its nominees any or all of the Pledged Shares. Each delivery ofCollateral (including any After-acquired Shares) shall be accompanied by aschedule describing the securities theretofore and then being pledgedhereunder, 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 affectthe validity of such pledge of such securities. Each schedule so deliveredshall 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) theissuer of the Pledged Shares, the certificate number(s) evidencing thePledged Shares, the Pledgor and the record and beneficial owner, the number andclass and the percentage of the issued and outstanding Equity Interests of theissuer of such class of all Pledged Shares and (ii) together with thecomparable schedule to each supplement hereto, includes all Equity Interestsrequired to be pledged hereunder. The Pledged Shares represent 65% of theissued and outstanding Equity Interests of each class of Equity Interests inthe issuer on the date hereof.

 

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(b)           The Pledgor is the legal and beneficial owner of the Collateral pledgedto or assigned by the Pledgor hereunder free and clear of any Lien, except forthe Lien created by this Pledge Agreement.

 

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

 

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

 

(e)           There is no existing agreement, option, right or privilege capable ofbecoming an agreement or option pursuant to which the Pledgor would be requiredto sell or otherwise dispose of any of the Pledged Shares.

 

6.             Further Assurances. The Pledgoragrees 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, agreementsand instruments, and take all such further actions (including the filing andrecording****of financing statementsand other documents), which may be required under any applicable law, or whichthe Administrative Agent or the Required Lenders may reasonably request, inorder (x) to perfect and protect any pledge, assignment or securityinterest granted or purported to be granted hereby (including the prioritythereof) or (y) to enable the Administrative Agent to exercise and enforceits 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 becontinuing:

 

(i)                                     The Pledgor shall be entitled to exercise any and all voting and otherconsensual rights pertaining to the Collateral or any part thereof for anypurpose not prohibited by the terms of this Pledge Agreement or the otherCredit Documents.

 

(ii)                                  The Administrative Agent shall execute and deliver (or cause to beexecuted and delivered) to the Pledgor all such proxies and other instrumentsas the Pledgor may reasonably request for the purpose of enabling the Pledgorto exercise the voting and other rights that it is entitled to exercisepursuant to paragraph (i) above.

 

(b)           Subjectto paragraph (c) below, the Pledgor shall be entitled to receive andretain and use, free and clear of the Lien of this Pledge Agreement, any andall dividends and distributions made or paid in respect of the Collateral tothe extent permitted by the Credit Agreement; provided, however,that any and all noncash dividends or other distributions that would constitutePledged Shares, whether resulting from a subdivision, combination orreclassification of the outstanding Equity Interests of the issuer of anyPledged Shares or

 

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received in exchange for Pledged Shares orPledged Debt or any part thereof, or in redemption thereof, or as a result ofany merger, consolidation, amalgamation, acquisition, or other exchange ofassets to which such issuer may be a party or otherwise, shall be, and shall beforthwith delivered to the Administrative Agent to hold as, Collateral andshall, if received by such Pledgor, be received in trust for the benefit of theAdministrative Agent, be segregated from the other property or funds of suchPledgor and be forthwith delivered to the Administrative Agent as Collateral inthe same form as so received (with any necessary indorsement).

 

(c)           Uponwritten notice to the Pledgor by the Administrative Agent followingtheoccurrence and during the continuance of an Event of Default,

 

(i)                                         all rights of the Pledgor to exercise or refrain from exercising thevoting and other consensual rights that it would otherwise be entitled toexercise pursuant to Section 7(a)(i) shall cease, and all such rightsshall thereupon become vested in the Administrative Agent, which shallthereupon have the sole right to exercise or refrain from exercising suchvoting and other consensual rights during the continuance of such Event ofDefault, provided that, unless otherwise directed by the RequiredLenders, the Administrative Agent shall have the right from time to timefollowing the occurrence and during the continuance of an Event of Default topermit the Pledgor to exercise such rights. After all Events of Default havebeen cured or waived and the Pledgor has delivered to the Administrative Agenta certificate to that effect, the Pledgor will have the right to exercise thevoting and consensual rights that the Pledgor would otherwise be entitled toexercise pursuant to the terms of Section 7(a)(i) (and theobligations of the Administrative Agent under Section 7(a)(ii) shallbe reinstated);

 

(ii)                                      all rights of the Pledgor to receive the dividends and distributions thatthe Pledgor would otherwise be authorized to receive and retain pursuant to Section 7(b) shallcease, and all such rights shall thereupon become vested in the AdministrativeAgent, which shall thereupon have the sole right to receive and hold asCollateral (subject to Section 12) such dividends and distributions duringthe continuance of such Event of Default. After all Events of Default have beencured or waived and the Pledgor has delivered to the Administrative Agent acertificate to that effect, the Administrative Agent shall repay to the Pledgor(without interest) all dividends, and distributions that the Pledgor wouldotherwise 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 contraryto the provisions of Section 7(b) shall be received in trust for thebenefit of the Administrative Agent, shall be segregated from other property orfunds of the Pledgor and shall forthwith be delivered to the AdministrativeAgent as Collateral in the same form as so received (with any necessaryindorsements); and

 

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(iv)                                   in order to permit the Administrative Agent to receive all dividends anddistributions to which it may be entitled under Section 7(b) above,to exercise the voting and other consensual rights that it may be entitled toexercise pursuant to Section 7(c)(i) above, and to receive alldividends, distributions and principal and interest payments that it may beentitled to under Sections 7(c)(ii) and (c)(iii) above, the Pledgorshall, if necessary, upon written notice from the Administrative Agent, fromtime to time execute and deliver to the Administrative Agent, appropriateproxies, dividend payment orders and other instruments as the AdministrativeAgent may reasonably request.

 

8.             Transfers and Other Liens, Etc.The Pledgor shall (a) not (i) except as permitted by the CreditAgreement, sell or otherwise dispose of, or grant any option or warrant withrespect to, any of the Collateral or (ii) create or suffer to exist anyconsensual Lien upon or with respect to any of the Collateral, except for theLien under this Pledge Agreement, provided that in the event the Pledgorsells or otherwise disposes of assets permitted by the Credit Agreement andsuch assets are or include any of the Collateral, the Administrative Agentshall release such Collateral free and clear of the Lien under this PledgeAgreement concurrently with the consummation of such sale; and

 

(b)           defendits and the Administrative Agent’s title or interest in and to all theCollateral (and in the Proceeds thereof) against any and all Liens (other thanthe Lien of this Pledge Agreement), however arising, and any and all Personswhomsoever.

 

9.             Administrative Agent Appointed Attorney-in-Fact. The Pledgor hereby appoints, which appointment is irrevocable andcoupled with an interest, the Administrative Agent as the Pledgor’sattorney-in-fact, with full authority in the place and stead of the Pledgor andin the name of the Pledgor or otherwise, to take any action and to execute anyinstrument, in each case after the occurrence and during the continuance of anEvent of Default, that the Administrative Agent may deem reasonably necessaryor advisable to accomplish the purposes of this Pledge Agreement, including toreceive, indorse and collect all instruments made payable to such Pledgorrepresenting any dividend or distribution in respect of the Collateral or anypart 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 toprotect its interest in the Collateral and shall not impose any duty upon it toexercise any such powers. Except for the safe custody of any Collateral in itspossession and the accounting for moneys actually received by it hereunder, theAdministrative Agent shall, except as required by applicable law, have no dutyas to any Collateral, as to ascertaining or taking action with respect tocalls, conversions, exchanges, maturities, tenders or other matters relative toany Pledged Shares, whether or not the Administrative Agent or any otherSecured Party has or is deemed to have knowledge of such matters, or as to thetaking of any necessary steps to preserve rights against any parties or anyother rights pertaining to any Collateral. The powers conferred on theAdministrative Agent hereunder The Administrative Agent shall be deemed to haveexercised reasonable care in the custody and preservation of any Collateral inits possession if such Collateral is accorded treatment substantially equal tothat

 

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which the AdministrativeAgent accords its own property and in accordance with the requirements ofapplicable law.

 

11.           Remedies. If an Event of Defaultshall occur and be continuing, the Administrative Agent may exercise in respectof the Collateral, in addition to all other rights and remedies provided forherein or otherwise available to it, all the rights and remedies of a securedparty upon default under the Ontario PPSA or any other applicable law and alsomay without notice except as specified below, personally or by agent, at suchtime or times as the Administrative Agent in its discretion may determine, doany one or more of the following:

 

(a)           Rights under Ontario PPSA, etc.Exercise all of the rights and remedies granted to secured parties under theOntario PPSA and any other applicable statute, or otherwise available to theAdministrative Agent at law or in equity.

 

(b)           Dispose of Collateral.Realize on any or all of the Collateral and sell, lease, assign, give optionsto 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 orprivate sale, at any exchange, broker’s board or office of the AdministrativeAgent or elsewhere, on such terms and conditions as the Administrative may deemadvisable and at such prices as it may deem best, for cash or on credit or forfuture delivery.

 

(c)           Court-Approved Disposition of Collateral.Apply to a court of competent jurisdiction for the sale or foreclosure of anyor all of the Collateral.

 

(d)           Purchase by Administrative Agent.At any public sale, and to the extent permitted by law on any private sale, bidfor and purchase any or all of the Collateral offered for sale and, uponcompliance with the terms of such sale, hold, retain and dispose of suchCollateral without any further accountability to the Pledgor or any otherPerson with respect to such holding, retention or disposition, except asrequired by law. In any such sale to the Administrative Agent, the AdministrativeAgent may, for the purpose of making payment for all or any part of theCollateral so purchased, use any claim for Obligations then due and payable toit as a credit against the purchase price.

 

(e)           Transfer of Pledged Shares.Transfer all or part of the Collateral into the name of the AdministrativeAgent or its nominee, with or without disclosing that the Pledged Shares aresubject to the Liens arising under this Agreement.

 

(f)            Vote Pledged Shares. Vote any or allof the Pledged Shares (whether or not transferred to the Administrative Agentor its nominee) and give or withhold all consents, waivers and ratifications inrespect thereof and otherwise act with respect thereto as though it were theoutright owner thereof.

 

(g)           Exercise Other Rights.Exercise any and all rights of conversion, exchange, subscription or any otherrights, privileges or options pertaining to any of the Pledged Shares as if itwere the absolute owner thereof, including the right to exchange at itsdiscretion any and all of the Pledged Shares upon the merger, consolidation,reorganization, recapitalization or other readjustment of any issuer of anyPledged Shares or upon the exercise by any such

 

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issuer or theAdministrative Agent of any right, privilege or option pertaining to any of thePledged Shares, and in connection therewith, to deposit and deliver any and allof the Pledged Shares with any committee, depositary, transfer agent, registraror other designated agency upon such terms and conditions as it may determine,all without liability except to account for property actually received by theAdministrative Agent and except as required by applicable law.

 

The Administrative Agent may exercise any or all ofthe foregoing rights and remedies without demand of performance or otherdemand, presentment, protest, advertisement or notice of any kind (except asrequired by applicable law) to or on the Pledgor or any other Person, and thePledgor by this Agreement waives each such demand, presentment, protest,advertisement and notice to the extent permitted by applicable law. None of theabove rights or remedies will be exclusive of or dependent on or merge in anyother right or remedy, and one or more of such rights and remedies may beexercised independently or in combination from time to time. Without prejudiceto the ability of the Administrative Agent to dispose of the Collateral at suchprice or prices and upon such other terms as are commercially reasonableirrespective of the impact of any such sales on the market price of theCollateral, the Pledgor acknowledges that, to the extent notice of sale shallbe required by law, at least ten days’ notice to the Pledgor of the time andplace of any public sale or the time after which any private sale is to be madeshall constitute reasonable notification. The Pledgor further acknowledges thata disposition of Collateral by the Administrative Agent which takes placesubstantially in accordance with the following provisions will be deemed to becommercially reasonable:

 

(i)            Collateralmay be disposed of in whole or in part;

 

(ii)           Collateralmay be disposed of by public auction, public tender or private contract, withor without advertising and without any other formality except as required byapplicable law;

 

(iii)          anypurchaser or lessee of Collateral may be a customer of the AdministrativeAgent;

 

(iv)          adisposition of Collateral may be on such terms and conditions as to credit orotherwise as the Administrative Agent, in is sole discretion, may deemadvantageous; and

 

(v)           theAdministrative Agent may establish an upset or reserve bid or price in respectof Collateral.

 

12.Applicationof Proceeds. The Administrative Agentshall apply the proceeds of any collection or sale of the Collateral at anytime after receipt as follows:

 

(i)                                     first, to the payment of all reasonable and documented costs and expensesincurred by the Administrative Agent in connection with such collection or saleor otherwise in connection with this Pledge Agreement, the other CreditDocuments or any of the Obligations,

 

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includingall court costs and the reasonable fees and expenses of its agents and legalcounsel, the repayment of all advances made by the Administrative Agenthereunder or under any other Credit Document on behalf of the Pledgor and anyother reasonable and documented costs or expenses incurred in connection withthe exercise of any right or remedy hereunder or under any other CreditDocument;

 

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

 

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

 

Upon any sale of the Collateral by theAdministrative Agent (including pursuant to a power of sale granted by statuteor under a judicial proceeding), the receipt of the Administrative Agent or ofthe officer making the sale shall be a sufficient discharge to the purchaser orpurchasers of the Collateral so sold and such purchaser or purchasers shall notbe obligated to see to the application of any part of the purchase money paidover to the Administrative Agent or such officer or be answerable in any wayfor the misapplication thereof.

 

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

 

(c)           All payments received by the Pledgor after the occurrence and during thecontinuance of an Event of Default in respect of the Collateral shall bereceived in trust for the benefit of the Administrative Agent, shall besegregated from other property or funds of the Pledgor and shall be forthwithdelivered to the Administrative Agent as Collateral in the same form as soreceived (with any necessary indorsement).

 

13.             Amendments, etc. withRespect to the Obligations; Waiver of Rights. The Pledgor shall remainobligated hereunder notwithstanding that, without any reservation of rightsagainst the Pledgor and without notice to or further assent by the Pledgor, (a) anydemand for payment of any of the Obligations made by the Administrative Agentor any other Secured Party may be rescinded by such party and any of theObligations continued, (b) the Obligations, or the liability of any otherparty upon or for any part thereof, or any collateral security or guaranteetherefor or right of offset with respect thereto, may, from time to time, inwhole or in part, be renewed, extended, amended, modified, accelerated,compromised, waived, surrendered or released by the Administrative Agent or anyother Secured Party, (c) the Credit Agreement, the other Credit Documents,the Letters of Credit and any other documents executed and delivered inconnection therewith and the Hedge Agreements and any other documents executedand delivered in connection therewith and any documents entered into with theAdministrative Agent or any of its Affiliates in connection with treasury,depositary or cash management services or in connection

 

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with any automatedclearinghouse transfer of funds may be amended, modified, supplemented orterminated, in whole or in part, as the Administrative Agent (or the RequiredLenders, as the case may be, or, in the case of any Hedge Agreement ordocuments entered into with the Administrative Agent or any of its Affiliatesin connection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds, the partythereto) may deem advisable from time to time, and (d) any collateralsecurity, guarantee or right of offset at any time held by the AdministrativeAgent or any other Secured Party for the payment of the Obligations may besold, exchanged, waived, surrendered or released. Neither the AdministrativeAgent 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 theObligations 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 remainin full force and effect and be binding in accordance with and to the extent ofits terms upon the Pledgor and its successors and assigns, and shall inure tothe benefit of the Administrative Agent and the other Secured Parties and theirrespective successors, indorsees, transferees and assigns until all Obligationsunder the Credit Documents shall have been satisfied by payment in full, theCommitments shall be terminated and no Letters of Credit shall be outstanding,notwithstanding that from time to time during the term of the Credit Agreementand any Hedge Agreement the Credit Parties may be free from any Obligations.This Pledge Agreement and the security interest granted hereby shall terminateon the first date on which all of the Obligations under the Credit Documentsshall have been satisfied by payment in full, the Commitments terminated and noLetters of Credit shall be outstanding.

 

(b)           Upon any sale or other transfer by the Pledgor of any Collateral that ispermitted under the Credit Agreement, or upon the effectiveness of any writtenconsent to the release of the security interest granted hereby in anyCollateral pursuant to Section 14.1 of the Credit Agreement, theobligations of the Pledgor with respect to such Collateral and the securityinterest granted hereby in such Collateral shall be automatically released andsuch Collateral sold free and clear of the Lien and security interests createdhereby.

 

(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 thePledgor’s expense, all documents that the Pledgor shall reasonably request toevidence such termination or release.

 

Any execution and delivery of documents pursuant tothis Section 14 shall be without recourse to or warranty by theAdministrative Agent.

 

15.           Reinstatement. This Pledge Agreementshall continue to be effective, or be reinstated, as the case may be, if at anytime payment, or any part thereof, of any of the Obligations is rescinded ormust otherwise be restored or returned by the Administrative Agent or any otherSecured Party upon the insolvency, bankruptcy, dissolution, liquidation orreorganization of the Pledgor, or upon or as a result of the appointment of areceiver, intervenor or conservator of, or trustee or similar officer for, thePledgor or any substantial part of its property, or otherwise, all as thoughsuch payments had not been made.

 

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16.           Notices. All notices, requestsand demands pursuant hereto shall be made in accordance with Section 14.2of the Credit Agreement.

 

17.           Counterparts. This Pledge Agreementmay be executed by one or more of the parties to this Pledge Agreement on anynumber of separate counterparts (including by facsimile or other electronictransmission), and all of said counterparts taken together shall be deemed toconstitute one and the same instrument. A set of the copies of this PledgeAgreement signed by all the parties shall be lodged with the AdministrativeAgent and the Pledgor.

 

18.           Severability. Any provision of thisPledge Agreement that is prohibited or unenforceable in any jurisdiction shall,as to such jurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall not invalidateor render unenforceable such provision in any other jurisdiction. The partieshereto shall endeavor in good-faith negotiations to replace the invalid,illegal or unenforceable provisions with valid provisions the economic effectof which comes as close as possible to that of the invalid, illegal orunenforceable provisions.

 

19.           Integration. This Pledge Agreementrepresents the agreement of the Pledgor with respect to the subject matterhereof and there are no promises, undertakings, representations or warrantiesby the Administrative Agent or any other Secured Party relative to the subjectmatter hereof not expressly set forth or referred to herein or in the otherCredit 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 instrumentexecuted by the Pledgor and the Administrative Agent in accordance with Section 14.1of 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 orremedy hereunder or to have acquiesced in any Default or Event of Default or inany 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 anyother Secured Party, any right, power or privilege hereunder shall operate as awaiver thereof. No single or partial exercise of any right, power or privilegehereunder shall preclude any other or further exercise thereof or the exerciseof any other right, power or privilege. A waiver by the Administrative Agent orany other Secured Party of any right or remedy hereunder on any one occasionshall not be construed as a bar to any right or remedy that the AdministrativeAgent or such other Secured Party would otherwise have on any future occasion.

 

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

 

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

 

22.           Successors and Assigns.This Pledge Agreement shall be binding upon the successors and assigns of thePledgor and shall inure to the benefit of the Administrative Agent and theother Secured Parties and their respective successors and assigns, except thatthe Pledgor may not assign, transfer or delegate any of its rights orobligations under this Pledge Agreement without the prior written consent ofthe Administrative Agent.

 

23.           **WAIVER OF JURY TRIAL****. THEPLEDGOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANYLEGAL ACTION OR PROCEEDING RELATING TO THIS PLEDGE AGREEMENT, ANY OTHER CREDITDOCUMENT 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 PledgeAgreement or for recognition and enforcement of any judgment in respectthereof, to the non-exclusive general jurisdiction of the courts of theProvince of Ontario, the courts of the State of New York, the courts of theUnited States of America for the Southern District of New York and appellatecourts from any thereof;

 

(b)           consents that any such action or proceeding may be brought in such courtsand waives any objection that it may now or hereafter have to the venue of anysuch action or proceeding in any such court or that such action or proceedingwas 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 beeffected by mailing a copy thereof by registered or certified mail (or anysubstantially similar form of mail), postage prepaid, to the Pledgor at itsaddress referred to in Section 16 or at such other address of which theAdministrative Agent shall have been notified pursuant thereto;

 

(d)           agrees that nothing herein shall affect the right of the AdministrativeAgent or any other Secured Party to effect service of process in any othermanner permitted by law or shall limit the right of the Administrative Agent orany 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 orrecover in any legal action or proceeding referred to in this Section 24any special, exemplary, punitive or consequential damages.

 

**25.****      ****GOVERNING LAW****. THIS PLEDGE AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIESHEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCEWITH, THE LAW OF THE PROVINCE OF ONTARIO.**

 

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**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**         | ** ** |
|        |       |       |       |              |       |                       |       |               |       |               |       |
|        |       |       |       |              |       |                       |       |               |       |               |       |
|        |       |       |       |              |       |                       |       |               |       |               |       |

 

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EXHIBIT A-3

 

[FORM OF]

 

**CANADIAN SECURITY AGREEMENT**

 

THIS CANADIAN SECURITYAGREEMENT dated as of July 30, 2004, is made among each of theSubsidiaries 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 CaymanIslands Branch, as administrative agent (in such capacity, the “AdministrativeAgent”) for the lenders (“Lenders”) from time to time partyto the Credit Agreement dated as of July 30, 2004 (as the same may beamended, supplemented or otherwise modified or restated from time to time, the “CreditAgreement”), among Rockwood Specialties Group, Inc., a Delawarecorporation (the “US Borrower”), Rockwood Specialties Limited, a companyincorporated under the laws of England and Wales (the “UK Borrower” and,together with the US Borrower, the “Borrowers”), Rockwood SpecialtiesInternational, Inc., a Delaware corporation (“Holdings”),and UBS Securities LLC and Goldman Sachs Credit Partners L.P., asco-syndication agents (in such capacity, the “Co-Syndication Agents”).

 

WI 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 theLetter of Credit Issuer has agreed to issue Letters of Credit for the accountof the UK Borrower (collectively, the “Extensions of Credit”) upon theterms and subject to the conditions set forth therein and (b) one or moreLenders or Affiliates of Lenders may from time to time enter into HedgeAgreements with the UK Borrower or any of the Restricted Subsidiaries of the UKBorrower;

 

WHEREAS, pursuant to the Canadian Guarantee (the “Guarantee”)dated as of the date hereof, each Grantor party thereto has unconditionally andirrevocably guaranteed to the Administrative Agent, for the ratable benefit ofthe 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 USBorrower and is incorporated under the laws of Canada or a province orterritory thereof;

 

WHEREAS, the proceeds of the Extensions of Creditwill be used in part to enable the UK Borrower to make valuable transfers tothe Grantors in connection with the operation of their respective businesses;

 

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WHEREAS, each Grantor acknowledges that it willderive substantial direct and indirect benefit from the making of theExtensions of Credit; and

 

WHEREAS, it is a condition precedent to theobligation of the Lenders and the Letter of Credit Issuer to make theirrespective Extensions of Credit to the UK Borrower under the Credit Agreementthat the Grantors shall have executed and delivered this Security Agreement tothe Administrative Agent for the ratable benefit of the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises andto induce the Administrative Agent, the Co-Syndication Agents, the Lenders andthe Letter of Credit Issuer to enter into the Credit Agreement and to inducethe Lenders and the Letter of Credit Issuer to make their respective Extensionsof Credit to the UK Borrower under the Credit Agreement and to induce one ormore Lenders or Affiliates of Lenders to enter into Hedge Agreements with theUK Borrower and/or the Restricted Subsidiaries of the UK Borrower, the Grantorshereby agree with the Administrative Agent, for the ratable benefit of theSecured Parties, as follows:

 

1.             DefinedTerms.

 

(a)   Unlessotherwise defined herein, terms defined in the Credit Agreement and used hereinshall have the meanings given to them in the Credit Agreement and all termsdefined in the *Personal Property SecurityAct*from time to time in effect in the Province of Ontario (the “OntarioPPSA”) and not defined herein shall have the meanings specified therein.

 

(b)   Thefollowing terms shall have the following meanings:

 

“Administrative Agent” shall have the meaningassigned to such term in the preamble hereto.

 

“Closing Time” shall mean 24:00 (German time)on the Closing Date.

 

“Collateral” shall have the meaning assignedto such term in Section 2.

 

“Collateral Account” shall mean anycollateral account established by the Administrative Agent as provided in Section 5.1.

 

“Copyright License” means any writtenagreement, now or hereafter in effect, granting any right to any third partyunder any copyright now or hereafter owned by any Grantor (including allCopyrights) or that any Grantor otherwise has the right to license, or grantingany right to any Grantor under any copyright now or hereafter owned by anythird party, and all rights of any Grantor under any such agreement, includingthose listed on Schedule 1.

 

“copyrights” means, with respect to anyPerson, all of the following now owned or hereafter acquired by such Person: (i) allcopyright rights in any work subject to the copyright laws of Canada or anyother country, whether as author, assignee, transferee or otherwise, and (ii) allregistrations and applications for registration of any such copyright in Canadaor any other country, including registrations, recordings,

 

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supplemental registrations and pending applicationsfor registration in the Canadian Intellectual Property Office.

 

“Copyrights” means all copyrights now ownedor hereafter acquired by any Grantor, including those listed on Schedule 2.

 

“Equipment” shall mean any “equipment,” assuch term is defined in the Ontario PPSA, now or hereafter owned by any Grantorand, in any event, shall include all machinery, equipment, furnishings, movabletrade fixtures and vehicles now or hereafter owned by any Grantor and any andall additions, substitutions and replacements of any of the foregoing, whereverlocated, together with all attachments, components, parts, equipment andaccessories installed thereon or affixed thereto; but excluding Equipment tothe extent it is subject to a Permitted Lien and the terms of the Indebtednesssecuring such Permitted Lien prohibit assignment of, or granting of a securityinterest in, such Grantor’s rights and interests therein, provided, thatimmediately upon the repayment of all Indebtedness secured by such PermittedLien, such Grantor shall be deemed to have granted a Security Interest in allthe rights and interests with respect to such Equipment.

 

“Guarantors” shall mean each Grantor otherthan the US Borrower.

 

“Grantor” shall have the meaning assigned tosuch term in the preamble hereto.

 

“Intangibles” shall mean all “intangibles” assuch term is defined in the Ontario PPSA and, in any event, including withrespect to any Grantor, all contracts, agreements, instruments and indenturesin any form, and portions thereof, to which such Grantor is a party or underwhich such Grantor has any right, title or interest or to which such Grantor orany property of such Grantor is subject, as the same may from time to time beamended, supplemented or otherwise modified, including (a) all rights ofsuch Grantor to receive moneys due and to become due to it thereunder or inconnection therewith, (b) all rights of such Grantor to receive proceedsof any insurance, indemnity, warranty or guarantee with respect thereto, (c) allclaims of such Grantor for damages arising out of any breach thereof or defaultthereunder and (d) all rights of such Grantor to terminate, amend,supplement, modify or exercise rights or options thereunder, to performthereunder and to compel performance and otherwise exercise all remediesthereunder, in each case to the extent the grant by such Grantor of a SecurityInterest pursuant to this Security Agreement in its right, title and interestin any such contract, agreement, instrument or indenture is not prohibited bysuch contract, agreement, instrument or indenture without the consent of anyother party thereto, would not give any other party to any such contract,agreement, instrument or indenture the right to terminate its obligationsthereunder or is permitted with consent if all necessary consents to such grantof a Security Interest have been obtained from the other parties thereto (itbeing understood that the foregoing shall not be deemed to obligate suchGrantor to obtain such consents), provided, that the foregoinglimitation shall not, in any event, affect, limit, restrict or impair the grantby such Grantor of a Security Interest pursuant to this Security Agreement inany Account or any money or other amounts due or to become due under any suchcontract, agreement, instrument or indenture.

 

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“Intellectual Property” shall mean allrights, priorities and privileges of any Grantor relating to intellectualproperty, whether arising under Canadian, multinational or foreign laws orotherwise now owned or hereafter acquired, including (a) all informationused or useful arising from the business of such Grantor including allgoodwill, 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) theCopyrights, the Patents, the Trademarks and the Licenses and all rights to sueat law or in equity for any infringement or other impairment thereof, includingthe right to receive all proceeds and damages therefrom, in each case to theextent the grant by such Grantor of a Security Interest pursuant to thisSecurity Agreement in any such rights, priorities and privileges relating tointellectual property is not prohibited by any contract, agreement or otherinstrument governing such rights, priorities and privileges without the consentof any other party thereto, would not give any other party to any suchcontract, agreement or other instrument the right to terminate its obligationsthereunder or is permitted with consent if all necessary consents to such grantof a Security Interest have been obtained from the relevant parties (it beingunderstood that the foregoing shall not be deemed to obligate such Grantor toobtain such consents).

 

“Investment Property” shall mean allSecurities (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 extentthe grant by a Grantor of a Security Interest therein pursuant to this SecurityAgreement in its right, title and interest in any such Investment Property isnot prohibited by any contract, agreement, instrument or indenture governingsuch Investment Property without the consent of any other party thereto, wouldnot give any other party to any such contract, agreement, instrument orindenture the right to terminate its obligations *thereunder*or is permitted with consent if all necessaryconsents to such grant of a Security Interest have been obtained from the otherparties thereto (it being understood that the foregoing shall not be deemed toobligate such Grantor to obtain such consents).

 

“License” shall mean any Patent License,Trademark License, CopyrightLicense or other license or sublicense of personalproperty to which any Grantor is a party.

 

“Ontario PPSA” has the meaning assigned tosuch term in Section 1(a).

 

“Obligations” means the collective referenceto (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 atthe applicable rate provided in the Credit Agreement (including interestaccruing during the pendency of any bankruptcy, insolvency, receivership orother similar proceeding, regardless of whether allowed or allowable in suchproceeding) on the Loans extended to the UK Borrower, when and as due, whetherat maturity, by acceleration, upon one or more dates set for prepayment orotherwise, (y) each payment required to be made by the UK Borrower underthe Credit Agreement in respect of any Letter of Credit, when and as due,including payments in respect of reimbursement of disbursements, interestthereon and obligations to provide cash collateral, and (z) all othermonetary obligations, including fees, costs, expenses and indemnities, whetherprimary, secondary, direct, contingent, fixed or otherwise (including monetaryobligations incurred during the pendency of any bankruptcy, insolvency,

 

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receivership or other similar proceeding, regardlessof whether allowed or allowable in such proceeding), of the UK Borrower or anyother Credit Party that is a Foreign Subsidiary to any of the Secured Partiesunder the Credit Agreement and the other Credit Documents, (ii) the dueand punctual performance of the Grantor’s obligations (including, withoutlimitation, those obligations arising under the Guarantee) in respect of allcovenants, agreements, obligations and liabilities of the UK Borrower under orpursuant to the Credit Agreement and the other Credit Documents, (iii) thedue and punctual payment and performance of all the covenants, agreements,obligations and liabilities of each Credit Party that is a Foreign Subsidiaryunder or pursuant to this Security Agreement or the other Credit Documents, (iv) thedue 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 orRestricted Subsidiary that is a Foreign Subsidiary under each Hedge Agreementthat (x) is in effect on the Closing Date with a counterparty that is a Lenderor an Affiliate of a Lender as of the Closing Date or (y) is entered intoafter the Closing Date with any counterparty that is a Lender or an Affiliateof a Lender at the time such Hedge Agreement is entered into and (v) thedue 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 liabilitiesowed to the Administrative Agent or its Affiliates by the UK Borrower or anyother Credit Party that is a Foreign Subsidiary arising from or in connectionwith treasury, depositary or cash management services or in connection with anyautomated clearinghouse transfer of funds.

 

“Patent License” means any written agreement,now or hereafter in effect, granting to any third party any right to make, useor 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 anyinvention on which a patent, now or hereafter owned by any third party, is inexistence, and all rights of any Grantor under any such agreement, includingthose listed on Schedule 3.

 

“patents” means, with respect to any Person,all of the following now owned or hereafter acquired by such Person: (a) allletters patent of Canada or the equivalent thereof in any other country, allregistrations and recordings thereof, and all applications for letters patentof Canada or the equivalent thereof in any other country, includingregistrations, recordings and pending applications in the Canadian IntellectualProperty Office or any similar offices in any other country, and (b) allreissues, continuations, divisions, continuations-in-part, renewals orextensions thereof, and the inventions disclosed or claimed therein, includingthe right to make, use and/or sell the inventions disclosed or claimed therein.

 

“Patents” means all patents now owned orhereafter acquired by any Grantor, including those listed on Schedule 4.

 

“Proceeds” shall mean all “proceeds” as suchterm is defined in the Ontario PPSA and, in any event, shall include withrespect to any Grantor, any consideration received from the sale, exchange,license, lease or other disposition of any asset or property that constitutesCollateral, any value received as a consequence of the possession of anyCollateral and any payment received from any insurer or other person or entityas a result of the destruction, loss, theft, damage or other involuntaryconversion of whatever nature of any asset or property that

 

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constitutes Collateral, and shall include (a) allcash and negotiable instruments received by or held on behalf of theAdministrative Agent, (b) any claim of any Grantor against any third partyfor (and the right to sue and recover for and the rights to damages or profitsdue or accrued arising out of or in connection with) (i) past, present orfuture infringement of any Patent or licensed under a Patent License, (ii) past,present or future infringement or dilution of any Trademark or licensed under aTrademark License or injury to the goodwill associated with or symbolized byany 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 anyGrantor or licensed under a Copyright License and (c) any and all otheramounts from time to time paid or payable under or in connection with any ofthe Collateral.

 

“Receiver” means a receiver, a manager, areceiver and manager or an interim receiver.

 

“Secured Parties” shall mean (i) theLenders, (ii) the Letter of Credit Issuer, (iii) the Swingline Lender,(iv) the Administrative Agent, (v) the Co-Syndication Agents, (vi) eachcounterparty to a Hedge Agreement the obligations under which constituteObligations, (vii) the beneficiaries of each indemnification obligationundertaken by any Credit Party under any Credit Document and (viii) anysuccessors, indorsees, transferees and assigns of each of the foregoing.

 

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

 

“Security Interest” shall have the meaningassigned to such term in Section 2.

 

“Trademark License” means any writtenagreement, now or hereafter in effect, granting to any third party any right touse any trademark now or hereafter owned by any Grantor (including anyTrademark) or that any Grantor otherwise has the right to license, or grantingto any Grantor any right to use any trademark now or hereafter owned by anythird party, and all rights of any Grantor under any such agreement, includingthose listed on Schedule 5.

 

“trademarks” means, with respect to anyPerson, all of the following now owned or hereafter acquired by such Person: (i) alltrademarks, 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 likenature, now existing or hereafter adopted or acquired, all registrations andrecordings thereof (if any), and all registration and recording applicationsfiled in connection therewith, including registrations and registrationapplications in the Canadian Intellectual Property Office or any similaroffices in any other country or any political subdivision thereof, and allextensions or renewals thereof, (ii) all goodwill associated therewith orsymbolized thereby and (iii) all other assets, rights and interests thatuniquely reflect or embody such goodwill.

 

“Trademarks” means all trademarks now ownedor hereafter acquired by any Grantor, including those listed on Schedule 6hereto.

 

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(c)   Thewords “hereof’, “herein”, “hereto” and “hereunder” and words of similar importwhen used in this Security Agreement shall refer to this Security Agreement asa whole and not to any particular provision of this Security Agreement, andSection, subsection and Schedule references are to this Security Agreementunless otherwise specified. The words “include”, “includes” and “including”shall be deemed to be followed by the phrase “without limitation”.

 

(d)   Themeanings given to terms defined herein shall be equally applicable to both thesingular and plural forms of such terms.

 

(e)   Wherethe 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 orthe relevant part thereof.

 

**2. Grant of Security Interest.**

 

(a) As collateral security for the prompt andcomplete payment and performance when due (whether at the stated maturity, byacceleration or otherwise) of the Obligations, each Grantor hereby bargains,sells, conveys, assigns, sets over, mortgages, pledges, hypothecates andtransfers to the Administrative Agent, and hereby grants to the AdministrativeAgent, for the ratable benefit of the Secured Parties, a security interest(which security interest shall attach immediately upon the Closing Time) (the “SecurityInterest”) in all of its personal property, now owned or hereafter acquiredby such Grantor or in which such Grantor now has or at any time in future mayacquire any right, title or interest, including (without limitation) thefollowing (collectively, the “Collateral”):

 

(i)            all Accounts;

 

(ii)           all Equipment;

 

(iii)          all Intangibles;

 

(iv)          all Intellectual Property;

 

(v)           all Inventory;

 

(vi)          allcash and cash accounts;

 

(vii)         allInvestment Property;

 

(viii)        allbooks and records pertaining to the Collateral; and

 

(ix)                           to the extent not otherwise included, all Proceeds and products of anyand all of the foregoing.

 

(b) Each Grantor hereby irrevocably authorizesthe Administrative Agent at any time and from time to time to file in anyrelevant jurisdiction any financing statements with respect to the Collateralor any part thereof and amendments thereto that contain the information

 

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required by the personal property securitylegislation of Canada. Each Grantor agrees to provide such information to theAdministrative Agent promptly upon request.

 

Each Grantor also ratifies its authorization for theAdministrative Agent to file in any relevant jurisdiction any initial financingstatements or amendments thereto if filed prior to the date hereof.

 

The Administrative Agent is further authorized tofile with the Canadian Intellectual Property Office (or any successor office orany similar office in any other country) such documents as may be necessary oradvisable for the purpose of perfecting, confirming, continuing, enforcing orprotecting the Security Interest granted by each Grantor in IntellectualProperty, without the signature of any Grantor, and naming any Grantor or theGrantors as debtors and the Administrative Agent as secured party.

 

The Security Interests are granted as security onlyand 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 withrespect to or arising out of the Collateral.

 

**3.****            ****Representationsand Warranties****.**

 

Each Grantor hereby represents and warrants to theAdministrative Agent and each Secured Party that:

 

3.1           Title;No Other Liens. Except for the SecurityInterest granted to the Administrative Agent for the ratable benefit of theSecured Parties pursuant to this Security Agreement, the Liens permitted by theCredit Agreement and any Liens securing Indebtedness which is no longeroutstanding or any Liens with respect to commitments to lend which have beenterminated, such Grantor owns each item of the Collateral free and clear of anyand all Liens or claims of others. No security agreement, financing statementor other public notice with respect to all or any part of the Collateral thatevidences a Lien securing any material Indebtedness is on file or of record inany public office, except such as have been filed in favor of theAdministrative Agent, for the ratable benefit of the Secured Parties, pursuantto this Security Agreement or are permitted by the Credit Agreement.

 

3.2           PerfectedFirst Priority Liens.

 

(a)   Subjectto the limitations set forth in clause (b) of this Section 3.2, theSecurity Interests granted pursuant to this Security Agreement (i) willconstitute valid perfected Security Interests in the Collateral in favor of theAdministrative Agent, for the ratable benefit of the Secured Parties, as collateralsecurity for the Obligations, upon (A) completion of all filings,registrations and recordings of financing statements and other similarinstruments under the Ontario PPSA or any other relevant personal propertysecurity legislation in Canada and (B) completion of the filing,registration and recording of a fully executed agreement in the form hereof (ora supplement hereto) and containing a description of all Collateralconstituting Intellectual Property in the Canadian Intellectual Property Officeand (ii) are prior to all other

 

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Lienson the Collateral other than Liens permitted pursuant to Section 10.2 ofthe Credit Agreement.

 

(b)   Notwithstandinganything to the contrary herein, no Grantor shall be required to perfect theSecurity Interests granted by this Security Agreement (including SecurityInterests in cash, cash accounts and Investment Property) by any means otherthan by (i) filings pursuant to the personal property security legislationof the relevant jurisdictions, (ii) filings approved by Canadiangovernment offices with respect to Intellectual Property or (iii) whenapplicable, possession by or on behalf of the Administrative Agent in Canada.No Grantor shall be required to complete any filings or other action withrespect to the perfection of Security Interests in any jurisdiction outsideCanada.

 

**(c)****          **Itis understood and agreed that the Security Interests in cash, cash accounts andPermitted Investments created hereunder shall not prevent the Grantors fromusing such assets in the ordinary course of their respective businesses. It isalso understood and agreed that the Grantors may sell, transfer or otherwisedispose of used or surplus Equipment, vehicles, Inventory and other assetsin the ordinary course of business to the extent permitted by the CreditAgreement.

 

3.3 Schedules. The Schedules attached to thisSecurity Agreement include accurate and complete lists of the informationrequired by this Security Agreement to be included therein.

 

**4. Covenants.**

 

Each Grantor hereby covenants and agrees with theAdministrative Agent and the Secured Parties that, from and after the date ofthis Security Agreement until the Obligations under the Credit Documents arepaid in full, the Commitments are terminated and no Letter of Credit remainsoutstanding:

 

4.1 Maintenance of Perfected Security InterestFurther Documentation.

 

(a) Such Grantor shall maintain the SecurityInterest created by this Security Agreement as a perfected Security Interesthaving at least the priority described in Section 3.2 and shall defendsuch Security Interest against the claims and demands of all Persons whomsoever(except for Liens permitted by the Credit Agreement, which Liens such Grantorshall pay and perform in accordance with their terms), in each case subject to Section 3.2(b).

 

(b)   SuchGrantor will furnish to the Administrative Agent and the Lenders from time totime statements and schedules further identifying and describing the assets andproperty of such Grantor and such other reports in connection therewith as theAdministrative Agent may reasonably request. In addition, within 30 days afterthe end of each calendar quarter, such Grantor will deliver to theAdministrative Agent a written supplement hereto substantially in the form ofAnnex 2 hereto with respect to any additional Copyrights, Copyright Licenses,Patents, Patent Licenses, Trademarks and Trademark Licenses acquired by suchGrantor after the date hereof, all in reasonable detail.

 

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(c)   Subjectto clause (d) below and Section 3.2(b), each Grantor agrees that atany time and from time to time, at the expense of such Grantor, it will executeany and all further documents, financing statements, agreements andinstruments, and take all such further actions (including the filing andrecording of financing statements, fixture filings, mortgages, deeds of trustand other documents), which may be required under any applicable law, or whichthe Administrative Agent or the Required Lenders may reasonably request, in *order*(x) to *grant,*preserve, protect and perfect thevalidity and priority of the Security Interests created or intended to becreated hereby or (y) to enable the Administrative Agent to exercise and enforceits rights and remedies hereunder with respect to any Collateral, including thefiling of any financing or continuation statements under the personal propertysecurity legislation of Canada in effect in any jurisdiction with respect tothe Security Interests created hereby, all at the expense of such Grantor.

 

(d)   Notwithstandinganything in this Section 4.1 to the contrary, (i) with respect to anyassets acquired by such Grantor after the date hereof that are required by theCredit Agreement to be subject to the Lien created hereby or (ii) withrespect to any Person that, subsequent to the date hereof, becomes a Subsidiaryof the US Borrower that is required by the Credit Agreement to become a partyhereto, the relevant Grantor after the acquisition or creation thereof shallpromptly 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 ofany change (i) in its legal name, (ii) in its jurisdiction ofincorporation or organization, (iii) in the location of its chiefexecutive office, its principal place of business, any office in which itmaintains books or records relating to Collateral owned by it (including theestablishment of any such new office), or (iv) in its identity or type oforganization or corporate structure. Each Grantor agrees promptly to providethe Administrative Agent with certified organizational documents reflecting anyof the changes described in the first sentence of this paragraph. Each Grantoragrees not to effect or permit any change referred to in the preceding sentenceunless all filings have been made under applicable personal property securitylegislation or otherwise that are required in order for the AdministrativeAgent to continue at all times following such change to have a valid, legal andperfected security interest in all the Collateral having at least the prioritydescribed in Section 3.2. Each Grantor also agrees promptly to notify theAdministrative Agent if any material portion of the Collateral is damaged ordestroyed.

 

4.3 Notices. Each Grantor will advise theAdministrative Agent and the Lenders promptly, in reasonable detail, of anyLien of which it has knowledge (other than the Security Interests createdhereby or Liens permitted under the Credit Agreement ) on any of the Collateralwhich would adversely affect, in any material respect, the ability of theAdministrative Agent to exercise any of its remedies hereunder.

 

4.4 Special Covenants with Respect to Equipment.

 

(a)        EachGrantor shall, promptly after the acquisition by such Grantor of any item ofEquipment, if requested by the Administrative Agent, provide copies ofdocumentation evidencing such acquisition and a description of such Equipment.

 

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(b)        Uponthe occurrence and during the continuation of any Event of Default, allinsurance payments in respect of such Equipment shall be paid to and applied byAdministrative Agent as specified in Section 5.4 hereof.

 

**5. Remedial Provisions.**

 

5.1 Certain Matters Relating to Accounts.

 

(a)          Atany time after the occurrence and during the continuance of an Event ofDefault, the Administrative Agent shall have the right to make testverifications of the Accounts of each Grantor in any manner and through any mediumthat it reasonably considers advisable, and each Grantor shall furnish all suchassistance and information as the Administrative Agent may require inconnection with such test verifications. The Administrative Agent shall havethe absolute right to share any information it gains from such inspection orverification with any Secured Party.

 

(b)         TheAdministrative Agent hereby confirms each Grantor’s right to collect suchGrantor’s Accounts, but the Administrative Agent may curtail or terminate saidauthority at any time after the occurrence and during the continuance of anEvent of Default. If required in writing by the Administrative Agent at anytime after the occurrence and during the continuance of an Event of Default,any payments of Accounts, when collected by any Grantor, (i) shall beforthwith (and, in any event, within two Business Days) deposited by suchGrantor in the exact form received, duly endorsed by such Grantor to theAdministrative Agent if requested, in a Collateral Account maintained under thesole dominion and control of and on terms and conditions reasonablysatisfactory to the Administrative Agent, subject to withdrawal by theAdministrative Agent for the account of the Secured Parties only as provided inSection 5.5, and (ii) until so turned over, shall be held by suchGrantor in trust for the Administrative Agent and the Secured Parties,segregated from other funds of such Grantor. Each such deposit of Proceeds ofAccounts shall be accompanied by a report of the applicable Grantor identifyingin reasonable detail the nature and source of the payments included in thedeposit.

 

(c)   Atthe Administrative Agent’s request at any time after the occurrence and duringthe continuance of an Event of Default, each Grantor shall deliver to theAdministrative Agent all original and other documents evidencing, and relatingto, the agreements and transactions which gave rise to such Grantor’s Accounts,including all original orders, invoices and shipping receipts.

 

(d)   Uponthe occurrence and during the continuance of an Event of Default, a Grantorshall 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 allowany credit or discount whatsoever thereon if the Administrative Agent shallhave instructed the Grantors not to grant or make any such extension, credit,discount, compromise, or settlement under any circumstances during thecontinuance of such Event of Default.

 

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**5.2 Communications with Obligors; Grantors Remain Liable.**

 

(a)   TheAdministrative Agent in its own name or in the name of others may at any timeafter the occurrence and during the continuance of an Event of Default, aftergiving reasonable notice to the relevant Grantor of its intent to do so,communicate with obligors under such Grantor’s Accounts to verify with them tothe Administrative Agent’s satisfaction the existence, amount and terms of anyof such Grantor’s Accounts. The Administrative Agent shall have the absoluteright to share any information it gains from such inspection or verificationwith any Secured Party.

 

**(b)****  **Uponthe written request of the Administrative Agent at any time after theoccurrence and during the continuance of an Event of Default, each Grantorshall notify obligors on its Accounts that such Accounts have been assigned tothe Administrative Agent for the ratable benefit of the Secured Parties andthat payments in respect thereof shall be made directly to the AdministrativeAgent.

 

(c)   Anythingherein to the contrary notwithstanding, each Grantor shall, to the maximumextent provided by law, remain liable under each of its Accounts to observe andperform all the conditions and obligations to be observed and performed by itthereunder, all in accordance with the terms of any agreement giving risethereto. Neither the Administrative Agent nor any Secured Party shall have anyobligation or liability under any Account (or any agreement giving risethereto) by reason of or arising out of this Security Agreement or the receiptby the Administrative Agent or any Secured Party of any payment relatingthereto, nor shall the Administrative Agent or any Secured Party be obligatedin any manner to perform any of the obligations of any Grantor under orpursuant to any Account (or any agreement giving rise thereto), to make anypayment, to make any inquiry as to the nature or the sufficiency of any paymentreceived by it or as to the sufficiency of any performance by any partythereunder, to present or file any claim, to take any action to enforce anyperformance or to collect the payment of any amounts which may have beenassigned to it or to which it may be entitled at any time or times.

 

5.3 Proceeds to be Turned Over to AdministrativeAgent. In addition to the rights of the Administrative Agent and theSecured Parties specified in Section 5.1 with respect to payments ofAccounts, if an Event of Default shall occur and be continuing and theAdministrative Agent so requires by notice in writing to the relevant Grantor(it being understood that the exercise of remedies by the Secured Parties inconnection with an Event of Default under Section 11.5 of the CreditAgreement shall be deemed to constitute a request by the Administrative Agentfor the purposes of this sentence and in such circumstances, no such writtennotice shall be required), all Proceeds received by any Grantor consisting ofcash, checks and other near-cash items shall be held by such Grantor in trustfor the Administrative Agent and the Secured Parties, segregated from otherfunds of such Grantor, and shall, forthwith upon receipt by such Grantor, beturned over to the Administrative Agent in the exact form received by suchGrantor (duly endorsed by such Grantor to the Administrative Agent, ifrequested by the Administrative Agent). All Proceeds received by theAdministrative Agent hereunder shall be held by the Administrative Agent in a CollateralAccount maintained under its sole dominion and control and on terms andconditions reasonably satisfactory to the Administrative Agent. All

 

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Proceeds while held by the Administrative Agent in aCollateral Account (or by such Grantor in trust for the Administrative Agentand the Secured Parties) shall continue to be held as collateral security forall the Obligations and shall not constitute payment thereof until applied asprovided in Section 5.5.

 

5.4 Application of Proceeds. TheAdministrative Agent shall apply the proceeds of any collection or sale of theCollateral as well as any Collateral consisting of cash, at any time afterreceipt as follows:

 

(i)            first,to the payment of all reasonable and documented costs and expenses incurred bythe Administrative Agent in connection with such collection or sale orotherwise in connection with this Security Agreement, the other CreditDocuments or any of the Obligations, including all court costs and thereasonable fees and expenses of its agents and legal counsel, the repayment ofall advances made by the Administrative Agent hereunder or under any otherCredit Document on behalf of any Grantor and any other reasonable anddocumented costs or expenses incurred in connection with the exercise of anyright 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 thedate of any distribution, and, if such moneys shall be insufficient to pay suchamounts in full, then ratably (without priority of any one over any other) tosuch 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 orassigns or to whomsoever may be lawfully entitled to receive the same or as acourt of competent jurisdiction may direct.

 

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

 

5.5 Other Remedies. If an Event of Defaultshall occur and be continuing, the Administrative Agent may exercise in respectof the Collateral, in addition to all other rights and remedies provided forherein or otherwise available to it, all the rights and remedies of a securedparty upon default under the Ontario PPSA or any other applicable law and alsomay without notice except as specified below, personally or by agent, at suchtime or times as the Administrative Agent in its discretion may determine, doany one or more of the following:

 

(a)   Rightsunder Ontario PPSA, etc.Exercise all of the rights and remedies granted to secured parties under theOntario PPSA and any other applicable statute, or otherwise available to theAdministrative Agent at law or in equity.

 

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(b)   DemandPossession. Demand possession of anyor all of the Collateral, in which event each Grantor will, at the expense ofsuch Grantor, promptly cause the Collateral designated by the AdministrativeAgent to be assembled and made available and/or delivered to the AdministrativeAgent at any place designated by the Administrative Agent.

 

(c)   TakePossession. Enter on any premiseswhere any Collateral is located and take possession of, disable or remove suchCollateral.

 

(d)   Dealwith Collateral. Hold, store and keepidle, or operate, lease or otherwise use or permit the use of, any or all ofthe Collateral for such time and on such terms as the Administrative Agent maydetermine, and demand, collect and retain all earnings and other sums due or tobecome due from any Person in respect of any of the Collateral.

 

(e)   Carryon Business. Carry on, or concur inthe carrying on of, any or all of the business or undertaking of the Grantorsand enter on, occupy and use (without charge by the Grantors) any of thepremises, buildings, plant and undertaking of, or occupied or used by, theGrantors.

 

(f)    EnforceCollateral. Seize, collect, receive,enforce or otherwise deal with any Collateral in such manner, on such terms andconditions and at such times as the Administrative Agent deems advisable.

 

(g)   Disposeof Collateral. Realize on any or all ofthe Collateral and sell, lease, assign, give options to purchase, or otherwisedispose of and deliver any or all of the Collateral (or contract to do any ofthe above), in one or more parcels at any public or private sale, at anyexchange, broker’s board or office of the Administrative Agent or elsewhere, atsuch price or prices and upon such other terms as are commercially reasonableirrespective of the impact of any such sales on the market price of theCollateral, for cash or on credit or for future delivery.

 

(h)   Court-ApprovedDisposition of Collateral. Apply to a courtof competent jurisdiction for the sale or foreclosure of any or all of the Collateral.

 

(i)    Purchaseby Administrative Agent. At any publicsale, and to the extent permitted by law on any private sale, bid for andpurchase any or all of the Collateral offered for sale and, upon compliancewith the terms of such sale, hold, retain and dispose of such Collateralwithout any further accountability to any Grantor or any other Person withrespect to such holding, retention or disposition, except as required byapplicable law. In any such sale to the Administrative Agent, the AdministrativeAgent may, for the purpose of making payment for all or any part of theCollateral so purchased, use any claim for Obligations then due and payable toit as a credit against the purchase price.

 

(j)    Transferof Securities. Transfer any InvestmentProperty forming part of the Collateral into the name of the AdministrativeAgent or its nominee, with or without disclosing that the Investment Propertyis subject to the Security Interests arising under this Agreement.

 

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(k) Exercise of Rights. Exercise any and allrights, privileges, entitlements and options pertaining to any InvestmentProperty forming part of the Collateral as if the Administrative Agent *were*the absolute owner of such InvestmentProperty.

 

(1) Payment of Liabilities. Pay anyliability secured by any Lien against any Collateral. Each Grantor willpromptly 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 Collateralor for carrying on any of the business or undertaking of any Grantor and grantSecurity Interests on any Collateral (in priority to the Security Interestscreated by this Agreement or otherwise) as security for the money so borrowed.Each Grantor will promptly on demand reimburse the Administrative Agent for allsuch borrowings.

 

(n) Appoint Receiver. Appoint by instrumentin writing one or more Receivers of any Grantor or any or all of the Collateralwith such rights, powers and authority (including any or all of the rights,powers and authority of the Administrative Agent under this Agreement) as maybe provided for in the instrument of appointment or any supplementalinstrument, and remove and replace any such Receiver from time to time. To theextent permitted by applicable law, any Receiver appointed by theAdministrative Agent will (for purposes relating to responsibility for theReceiver’s acts or omissions) be considered to be the agent of the Grantors andnot of the Administrative Agent or the Secured Parties.

 

(o) Court-Appointed Receiver. Apply to acourt of competent jurisdiction for the appointment of a Receiver of anyGrantor or of any or all of the Collateral.

 

The Administrative Agent may exercise any or all ofthe foregoing rights and remedies without demand of performance or otherdemand, presentment, protest, advertisement or notice of any kind (except asrequired by applicable law) to or on the Grantors or any other Person, and theGrantors by this Agreement waive each such demand, presentment, protest,advertisement and notice to the extent permitted by applicable law. None of theabove rights or remedies will be exclusive of or dependent on or merge in anyother right or remedy, and one or more of such rights and remedies may beexercised independently or in combination from time to time. Without prejudiceto the ability of the Administrative Agent to dispose of the Collateral at suchprice or prices and upon such other terms as are commercially reasonableirrespective of the impact of any such sales on the market price of theCollateral, each Grantor acknowledges that, to the extent notice of sale shallbe required by law, at least ten days’ notice to such Grantor of the time andplace of any public sale or the time after which any private sale is to be madeshall constitute reasonable notification. Each Grantor further acknowledgesthat a disposition of Collateral by the Administrative Agent which takes placesubstantially in accordance with the following provisions will be deemed to becommercially reasonable:

 

(i)            Collateralmay be disposed of in whole or in part;

 

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(ii)           Collateralmay be disposed of by public auction, public tender or private contract, withor without advertising and without any other formality except as required bylaw;

 

(iii)          anypurchaser or lessee of Collateral may be a customer of the AdministrativeAgent;

 

(iv)          adisposition of Collateral may be on such terms and conditions as to credit orotherwise as the Administrative Agent, in is sole discretion, may deemadvantageous; and

 

(v)           theAdministrative Agent may establish an upset or reserve bid or price in respectof Collateral.

 

5.6 Deficiency. Each Grantor shall remainliable for any deficiency if the proceeds of any sale or other disposition ofthe Collateral are insufficient to pay its Obligations and the reasonable feesand disbursements of any attorneys employed by the Administrative Agent or anySecured Party to collect such deficiency.

 

5.7 Amendments, etc. withRespect to the Obligations; Waiver of Rights. Each Grantor shall remainobligated hereunder notwithstanding that, without any reservation of rightsagainst any Grantor and without notice to or further assent by any Grantor, (a) anydemand for payment of any of the Obligations made by the Administrative Agentor any other Secured Party may be rescinded by such party and any of theObligations continued, (b) the Obligations, or the liability of any otherparty upon or for any part thereof, or any collateral security or guaranteetherefor or right of offset with respect thereto, may, from time to time, inwhole or in part, be renewed, extended, amended, modified, accelerated,compromised, waived, surrendered or released by the Administrative Agent or anyother Secured Party, (c) the Credit Agreement, the other Credit Documents,the Letters of Credit and any other documents executed and delivered inconnection therewith and the Hedge Agreements and any other documents executedand delivered in connection therewith and any documents entered into with theAdministrative Agent or any of its Affiliates in connection with treasury,depositary or cash management services or in connection with any automatedclearinghouse transfer of funds may be amended, modified, supplemented orterminated, in whole or in part, as the Administrative Agent (or the RequiredLenders, as the case may be, or, in the case of any Hedge Agreement ordocuments entered into with the Administrative Agent or any of its Affiliatesin connection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds, the partythereto) may deem advisable from time to time, and (d) any collateralsecurity, guarantee or right of offset at any time held by the AdministrativeAgent or any other Secured Party for the payment of the Obligations may besold, exchanged, waived, surrendered or released. Neither the AdministrativeAgent 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 theObligations or for this Security Agreement or any property subject thereto.When making any demand hereunder against any Grantor, the Administrative Agentor any other Secured Party may, but shall be under no obligation to, make asimilar demand on the US Borrower or any Grantor or grantor, and any failure bythe Administrative Agent or any other Secured Party to make any such demand orto collect any payments from the US Borrower or

 

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any Grantor or grantor or any release of the USBorrower or any Grantor or grantor shall not relieve any Grantor in respect ofwhich a demand or collection is not made or any Grantor not so released of itsseveral obligations or liabilities hereunder, and shall not impair or affectthe rights and remedies, express or implied, or as a matter of law, of theAdministrative Agent or any other Secured Party against any Grantor. For thepurposes hereof “demand” shall include the commencement and continuance of anylegal proceedings.

 

**6. The Administrative Agent.**

 

6.1 Administrative Agent’s Appointment asAttorney-in-Fact, etc

 

(a) Each Grantor hereby appoints, which appointmentis irrevocable and coupled with an interest, effective upon and during theoccurrence of an Event of Default, the Administrative Agent and any officer oragent thereof, with full power of substitution, as its true and lawfulattorney-in-fact with full irrevocable power and authority in the place andstead of such Grantor and in the name of such Grantor or otherwise, for thepurpose of carrying out the terms of this Security Agreement, to take any andall appropriate action and to execute any and all documents and instrumentswhich may be necessary or desirable to accomplish the purposes of this SecurityAgreement, and, without limiting the generality of the foregoing, each Grantorhereby gives the Administrative Agent the power and right, on behalf of suchGrantor, either in the Administrative Agent’s name or in the name of suchGrantor or otherwise, without further assent by such Grantor, to do any or allof the following, in each case after and during the occurrence of an Event ofDefault and after written notice by the Administrative Agent of its intent todo so:

 

(i)            takepossession of and endorse and collect any checks, drafts, notes, acceptances orother instruments for the payment of moneys due under any Account or withrespect to any other Collateral and file any claim or take any other action orproceeding in any court of law or equity or otherwise deemed appropriate by theAdministrative Agent for the purpose of collecting any and all such moneys dueunder any Account or with respect to any other Collateral whenever payable;

 

(ii)           inthe case of any Intellectual Property, execute and deliver, and have recorded,any and all agreements, instruments, documents and papers as the AdministrativeAgent reasonably *requires*to *evidence*the Administrative Agent’s andthe Secured Parties’ Security Interest in such Intellectual Property and thegoodwill and general intangibles of such Grantor relating thereto orrepresented thereby;

 

(iii)          payor discharge taxes and Liens levied or placed on or threatened against theCollateral;

 

(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 theCollateral;

 

(v)           obtainand adjust insurance required to be maintained by such Grantor or paid to theAdministrative Agent pursuant to Section 4.4; and

 

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(vi)          directany party liable for any payment under any of the Collateral to make payment ofany and all moneys due or to become due thereunder directly to theAdministrative Agent or as the Administrative Agent shall direct;

 

**(vii)****        **askfor or demand, collect and receive payment of and receipt for, any and allmoneys, claims and other amounts due or to become due at any time in respect ofor arising out of any Collateral;

 

(viii)        signand endorse any invoices, freight or express bills, bills of lading, storage orwarehouse receipts, drafts against debtors, assignments, verifications, noticesand other documents in connection with any of the Collateral;

 

(ix)           commenceand prosecute any suits, actions or proceedings at law or in equity in anycourt of competent jurisdiction to collect the Collateral or any portionthereof and to enforce any other right in respect of any Collateral;

 

(x)            defendany suit, action or proceeding brought against such Grantor with respect to anyCollateral (with such Grantor’s consent to the extent such action or itsresolution could materially affect such Grantor or any of its Affiliates in anymanner other than with respect to its continuing rights in such Collateral);

 

(xi)           settle,compromise or adjust any such suit, action or proceeding and, in connectiontherewith, give such discharges or releases as the Administrative Agent maydeem appropriate (with such Grantor’s consent to the extent such action or itsresolution could materially affect such Grantor or any of its Affiliates in anymanner other than with respect to its continuing rights in such Collateral);

 

(xii)          assignany Copyright, Patent or Trademark (along with the goodwill of the business towhich any such Copyright, Patent or Trademark pertains), throughout the worldfor such term or terms, on such conditions, and in such manner, as theAdministrative Agent shall in its sole discretion determine and

 

(xiii)         generally,sell, transfer, pledge and make any agreement with respect to or otherwise dealwith any of the Collateral as fully and completely as though the AdministrativeAgent were the absolute owner thereof for all purposes, and do, at theAdministrative Agent’s option and such Grantor’s expense, at any time, or fromtime to time, all acts and things that the Administrative Agent deems necessaryto protect, preserve or realize upon the Collateral and the AdministrativeAgent’s and the Secured Parties’ Security Interests therein and to effect theintent of this Security Agreement, all as fully and effectively as such Grantormight do.

 

Anything in this Section 6.1(a) to thecontrary notwithstanding, the Administrative Agent agrees that it will notexercise any rights under the power of attorney provided for in this Section 6.1(a) unlessan Event of Default shall have occurred and be continuing.

 

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(b)   Ifany Grantor fails to perform or comply with any of its agreements containedherein, the Administrative Agent, at its option, but without any obligation soto do, may perform or comply, or otherwise cause performance or compliance,with such agreement.

 

(c)   Theexpenses of the Administrative Agent incurred in connection with actionsundertaken as provided in this Section 6.1, together with interest thereonat a rate per annum equal to the highest rate per annum at which interest wouldthen be payable on any category of past due ABR Loans under the CreditAgreement, from the date of payment by the Administrative Agent to the datereimbursed by the relevant Grantor, shall be payable by such Grantor to theAdministrative Agent on demand.

 

(d)   EachGrantor hereby ratifies all that said attorneys shall lawfully do or cause tobe done by virtue hereof. All powers, authorizations and agencies contained inthis Security Agreement are coupled with an interest and are irrevocable untilthis Security Agreement is terminated and the Security Interests created herebyare released.

 

6.2 Duty of Administrative Agent. TheAdministrative Agent’s sole duty with respect to the custody, safekeeping andphysical preservation of the Collateral in its possession, under the OntarioPPSA or otherwise, shall be to deal with it in the same manner as theAdministrative Agent deals with similar property for its own account and asrequired by applicable law. The Administrative Agent shall be deemed to haveexercised reasonable care in the custody and preservation of any Collateral inits possession if such Collateral is accorded treatment substantially equal tothat which the Administrative Agent accords its own property and in accordancewith applicable law. Neither the Administrative Agent, any Secured Party norany of their respective officers, directors, employees or agents shall beliable for failure to demand, collect or realize upon any of the Collateral orfor any delay in doing so or shall be under any obligation to sell or otherwisedispose of any Collateral upon the request of any Grantor or any other Personor to take any other action whatsoever with regard to the Collateral or anypart thereof. The powers conferred on the Administrative Agent and the SecuredParties hereunder are solely to protect the Administrative Agent’s and theSecured Parties’ interests in the Collateral and shall not impose any duty uponthe Administrative Agent or any Secured Party to exercise any such powers. TheAdministrative Agent and the Secured Parties shall be accountable only for amountsthat they actually receive as a result of the exercise of such powers, andneither they nor any of their officers, directors, employees or agents shall beresponsible to any Grantor for any act or failure to act hereunder, except fortheir own gross negligence or willful misconduct.

 

6.3 Authority of Administrative Agent. EachGrantor acknowledges that the rights and responsibilities of the AdministrativeAgent under this Security Agreement with respect to any action taken by theAdministrative Agent or the exercise or non-exercise by the AdministrativeAgent of any option, voting right, request, judgment or other right or remedyprovided for herein or resulting or arising out of this Security Agreementshall, as between the Administrative Agent and the Secured Parties, be governedby the Credit Agreement and by such other agreements with respect thereto asmay exist from time to time among them, but, as between the

 

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Administrative Agent and the Grantors, theAdministrative Agent shall be conclusively presumed to be acting as agent forthe Secured Parties with full and valid authority so to act or refrain fromacting, and no Grantor shall be under any obligation, or entitlement, to makeany inquiry respecting such authority.

 

6.4 Security Interest Absolute. All rights ofthe Administrative Agent hereunder, the security interest and all obligationsof the Grantors hereunder shall be absolute and unconditional.

 

6.5 Continuing Security Interest; AssignmentsUnder the Credit Agreement; Release.

 

(a) This Security Agreement shall remain infull force and effect and be binding in accordance with and to the extent ofits terms upon each Grantor and the successors and assigns thereof and shallinure to the benefit of the Administrative Agent and the other Secured Partiesand their respective successors, indorsees, transferees and assigns until allObligations under the Credit Documents and the obligations of each Grantorunder this Security Agreement shall have been satisfied by payment in full, theCommitments shall be terminated and no Letters of Credit shall be outstanding,notwithstanding that from time to time during the term of the Credit Agreementand any Hedge Agreement the Credit Parties may be free from any Obligations.This Security Agreement and the security interest granted hereby shallterminate on the first date on which all of the Obligations under the CreditDocuments shall have been satisfied by payment in full, the Commitments shallbe terminated and no Letters of Credit shall be outstanding.

 

(b)   AGrantor shall automatically be released from its obligations hereunder and theSecurity Interest in the Collateral of such Grantor shall be automaticallyreleased upon the consummation of any transaction permitted by the CreditAgreement as a result of which such Grantor ceases to be a Subsidiary of the USBorrower.

 

(c)   Uponany sale or other transfer by any Grantor of any Collateral that is permittedunder the Credit Agreement, or upon the effectiveness of any written consent tothe release of the Security Interest granted hereby in any Collateral pursuantto Section 14.1 of the Credit Agreement, the Security Interest in suchCollateral shall be automatically released and such Collateral sold free andclear of the Lien and Security Interests created hereby.

 

(d)   Inconnection with any termination or release pursuant to paragraph (a), (b) or(c), the Administrative Agent shall execute and deliver to any Grantor, at suchGrantor’s expense, all documents that such Grantor shall reasonably request toevidence such termination or release. Any execution and delivery of documentspursuant to this Section 6.5 shall be without recourse to or warranty bythe Administrative Agent.

 

6.6 Reinstatement. This Security Agreementshall continue to be effective, or be reinstated, as the case may be, if at anytime payment, or any part thereof, of any of the Obligations is **rescinded or must otherwise be restored or returned bythe**Administrative Agent or any other Secured Party upon theinsolvency, bankruptcy, dissolution, liquidation or reorganization of the USBorrower or any other Credit Party, or upon or as a result of the appointmentof a receiver, intervenor or conservator of, or trustee or similar officer for,the US Borrower or any

 

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other Credit Party or any substantial part of itsproperty, or otherwise, all as though such payments had not been made.

 

**7. Administrative Agent As Agent.**

 

(a) Credit Suisse First Boston, acting throughits Cayman Islands Branch, has been appointed to act as Administrative Agenthereunder by the Lenders and, by their acceptance of the benefits hereof, theother Secured Parties. The Administrative Agent shall be obligated, and shallhave the right hereunder, to make demands, to give notices, to exercise orrefrain from exercising any rights, and to take or refrain from taking anyaction (including the release or substitution of Collateral), solely inaccordance with this Security Agreement and the Credit Agreement, provided thatthe Administrative Agent shall exercise, or refrain from exercising, anyremedies provided for in Section 5 in accordance with the instructions of (i) RequiredLenders or (ii) after the termination of this Security Agreement. Infurtherance of the foregoing provisions of this Section 7(a), each SecuredParty, by its acceptance of the benefits hereof, agrees that it shall have noright individually to realize upon any of the Collateral hereunder, it beingunderstood and agreed by such Secured Party that all rights and remedieshereunder may be exercised solely by the Administrative Agent for the ratablebenefit of the Lenders and Secured Parties in accordance with the terms of thisSection 7(a).

 

**(b)  **TheAdministrative Agent shall at all times be the same Person that is theAdministrative Agent under the Credit Agreement. Written notice of resignationby the Administrative Agent pursuant to Section 12.9 of the CreditAgreement shall also constitute notice of resignation as Administrative Agentunder this Security Agreement; removal of the Administrative Agent shall alsoconstitute removal as Administrative Agent under this Security Agreement; andappointment of a successor Administrative Agent pursuant to Section 12.9of the Credit Agreement shall also constitute appointment of a successorAdministrative Agent under this Security Agreement. Upon the acceptance of anyappointment as Administrative Agent under Section 12.9 of the CreditAgreement by a successor Administrative Agent, that successor AdministrativeAgent shall thereupon succeed to and become vested with all the rights, powers,privileges and duties of the retiring or removed Administrative Agent underthis Security Agreement, and the retiring or removed Administrative Agent underthis Security Agreement shall promptly (i) transfer to such successorAdministrative Agent all sums, securities and other items of Collateral heldhereunder, together with all records and other documents necessary orappropriate in connection with the performance of the duties of the successorAdministrative Agent under this Security Agreement, and (ii) execute anddeliver to such successor Administrative Agent such amendments to financingstatements and take such other actions, as may be necessary or appropriate inconnection with the assignment to such successor Administrative Agent of theSecurity Interests created hereunder, whereupon such retiring or removedAdministrative Agent shall be discharged from its duties and obligations underthis Security Agreement. After any retiring or removed Administrative Agent’sresignation or removal hereunder as Administrative Agent, the provisions ofthis Security Agreement shall *inure*toits benefit as to any actions taken or omitted to be taken by it under thisSecurity Agreement while it was Administrative Agent hereunder.

 

**(c)  **TheAdministrative Agent shall not be deemed to have any duty whatsoever withrespect to any Secured Party that is a counterparty to a Hedge Agreement theobligations under

 

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which constituteObligations, until it shall have received written notice in form and substancesatisfactory to the Administrative Agent from a Grantor or any such SecuredParty as to the existence and terms of the applicable Hedge Agreement.

 

**8. Miscellaneous.**

 

8.1 Amendments in Writing. None of the termsor provisions of this Security Agreement may be waived, amended, supplementedor otherwise modified except by a written instrument executed by the affectedGrantor and the Administrative Agent in accordance with Section 14.1 ofthe Credit Agreement.

 

8.2 Notices. All notices, requests anddemands pursuant hereto shall be made in accordance with Section 14.2 ofthe Credit Agreement. All communications and notices hereunder to any Grantorshall be given to it in care of the UK Borrower at the UK Borrower’s addressset forth in Section 14.2 of the Credit Agreement.

 

8.3 No Waiver by Course of Conduct; CumulativeRemedies. Neither the Administrative Agent nor any Secured Party shall byany act (except by a written instrument pursuant to Section 8.1 hereof),delay, indulgence, omission or otherwise be deemed to have waived any right orremedy hereunder or to have acquiesced in any Default or Event of Default or inany 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 anyother Secured Party, any right, power or privilege hereunder shall operate as awaiver thereof. No single or partial exercise of any right, power or privilege hereundershall preclude any other or further exercise thereof or the exercise of anyother right, power or privilege. A waiver by the Administrative Agent or anyother Secured Party of any right or remedy hereunder on any one occasion shallnot be construed as a bar to any right or remedy that the Administrative Agentor such other Secured Party would otherwise have on any future occasion. Therights, remedies, powers and privileges herein provided are cumulative, may beexercised singly or concurrently and are not exclusive of any other rights orremedies provided by law.

 

8.4 Enforcement Expenses; Indemnification.

 

(a)   Each Grantor agrees to pay any and allexpenses (including all reasonable fees and disbursements of counsel) that maybe paid or incurred by any Secured Party in enforcing, or obtaining advice ofcounsel in respect of, any rights with respect to, or collecting, any or all ofthe Obligations and/or enforcing any rights with respect to, or collectingagainst, such Grantor under this Security Agreement.

 

(b)   Each Grantor agrees to pay, and to save theAdministrative Agent and the Secured Parties harmless from, any and allliabilities with respect to, or resulting from any delay in paying, any and allstamp, excise, sales or other taxes (excluding taxes imposed on the net incomeor capital of the Administrative Agent and Secured Parties) which may bepayable or determined to be payable with respect to any of the Collateral or inconnection with any of the transactions contemplated by this Security Agreement.

 

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(c)   Each Grantor agrees to pay, and to save theAdministrative Agent and the Secured Parties harmless from, any and allliabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses or disbursements of any kind or nature whatsoever withrespect to the execution, delivery, enforcement, performance and administrationof this Security Agreement to the extent either of the Borrowers would berequired to do so pursuant to Section 12.7 of the Credit Agreement.

 

(d)   The agreements in this Section 8.4 shallsurvive repayment of the Obligations and all other amounts payable under theCredit Agreement and the other Credit Documents.

 

8.5 Successors and Assigns. The provisions ofthis Security Agreement shall be binding upon and inure to the benefit of theparties hereto and their respective successors and assigns permitted hereby,except that no Grantor may assign, transfer or delegate any of its rights orobligations under this Security Agreement without the prior written consent of the Administrative Agent except pursuantto a transaction permitted by the Credit Agreement.

 

8.6 Counterparts. This Security Agreement maybe executed by one or more of the parties to this Security Agreement on anynumber of separate counterparts (including by facsimile or other electronictransmission), and all of said counterparts taken together shall be deemed toconstitute one and the same instrument. A set of the copies of this Security Agreementsigned by all the parties shall be lodged with the Administrative Agent and theUS Borrower.

 

8.7 Severability. Any provision of thisSecurity Agreement that is prohibited or unenforceable in any jurisdictionshall, as to such jurisdiction, be ineffective to the extent of suchprohibition or unenforceability without invalidating the remaining provisionshereof, and any such prohibition or unenforceability in any jurisdiction shallnot invalidate or render unenforceable such provision in any other jurisdiction.The parties hereto shall endeavor in good-faith negotiations to replace theinvalid, illegal or unenforceable provisions with valid provisions the economiceffect of which comes as close as possible to that of the invalid, illegal orunenforceable provisions.

 

8.8 Section Headings. The Section headingsused in this Security Agreement are for convenience of reference only and arenot to affect the construction hereof or be taken into consideration in theinterpretation hereof.

 

8.9 Integration. This Security Agreementrepresents the agreement of each of the Grantors with respect to the subjectmatter hereof and there are no promises, undertakings, representations orwarranties by the Administrative Agent or any other Secured Party relative tothe subject matter hereof not expressly set forth or referred to herein or inthe other Credit Documents.

 

8.10 **GOVERNINGLAW. THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THEPARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED INACCORDANCE WITH, THE LAW OF THE PROVINCE OF ONTARIO.**

 

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8.11 Submission To Jurisdiction Waivers. EachGrantor hereby irrevocably and unconditionally:

 

(a)   submits itself in any legal action orproceeding relating to this Security Agreement, or for recognition andenforcement of any judgment in respect thereof, to the non-exclusive generaljurisdiction of the courts of the Province of Ontario, the courts of the Stateof New York, the courts of the United States of America for the SouthernDistrict of New York and appellate courts from any thereof;

 

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

 

(c)   agrees that service of process in any suchaction or proceeding may be effected by mailing a copy thereof by registered orcertified mail (or any substantially similar form of mail), postage prepaid, tosuch Grantor at its address referred to in Section 8.2 or at such otheraddress of which the Administrative Agent shall have been notified pursuant thereto;

 

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

 

(e)   waives, to the maximum extent not prohibitedby law, any right it may have to claim or recover in any legal action orproceeding referred to in this Section 8.11 any special, exemplary,punitive or consequential damages.

 

8.12 Acknowledgments. Each Grantor herebyacknowledges that:

 

(a)   it has been advised by counsel in thenegotiation, execution and delivery of this Security Agreement and the otherCredit Documents to which it is a party;

 

(b)   neither the Administrative Agent nor anyother Secured Party has any fiduciary relationship with or duty to any Grantorarising out of or in connection with this Security Agreement or any of theother 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 theother Credit Documents or otherwise exists by virtue of the transactionscontemplated hereby among the Lenders and any other Secured Party or among theGrantors and the Lenders and any other Secured Party.

 

8.13 Additional Grantors. Each Subsidiary ofthe US Borrower that is required to become a party to this Security Agreementpursuant 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, forall purposes of this Agreement upon execution and delivery by such Subsidiaryof a Supplement

 

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substantially in the form of Annex 1 hereto. Theexecution and delivery of any instrument adding an additional Grantor as aparty to this Security Agreement shall not require the consent of any otherGrantor hereunder. The rights and obligations of each Grantor hereunder shallremain in full force and effect notwithstanding the addition of any new Grantoras a party to this Security Agreement.

 

**[Remainder of this page intentionally left blank;signature pages follow]**

 

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ANNEX I TO THESECURITY AGREEMENT

 

SUPPLEMENTNO. [ ] dated as of [ ], tothe CanadianSecurity Agreement dated as of July 30, 2004 (the “Security Agreement”),among each Canadian subsidiary of ROCKWOOD SPECIALTIES GROUP, INC., aDelaware 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 IslandsBranch as administrative agent (in such capacity, the “Administrative Agent”)for the lenders (the “Lenders”) from time to time parties to the CreditAgreement referred to below.

 

A.          Reference is made to (a) theCredit Agreement dated as of July 30, 2004 (as amended, supplemented orotherwise modified from time to time, the “Credit Agreement”), among theUS Borrower, Rockwood Specialties Limited, a company incorporated under thelaws of England and Wales (the “UK Borrower” and, together with the USBorrower, the “Borrowers”), Rockwood Specialties International Inc., aDelaware Corporation, the Lenders, Credit Suisse First Boston, asAdministrative Agent for the Lenders, UBS Securities LLC and Goldman SachsCredit Partners L.P., as co-syndication agents (in such capacity, the “Co-SyndicationAgents”), and (b) the Canadian Guarantee dated as of July 30,2004 (as amended, supplemented or otherwise modified or restated from time totime, the “Guarantee”), among the Grantors party thereto and theAdministrative Agent.

 

B.           Capitalized terms used herein and nototherwise defined herein shall have the meanings assigned to such terms in theSecurity Agreement.

 

C.           The Grantors have entered into theSecurity Agreement in order to induce Administrative Agent, the Co-SyndicationAgents, the Lenders and the Letter of Credit Issuer to enter into the CreditAgreement and to induce the Lenders and the Letter of Credit Issuer to maketheir respective Extensions of Credit to the UK Borrower under the CreditAgreement and to induce one or more Lenders or Affiliates of Lenders to enter intoHedge Agreements with the UK Borrower and/or the Restricted Subsidiaries of theUK Borrower.

 

D.          Section 9.11 of the CreditAgreement and subsection 8.13 of the Security Agreement provide that eachSubsidiary of the US Borrower that is required to become a party to theSecurity Agreement pursuant to Section 9.11 of the Credit Agreement shallbecome a Grantor, with the same force and effect as if originally named as aGrantor therein, for all purposes of the Security Agreement upon execution anddelivery by such Subsidiary of an instrument in the form of this Supplement.Each undersigned Subsidiary (each a “New Grantor”) is executing thisSupplement in accordance with the requirements of the Security Agreement tobecome a Grantor under the Security Agreement in order to induce the Lendersand the Letter of Credit Issuer to make additional Extensions of Credit and asconsideration for Extensions of Credit previously made.

 

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Accordingly, the Administrative Agent and theNew Grantors agree as follows:

 

SECTION 1. In accordance with subsection 8.13of the Security Agreement, each New Grantor by its signature below becomes aGrantor under the Security Agreement, from and after the date hereof, with thesame force and effect as if originally named therein as a Grantor and each NewGrantor hereby (a) agrees to all the terms and provisions of the SecurityAgreement applicable to it as a Grantor thereunder and (b) represents andwarrants that the representations and warranties made by it as a Grantorthereunder are true and correct on and as of the date hereof. In furtherance ofthe foregoing, each New Grantor, as security for the payment and performance infull of the Obligations, does hereby bargain, sell, convey, assign, set over,mortgage, pledge, hypothecate and transfer to the Administrative Agent, andliereby grants to the Administrative Agent, for the ratable benefit of theSecured Parties, a Security Interest in all of the Collateral of such NewGrantor. Each reference to a “Grantor” in the Security Agreement shall bedeemed to include each New Grantor. The Security Agreement is herebyincorporated herein by reference.

 

SECTION 2. Each New Grantor represents andwarrants to the Administrative Agent and the other Secured Parties that thisSupplement has been duly authorized, executed and delivered by it andconstitutes its legal, valid and binding obligation, enforceable against it inaccordance with its terms, subject to limitations which might result frombankruptcy, insolvency, moratorium and other similar laws affecting creditors’rights generally and subject to limitations on the availability of equitableremedies.

 

SECTION 3. This Supplement may be executed byone or more of the parties to this Supplement on any number of separatecounterparts (including by facsimile or other electronic transmission), and allof said counterparts taken together shall be deemed to constitute one and thesame instrument. A set of the copies of this Supplement signed by all theparties shall be lodged with the Administrative Agent and the UK Borrower. ThisSupplement shall become effective as to each New Grantor when theAdministrative Agent shall have received counterparts of this Supplement that,when taken together, bear the signatures of such New Grantor and the AdministrativeAgent.

 

SECTION 4. Each New Grantor hereby representsand warrants that (a) setforth on Schedule I attached hereto is a true and correct schedule of thelocation of any and all Collateral of such New Grantor, (b) set forthunder its signature hereto is (i) the legal name of such New Grantor, (ii) thejurisdiction of incorporation or organization of such New Grantor, (iii) thetrue and correct location of the chief executive office and principal place ofbusiness and any office in which it maintains books or records relating toCollateral owned by it, and (iv) the identity or type of organization orcorporate structure of such New Grantor and (c) as of the date hereof (i) ScheduleII hereto sets forth all of each New Grantor’s Copyright Licenses, (ii) ScheduleIII hereto sets forth, in proper form for filing with the Canadian IntellectualProperty Office, all of each New Grantor’s Copyrights (and all applicationstherefor), (iii) Schedule N hereto sets forth all of each New Grantor’sPatent Licenses, (iv) Schedule V hereto sets forth, in proper form forfiling with the Canadian Intellectual Property 

 

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Office, all of eachNew Grantor’s Patents (and all applications therefor), (v) Schedule VIhereto sets forth all of each New Grantor’s Trademark Licenses, (vi) ScheduleVII hereto sets forth, in proper form for filing with the Canadian IntellectualProperty Office, all of each New Grantor’s Trademarks (and all applicationstherefor).

 

SECTION 5. Except as expressly supplementedhereby, the Security Agreement shall remain in full force and effect.

 

**SECTION 6. THIS SUPPLEMENT AND THE RIGHTS ANDOBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED ANDINTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OF ONTARIO.**

 

SECTION 7. Any provision of this Supplementthat is prohibited or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof and inthe Security Agreement, and any such prohibition or unenforceability in anyjurisdiction shall not invalidate or render unenforceable such provision in anyother jurisdiction. The parties hereto shall endeavor in good-faithnegotiations to replace the invalid, illegal or unenforceable provisions withvalid provisions the economic effect of which comes as close as possible tothat of the invalid, illegal or unenforceable provisions.

 

SECTION 8. All notices, requests and demandspursuant hereto shall be made in accordance with Section 14.2 of theCredit Agreement. All communications and notices hereunder to each New Grantorshall be given to it in care of the UK Borrower at the UK Borrower’s addressset forth in Section 14.2 of the Credit Agreement.

 

SECTION 9. Each New Grantor agrees to reimbursethe Administrative Agent for its reasonable out-of-pocket expenses inconnection with this Supplement, including the reasonable fees, other chargesand disbursements of counsel for the Administrative Agent.

 

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IN WITNESS WHEREOF, each New Grantor and theAdministrative Agent have duly executed this Supplement to the SecurityAgreement 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: |
|        |                                                                                                |  |  |

 

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SCHEDULE ITO THE SUPPLEMENT NO.      TO THESECURITY 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** | ** ** |
|---------------------|------------|---------------------------------------------------------------|------------|---------------------------------------------------------------------------------------------------------|------------|--------------------------------------------------------------|------------|
| ** **          | ** ** | ** **                                                    | ** ** | ** **                                                                                              | ** ** | ** **                                                   | ** ** |
| ** **          | ** ** | ** **                                                    | ** ** | ** **                                                                                              | ** ** | ** **                                                   | ** ** |
| ** **          | ** ** | ** **                                                    | ** ** | ** **                                                                                              | ** ** | ** **                                                   | ** ** |

 

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SCHEDULE IITO THE SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

COPYRIGHT LICENSES

 

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SCHEDULE IIITO THE SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

**COPYRIGHTS**

** **
| **Registered Owner/Grantor** | ** ** | **Title**  | ** ** | **Registration  Number** | ** ** |
|-----------------------------------|------------|------------|------------|--------------------------|------------|
| ** **                        | ** ** | ** ** | ** ** | ** **               | ** ** |
| ** **                        | ** ** | ** ** | ** ** | ** **               | ** ** |
| ** **                        | ** ** | ** ** | ** ** | ** **               | ** ** |

 

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SCHEDULE IVTO THE SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

PATENT LICENSES

 

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SCHEDULE VTO THE SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

PATENTS

 

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SCHEDULE VITO THE SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

TRADEMARK LICENSES

 

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SCHEDULE VIITO THE SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

**TRADEMARKS**

 

***Canadian Trademarks***

 
| **Registered  Owner/Grantor** | ** ** | **Trademark** | ** ** | **Registration  No.** | ** ** | **Application  No.** | ** ** |
|-------------------------------|------------|---------------|------------|-----------------------|------------|----------------------|------------|
| ** **                    | ** ** | ** **    | ** ** | ** **            | ** ** | ** **           | ** ** |
| ** **                    | ** ** | ** **    | ** ** | ** **            | ** ** | ** **           | ** ** |
| ** **                    | ** ** | ** **    | ** ** | ** **            | ** ** | ** **           | ** ** |

 

***Foreign Trademarks***

 
| **Registered  Owner/Grantor** | ** ** | **Trademark** | ** ** | **Registration  No.** | ** ** | **Application ****Country****No.** | ** ** |
|-------------------------------|------------|---------------|------------|-----------------------|------------|-----------------------------------------|------------|
| ** **                    | ** ** | ** **    | ** ** | ** **            | ** ** | ** **                              | ** ** |
| ** **                    | ** ** | ** **    | ** ** | ** **            | ** ** | ** **                              | ** ** |
| ** **                    | ** ** | ** **    | ** ** | ** **            | ** ** | ** **                              | ** ** |

 

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ANNEX 2 TO THE SECURITY AGREEMENT

 

SUPPLEMENTNO. [ ] dated as of [               ],to the Canadian Security Agreement dated as of July 30, 2004 (the “SecurityAgreement”), 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 CreditAgreement referred to below.

 

A.       Referenceis made to (a) the Credit Agreement dated as of July 30, 2004 (asamended, supplemented or otherwise modified from time to time, the “CreditAgreement”), among the US Borrower, Rockwood Specialties Limited, a companyincorporated 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, asAdministrative Agent for the Lenders, and UBS Securities LLC and Goldman SachsCredit Partners L.P., as co-syndication agents (in such capacity, the “Co-SyndicationAgents”), and (b) the Canadian Guarantee dated as of July 30,2004 (as amended, supplemented or otherwise modified or restated from time totime, the “Guarantee”), among the Grantors party thereto and theAdministrative Agent.

 

B.       Capitalizedterms used herein and not otherwise defined herein shall have the meaningsassigned to such terms in the Security Agreement.

 

C.       TheGrantors have entered into the Security Agreement in order to induceAdministrative Agent, the Co-Syndication Agents, the Lenders and the Letter ofCredit Issuer to enter into the Credit Agreement and to induce the Lenders andthe Letter of Credit Issuer to make their respective Extensions of Credit tothe UK Borrower under the Credit Agreement and to induce one or more Lenders orAffiliates of Lenders to enter into Hedge Agreements with the UK Borrower.Pursuant to Section 4.1(b) of the Security Agreement, within 30 daysafter the end of each calendar quarter, each Grantor has agreed to deliver tothe Administrative Agent a written supplement substantially in the form ofAnnex 2 thereto with respect to any additional Copyrights, Copyright Licenses,Patents, Patent Licenses, Trademarks and Trademark Licenses acquired by suchGrantor after the date of the Credit Agreement. The Grantors have identifiedthe additional Copyrights, Copyright Licenses, Patents, Patent Licenses,Trademarks and Trademark Licenses acquired by such Grantors after the date ofthe Credit Agreement set forth on Schedule I, II, III, IV, V andVI hereto. The undersigned Grantors are executing this Supplement in order tofacilitate supplemental filings to be made by the Collateral Agent with theCanadian Intellectual Property Office.

 

Accordingly, the Administrative Agent and theGrantors agree as follows:

 

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SECTION 1. (a) Schedule1 of the Security Agreement is hereby supplemented, as applicable, by theinformation set forth in the Schedule I hereto, (b) Schedule 2 of theSecurity Agreement is hereby supplemented, as applicable, by the informationset forth in the Schedule II hereto, (c) Schedule 3 of the SecurityAgreement is hereby supplemented, as applicable, by the information set forthin the Schedule III hereto, (d) Schedule 4 of the Security Agreement ishereby supplemented, as applicable, by the information set forth in theSchedule IV hereto, (e) Schedule 5 of the Security Agreement is herebysupplemented, as applicable, by the information set forth in the Schedule Vhereto, and (f) Schedule 6 of the Security Agreement is herebysupplemented, as applicable, by the information set forth in the Schedule VIhereto.

 

SECTION 2. EachGrantor hereby represents and warrants that the information set forth onSchedules I, II, III, IV, V and VI hereto is true and correct.

 

SECTION 3. ThisSupplement may be executed by one or more of the parties to this Supplement onany number of separate counterparts (including by facsimile or other electronictransmission), and all of said counterparts taken together shall be deemed toconstitute one and the same instrument. A set of the copies of this Supplementsigned by all the parties shall be lodged with the Administrative Agent and theUK Borrower. This Supplement shall become effective as to each **Grantor**when the Administrative Agent shallhave received counterparts of this Supplement that, when taken together, bearthe signatures of such Grantor and the Administrative Agent.

 

SECTION 4. Except asexpressly supplemented hereby, the Security Agreement shall remain in fullforce and effect.

 

**SECTION 5. THIS SUPPLEMENT ANDTHE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, ANDCONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE PROVINCE OFONTARIO.**

 

SECTION 6. Anyprovision of this Supplement that is prohibited or unenforceable in **any**jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof and inthe Security Agreement, and any such prohibition or unenforceability in anyjurisdiction shall not invalidate or render unenforceable such provision in anyother jurisdiction. The parties hereto shall endeavor in good-faithnegotiations to replace the invalid, illegal or unenforceable provisions withvalid provisions the economic effect of which comes as close as possible tothat of the invalid, illegal or unenforceable provisions.

 

SECTION 7. Allnotices, requests and demands pursuant hereto shall be made in accordance with Section 14.2of the Credit Agreement. All communications and notices hereunder to each Grantorshall be given to it in care of the UK Borrower at the UK Borrower’s addressset forth in Section 14.2 of the Credit Agreement.

 

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SECTION 8. Each Grantor agrees to reimburse theAdministrative Agent for its reasonable out-of-pocket expenses in connectionwith this Supplement, including the reasonable fees, other charges anddisbursements of counsel for the Administrative Agent.

 

IN WITNESS WHEREOF, each Grantor and theAdministrative Agent have duly executed this Supplement to the SecurityAgreement 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: |

 

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SCHEDULE ITO SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

COPYRIGHT LICENSES

 

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SCHEDULE IITO SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

**COPYRIGHTS**

 
| **Registered Owner/Grantor** | ** ** | **Title**  | ** ** | **Registration  Number** | ** ** |
|-----------------------------------|------------|------------|------------|--------------------------|------------|
| ** **                        | ** ** | ** ** | ** ** | ** **               | ** ** |
| ** **                        | ** ** | ** ** | ** ** | ** **               | ** ** |
| ** **                        | ** ** | ** ** | ** ** | ** **               | ** ** |

 

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SCHEDULE IIITO SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

PATENT LICENSES

 

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SCHEDULE IVTO THE SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

PATENTS

 

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SCHEDULE VTO SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

TRADEMARK LICENSES

 

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SCHEDULE VITO THE SUPPLEMENT NO.      TO THESECURITY AGREEMENT

 

**TRADEMARKS**

 

*Canadian Trademarks*

 
| **Registered**    | ** ** | ** **    | ** ** | **Registration** | ** ** | **Application** | ** ** |
|-------------------|------------|---------------|------------|------------------|------------|-----------------|------------|
| **Owner/Grantor** | ** ** | **Trademark** | ** ** | **No.**          | ** ** | **No.**         | ** ** |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **      | ** ** |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **      | ** ** |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **      | ** ** |

 

*Foreign Trademarks*

 
| **Registered**    | ** ** | ** **    | ** ** | **Registration** | ** ** | **Application ****Country** | ** ** |
|-------------------|------------|---------------|------------|------------------|------------|----------------------------------|------------|
| **Owner/Grantor** | ** ** | **Trademark** | ** ** | **No.**          | ** ** | **No.**                          | ** ** |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **                       | ** ** |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **                       | ** ** |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **                       | ** ** |

 

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EXHIBIT B

 

FORMSOF 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, asAdministrative Agent and as Collateral Agent (in both capacities, the “AdministrativeAgent”) 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 timeto time, the “Credit Agreement”), among, *inter alia,*the Pledgor (as “US Borrower”), ROCKWOODSPECIALTIES 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, UBSSECURITIES LLC and GOLDMAN SACHS CREDIT PARTNERS L.P. as Co-Syndication Agents(in such capacity, the “Syndication Agents”), the Lenders and the otherSecured Parties.

 

WITNESSETH:

 

WHEREAS, (a) pursuant to the CreditAgreement, the Lenders have severally agreed to make Loans to the Borrowers andthe Letter of Credit Issuer has agreed to issue Letters of Credit for theaccount of the Borrowers (collectively, the “Extensions of Credit”) uponthe terms and subject to the conditions set forth therein and (b) one ormore Lenders or affiliates of Lenders may from time to time enter into HedgeAgreements with the Borrowers;

 

WHEREAS, the Pledgor acknowledges that itwill derive substantial direct and indirect benefit from the making of theExtensions of Credit;

 

WHEREAS, it is a condition precedent to theobligation of the Lenders and the Letter of Credit Issuer to make theirrespective Extensions of Credit to the Borrowers under the Credit Agreementthat the Pledgor shall have executed and delivered this Pledge Agreement; and

 

WHEREAS, the Pledgor is the owner of theshares described under Schedule 1 hereto and issued by Rockwood ElectronicMaterials S.A., a French *societe anonyme,*witha 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 underthe number 323 346 973 (the “Company”) (the pledged shares describedabove are, together with any shares of the Company obtained in the futurearising out of or in connection with such pledged shares (the “After-acquiredShares”), provided that such After-acquired Shares are not pledgedunder the pledge agreement dated as of July 30, 2004, among the Pledgorand the Administrative Agent with respect to 35% of the Equity Interests in theCompany (the “UK French Pledge Agreement”), referred to collectivelyherein as the “Pledged Shares”).

 

NOW, THEREFORE, in consideration of thepremises and to induce the Administrative Agent, the Syndication Agents and theLenders and the Letter of Credit Issuer to enter into the

 

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Credit Agreement and to induce the Lenders and theLetter of Credit Issuer to make their respective Extensions of Credit to theBorrowers under the Credit Agreement and to induce one or more Lenders oraffiliates of Lenders to enter into Hedge Agreements with the Borrowers, thePledgor hereby agrees with the Administrative Agent, as agent for the Lenders andfor the ratable benefit of the Secured Parties, as follows:

 

1.                             Defined Terms.

 

a)      Unless otherwise defined herein (including in the above recitals), termsdefined in the Credit Agreement and used herein shall have the meanings givento them in the Credit Agreement.

 

b)     As used herein, the term “Equity Interests” means shares ofcapital stock of the Company as well as any shares which may be substitutedfor, or added to, the Pledged Shares by way of exchange, consolidation,division, free distribution, or otherwise and any warrants, options or otherrights entitling the holder thereof to purchase or acquire any of the foregoingand any of the foregoing class of securities being a “Class of EquityInterest”.

 

c)       As used herein, the term “Obligations” means the collectivereference to (i) the due and punctual payment of (x) the principal ofand premium, if any, and interest at the applicable rate provided in the CreditAgreement (including interest accruing during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding) on the Loans, when and as due, whetherat maturity, by acceleration, upon one or more dates set for prepayment orotherwise, (y) each payment required to be made by the Borrowers under theCredit Agreement in respect of any Letter of Credit, when and as due, includingpayments in respect of reimbursement of disbursements, interest thereon andobligations to provide cash collateral, and (z) all other monetaryobligations, including fees, costs, expenses and indemnities, whether primary,secondary, direct, contingent, fixed or otherwise (including monetaryobligations incurred during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding, regardless of whether allowed orallowable in such proceeding), of the Borrowers or any other Credit Party toany of the Secured Parties under the Credit Agreement and the other CreditDocuments, (ii) the due and punctual performance of all covenants,agreements, obligations and liabilities of the Borrowers under or pursuant tothe Credit Agreement and the other Credit Documents, (iii) the due andpunctual payment and performance of all the covenants, agreements, obligationsand liabilities of each other Credit Party under or pursuant to this PledgeAgreement or the other Credit Documents, (iv) the due and punctual paymentand performance of all obligations of each Credit Party under each HedgeAgreement that (x) is in effect on the Closing Date with a counterpartythat is a Lender or an affiliate of a Lender as of the Closing Date or (y) isentered into after the Closing Date with any counterparty that is a Lender or aaffiliate of a Lender at the time such Hedge Agreement is entered into and suchcounterparty has acceded to this Pledge Agreement pursuant to an accessionagreement in the form of Schedule 2 attached hereto and (v) the due andpunctual payment and performance of all obligations in respect of overdraftsand related liabilities owed to the Administrative Agent or its affiliatesarising from or in a

 

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connection with treasury, depositary or cashmanagment services or in connection with any automated clearinghouse transferof funds.

 

d)      As usedherein, the term “Secured Parties” means (i) the Lenders, (ii) theLetter of Credit Issuer, (iii) the Swingline Lender, (iv) theAdministrative Agent, (v) the Syndication Agents, (vi) eachcounterparty to a Hedge Agreement the obligations under which constituteObligations (and, if such Hedge Agreement has been entered into after theClosing Date, which has acceded to this Pledge Agreement pursuant to anaccession agreement in the form of Schedule 2 attached hereto), (vii) thebeneficiaries of each indemnification obligation undertaken by any Credit Partyunder any Credit Document and (viii) any successors, indorsees,transferees and assigns of each of the foregoing.

 

e) References to “Lenders” in this Pledge Agreementshall be deemed to include affiliates of Lenders that may from time to timeenter into Hedge Agreements with the Borrowers as hedging counterparties,provided that such affiliates have acceded to this Plegde Agreement pursuant toan accession agreement in the form of Schedule 2 attached hereto.

 

f) The words “hereof’, “herein” and “hereunder” andwords of similar import when used in this Pledge Agreement shall refer to thisPledge Agreement as a whole and not to any particular provision of this PledgeAgreement, and Section references are to Sections of this Pledge Agreementunless 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 shallbe equally applicable to both the singular and plural forms of such terms.

 

2.                  Grant of Security. The Pledgorhereby undertakes in accordance with Section 4 to pledge to the SecuredParties, for their ratable benefit, represented by the Administrative Agent,all of the Pledgor’s right, title and interest in the following, now owned orexisting, and hereby undertakes to pledge to the Secured Parties represented bythe Administrative Agent all of the Pledgor’s right, title and interest in anyof the following hereafter acquired or existing (collectively, the “Collateral”):

 

a)      thePledged Shares registered in the Pledgor’s name in an account held by theCompany (the “Pledged Account”) and, subject to Section 7 hereof,all dividends, cash, warrants, rights, instruments and other property orproceeds from time to time received, receivable or otherwise distributed inrespect of or in exchange for any or all of the Pledged Shares, providedthat the Pledged Shares under this Pledge Agreement shall not include more than65 percent of each issued and outstanding Class of Equity Interests in theCompany. If at any time more than 65 percent of an issued and outstanding Class ofEquity Interest in the Company is registered in the Plegde Account (the Class ofEquity Interest registered in the Pledged Account in excess of 65% of such Class ofEquity Interest being for the purposes of this Section 2, the “Excess Class ofEquity Interest”),the Pledgor shall immediately notify theAdministrative Agent and the Administrative shall be entitled to request theCompany as holder of the Pledge Account, to register said

 

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Excess Class of Equity Interest on the pledgedaccount created pursuant to the UK French Pledge Agreement; and

 

b)      to theextent not covered by clause (a) above, and subject to Section 7hereof, all proceeds of any or all of the foregoing Collateral. For purposes ofthis Pledge Agreement, the term “proceeds” includes whatever is receivable orreceived when Collateral or proceeds are sold, exchanged, collected orotherwise disposed of, whether such disposition is voluntary or involuntary,and includes proceeds of any indemnity or guarantee payable to the Pledgor orthe 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 theBorrowers and/or each other Credit Party to the Administrative Agent or theSecured Parties for their ratable benefit. Without limiting the generality ofthe foregoing, this Pledge Agreement secures the payment of all amounts thatconstitute part of the Obligations and would be owed by the Borrowers to theAdministrative Agent or the Secured Parties under the Credit Documents but forthe fact that they are unenforceable or not allowable due to the existence of abankruptcy, reorganization or similar proceeding involving the Borrowers and/oreach 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 thePledged Shares shall be constituted pursuant to article L 431-4 of the FrenchMonetary and Financial Code by the execution of a declaration of pledge of thePledged Account *(déclaration de gage decompte d’instruments financiers,*hereinafter the *“Déclaration de Gage”)* in the formset 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 lateston August 2, 2004 a certificate of confirmation of pledge relating to thePledged Account *(attestation de gage) in*theform of Annex 2 hereto, and promptly to transmit such confirmation of pledge tothe Administrative Agent.

 

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

 

a)                  Schedule1 hereto (i) correctly represents as of the date hereof the issuer, thePledgor, the number, the Class of Equity Interest and the percentage ofthe issued and outstanding Class of Equity Interests of such Class ofEquity Interests of all Pledged Shares and (ii) includes all EquityInterests required to be pledged hereunder. Except as set forth on Schedule 1,the Pledged Shares represent 65 percent of such issued and outstanding Class ofEquity Interests and no other Class of Equity Interests in the Company hasbeen issued on the date hereof.

 

b)                  Onthe date hereof, the Pledgor is the owner of the Pledged Shares and, as fromthe execution of the *Déclaration de Gage*referredto in Section 4 above, the Pledgor shall be the owner of the Collateralpledged by the Pledgor hereunder free and clear of any Lien, except for theLien created by this Pledge Agreement and the *Déclarationde Gage*referred to in Section 4 above.

 

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c)                   Asof the date of this Pledge Agreement, the Pledged Shares pledged by the Pledgorhereunder have been duly authorized by a meeting of the shareholders of theCompany and are validly issued and are fully paid up.

 

d)                  Theexecution and delivery by the Pledgor of the *Déclarationde Gage*pursuant to this Pledge Agreement and the pledge of theCollateral by the Pledgor thereunder shall immediately create a valid andperfected first-priority security interest in the Collateral, securing thepayment of the Obligations, in favor of the Secured Parties.

 

e)                   ThePledgor has full power, authority and legal right to pledge all the Collateralin accordance with this Pledge Agreement and this Pledge Agreement constitutesa legal, valid and binding obligation of the Pledgor, enforceable in accordancewith 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 7of the Company’s by-laws *(statuts),*thereis no provision in the by-laws of the Company or any other instrument whichwould restrict the exercise by the Administrative Agent of its rights underthis Pledge Agreement or the *Declaration deGage.*

 

6.                  Further Assurances. The Pledgoragrees 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 andtake all such further actions, which may be required under any applicable law,or which the Administrative Agent or the Required Lenders may reasonablyrequest, in order (x) to perfect and protect any pledge, assignment orsecurity interest granted or purported to be granted hereby (including thepriority thereof) or (y) to enable the Administrative Agent to exerciseand enforce the rights and remedies hereunder with respect to any Collateral.

 

7.                  Voting Rights; Dividends and Distributions; Etc.

 

**a)****                **Subjectto paragraph (b) below, the Pledgor shall be entitled to receive andretain and use, free and clear of the Lien of this Pledge Agreement, any andall dividends and distributions made or paid in respect of the Collateral tothe extent permitted by the Credit Agreeement; provided, however,that any and all noncash dividends or other distributions that would constitutePledged Shares, whether resulting from a subdivision, combination orreclassification of the outstanding Equity Interests of the issuer of anyPledged 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 orotherwise, shall be deposited in the Pledged Account and shall be held asCollateral and shall, if received by the Pledgor, be held for the benefit ofthe Administrative Agent, be segregated from the other property or funds of thePledgor and be forthwith deposited in the Pledged Account as Collateral in thesame form as so received.

 

**b)****                **Uponwritten notice to the Pledgor by the Administrative Agent following theoccurrence and during the continuance of an Event of Default,

 

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(i)        allrights of the Pledgor to receive the dividends and distributions that thePledgor would otherwise be authorized to receive and retain pursuant to Section 7(a) shall cease, and all such rights shall thereupon become vested in theAdministrative Agent as agent for the Secured Parties, which shall thereuponhave the sole right to receive and hold as Collateral such dividends anddistributions during the continuance of such Event of Default. TheAdministrative Agent shall retain those amounts as a *“gage espèce”.*After all Events of Default have been curedor waived and the Pledgor has delivered to the Administrative Agent acertificate to that effect, the Administrative Agent shall repay to the Pledgor(without interest) all such dividends and distributions that the Pledgor wouldotherwise be permitted to receive, retain and use pursuant to the terms of Section 7(a);

 

(ii)       alldividends and distributions that are received by the Pledgor contrary to theprovisions of Section 7 (a) and 7 (b)(i) shall be held for thebenefit of the Administrative Agent, shall be segregated from other property orfunds of the Pledgor and shall forthwith be deposited in the Pledged Accountor, in the case of cash dividends, distributions of cash or any otherdistributions 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 aslong as the Pledge Agreement remains in force:

 

(i)        torefrain from using any voting rights in respect of the Pledged Shares and anyother financial instruments subsequently registered on the Pledged Account in away which would be contrary to the provisions of this Pledge Agreement or ofany other Credit Document to which the Pledgor is a party;

 

(ii)       (x) ifthe Company proceeds with a reduction of share capital which is not motived bylosses, not to offer the shares of the Company that it owns to the Company forrepurchase and (y) if the Company proceeds with a share capital reductionwhich is motivated by losses, to inform the Administrative Agent of theproposed reduction before its adoption by the shareholders’ meeting and tocause any new shares issued and attributed to the Pledgor as a result of thereduction in capital to be included in the Collateral; and

 

(iii)      withthe exception of the authorization procedure provided for in Article 7 ofthe Company’s by-laws, not to permit the Company’s by-laws or any otherinstrument to contain any provision (including preemption rights, rights ofreplacement or similar rights) which would limit in any way the execution orthe performance of this Pledge Agreement or the enforcement by theAdministrative Agent of the security interest herein created.

 

8.                  Transfers and Other Liens.The Pledgor shall:

 

a)      not (i) exceptas permitted by the Credit Agreement, sell or otherwise dispose of, or grantany option or warrant with respect to, any of the Collateral or (ii) createor suffer to exist any contractual Lien upon or with respect to any of theCollateral, except for the

 

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Lienunder this Pledge Agreement and the related *Déclarationde Gage,*provided that in the event the Pledgor sells orotherwise disposes of assets permitted by the Credit Agreement and such assetsare or include any of the Collateral, the Administrative Agent shall releasesuch Collateral to the Pledgor free and clear of the Lien under this PledgeAgreement and the related *Déclaration deGage*concurrently with the consummation of such sale;

 

b)      defendits and the Administrative Agent’s title or interest in and to all theCollateral (and in the proceeds thereof) against any and all Liens (other thanthe Lien of this Pledge Agreement), however arising, and any and all Personswhomsoever.

 

9.                  Remedies. If any Event of Defaultshall have occurred and be continuing:

 

a) The Administrative Agent and any nominee of theAdministrative Agent may on behalf of the Secured Parties exercise in respectof all or any of the Collateral, in addition to other rights and remediesprovided for herein or otherwise available to it, all the rights and remediesconferred on a secured creditor *(créanciergagiste)*pursuant to French law and regulations, and may, subject tothe prior authorization of the Company’s Board of Directors pursuant to Section 7of the Company’s by-laws and to the prior information and consultation of theCompany’s Workers Council *(Comité d’entreprise)*as required by article L.432-1 of the French *Code du travail,*(x) proceed to a publicsale of the Collateral in accordance with the provisions of Article L.521-3of the French Commercial Code, or (y) petition a French court to attributeownership of the Collateral to the Secured Parties.

 

In the event ownership of the Collateral is attributedto the Secured Parties pursuant to clause (y) above, subject to mandatoryprovisions of French law and except as specified below, the AdministrativeAgent acting in such capacity:

 

(i)   shall beentitled to sell the Collateral or any part thereof in one or more parcels forcash, on credit or for future delivery, at such price or prices and upon suchother terms as are commercially reasonable irrespective of the impact of anysuch 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 whowill represent and agree that they are purchasing the Collateral for their ownaccount 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 anddeliver to the purchaser or purchasers thereof the Collateral so sold. Eachpurchaser at any such sale shall hold the property sold absolutely free fromany 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/orappraisal that it now has or may at any time in the future have under any rule oflaw or statute now existing or hereafter enacted; and

 

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(iii) TheAdministrative Agent or any Secured Party shall have the right, to the extentpermitted by law, upon any such sale, to purchase the whole or any part of theCollateral 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 toapplicable law, the Administrative Agent shall not be obligated to make anysale of Collateral regardless of notice of sale having been given. TheAdministrative Agent may adjourn any sale from time to time by announcement atthe 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 extentpermitted by law, the Pledgor hereby waives any claim against theAdministrative Agent arising by reason of the fact that the price at which anyCollateral may have been sold at such a private sale was less than the pricethat might have been obtained at a public sale, even if the AdministrativeAgent accepts the first offer received and does not offer such Collateral tomore than one offeree.

 

b) The Administrative Agent shall apply the proceedsof any collection or sale of the Collateral (except, for the avoidance ofdoubt, in the case of a sale following the attribution of ownership of the sameas referred to in Section 9(a)(y)) at any time after receipt as follows:

 

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

 

**(ii)  **second, to the Secured Parties, an amount equal to all Obligations owingto them on the date of any such distribution, and, if such moneys shall beinsufficient to pay such amounts in full, then ratably (without priority of anyone over any other) to such Secured Parties in proportion to the unpaid amountsthereof; and

 

**(iii)**third, any surplus then remaining shall be paid to the Pledgor or itssuccessors or assigns or to whomsoever may be lawfully entitled to receive thesame or as a court of competent jurisdiction may direct.

 

Upon any sale of the Collateral by theAdministrative Agent following attribution of ownership of the Collateral tothe 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 applicationof any part of the purchase money paid over to the Administrative Agent or suchofficer or be answerable in any way for the misapplication thereof.

 

**c)       **All payments received by the Pledgor after the occurrence and during thecontinuance of an Event of Default in respect of the Collateral shall be heldfor the

 

8

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benefitof the Administrative Agent, shall be segregated from other property or fundsof the Pledgor and shall be forthwith delivered to the Administrative Agent asCollateral *(“ gage-espèce”)*inthe same form as so received.

 

**d)       **The Pledgor hereby waives its rights under Articles 2032 and 2039 of theFrench Civil Code.

 

10.   Amendments, etc.with Respect to the Obligations; Waiver of Rights. The Pledgor shall remainobligated hereunder, and the charges created hereby shall not be adverselyaffected nor shall this Agreement be novated unless expressly agreed in writingby the parties hereto, notwithstanding that, without any reservation of rightsagainst the Pledgor and without notice to or further assent by the Pledgor, (a) anydemand for payment of any of the Obligations made by the Administrative Agentor any other Secured Party may be rescinded by such party and any of theObligations continued, (b) the Obligations, or the liability of any otherparty upon of for any part thereof, or any collateral security or guaranteetherefor or right of offset with respect thereto, may, from time to time, inwhole or in part, be renewed, extended, amended, modified, accelerated,compromised, waived, surrendered or released by the Administrative Agent or anyother Secured Party, (c) the Credit Agreement, the other Credit Documents,the Letters of Credit and any other documents executed and delivered inconnection therewith and the Hedge Agreements and any other documents executedand delivered in connection therewith and any documents entered into with theAdministrative Agent or any of its affiliates in connection with treasury,depositary or cash management services or in connection with any automatedclearinghouse transfer of funds may be amended, modified, supplemented orterminated, in whole or in part, as the Administrative Agent (or the RequiredLenders, as the case may be, or, in the case of any Hedge Agreement, or documententered into with the Administrative Agent or any of its affiliates inconnection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds, the partythereto) may deem advisable from time to time, and (d) any collateralsecurity, guarantee or right of offset at any time held by the AdministrativeAgent or any other Secured Party for the payment of the Obligations may besold, exchanged, waived, surrendered or released. Neither the AdministrativeAgent nor any other Secured Party shall have any obligation to protect, secureperfect or insure any Lien at any time held by it as security for theObligations or for this Pledge Agreement or any property subject thereto. Whenmaking any demand hereunder against the Pledgor, the Administrative Agent orany other Secured Party may, but shall be under no obligation to, make asimilar demand on the Borrowers or any pledgor and any failure by theAdministrative Agent or any other such Secured Party to make any such demand orto collect any payments from the Borrowers or any pledgor or any release of theBorrowers or any pledgor shall not relieve the Pledgor in respect of which ademand or collection is not made or the Pledgor not so released of its severalobligations or liabilities hereunder, and shall not impair or affect the rightsand remedies, express or implied, or as a matter of law, of the AdministrativeAgent or any other Secured Party against the Pledgor. For the purposes hereof “demand”shall include the commencement and continuance of any legal proceedings.

 

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11.  ContinuingSecurity Interest; Assignments Under the Credit Agreement: Release.

 

**a)      **This Pledge Agreement shall remain in full force and effect and bebinding in accordance with and to the extent of its terms upon the Pledgor andthe successors and assigns thereof, and shall inure to the benefit of theAdministrative Agent and the other Secured Parties and their respectivesuccessors, indorsees, transferees and assigns until all the Obligations underthe Credit Documents shall have been satisfied by payment in full, theCommitments shall be terminated and no Letters of Credit shall be outstanding,notwithstanding that from time to time during the term of the Credit Agreementand 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 ispermitted under the Credit Agreement to any Person, or upon the effectivenessof any written consent to the release of the security interest granted herebyin any Collateral pursuant to Section 14.1 of the Credit Agreement, theobligations of such Pledgor with respect to such Collateral shall beautomatically released and such Collateral sold free and clear of the Liencreated 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 thePledgor’s expense, all documents that the Pledgor shall reasonably request toevidence such termination or release. Any execution and delivery of documentspursuant to this Section 11 shall be without recourse to or warranty bythe Administrative Agent.

 

12.           Reinstatement. This Pledge Agreementshall continue to be effective, or be reinstated, as the case may be, if at anytime payment, or any part thereof, of any of the Obligations is rescinded ormust otherwise be restored or returned by the Administrative Agent or any otherSecured Party upon the insolvency, bankruptcy, dissolution, administration,liquidation or reorganization of the Pledgor, or upon or as a result of theappointment of a receiver, intervenor or conservator of, or trustee or similarofficer 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, requestsand demands pursuant hereto shall be made in accordance with Section 14.2of the Credit Agreement.

 

14.           Severability. Any provision of thisPledge Agreement that is prohibited or unenforceable in any jurisdiction shall,as to such jurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall invalidate orrender unenforceable such provision in any other jurisdiction. The partieshereto shall endeavor in good-faith negotiations to replace the invalid,illegal or unenforceable provisions with valid provisions the economic effectof which comes as close as possible to that of the invalid, illegal orunenforceable provisions.

 

15.           Integration. This pledge Agreementand the Schedule and Annexes hereto represent the agreement of the Pledgor withrespect to the subject matter hereof and there are no promises, undertakings,representations or warranties by the Administrative Agent or

 

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any other Secured Party relative to the subjectmatter hereof not expressly set forth or referred to herein or in the otherCredit 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 instrumentexecuted by the affected Pledgor and the Administrative Agent in accordancewith 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 orremedy hereunder or to have acquiesced in any Default or Event of Default or inany 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 anyother secured Party, any right, power or privilege hereunder shall operate as awaiver hereof. No single or partial exercise of any right, power or privilege hereundershall preclude any other or further exercise thereof or the exercise of anyother right, power or privilege. A waiver by the Administrative Agent or anyother Secured Party of any right or remedy hereunder on any one occasion shallnot be construed as a bar to any right or remedy that the Administrative Agentor such other Secured Party otherwise have on any future occasion.

 

**c)     **The rights, remedies, powers and privileges herein provided arecumulative, may be exercised singly or concurrently and not exclusive of anyother rights or remedies provided by law.

 

17.   Section Headings.The Section Headings used in this Pledge Agreement are for convenience orreference only and are not to affect the construction hereof or be taken intoconsideration in the interpretation hereof.

 

18.   Successorsand Assigns. This Pledge Agreement shall be binding upon the successors andassigns of the Pledgor and shall insure to the benefit of the AdministrativeAgent and the other Secured Parties and their respective successors andassigns, except that the Pledgor may not assign, transfer or delegate any ofits rights or obligations under this Pledge Agreement without the prior writtenconsent of the Administrative Agent.

 

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SCHEDULE 2

 

Form of Accession Agreement

 

(on letterhead of acceding hedgingcounterparty)

 
| 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 *[[specifydate]]*

 

We refer to the pledge agreement entered into onJuly 30, 2004 between, *inter alia,*thePledgor and the Administrative Agent relating to the pledge of 64.997 percentof the shares held by the Pledgor in the Company (the “US French PledgeAgreement”).

 

Pursuant to Section 1.(d) of the US French PledgeAgreement, *[[specify name of accedinghedging counterparty]]*(the “Acceding Lender”) hereby accedesto the US French Pledge Agreement as Secured Party and therefore hereby agreesto be bound by its provisions as though it were a Secured Party named therein.

 

The Acceding Lender hereby appoints theAdministrative Agent as its agent under and in accordance with the provisionsof the US French Pledge Agreement and of the Credit Agreement.

 

All notices, requests and demands to the AccedingLender pursuant to the US French Pledge Agreement shall be made in accordancewith Section 14.2 of the Credit Agreement and:

 

To: *[[specifyaddress of acceding hedging counterparty]]*

 

For the attention of: [[ ]]

fax number: [[ ]]

 

telephone number: [[ ]]

 

Unless otherwise defined herein, capitalized termsin this accession agreement will have the meanings assigned to them in the USFrench Pledge Agreement.

 
| By     |   |   |
|--------|--------|--------|
|   |   |   |
|   |   |   |
|   | Name:  |   |
|   | Title: |   |

 

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ANNEX 1

 

**DECLARATION DE GAGE DE**

 

**COMPTE D’INSTRUMENTS FINANCIERS**

 

La présente déclaration est soumise aux dispositionsde 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 situéà 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’INSTRUMENTSFINANCIERS :**

 

n° 22 quinquies

 

(ci-après désigné le “**Compte Nanti**”).

 

**OUVERT AUNOM DU CONSTITUANT DANS LES LIVRES DE :**

 

**ROCKWOODELECTRONIC MATERIALS SA**, une société anonyme au capital**de €40.308.576, dont le siège social est situé a Saint-Fromond — 50620 Saint-Jeande Daye, immatriculée au registre du commerce et des sociétés de Coutances sousle numéro unique d’identification 323 346 973,

 

(ci-aprèsdésigné, en cette qualité, le “**Teneur deCompte**”).

 

**DANS LEQUEL SONT INSCRITS INITIALEMENT LES INSTRUMENTSFINANCIERS 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 |

 

 

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|     | ** ** | 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 laprésente déclaration de gage et de toute autre entité qui deviendrait partie entant que “*Secured Party*”*à*la convention de nantissement de compte d’instruments financiers de langueanglaise intitulée *“US French PledgeAgreement” en*date du 30 juillet 2004 (le “***US FrenchPledge Agreement***”*),*concluedans le cadre d’un contrat de crédit intitulé *“CreditAgreement” en*date du 30 juillet 2004 entre notamment le Constituanten tant que *“US Borrower”,*UBSSECURITIES LLC and GOLDMAN SACHS CREDIT PARTNERS L.P.en tant que *“Co-Syndication Agents”*et CREDIT SUISSEFIRST BOSTON (agissant par l’intermédiaire de sa succursale des Iles Cayman) entant que *“Administrative and CollateralAgent”*et dont un exemplaire est remis à la Société avec la présentedéclaration de gage

 

(ci-après désignées individuellement oucollectivement le “**Bénéficiaire**”)

 

représentées par CREDIT SUISSE FIRST BOSTON(agissant par l’intermédiaire de sa succursale des Iles Cayman), dont l’adresseest Eleven Madison Avenue, New York, NY 10010, United States of America,agissant en qualité de mandataire en tant que “*Administrativeand Collateral Agent”*au nom et pour le compte du Bénéficiaire, outout autre successeur de CREDIT SUISSE FIRST BOSTON en cette qualité,

 

**EN GARANTIE DU PAIEMENT DES SOMMES DUES AU TITRE DESOBLIGATIONS CI-APRES DEFINIES :**

 

le paiement de toutes les sommes en principal,intérêts ou autres accessoires dues ou venant à être dues au Bénéficiaire, ycompris 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 431-4du 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

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Annexe

 

Credit Suisse First Boston, acting through itsCayman Islands branchUetilbergstrasse, CH 8070Zurich, Switzerland

 

UBS Securities LLC677 Washington BoulevardStamford, Connecticut 06901

 

UBS Loan Finance LLC677 Washington BoulevardStamford, Connecticut 06901

 

Goldman Sachs Credit Partners L.P.Church Street, Hamilton HM CXBermuda

 

15

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**ANNEX 2**

 

**CERTIFICATE OF PLEDGE OF FINANCIAL INSTRUMENTS ACCOUNT**

 

(L 431-4 of the French Monetary and FinancialCode)

 

After examination of the *déclaration de gage*of the financial instruments account,

 

dated : [[ ]] 2004

 

signed by :            **ROCKWOODSPECIALTIES GROUP, INC.**, a company organised and existing under thelaws of Delaware (USA), having its registered office at 100 Overlook CenterPrinceton, 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 entityfrom time to time party as “Secured Party” to the pledge of financialinstruments account entitled “US French Pledge Agreement” dated July 30, 2004;

 

(hereafter jointly or severally referred toas the “**Beneficiary**”)

 

represented by CREDIT SUISSE FIRST BOSTON, actingthrough its Cayman Islands Branch, whose address is Eleven Madison Avenue, NewYork, NY 10010, United States of America, acting as Administrative andCollateral Agent, or any successor, endorsee, transferee and assign of CREDITSUISSE 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 financialinstruments account, the references of which appear in said *declaration de gage*(the “**Pledged Account**”), is duly registered inour securities registers *(“registre desmouvements de titres”)*for the benefit of the Beneficiary;

 

2/                                      hereby certify that as from the date hereof all the financial instrumentsidentified in said *déclaration de gage*areduly registered in the Pledged Account; and

 

3/                                      acknowledge and accept to refrain from any act or action that would be incontradiction with the prohibition of the Pledgor from disposing of thefinancial instruments in the Pledged Account and their income and proceeds inany currency, subject to and in accordance with the conditions provided for bythe US French Pledge Agreement, a copy of which we were given with theabove-mentioned *déclaration de gage.*

 

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Made in                                    ,on [[  ]] 2004

 

The Account Holder:

 

 
|                                                   |   |
|--------------------------------------------------------|--------|
| Rockwood Electronic Materials SA                       |   |
| By: [[Reg Stephenson]]                                 |   |
| Title: [[Président  Directeur Général]] |   |

 

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EXHIBITC-1

 

FORMSOF GERMAN ABSTRACT ACKNOWLEDGEMENTS OF INDEBTEDNESS

 

Dated July 30, 2004

 

----

 

**ROCKWOOD SPECIALTIES GROUP, INC. (1)**

 

**CREDIT SUISSE FIRST BOSTON (2)**

 

----

 

**ABSTRACT ACKNOWLEDGEMENT OFINDEBTEDNESS II*(Abstraktes Schuldanerkenntnis)***

 

----

 

----

 

THIS AGREEMENT is made BETWEEN:

 

**(1)****        **Rockwood SpecialtiesGroup, Inc., a Delaware corporation having its business address at 100 OverlookCenter, Princeton, NJ 08542, USA,

 

- hereinafter referred to as the “**Debtor**” -

 

and

 

**(2)****        **Credit Suisse FirstBoston, a New York banking corporation having its business address at ElevenMadison Avenue, New York, NY 10010, USA, acting through its Cayman IslandsBranch,

 

- hereinafter referred to as the “**Creditor**” -

 

**Preamble**

 

**(A)****        **Rockwood SpecialtiesGroup, Inc. (the “**US Borrower**”)and Rockwood Specialties Limited, a company incorporated under the laws ofEngland and Wales (the “**UK Borrower**”),as borrowers, the lenders, JPMorgan Chase Bank as administrative agent for thelenders, 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 andletters of credit for the account of the borrowers by the lenders.

 

**(B)****        **The US Borrower, the UKBorrower, Rockwood Specialties International, Inc., the Lenders (as defined inthe Credit Agreement (as defined below)) from time to time party thereto,Credit Suisse First Boston acting through its Cayman Islands Branch asadministrative agent (the “**AdministrativeAgent**”) and collateral agent, and UBS Securities LLC and GoldmanSachs Credit Partners L.P., as co-syndication agents, entered into a creditagreement dated as of July 30, 2004 (the “**CreditAgreement**”), as amended pursuant to which the Lenders have severallyagreed to make loans to the US Borrower and the UK Borrower (the US Borrowerand the UK Borrower together also the “**Borrowers**”)and the Letter of Credit Issuer (as defined in the Credit Agreement) has agreedto issue letters of credit for the account of the Borrowers (collectively, the “**Extension of Credit**”), upon the terms andsubject to the conditions set forth therein and one or more Lenders oraffiliates of Lenders may from time to time enter into Hedge Agreements (asdefined below) with the US Borrower or any of the Restricted Subsidiaries (asdefined in the Credit Agreement).

 

**(C)****        **It is a conditionprecedent to the obligation of the Lenders, the Letter of Credit Issuer and theCreditor to make their respective Extensions of Credit to the US Borrower underthe Credit Agreement that the Debtor shall have executed and delivered thisAbstract Acknowledgement of Indebtedness H *(Abstraktes**Schuldanerkenntnis)*(this “**Agreement**”)to the Creditor.

 

**NOW ITIS HEREBY AGREED** as follows:

 

2

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**1****                                        ****Headings,capitalized terms, references and language**

 

1.1           Headings are for ease ofreference only and shall not affect the construction of this Agreement.

 

1.2           Unless otherwise definedherein or unless the context otherwise requires, capitalized terms defined inthe Credit Agreement, shall have the same meaning when used in this Agreement.

 

1.3           As used herein, the term “**ClosingTime**” means 24:00 (German time) on July 31, 2004, being the “**ClosingDate**”.

 

1.4           As used herein,the term “**Obligations**” means the collective reference to (i) thedue and punctual payment of (x) the principal of and premium, if any, andinterest at the applicable rate provided in the Credit Agreement (includinginterest accruing during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding, regardless of whether allowed orallowable in such proceeding) on the Loans granted to the US Borrower, when andas due, whether at maturity, by acceleration, upon one or more dates set forprepayment or otherwise, (y) each payment required to be made by the US Borrower under the Credit Agreement inrespect of any Letter of Credit, when and as due, including payments in respectof reimbursement of disbursements, interest thereon and obligations to providecash 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 thependency of any bankruptcy, insolvency, receivership or other similarproceeding, regardless of whether allowed or allowable in such proceeding), ofthe US Borrower or any other Credit Party to any of the Secured Parties underthe Credit Agreement and the other Credit Documents, (ii) the due and punctualperformance of all covenants, agreements, obligations and liabilities of the USBorrower under or pursuant to the Credit Agreement and the other CreditDocuments (provided always that such covenants, agreements, obligations andliabilities 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 tothis Agreement or the other Credit Documents (provided always that suchcovenants, agreements, obligations and liabilities are capable of beingtransformed into financial obligations), (iv) the due and punctual payment andperformance of all obligations of each Credit Party under each Hedge Agreementthat (x) is in effect on the Closing Date with a counterparty that is a Lenderor an Affiliate of a Lender as of the Closing Date or (y) is entered into afterthe Closing Date with any counterparty that is a Lender or an Affiliate of aLender at the time such Hedge Agreement is entered into (provided always thatthe performance of obligations is capable of being transformed into financialobligations), and (v) the due and punctual payment and performance of allobligations in respect of overdrafts and related liabilities owed to theCreditor or its Affiliates arising fromor in connection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds (provided alwaysthat the performance of obligations is capable of being transformed intofinancial obligations).

 

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

 

1.6           References to “Lenders” inthis Agreement shall be deemed to include Affiliates of Lenders that may fromtime 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 shallrefer to this Agreement as a whole and not to any particular prevision of thisAgreement, and clause references are to clauses of this Agreement unlessotherwise specified. The words “include”, “includes” and “including” shall bedeemed to be followed by the phrase “without limitation”.

 

1.8           The meanings given to termsdefined herein shall be equally applicable to both the singular and pluralforms of such terms.

 

1.9           This Agreement is made inthe English language. For the avoidance of doubt, the English language versionof this Agreement shall prevail over any translation of this Agreement.However, where a German translation of a word or phrase appears in the text ofthis Agreement, the German translation of such word or phrase shallprevail.

 

**2****                                        ****AbstractAcknowledgement of Indebtedness**

 

TheDebtor hereby acknowledges with effect immediately upon the Closing Time by wayof an abstract acknowledgement of indebtedness *(inForm eines abstrakten Schuldanerkenntnisses*) that**it owes US$ 470,000,000 (in words: four hundred and seventy million US dollars) to theCreditor (hereinafter referred to as the “**Abstract Acknowledgement ofIndebtedness II**”). The Abstract Acknowledgement ofIndebtedness II (whichconstitutes the independent obligation to pay the above-mentioned amount) issubject to interest in the amount of twelve (12) percent per year from the dateof execution of this Agreement, and theAbstract Acknowledgement of Indebtedness II shall extent to such interestpayment.

 

**3****                                        ****Maturityand Realization of the Abstract Acknowledgement of Indebtedness II and SecurityPurpose**

 

3.1           If any Event of Defaultunder the Credit Agreement with respect to the Underlying Obligations (asdefined below) shall have occurred and be continuing, the AbstractAcknowledgement of Indebtedness II becomes due and payable and the Creditorshall be entitled to demand full or partial payment under the Acknowledgment ofIndebtedness II in any legally permissible manner to the extent necessary tosatisfy the outstanding Underlying Obligations from time to time.  However, for the avoidance of doubt, the Creditor shall not be required to obtain anyprior court ruling or to present any other executory title or documentjustifying payment request.

 

4

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Whenrequesting payment under this Abstract Acknowledgement of Indebtedness II, theCreditor shall inform the Pledgor in writing about the amount requested andgive further information as to which of the Underlying Obligations to thepayment request relates.

 

3.2           Irrespective of clause 3.1 and the Underlying Obligations (as defined inclause 4.1), this AbstractAcknowledgement of Indebtedness II constitutes an independent obligation of theDebtor.

 

3.3           The purpose of this AbstractAcknowledgement of Indebtedness II is to secure the Underlying Obligations.

 

4              Underlying Obligations

 

4.1           The Abstract Acknowledgement of Indebtedness II is made with regard tothe payment of all Obligations under the Credit Documents of the US Borrower.Without limiting the generality of the foregoing, this Agreement is made withregard to the payment of all amounts that constitute part of the Obligations under the Credit Documents and wouldbe owed by the US Borrower to the Secured Parties but for the fact that theyare unenforceable or not allowable due to the existence of a bankruptcy,reorganization or similar proceeding involving the US Borrower and/or eachother Credit Party (hereinafter collectively referred to as the “**Underlying Obligations**”).

 

4.2           The Debtor’s obligationsunder this Agreement shall not affect any of the Debtor’s obligations, promisesand other liabilities under the other Credit Documents and any Hedge Agreement.

 

**5****                                        ****Declarationof trust**

 

Eachof the Debtor and the Creditor acknowledges that all rights and claimsconstituted by this Agreement and all rights, claims, and moneys paid to theCreditor or held by the Creditor pursuant to or in connection with thisAgreement are *held*by theCreditor with effect from the date of this Agreement on trust *(treuhanderisch)*for the Secured Partiesand administered in accordance with the Credit Agreement.

 

**6****                                        ****Applicationof proceeds**

 

6.1           The Creditor shall apply,vis-à-vis the Secured Parties, the proceeds of any payment of the Debtor underthis Agreement or from the enforcement of any security interest securing theclaim hereunder after receipt as follows:

 

6.1.1        first, to the payment of allreasonable and documented costs and expenses incurred by the Creditor inconnection with such payment or otherwise in connection with this Agreement,the other Credit Documents or any of the Underlying Obligations owed by the USBorrower, including all court costs and the reasonable fees and expenses of itsagents and legal counsel, the repayment of all advances made by the Creditorhereunder or under any other Credit Document on behalf of the Debtor and anyother reasonable and documented costs or expenses incurred in connection withthe exercise of any right or remedy hereunder or under any other CreditDocument;

 

5

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6.1.2        second, to the SecuredParties, an amount equal to all Underlying Obligations owed by the US Borrowerto them on the date of any such distribution, and, if such moneys shall beinsufficient to pay such amounts in full, then ratably (without priority of anyone over any other) to such Secured Parties in proportion to the unpaid amountsthereof;

 

6.1.3        third, any surplus thenremaining shall be paid to the US Borrower or its successors or assigns or towhomsoever may be lawfully entitled to receive the same or as a court ofcompetent jurisdiction may direct.

 

**7****                                        ****Furtherassurance**

 

TheDebtor will execute any and all further documents, financing statements,agreements and instruments, and take all such further actions (including thefiling and recording of financing statements, mortgages, deeds of trust andother documents), which may berequired under any applicable law, orwhich the Creditor or the Required Lenders may reasonably request, in order toeffectuate the transactions contemplated by this Agreement and in order (x) togrant, preserve, protect and perfect the validity and priority of the securityinterests created or intended to be created hereby or (y) to enable theCreditor to exercise and enforce its rights and remedies hereunder with respectto any Collateral, all at the expense of such Debtor.

 

**8****                                        ****Assignmentand transfer**

 

8.1           The Creditor shall, at anytime, have the right to assign, to transfer or to dispose of all or any part ofits rights or obligations or both under this Agreement to any of the SecuredParties or any Person becoming a Secured Party and the Debtor shall execute allsuch documents and do all such acts and things which the Creditor mayreasonably require in connection with such transfer, assignment or disposal.

 

8.2           The Debtor shall not beentitled to assign, to transfer, or to dispose of all or any part of its rightsor obligations or both hereunder.

 

8.3           The Debtor hereby agrees toany accession of a new party and any change to the parties to the CreditDocuments. The Debtor further agrees that notwithstanding any such accession ofa 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 shallremain in full force and effect.

 

**9****                                        ****Costsand expenses**

 

Allreasonable costs and expenses arising from the execution of this Agreement,from amendments or prolongation thereof or any costs arising from theenforcement or preservation of the Creditor’s rights hereunder shall be borneby the Debtor, whereby the Creditor is entitled to mandate a third party toperform such actions in its own name but for the Debtor’s account.

 

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**10****                                 ****Indemnity**

 

10.1         The Creditor shall not beliable for any loss or damage which is suffered by the Debtor save in respectof 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 indemnifythe 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 doneor omitted in the exercise or purported exercise of the powers and rights underthis Agreement or occasioned by any breach of the Debtor of any of itsobligations or undertakings contained herein, provided always that there willbe no such indemnification, to the extent that such losses, actions, claims,expenses, demands and liabilities are incurred by or made against the Creditoras a result of willful misconduct or gross negligence of the Creditor.

 

**11****                                 ****Duration,period of limitation and partial invalidity**

 

11.1         This Agreement shall remainin full force and effect until the Underlying Obligations of the US Borrower,in the sole opinion of the Creditor, have been completely satisfied and allfacilities which might give rise to such obligations, promises and/orliabilities have terminated.

 

11.2         The parties hereby agreethat the period of limitation *(Verjiihrungsfrist)*for the Creditor’s rights and claims under the AbstractAcknowledgement of Indebtedness II shall be twelve (12) years from the AbstractAcknowledgement of Indebtedness II coming into existence *(Entstehung).*

 

11.3         Any provision of thisAgreement that is prohibited or unenforceable in any jurisdiction shall, as tosuch jurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall not invalidateor 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 provisionby a valid one which reflects the economic purpose of the invalid provision asclosely as possible.

 

11.5         This Agreement shall createcontinuing and independent obligations of the Debtor under the AbstractAcknowledgement of Indebtedness II and no change or amendment to the CreditDocuments shall affect the validity and the scope of this Agreement nor theobligations which are imposed on the Debtor pursuant to it.

 

11.6         This Agreement shall inureto the benefit of the Creditor, its successors and assigns.

 

**12****                                 ****Noticesand other matters**

 

12.1         Notices

 

Everynotice, request demand or other communication under this Agreement shall:

 

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12.1.1      be in writing deliveredpersonally or by prepaid letter (airmail if available) or fax;

 

12.1.2      be deemed to have beenreceived, subject as otherwise provided in this Agreement, in the case of aletter, when delivered personally or ten (10) days after it has been put intothe post and, in the case of a fax, when a complete and legible copy isreceived by the addressee (unless the time of dispatch of any fax is afterclose of business in which case it shall be deemed to have been received at theopening of business on the next business day); and

 

12.1.3      be sent

 

(a)           tothe Debtor at:

 

RockwoodSpecialties Group, Inc.100 Overlook CenterPrinceton, NJ 08542USAAttention: Fax:

 

witha copy to:

 

KohlbergKravis Roberts & Co., L.P.9 West 57th StreetSuite 4200New York, NY 10019USA

 

Attention:Fax:

 

(b)           to the Creditor at:

 

CreditSuisse First BostonEleven Madison AvenueNew YorkNY 10010

 

Attention:Fax:

 

orto such other address or fax number as is notified by the relevant party to theother parties to this Agreement.

 

12.2         No implied waiver, remediescumulative

 

Nofailure or delay on the part of the Creditor to exercise any power, right or remedyunder this Agreement shall operate as a waiver thereof, nor shall any single orpartial

 

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exerciseby the Creditor of any power, right or remedy preclude any other or furtherexercise thereof or the exercise of any power, right or remedy. The remediesprovided in this Agreement are cumulative and are not exclusive of any remediesprovided by law.

 

12.3         English translations

 

Alldocuments to be delivered under or supplied in connection with this Agreementshall be in the English language or shall be accompanied by a certifiedtranslation into English upon which the recipient shall be entitled to rely.

 

12.4         Counterparts

 

ThisAgreement may be executed in any number of counterparts (whether by facsimile orotherwise, but, if by facsimile, with the original signed pages being promptlysent to the Creditor by prepaid letter (and the Creditor is hereby authorizedto incorporate such pages into bound originals)) and by the different partieson separate counterparts, each of which when so executed and delivered shall bean original, but all counterparts shall together constitute one and the sameagreement.

 

**13****                                 ****Changesand amendments**

 

Changesto and amendments of this Agreement including this subsection must be made inwriting , signed by all of the parties hereto.

 

**14****                                 ****Choiceof law and venue**

 

14.1         THIS AGREEMENT AND THERIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, ANDCONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE FEDERAL REPUBLICOF GERMANY.

 

14.2         The Debtor herebyirrevocably and unconditionally:

 

14.2.1      submits itself in any legalaction or proceeding relating to this Agreement, or for recognition andenforcement of any judgment in respect thereof, to the non-exclusive generaljurisdiction of the courts of Frankfurt am Main, Germany, the courts of theState of New York, the courts of the United States of America for the SouthernDistrict of New York and appellate courts from any thereof;

 

14.2.2      consents that any such actionor proceeding may be brought in such courts and waives any objection that itmay now or hereafter have to the venue of any such action or proceeding in anysuch court or that such action or proceeding was brought in an inconvenientcourt and agrees not to plead or claim the same; and

 

14.2.3.     agrees that nothing hereinshall limit the right of the Creditor to take legal actions before any othercourt of competent jurisdiction.

 

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**15****                                 ****Process agent**

 

15.1         For the purpose of any suit,action, proceeding or settlement of dispute in the German courts, the Debtorhereby appoints *(bestellt)*andauthorizes *(bevollmiichtigt)*aprocess agent *(Zustellungsbevollmeichtigten)*to accept service of process in respect of any such suit, action,proceeding or settlement of dispute in connection with this Agreement, theidentity of which is as follows:

 

RockwoodSpecialties GmbHMühlstr. 11865396 WallufGermany

 

Fax No. Tel. No. attn.

 

15.2         If for any reason, suchprocess agent no longer serves as agent to receive process in the FederalRepublic of Germany, the Debtor shall promptly notify the Creditor and within30 days appoint a substitute process agent acceptable to the Creditor.

 

***Signature Page follows***

 

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EXHIBIT C-2

 

FORMOF GERMAN ASSIGNMENT OF CLAIMS

 

Dated July 30, 2004

 

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**ROCKWOOD SPECIALTIES GMBH41)**

 

**ROCKWOOD PIGMENTE HOLDING GMBH (2)**

 

**SILO PIGMENTE GMBH (3)**

 

**CREDIT SUISSE FIRST BOSTON (4)**

 

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**ASSIGNMENT OF CLAIMS(Forderungsabtretung)**

 

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**THIS AGREEMENT** is made **BETWEEN**:

 

(1)                                  RockwoodSpecialties GmbH, a corporation *(Gesellschaftmit beschränkter Haftung)*incorporated under the laws of the FederalRepublic of Germany, having its business address at Whist. 118, 65396 Walluf,Germany, registered with the commercial register of the local court ofWiesbaden under HR B 17839;

 

(2)                                  RockwoodPigmente Holding GmbH, a corporation *(Gesellschaftmit beschränlder Haftung)*incorporated under the laws of the FederalRepublic of Germany having its business address at Mühlstr. 118, 65396 Walluf,Germany, registered with the commercial register of the local court ofWiesbaden under HR B 17837, Germany;

 

(3)                                  Silo PigmenteGmbH, a corporation *(Gesellschaft mitbeschränkter Haftung)*incorporated under the laws of the FederalRepublic of Germany having its business address at Mühlstr. 118, 65396 Walluf,Germany, registered with the commercial register of the local court ofWiesbaden under HR B 17832, Germany,

 

- hereinafter collectively referred to as the “**Security Providers**” -

 

(4)                                  Credit SuisseFirst Boston, a New York banking corporation having its business address atEleven Madison Avenue, New York, NY 10010, USA, acting through its CaymanIslands Branch,

 

- hereinafterreferred to as the “**Security Recipient**”-

 

**Preamble**

 

(A)                              RockwoodSpecialties Group, Inc. (the “**US Borrower**”) and RockwoodSpecialties Limited, a company incorporated under the laws of England and Wales(the “**UKBorrower**”), as borrowers, the lenders, JPMorgan Chase Bank asadministrative agent for the lenders, and others have entered into a CreditAgreement dated as of July 23, 2003 (the “**Original Credit Agreement**”),as amended pursuant to which the borrowers have been made availableloans and letters of credit for the account of the borrowers by the lenders.

 

(B)                                The USBorrower, the UK Borrower, Rockwood Specialties International, Inc., theLenders (as defined in the Credit Agreement (as defined below)) from time totime party thereto, Credit Suisse First Boston acting through its CaymanIslands Branch as administrative agent (the “**Administrative Agent**”) andcollateral agent, and UBS Securities LLC and Goldman Sachs Credit PartnersL.P., as co-syndication agents, entered into a credit agreement dated as ofJuly 30, 2004 (the “**Credit Agreement**”), as amendedpursuant to which the Lenders have severally agreed to make loans to the USBorrower and the UK Borrower (the US Borrower and the UK Borrower together alsothe “**Borrowers**”)and the Letter of Credit Issuer (as defined in the Credit Agreement) hasagreed to issue letters of credit for the account of the Borrowers(collectively, the “**Extension of Credit**”), upon theterms and subject to the conditions set forth thereinand one or moreLenders or affiliates of Lenders may from time to time enter into Hedge

 

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Agreements (as defined below) with the US Borroweror any of the Restricted Subsidiaries (as defined in the Credit Agreement).

 

(C)                                The proceeds ofthe Extensions of Credit will be used in part to enable the UK Borrower to makevaluable transfers to the Security Providers in connection with the operationof their respective business.

 

(D)                               Each SecurityProviders acknowledges that it will derive substantial direct and indirectbenefit from the Extensions of Credit.

 

(E)                                 It is acondition precedent to the obligation of the Lenders and the Letter of CreditIssuer to make their respective the Extensions of Credit to the UK Borrowerunder the Credit Agreement that each of the Security Providers shall haveexecuted and delivered this Global Assignment Agreement to the SecurityRecipient for the ratable benefit of the Secured Parties.

 

**NOW, THEREFORE**, inconsideration of the premises and to induce the Security Recipient, theCo-Syndication Agents, the Documentation Agent, the Lenders and the Letter ofCredit Issuer to enter into the Credit Agreement and to induce the Lenders andthe Letter of Credit Issuer to make their respective Extensions of Credit tothe UK Borrower under the Credit Agreement and to induce one or more Lenders oraffiliates of Lenders to enter into Hedge Agreements with the UK Borrower, theSecurity Providers hereby agree with the Security Recipient, for the ratablebenefit of the Secured Parties, as follows:

 

**1****                                        ****Headings,capitalized terms and references**

 

1.1                                 Unlessotherwise defined herein, terms defined in the Credit Agreement and used hereinshall 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 collectivereference to (i) the due and punctual payment of (x) the principal of andpremium, if any, and interest at the applicable rate provided in the CreditAgreement (including interest accruing during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding) on the Loans extended to the UKBorrower, when and as due, whether at maturity, by acceleration, upon one ormore dates set for prepayment or otherwise, (y) each payment required to bemade by the UK Borrower under the Credit Agreement in respect of any Letter ofCredit, when and as due, including payments in respect of reimbursement ofdisbursements, interest thereon and obligations to provide cash collateral, and(z) all other monetary obligations, including fees, costs, expenses andindemnities, 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 whetherallowed or allowable in such proceeding), of the UK Borrower or any otherCredit Party that is a Foreign Subsidiary to any of the Secured Parties underthe Credit Agreement and the other Credit Documents, (ii) the due and punctualperformance

 

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of all covenants, agreements, obligations andliabilities of the UK Borrower under or pursuant to the Credit Agreement andthe other Credit Documents, (iii) the due and punctual payment and performanceof all the covenants, agreements, obligations and liabilities of each otherCredit Party that is a Foreign Subsidiary under or pursuant to this Agreementor the other Credit Documents, (iv) the due and punctual payment andperformance of all obligations of the UK Borrower and each Credit Party that isa Foreign Subsidiary under each Hedge Agreement that (x) is in effect on theClosing Date with a counterparty that is a Lender or an affiliate of a Lenderas of the Closing Date or (y) is entered into after the Closing Date with anycounterparty that is a Lender or an affiliate of a Lender at the time suchHedge Agreement is entered into and (v) the due and punctual payment andperformance of all obligations in respect of overdrafts and related liabilitiesowed to the Security Recipient or its affiliates by the UK Borrower or anyCredit Party that is a Foreign Subsidiary arising from or in connection withtreasury, depositary or cash management services or in connection with anyautomated 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 SecurityRecipient, (v) the Co-Syndication Agents, (vi) the Documentation Agent, (vii)each counterparty to a Hedge Agreement the obligations under which constituteObligations, (viii) the beneficiaries of each indemnification obligationundertaken by the UK Borrower or any Credit Party that is a Foreign Subsidiaryunder any Credit Document, (ix) any successors, endorsees, transferees andassigns of each of the foregoing.

 

1.5                                 References to “Lenders”in this Agreement shall be deemed to include Affiliates of Lenders that mayfrom 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 thisAgreement shall refer to this Agreement as a whole and not to any particularprovision of this Agreement, and Section references are to Sections of thisAgreement unless otherwise specified. The words “include”, “includes” and “including”shall be deemed to be followed by the phrase “without limitation”.

 

1.7                                 The meaningsgiven to terms defined herein shall be equally applicable to both the singularand plural forms of such terms.

 

1.8                                 Headings arefor ease of reference only and shall not affect the construction of thisAgreement.

 

1.9                                 This Agreementis made in the English language. For the avoidance of doubt, the Englishlanguage version of this Agreement shall prevail over any translation of thisAgreement. However, where a German translation of a word or phrase appears inthe text of this Agreement, the German translation of such word or phrase shallprevail.

 

**2****                                        ****Assignment**

 

                                                Each of theSecurity Providers (each Security Provider to the extent it has title to therelevant claims) hereby assigns (*tritt ab*) tothe Security Recipient all of its present and

 

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future accounts receivable (*Forderungen*)against all enterprises related to such Security Provider within the meaning ofSections 15 et seq. of the German Stock Corporation Act (AktG), including butnot limited to, in case of Silo Pigmente GmbH, any claims under the businesslease agreement (*Betriebspachtvertrag*) betweenBrockhues GmbH & Co. KG (formerly known as Chemische Werke Brockhues AG)and Silo Pigmente GmbH dated 5 January 1998 (hereinafter collectively referredto as the “**Assigned Claims**”). The SecurityRecipient hereby accepts. such assignments. Such assignments of the AssignedClaims shall become effective immediately upon the Closing Time.

 

**3****                                        ****Time ofassignment**

 

                                                The presentAssigned Claims shall pass over to the Security Recipient upon the execution ofthis Agreement, and all future Assigned Claims shall pass over to the SecurityRecipient at the time at which they come into being.

 

**4****                                        ****Assignmentand transfer of ancillary rights**

 

4.1                                 Together withall claims and rights assigned in accordance with this Agreement to theSecurity Recipient, all security interests and all ancillary rights pertainingto the Assigned Claims (including insurance claims) as well as all rightsresulting from the underlying agreements are hereby assigned and transferred (*übertragen*) to the Security Recipient. To the extent theSecurity Recipient has received tangible assets as security for the AssignedClaims, the parties agree that title in these assets is hereby transferred tothe Security Recipient. If a Security Provider is in direct possession of theassets, the transfer of possession is substituted by such Security Providerholding the same, with the diligence of a prudent businessman, in custody forthe Security Recipient free of charge. To the extent the assets are in the directpossession of third parties, all Security Provider’s claims to demand delivery(*Herausgabeanspruch*) against the directpossessor are hereby assigned to the Security Recipient. The Security Recipientaccepts such transfer and assignment.

 

4.2                                 If deemednecessary by the Security Recipient, upon request, each Security Provider shalltake any action necessary, particularly make any necessary statements, totransfer and assign such security interests, claims, assets, and ancillaryrights to the Security Recipient.

 

4.3                                 Any securityinterest transferred under this clause 4 shall be for the-purpose of securing   the Secured Claims (as defined below).

 

4.4                                 The AssignedClaims and all other claims, rights, and security interests assigned andtransferred under this Agreement to the Security Recipient are hereinaftercollectively also referred to as the “**Collateral**”.

 

**5****                                        ****SecuredClaims**

 

                                                The Collateralshall serve as security for the prompt and complete payment and performance ofall Obligations (always provided that such obligations are capable of

 

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being transformed into financial obligations)towards the Secured Parties or any of them (hereinafter collectively referredto as the “**Secured Claims**”).

** **

**6****                                        ****Declarationof trust**

 

                                                Each of theSecurity Providers and the Security Recipient acknowledges that all Collateralconstituted by this Agreement and all moneys, property, claims, rights andassets paid to the Security Recipient or held by the Security Recipientpursuant to or in connection with this Agreement are held and administered bythe Security Recipient with effect from the date of this Agreement on trust (*treuhänderisch*) for the Secured Parties and administered inaccordance with the Credit Agreement.

 

**7****                                        ****Representationsand warranties, Covenants**

 

                                                Each of theSecurity Providers represents and warrants to the Security Recipient that:

 

7.1                                 each of theSecurity Providers has the requisite power and authority to enter into thisAgreement and all necessary corporate action has been taken and all necessaryapprovals and consents for the execution and performance of this Agreement havebeen obtained;

 

7.2                                 it is the soleowner of the Collateral, has full title thereto and is entitled to assignand/or transfer the Collateral to the Security Recipient;

 

7.3                                 this Agreementconstitutes a first priority right in the Collateral and the Collateral is notsubject to any prior or *pari passu*rights, including but not limited to rights of pledge, rights of usufruct orattachment; and

 

7.4                                 therepresentations and warranties set forth in Section 8 of the Credit Agreementas they relate to each Security Provider or in the other Credit Documents towhich such Security Provider is a party, each of which is hereby incorporatedherein by reference, are true and correct, and the Security Recipient and eachother Secured Party shall be entitled to rely on each of them as if they werefully set forth herein.

 

7.5                                 Each SecurityProvider hereby covenants and agrees with the Security Recipient and each otherSecured Party that, from and after the date of this Agreement until theObligations under the Credit Documents are paid in full, the Commitments areterminated and no Letter of Credit drawn by the UK Borrower remainsoutstanding, 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 sothat no violation of any provision, covenant or agreement contained in Section9 or 10 of the Credit Agreement, and so that no Default or Event of Default, iscaused by any act or failure to act of any Security Provider or any of itsSubsidiaries.

 

**8****                                        ****Transferof legal title of cheques and bills of exchange**

 

8.1                                 If payments inrelation to the Collateral are made by cheque or bills of exchange, legal titleto such securities as well as the vested rights thereto are (in advance)assigned and transferred to the Security Recipient, who accepts such assignmentand transfer. The

 

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transfer of the cheques or bills of exchange ishereby substituted by each Security Provider holding the same, with thediligence of a prudent business man, in custody for the Security Recipient freeof charge. If the cheques or bills of exchange are in the physical possessionof third parties, each Security Provider hereby assigns to the SecurityRecipient its present and future claims against these third parties, especiallyits rights to demand the surrender of the products. The Security Recipienthereby accepts such assignment

 

8.2                                 Until theoccurrence of an Enforcement Event (as defined below), the Security Recipientshall have the right to collect the cheques and bills of exchange for payment.Upon the Security Recipient’s request or after notice of the assignmentscreated hereunder in accordance with clause 10 below, the relevant SecurityProvider shall immediately endorse the cheques and bills of exchange anddeliver them to the Security Recipient.

 

**9****                                        ****Collectionof Assigned Claims by Security Provider**

 

                                                Until theoccurrence of an Enforcement Event (as defined below), each Security Provideris entitled to collect and receive payments made by the relevant third partydebtor with respect to the Assigned Claims.

 

**10****                                 ****Collectionof Assigned Claims by the Security Recipient**

 

10.1                           Upon theoccurrence and continuance of an Event of Default as defined in Section 11 ofthe Credit Agreement and the Secured Claims (or any parts thereof) have becomedue and payable (*fällig*) (an “**EnforcementEvent**”) the Security Recipient is entitled to revoke or otherwiselimit the Security Providers’ power of collection and to notify the relevantthird party debtor accordingly in its own name and also on behalf of theSecurity Providers. Upon notification of the relevant third party debtor, theSecurity Recipient may collect the Assigned Claims in its own name or in thename of the Security Providers. The Security Recipient, however, is not obligedto collect the Assigned Claims by itself. Upon request of the SecurityRecipient, the Security Providers shall collect the Assigned Claims and deliverall proceeds thereunder promptly to the Security Recipient.

 

10.2                           The SecurityRecipient will notify the revocation or limitation of the power of collectionand/or the notification of the third party debtors to the Security Providers inwriting ten (10) days in advance. The Security Recipient can refrain fromgiving previous notification, if the Security Providers (or any of them)suspend their payments or if the Security Providers (or any of them) or a thirdparty has applied for insolvency proceedings concerning the assets of theSecurity Providers (or any of them) or if the Security Provider has notifiedthe Security Recipient of any such application.

 

10.3                           If the SecurityProviders’ authority to collect the Assigned Claims is revoked or otherwiselimited by the Security Recipient, the Security Recipient can demand the promptdelivery by the Security Provider of all documents concerning the AssignedClaims.

 

10.4                           If the SecurityRecipient collects the Assigned Claims itself, it may take all commerciallyreasonable action and reach all agreements with third-party debtors which itconsiders

 

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necessary to collect the Assigned Claims, and inparticular, grant additional time and discounts and conclude settlementagreements. Any action taken by the Security Recipient shall not invalidate theterms of this Agreement.

 

10.5                           The SecurityRecipient is authorized to make use of the Security Providers’ electronic dataprocessing equipment including peripheral equipment and the data stored withthe Security Providers for the purposes of disclosing the assignments andtransfers to a third party debtor provided that the data stored concernsaccounting procedures in connection with the assignment and transfer. TheSecurity Providers shall provide the Security Recipient with all necessarymaterials and the operating staff free of charge.

 

10.6                           The SecurityRecipient shall apply the proceeds of any collection or sale of the AssignedClaims and the proceeds of the enforcement of any other Collateral as well asany Collateral consisting of cash, at any time after receipt as follows:

 

10.6.1                  first, to thepayment of all reasonable and documented costs and expenses incurred by theSecurity Recipient in connection with such collection or sale or otherwise inconnection with this Agreement, the other Credit Documents or any of theObligations, including all court costs and the reasonable fees and expenses ofits agents and legal counsel, the repayment of all advances made by theSecurity Recipient hereunder or under any other Credit Document on behalf ofany Grantor and any other reasonable and documented costs or expenses incurredin connection with the exercise of any right or remedy hereunder or under anyother Credit Document;

 

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

 

10.6.3                  third, any surplusthen remaining shall be paid to the Security Provider or its successors orassigns or to whomsoever may be lawfully entitled to receive the same or as acourt of competent jurisdiction may direct.

 

10.7                           Upon anycollection or sale of Assigned Claims or the enforcement or sale of any of theCollateral by the Security Recipient (including pursuant to a power of sale grantedby statute or under a judicial proceeding), the receipt of the SecurityRecipient or of the officer making the collection or sale shall be a sufficientdischarge to the purchaser or purchasers of the Collateral so sold and suchpurchaser or purchasers shall not be obligated to see to the application of anypart of the purchase money paid over to the Security Recipient or such officeror be answerable in any way for the misapplication thereof.

 

10.8                           The SecurityRecipient agrees to release proceeds from the enforcement of any of theCollateral if and to the extent that:

 

10.8.1                  the Collateral securesclaims against shareholders of any Security Provider or persons deemed to beequivalent to shareholders for purposes of Sections 30 and 31 of the

 

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German Limited Liability Companies Act (GmbHG) (*Gesellschaft nahestehende Personen*),

 

10.8.2      in relation to each SecurityProvider, the Security Provide demonstrates to the satisfaction of the SecurityRecipient that the application of proceeds towards such claims would lead to asituation that such Security Provider would not have sufficient assets tomaintain its nominal capital (*Stammkapital*),and

 

10.8.3      the Security Providerdemonstrates to the satisfaction of the Security Recipient that the applicationof the proceeds therefore would lead to a violation of Section 30 of theGerman Limited Liability Companies Act (GmbHG), provided that for the purposesof the calculation of the amount to be released (if any) the following balancesheet items shall be adjusted as follows:

 

10.8.4      the amount of any increaseof nominal capital (*Stammkapital*)after the date hereof that has been effected without prior written consent ofthe Security Recipient shall be deducted from the nominal capital (*Stammkapital*), and

 

10.8.5      loans and other contractualliabilities incurred in violation of the provisions of the Credit Agreementshall be disregarded.

 

For the avoidance of doubt, each Security Providershall have a right to the proceeds to the extent such proceeds have to bereleased. However, no release under this clause will prejudice the rights ofthe Security Recipient to enforce the Collateral again.

 

10.9         In addition, if any SecurityProvider does not (or would not if the Collateral is enforced) have sufficientassets to maintain its nominal capital, such Security Provider shall to theextent legally permitted in respect of its business realise any and all of itsassets that are shown in its balance sheet with a book value (*Buchwert*) that is significantly lower than the market valueof the asset(s) if such asset(s) is/are not necessary for suchSecurity Provider’s business (*betriebsnotwendig*).

 

**11****                                 ****Informationobligation in the event of impairments of the Collateral**

 

11.1         Each Security Providerundertakes to inform the Security Recipient without undue delay of anyimpairments of the Collateral (or any part thereof), in particular but notlimited to set-off, price discounts, third party debtor complaints or any otherevent having an adverse effect on the actual value of the Collateral. The sameshall apply to changes of the maturity of the Assigned Claims or if a SecurityProvider becomes aware of any circumstances that may affect the solvency of anythird party debtor. If any of Assigned Claims are attached (*gepfändet*), the Security Providers shall without undue delayinform the Security Recipient accordingly and send to the Security Recipient acopy of the order of attachment and transfer. The Security Providers shallfurther inform the attaching creditor in writing of the Security Recipient’ssecurity interest in the Assigned Claims.

 

11.2         In each of the eventsdescribed in clause 11.1 above, the Security Providers shall act according tothe Security Recipient’s instructions.

 

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**12****                                 ****Rightof survey and inspection**

 

12.1         Each Security Provider shallgive the Security Recipient, upon request, all information, evidence, anddocuments which in the Security Recipient’s reasonable opinion are necessaryfor the evaluation and/or assertion of the Assigned Claims. If electronic dataprocessing facilities are used, each Security Provider must print the necessarydocuments; if no printout is made, the data carriers and the software necessaryfor this shall be delivered to the Security Recipient to enable it to make theprintout itself.

 

12.2         The Security Recipient shallhave the right to inspect either by itself or through its nominated and dulyauthorized agent each Security Provider’s documents for purposes of inspectingand realizing the Collateral.

 

12.3         The Security Recipient shallhave the absolute right to share any information it gains from such inspectionor verification or otherwise in connection with this Agreement with any SecuredParty.

 

**13****                                 ****Securityvalue and release of Collateral**

 

13.1         After the Obligations underthe Credit Documents are paid in full, the Commitments are terminated and noLetters of Credit drawn by the UK Borrower shall be outstanding,notwithstanding that from time to time during the term of the Credit Agreementand any Hedge Agreement the Credit Parties may be free from any Obligations(the “**Discharge Date**”), the SecurityRecipient shall retransfer to each Security Provider all Collateral assignedand transferred to it hereunder by each Security Provider and surrender anyexcess proceeds to the Security Providers, at the Security Providers’ expense.However, the Security Recipient will transfer such Collateral to a third partyif it is obliged to do so; that is the case, for example, if a SecurityProvider is at the same time a debtor, and a surety has made payment to theSecurity Recipient.

 

13.2         The Security Recipient isobliged, already prior to the full discharge of the Secured Claims and thetermination of any facilities which may give rise to the Secured Claims, toentirely or partially release the Collateral, if so requested, to a SecurityProvider, provided and to the extent that the realisable value of all securityprovided to secure the Secured Claims not only temporarily exceeds 110 percentof the Secured Claims. To the extent the Security Recipient is obliged to payany 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 shallbe free to select the security items to be released under clause 13.1 aboveand, to the extent an obligation of the Security Recipient to release anysecurity provided for the Secured Claims (or any part thereof) also existsunder or in connection with any other security agreement, under any othersecurity document. In selecting security items to be released under clause 13.2above, the Security Recipient shall duly consider the Security Providers’legitimate interests and the legitimate interests of parties having providedadditional security.

 

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13.4         A Security Provider shallautomatically be released from its obligations hereunder and the assignment ofsuch Security Provider shall be automatically released upon the consummation ofany transaction permitted by the Credit Agreement as a result of which suchSecurity Provider ceases to be a Subsidiary of the US Borrower. In connectionwith any such release, the Security Recipient shall execute and deliver to therelevant Security Provider, at such Security Provider’s expense, all documentsthat such Security Provider shall reasonably request to evidence suchtermination or release. Any execution and delivery of documents pursuant to thepreceding sentence of this clause 13.4 shall be without recourse to or warrantyby the Security Recipient.

 

**14****                                 ****Authorityof Agent**

 

The Security Providers acknowledge that the rightsand responsibilities of the Security Recipient under this Agreement withrespect to any action taken by the Security Recipient or the exercise ornon-exercise by the Security Recipient of any option, right, request, judgmentor other right or remedy provided for herein or resulting or arising out ofthis Agreement shall, as between the Security Recipient and the other SecuredParties, be governed by the Credit Agreement and by such other agreements withrespect thereto as may exist from time to time among them, but, as between theSecurity Recipient and the Security Providers, the Security Recipient shall beconclusively presumed to be acting as agent for the Secured Parties with fulland valid authority so to act or refrain from acting, and the SecurityProviders shall not have the obligation, or entitlement, to make any inquiryrespecting such authority.

 

**15****                                 ****Furtherassurance**

 

Each Security Provider will execute any and allfurther documents, financing statements, agreements and instruments, and takeall such further actions (including the filing and recording of financingstatements, mortgages, deeds of trust and other documents), which may berequired under any applicable law, or which the Security Recipient or theRequired Lenders may reasonably request, in order to effectuate thetransactions contemplated by this Agreement and in order (x) to grant,preserve, protect and perfect the validity and priority of the securityinterests created or intended to be created hereby or (y) to enable theAdministrative Agent to exercise and enforce its rights and remedies hereunderwith respect to any Collateral, all at the expense of such Security Provider.

 

**16****                                 ****Assignmentand transfer**

 

16.1         The Security Recipientshall, at any time, have the right to assign, to transfer, or to dispose of allor any part of its rights or obligations or both under this Agreement to any ofthe Secured Parties or any person becoming a Secured Party and each SecurityProvider shall execute all such documents and do all such acts and things whichthe Security Recipient may reasonably require in connection with such transfer,assignment, or disposal.

 

16.2         No Security Provider shallbe entitled to assign, to transfer or to dispose of all or any part of itsrights or obligations or both hereunder.

 

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16.3         Each Security Providerhereby agrees to any accession of a new party and any change to the parties tothe Credit Documents and the Hedge Agreements. Each Security Provider furtheragrees to that, notwithstanding any such accession of a party or change to theparties, to the Credit Documents or any assignment, transfer or disposal ascontemplated in clause 16.1 above, this Agreement shall remain in full forceand effect.

 

**17****                                 ****Costsand expenses**

 

All reasonable costs and expenses arising from theexecution of this Agreement, from amendments or prolongation thereof or anycosts arising from the enforcement or preservation of the Security Recipient’srights hereunder shall be borne jointly and severally by the SecurityProviders, whereby the Security Recipient is entitled to mandate a third partyto perform such actions in its own name but for each Security Provider’saccount.

 

**18****                                 ****Indemnity**

 

18.1         The Security Recipient shallnot be liable for any loss or damage which is suffered by a Security Providersave in respect of such loss or damage which is suffered as a result of theSecurity Recipient’s willful misconduct (*Vorsatz*) orgross negligence (*grobe Fahrlässigkeit*).

 

18.2         The Security Providers shalljointly and severally indemnify the Security Recipient and keep the SecurityRecipient indemnified against any losses, actions claims, expenses, demands andliabilities which may be made against or incurred by the Security Recipient foranything done or omitted in the exercise or purported exercise of the powersand rights under this Agreement or occasioned by any breach of a SecurityProvider of any of its obligations or undertakings under-contained herein,provided always that there will be no such indemnification, to the extent thatsuch losses, actions, claims, expenses, demands and liabilities are incurred byor made against the Security Recipient as a result of willful misconduct orgross negligence of the Security Recipient.

 

**19****                                 ****Durationand partial invalidity**

 

19.1         This Agreement shall remainin full force and effect until the Discharge Date. As long as the Obligationsunder the Credit Documents remain outstanding no Security Provider shall assertany claims against the UK Borrower or any Credit Party that is a ForeignSubsidiary (or any of them) which might arise from the fulfillment of itsobligations according to this Agreement, either contractual or statutory. Themonies which are transferred to or debited by a Security Provider from the UKBorrower 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 aremade to the Security Recipient by a Security Provider, such Security Providershall not assert any rights or claims against the debtors arising by virtue ofsuch payment until the Secured Claims have been paid and discharged in full andany facilities which may give rise to the Secured Claims have been terminated.

 

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19.2         Any provision of thisAgreement that is prohibited or unenforceable in any jurisdiction shall, as tosuch jurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall not invalidateor render unenforceable such provision in any other jurisdiction.

 

19.3         In case of a prohibited,invalid or unenforceable provision the parties hereto shall endeavor ingood-faith negotiations to replace the invalid, illegal or unenforceableprovisions with valid provisions the economic effect of which comes as close aspossible to that of the invalid, illegal or unenforceable provisions..

 

19.4         This Agreement shall createa continuing security and no change or amendment to the Credit Documents shallaffect the validity and the scope of this Agreement nor the obligations whichare imposed on the Security Providers pursuant to it.

 

19.5         Subject to anythingexpressed to the contrary in this Agreement, this Agreement is independent fromany other security or guarantee which may have been given to the SecuredParties with respect to any of the Secured Claims. None of such other securityinterests shall prejudice, or shall be prejudiced by, or shall be merged in anyway with, this Agreement.

 

19.6         This Agreement shall inureto the benefit of the Security Recipient, its successors and assigns.

 

**20****                                 ****Noticesand other matters**

 

20.1         Notices

 

Every notice, request, demand or other communicationunder this Agreement shall:

 

20.1.1      be in writing deliveredpersonally or by prepaid letter (airmail if available) or fax;

 

20.1.2      be deemed to have beenreceived, subject as otherwise provided in this Agreement, in the case of aletter, when delivered personally or 10 days after it has been put into thepost and, in the case of a fax, when a complete and legible copy is received bythe addressee (unless the time of dispatch of any fax is after close ofbusiness in which case it shall be deemed to have been received at the openingof business on the next business day); and

 

20.1.3      be sent

 

(a)                                  For each of theSecurity Providers at:

 

Rockwood Specialties Group, Inc.100 Overlook CenterPrinceton, NJ 08542USA

 

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Attention:              Fax:

 

with a copy to:

 

Kohlberg Kravis Roberts & Co., L.P.9 West 57th StreetSuite 4200New York, NY 10019USA

 

Attention:              Fax:

 

(b)                                 to the SecurityRecipient at:

 

Credit Suisse First BostonEleven Madison AvenueNew YorkNY 10010

 

Attention:              Fax:

 

or to such other address or fax number as isnotified by the relevant party to the other parties to this Agreement.

 

For the purpose of this Agreement each of theSecurity Providers hereby appoints and authorizes Rockwood Specialties Group, Inc.,to receive any notice, request demand or other communication under thisAgreement (Empfangsvollmacht)

 

20.2         No implied waiver, remediescumulative

 

No failure or delay on the part of the SecurityRecipient to exercise any power, right or remedy under this Agreement shalloperate as a waiver thereof, nor shall any single or partial exercise by theSecurity Recipient of any power, right or remedy preclude any other or furtherexercise thereof or the exercise of any power, right or remedy. The remediesprovided in this Agreement are cumulative and are not exclusive of any remediesprovided by law.

 

20.3         English translations

 

All documents to be delivered under or supplied inconnection with this Agreement shall be in the English language or shall beaccompanied by a certified translation into English upon which the recipientshall be entitled to rely.

 

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**21****                                 ****Counterparts**

 

This Agreement may be executed in any number ofcounterparts (whether by facsimile or otherwise, but, if by facsimile, with theoriginal signed pages being promptly sent to the Security Recipient byprepaid letter (and the Security Recipient is hereby authorized to incorporatesuch pages into bound originals)) and by the different parties on separatecounterparts, each of which when so executed and delivered shall be anoriginal, but all counterparts shall together constitute one and the sameagreement.

 

**22****                                 ****Changesand amendments**

 

Changes to and amendments of this Agreement includingthis subsection must be made in writing, signed by all of the parties hereto.

 

**23****                                 ****Choiceof law and venue**

 

23.1         THIS AGREEMENT AND THERIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, ANDCONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE FEDERAL REPUBLICOF GERMANY.

 

23.2         Each Security Providerhereby irrevocably and unconditionally:

 

23.2.1      submits itself in any Legalaction or proceeding relating to this Agreement and the Other Credit Documentsto which it is a party, or for recognition and enforcement of any judgment inrespect thereof, to the non-exclusive general jurisdiction of the courts ofFrankfurt am Main, Germany, the courts of the State of New York, the courts ofthe United States of America for the Southern District of New York andappellate courts from any thereof;

 

23.2.2      consents that any suchaction or proceeding may be brought in such courts and waives any objectionthat it may now or hereafter have to the venue of any such action or proceedingin any such court or that such action or proceeding was brought in aninconvenient court and agrees not to plead or claim the same, and

 

23.2.3      agrees that nothing hereinshall limit the right of the Administrative Agent to take legal actions beforeany other court of competent jurisdiction.

 

***Signature Page follows***

 

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EXHIBIT C-3

 

FORM OFGERMAN GUARANTEE

 

 

Dated July 30,2004

 

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**ROCKWOOD SPECIALTIES-GMBH (1)**

 

**ROCKWOOD PIGMENTE HOLDING GMBH (2)**

 

**SILO PIGMENTE GMBH (3)**

 

**CREDIT SUISSE FIRST BOSTON (4)**

 

 

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**GUARANTEE(*Garantie*)**

 

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**THISGUARANTEE AGREEMENT** is made **BETWEEN**:

 

**(1)****        **Rockwood Specialties GmbH,a corporation *(Gesellschaft mitbeschriinkter Haftung)*incorporated under the laws of the FederalRepublic of Germany, having its business address at MiihIstr. 118, 65396Walluf, Germany, registered with the commercial register of the local court ofWiesbaden under HR B 17839;

 

**(2)****        **Rockwood Pigmente HoldingGmbH, a corporation *(Gesellschaft mitbeschrdnkter Haftung)*incorporated under the laws of the FederalRepublic of Germany having its business address at Miihlstr. 118, 65396 Walluf,Germany, registered with the commercial register of the local court ofWiesbaden under HR B 17837, Germany;

 

**(3)****        **Silo Pigmente GmbH, acorporation *(Gesellschaft mit beschrankterHaftung)*incorporated under the laws of the Federal Republic ofGermany having its business address at Whist. 118, 65396 Walluf, Germany,registered with the commercial register of the local court of Wiesbaden underHR B 17832, Germany,

 

- hereinafter collectively referred to as the“**Guarantors**” -

 

**(4)****        **Credit Suisse FirstBoston, a New York banking corporation having its business address at ElevenMadison Avenue, New York, NY 10010, USA, acting through its Cayman IslandsBranch,

 

- hereinafter referred to as the “**Administrative Agent**” -

 

**Preamble**

 

(A)                               Rockwood SpecialtiesGroup, Inc. (the “**US Borrower**”)and Rockwood Specialties Limited, a company incorporated under the laws ofEngland and Wales (the “**UK Borrower**”),as borrowers, the lenders, JPMorgan Chase Bank as administrative agent for thelenders, and others have entered into a Credit Agreement dated as of July 23,2003 (the “**Original Credit Agreement**”), asamended pursuant to which the borrowers have been made available loans andletters of credit for the account of the borrowers by the lenders.

 

(B)                               The US Borrower,the UK Borrower, Rockwood Specialties International, Inc., the Lenders (asdefined in the Credit Agreement (as defined below)) from time to time partythereto, Credit Suisse First Boston acting through its Cayman Islands Branch asadministrative agent (the “**Administrative Agent**”) andcollateral agent, and UBS Securities LLC and Goldman Sachs Credit PartnersL.P., as co-syndication agents, entered into a credit agreement dated as of July 30,2004 (the “**Credit Agreement**”), as amended pursuant to which theLenders have severally agreed to make loans to the US Borrower and the UKBorrower (the US Borrower and the UK Borrower together also the “**Borrowers**”)and the Letter of Credit Issuer (as defined in the Credit Agreement) hasagreed to issue letters of credit for the account of the Borrowers(collectively, the “**Extension of Credit**”), upon the terms and subject to theconditions set forth therein and one or more Lenders or affiliates ofLenders may from time to time enter into Hedge

 

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Agreements (as defined below) with the US Borroweror any of the Restricted Subsidiaries (as defined in the Credit Agreement).

 

(C)                               The proceeds ofthe Extensions of Credit will be used in part to enable the UK Borrower to makevaluable transfers to the Guarantors in connection with the operation of theirrespective business.

 

(D)                               Each Guarantoracknowledges that it will derive substantial direct and indirect benefit fromthe making of the Extensions of Credit.

 

(E)                                It is a conditionprecedent to the obligations of the Lenders and the Letter of Credit Issuer tomake their respective Extensions of Credit to the UK Borrower under the CreditAgreement that the Guarantors shall have executed and delivered this Guaranteeto the Administrative Agent for the ratable benefit of the Secured Parties.

 

**NOW, THEREFORE**, inconsideration of the premises and to induce the Administrative Agent, theCo-Syndication Agents, the Documentation Agent, the Lenders and the Letter ofCredit Issuer to enter into the Credit Agreement and to induce the Lenders andthe Letter of Credit Issuer to make their respective Extensions of Credit tothe UK Borrower under the Credit Agreementand to induce one or more Lenders or Affiliates of Lenders to enter into HedgeAgreements with the UK Borrower, the Guarantors hereby agree with theAdministrative Agent, for the ratable benefit of the Secured Parties, asfollows:

 

**1****                                        ****Headings,capitalized terms and references**

 

1.1                               Unlessotherwise defined herein, terms defined in the Credit Agreement and used hereinshall 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 collectivereference to (i) the due and punctual payment of (x) the principal ofand premium, if any, and interest at the applicable rate provided in the CreditAgreement (including interest accruing during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding) on the Loans extended to the UKBorrower, when and as due, whether at maturity, by acceleration, upon one ormore dates set for prepayment or otherwise, (y) each payment required tobe made by the UK Borrower under the Credit Agreement in respect of any Letterof Credit, when and as due, including payments in respect of reimbursement ofdisbursements, interest thereon and obligations to provide cash collateral, and(z) all other monetary obligations, including fees, costs, expenses andindemnities, whether primary, secondary, direct, contingent, fixed, future orotherwise (including monetary obligations incurred during the pendency of anybankruptcy, insolvency, receivership or other similar proceeding, regardless ofwhether allowed or allowable in such proceeding), of the UK Borrower or anyother Credit Party that is a Foreign Subsidiary to any of the Secured Partiesunder the Credit Agreement and the other Credit Documents, (ii) the dueand punctual performance of all covenants, agreements, obligations andliabilities of the UK Borrower under or

 

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pursuant to the Credit Agreement and the other CreditDocuments, (iii) the due and punctual payment and performance of all thecovenants, agreements, obligations and liabilities of each other Credit Partythat is a Foreign Subsidiary under or pursuant to this Guarantee or the otherCredit Documents, (iv) the due and punctual payment and performance of allobligations of the UK Borrower and each Credit Party that is a ForeignSubsidiary under each Hedge Agreement that (x) is in effect on the ClosingDate with a counterparty that is a Lender or an Affiliate of a Lender as of theClosing Date or (y) is entered into after the Closing Date with anycounterparty that is a Lender or an Affiliate of a Lender at the time suchHedge Agreement is entered into and (v) the due and punctual payment andperformance of all obligations in respect of overdrafts and related liabilitiesowed to the Administrative Agent or its Affiliates by the UK Borrower or anyother Credit Party that is a Foreign Subsidiary arising from or in connectionwith treasury, depositary or cash management services or in connection with anyautomated clearinghouse transfer of funds.

 

1.4                               As used herein,the term “**Secured Parties**” means (i) theLenders, (ii) the Letter of Credit Issuer, (iii) the SwinglineLender, (iv) the Administrative Agent, (v) the Co-Syndication Agents,(vi) the Documentation Agent, (vii) each counterparty to a HedgeAgreement the obligations under which constitute Obligations, (viii) thebeneficiaries of each indemnification obligation undertaken by the UK Borroweror any Credit Party that is a Foreign Subsidiary under any Credit Document, and(ix) any successors, indorsees, transferees and assigns of each of theforegoing.

 

1.5                               References to “Lenders”in this Guarantee shall be deemed to include Affiliates of Lenders that mayfrom 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 thisGuarantee shall refer to this Guarantee as a whole and not to any particularprovision of this Guarantee, and clause references are to clauses of thisGuarantee unless otherwise specified. The words “include”, “includes” and “including”shall be deemed to be followed by the phrase “without limitation”.

 

1.7                               The meaningsgiven to terms defined herein shall be equally applicable to both the singularand plural forms of such terms.

 

1.8                               Headings arefor ease of reference only and shall not affect the construction of thisGuarantee.

 

1.9                               This Guaranteeis made in the English language. For the avoidance of doubt, the Englishlanguage version of this Guarantee shall prevail over any translation of thisGuarantee. However, where a German translation of a word or phrase appears inthe text of this Guarantee, the German translation of such word or phrase shallprevail.

 

**2****                                        ****Guarantee**

 

2.1                               Each Guarantorhereby guarantees (*garantiert*), asprimary obligor (*selbständig Verpflichteter*) andnot merely as surety (Burge) absolutely, unconditionally and irrevocably (*unbedingt and unwiderruflich*) to the Administrative Agent forthe ratable

 

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benefit of the Secured Parties their respectivesuccessors, indorsees, transferees and assigns, as each Guarantor’s independentobligation (*selbständige Verpflichtung*) the promptand complete payment and performance of all Obligations (provided always thatsuch Obligations are capable of being transformed into financial obligations (*Zahlungsverpflichtungen*)) (the “**Guarantee**”).

 

2.2                               Each Guarantorfurther agrees to pay any and all expenses (including all reasonable fees anddisbursements of counsel) that may be paid or incurred by the AdministrativeAgent or any other Secured Party in enforcing, or obtaining advice of counselin respect of, any rights with respect to, or collecting, any or all of theObligations and/or enforcing any rights with respect to, or collecting against,such Guarantor under this Guarantee. Any taxes, fees or reasonable costs owedfor the signing or execution of this Guarantee shall be borne by theGuarantors. All payments to be made by a Guarantor under this Guarantee shallbe made in full and, subject as provided below, free and clear of anydeductions or withholdings on the due date to such account as theAdministrative Agent may from time to time specify. If a Guarantor is requiredto make any deduction or withholding in respect of taxes from any payment dueunder this Guarantee to the Administrative Agent, or if the AdministrativeAgent is required to make any such deduction or withholding from a payment toanother Secured Party, the sum due from such Guarantor in respect of suchpayment shall be increased to the extent necessary to ensure that, after themaking of such deduction or withholding by such Guarantor or the AdministrativeAgent (as the case may be) and the payment to the Secured Parties by theAdministrative Agent, each Secured Party receives on the due date for suchpayment (and retains, free from any liability in respect of such deduction orwithholding) a net sum equal to the sum which it would have received had nosuch deduction or withholding been required to be made; the relevant Guarantorshall indemnify the Administrative Agent and each other Secured Party againstany losses or costs incurred by any of them by reason of any failure of suchGuarantor to make any such deduction or withholding or by reason of anyincreased payment not being made on the due date for such payment. EachGuarantor shall promptly deliver to the Administrative Agent any receipts,certificates or other proof (if any) evidencing the amount paid or payable inrespect of any deduction or withholding as aforesaid.

 

2.3                               No payment orpayments made by the UK Borrower, any of the Guarantors, any other guarantor orany other Person or received or collected by the Administrative Agent or anyother Secured Party from the UK Borrower, any of the Guarantors, any otherguarantor or any other Person by virtue of any action or proceeding or anyset-off or appropriation or application at any time or from time to time inreduction 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 paymentsmade by such Guarantor in respect of the Obligations or payments received orcollected from such Guarantor in respect of the Obligations, remain liable forthe Obligations up to the maximum liability of such Guarantor hereunder untilthe Obligations are paid in full, the Commitments are terminated and no Lettersof Credit drawn by the UK Borrower shall be outstanding.

 

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2.4                               Each Guarantoragrees that whenever, at any time, or from time to time, it shall make anypayment to the Administrative Agent or any other Secured Party on account ofits liability hereunder, it will notify the Administrative Agent in writingthat such payment is made under this Guarantee for such purpose.

 

**3****                                        ****Acceptanceof the Guarantee and shareholders’ approval / Effectiveness of Guarantee**

 

3.1                               TheAdministrative Agent hereby accepts the Guarantee as described in clause 2above.

 

3.2                               The respectiveshareholders of the Guarantors have approved the granting of the Guarantee asdescribed 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 securityinterest created by the Guarantee shall attach immediately upon the ClosingTime.

 

**4****                                        ****Amendments**

 

This Guarantee shall create continuing security andno change or amendment whatsoever to the Credit Agreement or any other CreditDocument shall affect the validity and scope of this Guarantee nor theobligations which are imposed on the Guarantors pursuant to it,  unless express reference is made to this Guaranteeand this clause.

 

**5****                                        ****Noset-off or counterclaim, contribution**

 

5.1                               All payments tobe made by a Guarantor under this Guarantee shall be made without any set-offor rights of retention of any nature whatsoever unless the respectivecounterclaim or right of retention is undisputed (*unbestritten*)or determined by final court ruling (*rechtskräflig festgestellt*).

 

5.2                               Each Guarantorhereby agrees that to the extent that a Guarantor shall have paid more than itsproportionate share of any payment made hereunder, such Guarantor shall beentitled to seek and receive contribution from and against any other Guarantorhereunder who has not paid its proportionate share of such payment. EachGuarantor’s right of contribution shall be subject to the terms and conditionsof clause 14 hereof. The provisions of this clause 5 shall in no respect limitthe obligations and liabilities of any Guarantor to the Administrative Agentand the other Secured Parties, and each Guarantor shall remain liable to theAdministrative Agent and the other Secured Parties for the full amountguaranteed by such Guarantor hereunder.

 

5.3                               In addition toany rights and remedies of the Secured Parties provided by law, each Guarantorhereby irrevocably authorizes each Secured Party at any time and from time totime following the occurrence and during the continuance of an Event of Defaultwithout notice to such Guarantor or any other Guarantor, any such notice beingexpressly waived by each Guarantor, upon any amount becoming due and payable bysuch Guarantor hereunder (whether at stated maturity, by acceleration orotherwise) to set-off and appropriate and apply against such amount any and alldeposits (general or special, time

 

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or demand, provisional or final), and any othercredits, indebtedness or claims, in each case whether direct or indirect,absolute or contingent, at any time held or owing by such Secured Party to orfor the credit or the account of such Guarantor. Each Secured Party shallnotify such Guarantor promptly of any such set-off and the appropriation andapplication made by such Secured Party, provided that the failure togive such notice shall not affect the validity of such set-off and application.

 

**6****                                        ****Limitationof Guarantee**

 

6.1                               TheAdministrative Agent agrees to release proceeds from the enforcement of anycollateral established by this Guarantee if and to the extent that:

 

6.1.1                     the collateral securesclaims against shareholders of any Guarantor or Persons deemed to be equivalentto shareholders for purposes of Sections 30 and 31 of the German LimitedLiability Companies Act (GmbHG) (*Gesellschaft nahestehendePersonen*),

 

6.1.2                     in relation to eachGuarantor, the application of proceeds towards such claims would lead to asituation that such Guarantor would not have sufficient assets to maintain itsnominal capital (*Stammkapital*), and

 

6.1.3                     the relevant Guarantordemonstrates to the satisfaction of the Administrative Agent that theapplication of the proceeds therefore would lead to a violation of Section 30of the German Limited Liability Companies Act (GmbHG),

 

provided that for the purposes of the calculation ofthe amount to be released (if any) the following balance sheet items shall beadjusted as follows:

 

6.1.4                     the amount of any increaseof nominal capital (*Stammkapital*)after the date hereof that has been effected without prior written consent ofthe recipient of the Guarantee shall be deducted from the nominal capital (*Stammkapital*), and

 

6.1.5                     loans and other contractualliabilities incurred in violation of the provisions of the Credit Agreementshall be disregarded.

 

For the avoidance of doubt, each Guarantor shallhave 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 AdministrativeAgent to claim again under this Guarantee for any unpaid amount.

 

6.2                               In addition, ifany Guarantor does not (or would not if the Guarantee is enforced) havesufficient assets to maintain its nominal capital, such Guarantor shall to theextent legally permitted in respect of its business realize any and all of itsassets that are shown in its balance sheet with a book value (*Buchwert*) that is significantly lower than the market valueof the asset(s) if such asset(s) is/are not necessary for suchGuarantor’s business (*betriebsnotwendig*).

 

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**7****                                        ****Payments,Currency and currency indemnity**

 

All payments to be made by a Guarantor under thisGuarantee 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 Agentrecovering any amount hereunder in a currency other than the Contractual Currencyand if the said amount so recovered is insufficient when converted intoContractual Currency at the date of receipt by the Administrative Agent tosatisfy in full the amount due to the Administrative Agent hereunder, eachGuarantor shall upon the Administrative Agents written demand pay to theAdministrative Agent such further amount(s) in the Contractual Currency aswill be sufficient to satisfy in full the amount so due to the AdministrativeAgent hereunder and such further amount(s) shall be due as a separate debthereunder.

 

**8****                                        ****SeveralGuarantors**

 

The obligations and liabilities of the Guarantorsunder this Guarantee are joint and several and shall be construed accordingly.

 

**9****                                        ****Declarationof trust**

 

Each of the Guarantors and the Administrative Agentacknowledges that all rights and claims constituted by this Guarantee and allrights, claims, and moneys paid to the Administrative Agent or held by theAdministrative Agent pursuant to or in connection with this Guarantee are heldand administered by the Administrative Agent with effect from the date of thisGuarantee on trust (*treuhänderisch*)for the Secured Parties and administered in accordance with the CreditAgreement.

 

**10****                                 ****Applicationof proceeds**

 

The Administrative Agent shall apply, vis-à-vis theSecured Parties, the proceeds of any payment of the Guarantors after receipt asfollows:

 

first, to the payment of all reasonable and documentedcosts and expenses incurred by the Administrative Agent in connection with suchpayment or otherwise in connection with this Agreement, the other CreditDocuments or any of the Obligations, including all court costs and thereasonable fees and expenses of its agents and legal counsel, the repayment ofall advances made by the Administrative Agent hereunder or under any otherCredit Document on behalf of the Guarantors and any other reasonable anddocumented costs or expenses incurred in connection with the exercise of anyright or remedy hereunder or under any other Credit Document;

 

second, to the Secured Parties, an amount equal to allObligations owing to them on the date of any such distribution, and, if suchmoneys shall be insufficient to pay such amounts in full, then ratably (withoutpriority of any one over any other) to such Secured Parties in proportion to theunpaid amounts thereof;

 

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third, any surplus then remaining shall be paid to therelevant Guarantors or its successors or assigns or to whomsoever may belawfully entitled to receive the same or as a court of competent jurisdictionmay direct.

 

**11****                                 ****Representationsand warranties, Covenants**

 

Each Guarantor hereby represents and warrants to theAdministrative Agent:

 

11.1                        that eachGuarantor is a company duly incorporated and validly existing under German lawand is neither insolvent nor subject to any insolvency proceedings;

 

11.2                        that each ofthe Guarantors has the requisite power and authority to enter into thisGuarantee Agreement and to grant the Guarantee and that all necessary corporateaction have been taken and all necessary approvals and consents for theexecution and performance of this Guarantee have been obtained;

 

11.3                        that theexecution and performance of this Guarantee will not violate any applicableprovision of the Guarantor’s articles of association or result in the breach ofany agreement or contract to which any of the Guarantors is a party;

 

11.4                        that it has notreceived any security in respect of any of its obligations under this Guaranteeor any other Credit Document from any other Guarantor or any of the CreditParties;

 

11.5                        that therepresentations and warranties set forth in Section 8 of the CreditAgreement as they relate to such Guarantor or in the other Credit Documents towhich such Guarantor is a party, each of which is hereby incorporated herein byreference, are true and correct, and the Administrative Agent and each otherSecured Party shall be entitled to rely on each of them as if they were fullyset forth herein.

 

11.6                        Each Guarantorhereby covenants and agrees with the Administrative Agent and each otherSecured Party that, from and after the date of this Guarantee until theObligations under the Credit Documents are paid in full, the Commitments areterminated 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 ofany provision, covenant or agreement contained in Section 9 or 10 of theCredit Agreement, and so that no Default or Event of Default, is caused by anyact or failure to act of such Guarantor or any of its Subsidiaries.

 

**12****                                 ****Authorityof Agent**

 

Each Guarantor acknowledges that the rights andresponsibilities of the Administrative Agent under this Guarantee with respectto any action taken by the Administrative Agent or the exercise or non-exerciseby the Administrative Agent of any option, right, request, judgment or otherright or remedy provided for herein or resulting or arising out of this Guaranteeshall, as between the Administrative Agent and the other Secured Parties, begoverned by the Credit Agreement and by such other agreements with respectthereto as may exist from time to time among them, but, as between theAdministrative Agent and

 

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such Guarantor, the Administrative Agent shall beconclusively presumed to be acting as agent for the Secured Parties with fulland valid authority so to act or refrain from acting, and no Guarantor shall beunder obligation, or entitlement, to make any inquiry respecting suchauthority.

 

**13****                                 ****Nosecurity taken by Guarantor**

 

Each Guarantor hereby agrees that any securityreceived by a Guarantor in violation of clause 11.4 shall, unless otherwiseagreed upon with the Administrative Agent, be held on trust (*treuhänderisch*) for the Administrative Agent and asadditional security for the Obligations of such Guarantor and/or the UKBorrower under any of the Credit Documents.

 

**14****                                 ****Negativeundertakings**

 

14.1                        Until allguaranteed Obligations under the Credit Documents have been satisfied bypayment in full, the Commitments have been terminated and no Letters of Credithave been drawn by the UK Borrower, notwithstanding that from time to timeduring the term of the Credit Agreement and any Hedge Agreement the CreditParties may be free from any Obligations, each Guarantor agrees that, withoutthe prior written consent of the Administrative Agent, it will not:

 

14.1.1              exercise any rights ofsubrogation, contribution or indemnity against any other Guarantor or the UKBorrower or any other Person liable;

 

14.1.2              demand or accept repaymentin whole or in part of any obligations or liabilities now or hereafter due tosuch Guarantor by reason of performance of its obligations under any of theCredit Documents from any other Guarantor or the UK Borrower;

 

14.1.3              demand or accept anysecurity interest in respect of any of its obligations under this Guarantee orany other Credit Document from any other Guarantor or the UK Borrower; and

 

14.1.4              take any step to enforce anyright against any other Guarantor or the UK Borrower in respect of anyguaranteed Obligation.

 

14.2                        In case ofviolation of clauses 14.1.1 to 14.1.4 (inclusive), any monies or other propertyreceived 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 Guarantorshall automatically be released from its obligations hereunder and theguarantee of such Guarantor shall be automatically released upon theconsummation of any transaction permitted by the Credit Agreement as a resultof which such Guarantor ceases to be a Subsidiary of the US Borrower. Inconnection with any such release, the Administrative Agent shall execute anddeliver to any Guarantor, at such Guarantor’s expense, all documents that suchGuarantor shall reasonably request to evidence such termination or release. Anyexecution and delivery of documents pursuant to the

 

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preceding sentence of thisclause 14.3 shall be without recourse to or warranty by the AdministrativeAgent.

 

**15****                                 ****Positiveundertakings**

 

15.1                        Each Guarantorhereby undertakes with the Administrative Agent that during the continuance ofthis Guarantee it will take any step and execute any amendment agreement andother documents which the Administrative Agent may deem necessary to ensurecontinuance of this Guarantee in accordance with its provisions, in particularwhen any supplemental agreement to this Guarantee is signed and new SecuredParties accede.

 

**16****                                 ****Independentguarantee**

 

16.1                        This Guaranteeshall be in addition to any other guarantee or other security given by or onbehalf of the UK Borrower, any other Guarantor or otherwise which the SecuredParties and/or the Administrative Agent may now or hereafter hold and shall bebinding on each Guarantor notwithstanding that any other Person who has alsobeen requested by the Secured Parties and/or the Administrative Agent toguarantee or give security for the guaranteed Obligations shall fail to givesuch guarantee or security or shall be released from any guarantee or securitygiven by it or them.

 

16.2                        The liabilityof each Guarantor shall not be affected nor shall any guarantee under thisGuarantee be discharged or reduced by reason of:

 

16.2.1              any modification of thearticles of association, the legal structure or the shareholder structure ofthe other Guarantors or the UK Borrower, in particular those resulting from anymerger, change in corporate form or corporate purpose of the other Guarantorsor the UK Borrower, even if such merger, change or modification results in thecreation of a new legal entity, or if the corporate form of the respectiveGuarantor 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 anyanalogous proceeding occurring in relation to the respective Guarantor or theUK Borrower;

 

16.2.3              the Administrative Agent orany of the other Secured Parties granting any time, indulgence or concessionto, or compounding with, discharging, releasing or varying the liability of anyGuarantor or the UK Borrower or renewing, determining, varying or increasingany accommodation, facility or transaction or otherwise dealing with the samein any manner whatsoever or concurring in, accepting or varying any compromise,arrangement or settlement or omitting to claim or enforce payment from anyother Guarantor or the UK Borrower;

 

16.2.4              any amendment, variation orwaiver of any of the Credit Documents or any Hedge Agreement; or

 

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16.2.5              any act or omission whichwould not have discharged or affected the liability of such Guarantor had itbeen a principal debtor instead of a guarantor or anything done or omittedwhich but for this provision might operate to exonerate such Guarantor.

 

16.3                        Each Guarantoragrees to be bound by this Guarantee notwithstanding that any Person intendedto execute or to be bound by this Guarantee may not do so or may not beeffectually bound and notwithstanding that any guarantees contained in thisGuarantee may be terminated or released or may be or become invalid or unenforceableagainst any other Guarantor whether or not the deficiency is known to theAdministrative Agent or any of the Secured Parties.

 

16.4                        Neither theAdministrative Agent nor any of the other Secured Parties shall be obliged tomake any claim or demand on any Guarantor or the UK Borrower or any otherPerson liable or to resort to any security which is granted for the guaranteedObligations before enforcing this Guarantee and no action taken or omitted inconnection with any such claim or security shall discharge, reduce, prejudiceor affect the liability of any Guarantor under this Guarantee.

 

**17****                                 ****Settlementsconditional**

 

Any release, discharge or settlement between aGuarantor and the Administrative Agent shall be conditional upon no security,disposition or payment to the Administrative Agent or any of the other SecuredParties by any of the Guarantors or any other Person being void, set aside orordered to be refunded pursuant to any enactment or law relating toliquidation, administration or insolvency or for any other reason whatsoeverand if such condition is not fulfilled the Administrative Agent shall beentitled to enforce this Guarantee as if such release, discharge or settlementhad not occurred and any such payment had not been made.

 

**18****                                 ****Additionalactions and declarations**

 

The Guarantor will execute any and all furtherdocuments, financing statements, agreements and instruments, and take all suchfurther actions (including the filing and recording of financing statements,mortgages, deeds of trust and other documents), which may be required under anyapplicable law, or which the Administrative Agent or the Required Lenders mayreasonably request, in order to effectuate the transactions contemplated bythis Guarantee and in order (x) to grant, preserve, protect and perfectthe validity and priority of the security interests created or intended to becreated hereby or (y) to enable the Administrative Agent to exercise andenforce its rights and remedies hereunder with respect to any Collateral, allat the expense of such Guarantor.

 

**19****                                 ****Costsand expenses**

 

All costs and expenses arising from the execution ofthis Guarantee, from amendments or prolongation thereof or any costs arisingfrom the enforcement or preservation of Administrative Agent’s rights hereunderif reasonably incurred shall be borne by the Guarantors jointly and severally,whereby the Administrative Agent is entitled to

 

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mandate a third party to perform such actions in itsown name but for each Guarantor’s account.

 

**20****                                 ****Indemnity**

 

20.1                        TheAdministrative Agent shall not be liable for any loss or damage which issuffered by the Guarantor save in respect of such loss or damage which issuffered as a result of willful misconduct (*Vorsatz*) or grossnegligence (*grobe Fahrlässigkeit*).

 

20.2                        The Guarantorsshall, jointly and severally, indemnify the Administrative Agent and keep theAdministrative Agent indemnified against any losses, actions, claims, expenses,demands and liabilities which may be made against or incurred by theAdministrative Agent for anything done or omitted in the exercise or purportedexercise of the powers and rights under this Guarantee or occasioned by anybreach of a Guarantor of any of its obligations or undertakings containedherein, provided always that there will be no such indemnification, to theextent that such losses, actions, claims, expenses, demands and liabilities areincurred by or made against the Administrative Agent as a result of willfulmisconduct (*Vorsatz*) or gross negligence (*grobe Fahrlässigkeit*) of the Administrative Agent.

 

**21****                                 ****Assignmentand transfer**

 

21.1                        TheAdministrative Agent shall, at any time, have the right to assign, to transferor to dispose of all or any part of its rights or obligations or both underthis Guarantee to any of the Secured Parties or any Person becoming a SecuredParty and each Guarantor shall execute all such documents and do all such actsand things which the Administrative Agent may reasonably require in connectionwith such assignment, transfer or disposal.

 

21.2                        No Guarantorshall be entitled to assign, to transfer or to dispose of all or any part ofits rights or obligations or both hereunder.

 

21.3                        Each Guarantorhereby agrees to any accession of a new party and any change to the parties tothe Credit Documents. Each Guarantor further agrees that notwithstanding anysuch accession of a party or change to the parties to the Credit Documents orany assignment, transfer or disposal as contemplated in clause 21.1 above, thisGuarantee shall remain in full force and effect.

 

**22****                                 ****Duration,partial invalidity and other matters**

 

22.1                        This Guaranteeshall be a continuing security and shall remain in full force and effect untilthe Obligations under the Credit Documents are paid in full, the Commitmentsare terminated and no Letters of Credit drawn by the UK Borrower shall beoutstanding, notwithstanding that from time to time during the term of theCredit Agreement and any Hedge Agreement the Credit Parties may be free fromany Obligations (the “**Discharge Date**”).

 

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22.2                        When paymentsare made to the Administrative Agent by a Guarantor, the rights of the SecuredParties towards the UK Borrower and the Guarantors (or any of them) shall onlybe transferred to the respective Guarantor after the occurrence of theDischarge Date.

 

22.3                        Any provisionof this Guarantee that is prohibited or unenforceable in any jurisdictionshall, as to such jurisdiction, be ineffective to the extent of such prohibitionor unenforceability without invalidating the remaining provisions hereof, andany such prohibition or unenforceability in any jurisdiction shall notinvalidate or render unenforceable such provision in any other jurisdiction.

 

22.4                        This Guarantee representsthe agreement of each Guarantor and the Administrative Agent with respect tothe subject matter hereof, and there are no promises, undertakings,representations or warranties by the Administrative Agent or any other SecuredParty relative to the subject matter hereof not expressly set forth or referredto herein or in the other Credit Documents.

 

22.5                        In case of aprohibited, invalid or unenforceable provision the parties hereto shallendeavor in good-faith negotiations to replace the invalid, illegal orunenforceable provisions with valid provisions the economic effect of whichcomes as close as possible to that of the invalid, illegal or unenforceableprovisions.

 

22.6                        This Guaranteeshall inure to the benefit of the Administrative Agent, its successors andassigns.

 

**23****                                 ****Noticesand other Matters**

 

23.1                        Notices

 

Every notice, request demand or other communicationunder this Guarantee shall:

 

23.1.1              be in writing deliveredpersonally or by prepaid letter (airmail if available) or fax;

 

23.1.2              be deemed to have beenreceived, subject as otherwise provided in this Guarantee, in the case of aletter, when delivered personally or ten (10) days after it has been putinto the post and, in the case of a fax, when a complete and legible copy isreceived by the addressee (unless the time of dispatch of any fax is afterclose of business in which case it shall be deemed to have been received at theopening of business on the next business day); and

 

23.1.3              be sent

 

(a)           to the Guarantors at:

RockwoodSpecialties Group, Inc.100 Overlook CenterPrinceton, NJ 08542USA

 

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Attention:Fax:

 

witha copy to:

 

KohlbergKravis Roberts & Co., L.P.9 West 57th StreetSuite 4200New York, NY 10019USA

 

Attention:Fax:

 

(b)          to the AdministrativeAgent at:

 

CreditSuisse First BostonEleven Madison AvenueNew YorkNY 10010

 

Attention:Fax:

 

or to such other address or fax number as isnotified by the relevant party to the other parties to this Guarantee.

 

For the purpose of this Guarantee each Guarantorhereby appoints and authorizes Rockwood Specialties Group, Inc., toreceive any notice, request demand or other communication under this Guarantee(*Empfangsvollmacht*).

 

**24****                                 ****Noimplied waiver, remedies cumulative**

 

No failure or delay on the part of theAdministrative Agent to exercise any power, right or remedy under thisGuarantee shall operate as a waiver thereof, nor shall any single or partialexercise by the Administrative Agent of any power, right or remedy preclude anyother or further exercise thereof or the exercise of any power, right orremedy. The remedies provided in this Guarantee are cumulative and are notexclusive of any remedies provided by law.

 

24.1                        Englishtranslations

 

All documents to be delivered under or supplied inconnection with this Guarantee shall be in the English language or shall beaccompanied by a certified translation into English upon which the recipientshall be entitled to rely.

 

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24.2                        Counterparts

 

This Guarantee may be executed in any number ofcounterparts (whether by facsimile or otherwise, but, if by facsimile, with theoriginal signed pages being promptly sent to the Administrative Agent byfirst-class prepaid letter (and the Administrative Agent is hereby authorizedto incorporate such pages into bound originals)) and by the differentparties on separate counterparts, each of which when so executed and deliveredshall be an original, but all counterparts shall together constitute one andthe same instrument.

 

**25****                                 ****AdditionalGuarantors**

 

Except as provided in Section 9.11 of theCredit Agreement, each Guarantor undertakes to cause each of its subsidiariesorganized under the laws of Germany formed, purchased or acquired after thedate hereof to execute a supplement to this Guarantee in order to becomeGuarantor hereunder with the same force and effect as if originally named as aGuarantor herein. The execution and delivery of any instrument adding anadditional Guarantor as a party to this Guarantee shall not require the consentof any other Guarantor hereunder. The rights and obligations of each Guarantorhereunder shall remain in full force and effect notwithstanding the addition ofany new Guarantor as a party to this Guarantee.

 

**26****                                 ****Changesand amendments**

 

Changes to and amendments of this Guaranteeincluding this subsection must be made in writing, signed by all of the partieshereto.

 

**27****                                 ****Choiceof law and venue**

 

27.1                        THIS GUARANTEEAND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,AND CONSTRUED AND INTERTFEETED IN ACCORDANCE WITH, THE LAWS OF THE FEDERALREPUBLIC OF GERMANY.

 

27.2                        Each Guarantorhereby irrevocably and unconditionally:

 

27.2.1              submits itself in any legalaction or proceeding relating to this Guarantee and the other Credit Documentsto which it is a party, or for recognition and enforcement of any judgment inrespect thereof, to the non-exclusive general jurisdiction of the courts ofFrankfurt am Main, Germany, the courts of the State of New York, the courts ofthe United States of America for the Southern District of New York andappellate courts from any thereof;

 

27.2.2              consents that any suchaction or proceeding may be brought in such courts and waives any objectionthat it may now or hereafter have to the venue of any such action or proceedingin any such court or that such action or proceeding was brought in aninconvenient court and agrees not to plead or claim the same; and

 

27.2.3              agrees that nothing hereinshall limit the right of the Administrative Agent to take legal actions beforeany other court of competent jurisdiction.

 

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***Signature Page Follows***

 

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EXHIBIT C-4

 

FORM OFGERMAN 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 RockwoodPigmente, the “**Rockwood Parties**”)both incorporated under the laws of the Federal Republic of Germany, and CreditSuisse First Boston, acting through its Cayman Islands Branch, asadministrative agent (in such capacity, the “**AdministrativeAgent**”) to the Lenders (as defined below) under the Credit Agreement(as defined below).

 

A.            Reference is made to the CreditAgreement dated as of July 30, 2004 (the “**CreditAgreement**”), among Rockwood Specialties Group, Inc, a Delawarecorporation, Rockwood Specialties Limited, a company incorporated under thelaws of England and Wales, Rockwood Specialties International, Inc., aDelaware corporation, the lenders from time to time parties thereto (the “**Lenders**”), the Administrative Agent, and UBS Securities LLCand Goldman Sachs Credit Partners L.P., as co-syndication agents. Capitalizedterms used herein but not otherwise defined herein, shall have the meaningsascribed to such terms in the Credit Agreement.

 

B.            Rockwood Pigmente and Silo Pigmenteown 89.93% and 10%, respectively, of the partnership interests of Brockues GmbH &Co. KG (the “**Partnership**”).

 

C.            In accordance with Section 6.1(m) ofthe 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 AdministrativeAgent on behalf of the Lenders that such Rockwood Parties shall:

 

(a)           until the Obligations (as defined inthe German Guarantee) under the Credit Documents are paid in full, theCommitments are terminated and no Letters of Credit drawn by the UK Borrower orthe US Borrower shall be outstanding, notwithstanding that from time to timeduring the term of the Credit Agreement and any Hedge Agreement the CreditParties may be free from any Obligations, undertake to exercise their votingrights in the Partnership to prevent the Partnership from creating, incurring,assuming or suffering to exist any Lien upon any property or assets of anykind, save for Liens created, incurred, assumed or suffered to exist to meetthe regular working capital requirements of the Partnership or which arecreated, incurred, assumed or suffered to exist in the ordinary course ofbusiness of the Partnership, in each case, to the extent permitted by any ofSections 10.2(a) through (e) (inclusive) of the Credit Agreement or Section 10.2(h) ofthe Credit Agreement; provided, that the aggregate principal 

 

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amountof the obligations so secured pursuant to such Section 10.2(h) shallnot exceed US$ 5,000,000 at any one time outstanding,

 

(b)           undertake to exercise their votingrights in the Partnership to the effect that a partners’ resolution shall bepassed to resolve that the Rockwood Parties may pledge all of the partners’interests in the Partnership owned by such Rockwood Parties in favor of CreditSuisse First Boston, as Administrative Agent to the Lenders,

 

(c)           undertake to enter into a pledgeagreement in the form substantially set out in Exhibit A-1 hereto topledge all of the partners’ interests in the Partnership owned by the RockwoodParties following the partners’ resolution described in paragraph (b) above,and

 

(d)           undertake to exercise their votingrights in the Partnership to change the legal status of the Partnership into astock corporation *(Aktiengesellschaft).*Followingsuch change, the Rockwood Parties agree to “squeeze-out” or take similar stepswhich 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 Partiesreasonably determine, in consultation with the Administrative Agent, that suchexercise is commercially reasonable and would not require the Rockwood Partiesto take material legal risks under German law or other unduly burdensomeactions.

 

SECTION 2.Further Assurances. Each party agrees, upon the reasonable request ofany other party, at any time and from time to time, to execute and deliver allsuch further documents and take such action as may be reasonably necessary orappropriate in order to effectively confirm or carry out the provisions of thisAgreement. Any execution and delivery of documents by the Administrative Agentcontemplated by the immediately preceding sentence shall be without recourse toor warranty by the Administrative Agent.

 

SECTION 3.Amendment. This Agreement may not be amended, modified or waived exceptin writing signed by each party hereto.

 

SECTION 4.Successors and Assigns Beneficiaries. This Agreement shall be binding onand inure to the benefit of the parties hereto and their respective successorsand assigns.

 

SECTION 5.Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH ANDBE GOVERNED BY AND INTERPRETED UNDER THE LAWS OF THE FEDERAL REPUBLIC OFGERMANY.

 

SECTION 6.Execution of Counterparts. This Agreement may be executed by one or moreof the parties to this Agreement on any numberof separate counterparts, and all of said counterparts taken togethershall be deemed to constitute one and the same instrument. Delivery of anexecuted signature page to this Agreement by facsimile or other electronictransmission shall be effective as delivery of a manually executed counterparthereof.

 

*(Signature page follows)*

 

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EXHIBIT D

 

FORM OFGUARANTEE

 

GUARANTEE

 

GUARANTEE dated as of July 30,2004, made among ROCKWOOD SPECIALTIES INTERNATIONAL, INC., a Delawarecorporation (“Holdings”), each of the subsidiaries of ROCKWOODSPECIALTIES GROUP, INC., a Delaware corporation (the “US Borrower”),listed on Annex A hereto (each such subsidiary individually, a “SubsidiaryGuarantor” and, collectively, the “Subsidiary Guarantors”; theSubsidiary Guarantors and Holdings are referred to collectively as the “Guarantors”)and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, asadministrative agent (in such capacity, the “Administrative Agent”) forthe lenders (the “Lenders”) from time to time parties to the CreditAgreement 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 incorporatedunder the laws of England and Wales (the “UK Borrower” and, togetherwith the US Borrower, the “Borrowers”), Holdings, the Lenders, theAdministrative Agent and UBS Securities LLC and Goldman Sachs Credit PartnersL.P., as co-syndication agents (in such capacities, the “Co-SyndicationAgents”) 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 Letterof Credit Issuer has agreed to issue Letters of Credit for the account of theBorrowers (collectively, the “Extensions of Credit”) upon the terms andsubject to the conditions set forth therein and (b) one or more Lenders orAffiliates of Lenders may from time to time enter into Hedge Agreements withthe Borrowers or any of the Restricted Subsidiaries;

 

WHEREAS, each Subsidiary Guarantor is a DomesticSubsidiary of the US Borrower;

 

WHEREAS, the proceeds of the Extensions of Creditwill be used in part to enable the Borrowers to make valuable transfers to theSubsidiary Guarantors in connection with the operation of their respectivebusinesses;

 

WHEREAS, each Guarantor acknowledges that it willderive substantial direct and indirect benefit from the making of theExtensions of Credit; and

 

WHEREAS, it is a condition precedent to theobligation of the Lenders and the Letter of Credit Issuer to make theirrespective Extensions of Credit to the Borrowers under the

 

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Credit Agreement that the Guarantors shall haveexecuted and delivered this Guarantee to the Administrative Agent for theratable benefit of the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises andto induce the Administrative Agent, the Co-Syndication Agents, the Lenders andthe Letter of Credit Issuer to enter into the Credit Agreement and to inducethe Lenders and the Letter of Credit Issuer to make their respective Extensionsof Credit to the Borrowers under the Credit Agreement and to induce one or moreLenders or Affiliates of Lenders to enter into Hedge Agreements with theBorrowers and/or the Restricted Subsidiaries, the Guarantors hereby agree withthe Administrative Agent, for the ratable benefit of the Secured Parties, asfollows:

 

1.             DefinedTerms.

 

(a)           Unlessotherwise defined herein, terms defined in the Credit Agreement and used hereinshall have the meanings given to them in the Credit Agreement.

 

(b)           Asused herein, the term “Closing Time” means 24:00 (German time) on theClosing Date.

 

(c)           Asused 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 orallowable in such proceeding) on the Loans, when and as due, whether atmaturity, by acceleration, upon one or more dates set for prepayment orotherwise, (y) each payment required to be made by the Borrowers under theCredit Agreement in respect of any Letter of Credit, when and as due, includingpayments in respect of reimbursement of disbursements, interest thereon andobligations to provide cash collateral, and (z) all other monetaryobligations, including fees, costs, expenses and indemnities, whether primary,secondary, direct, contingent, fixed or otherwise (including monetaryobligations incurred during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding, regardless of whether allowed orallowable in such proceeding), of the Borrowers or any other Credit Party to anyof the Secured Parties under the Credit Agreement and the other CreditDocuments, (ii) the due and punctual performance of all covenants,agreements, obligations and liabilities of the Borrowers under or pursuant tothe Credit Agreement and the other Credit Documents, (iii) the due andpunctual payment and performance of all the covenants, agreements, obligationsand liabilities of each other Credit Party under or pursuant to this Guaranteeor the other Credit Documents, (iv) the due and punctual payment andperformance of all obligations of each Borrower or Restricted Subsidiary undereach Hedge Agreement that (x) is in effect on the Closing Date with acounterparty that is a Lender or an Affiliate of a Lender as of the ClosingDate or (y) is entered into after the Closing Date with any counterpartythat is a Lender or an Affiliate of a Lender at the time such Hedge Agreementis entered into and (v) the due and punctual payment and performance ofall obligations in respect of overdrafts and related liabilities owed to theAdministrative Agent or its Affiliates arising from or in connection withtreasury, depositary or cash management services or in connection with anyautomated clearinghouse transfer of funds.

 

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(d)           Asused 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 whichconstitute Obligations, (viii) the beneficiaries of each indemnificationobligation undertaken by any Credit Party under any Credit Document and(ix) any successors, indorsees, transferees and assigns of each of theforegoing.

 

(e)           Referencesto “Lenders” in this Guarantee shall be deemed to include Affiliates of Lendersthat may from time to time enter into Hedge Agreements with any Borrower orRestricted Subsidiary.

 

(f)            Thewords “hereof,” “herein” and “hereunder” and words of similar import when usedin this Guarantee shall refer to this Guarantee as a whole and not to anyparticular provision of this Guarantee, and Section references are toSections of this Guarantee unless otherwise specified.  The words “include”, “includes” and “including”shall be deemed to be followed by the phrase “without limitation”.

 

(g)           Themeanings given to terms defined herein shall be equally applicable to both thesingular and plural forms of such terms.

 

2.             Guarantee.

 

(a)           Subjectto the provisions of Section 2(b) and effective immediately upon theClosing Time, each of the Guarantors hereby, jointly and severally,unconditionally and irrevocably, guarantees, as primary obligor and not merelyas surety, to the Administrative Agent, for the ratable benefit of the SecuredParties, the prompt and complete payment and performance when due (whether atthe stated maturity, by acceleration or otherwise) of the Obligations.

 

(b)           Anythingherein or in any other Credit Document to the contrary notwithstanding, the maximumliability of each Guarantor hereunder and under the other Credit Documentsshall in no event exceed the amount that can be guaranteed by such Guarantorunder applicable laws relating to the insolvency of debtors.

 

(c)           EachGuarantor further agrees to pay any and all expenses (including all fees anddisbursements of counsel) that may be paid or incurred by the AdministrativeAgent or any other Secured Party in enforcing, or obtaining advice of counselin respect of, any rights with respect to, or collecting, any or all of theObligations and/or enforcing any rights with respect to, or collecting against,such Guarantor under this Guarantee.

 

(d)           EachGuarantor agrees that the Obligations may at any time and from time to timeexceed the amount of the liability of such Guarantor hereunder withoutimpairing this Guarantee or affecting the rights and remedies of theAdministrative Agent or any other Secured Party hereunder.

 

(e)           Nopayment or payments made by the Borrowers, any of the Guarantors, any otherguarantor or any other Person or received or collected by the AdministrativeAgent or any other Secured Party from the Borrowers, any of the Guarantors, anyother guarantor or any

 

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other Person by virtue of any action or proceedingor any set-off or appropriation or application at any time or from time to timein 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 paymentsmade by such Guarantor in respect of the Obligations or payments received orcollected from such Guarantor in respect of the Obligations, remain liable forthe Obligations up to the maximum liability of such Guarantor hereunder untilthe Obligations under the Credit Documents are paid in full, the Commitmentsare terminated and no Letters of Credit shall be outstanding.

 

(f)            EachGuarantor agrees that whenever, at any time, or from time to time, it shallmake any payment to the Administrative Agent or any other Secured Party onaccount of its liability hereunder, it will notify the Administrative Agent inwriting that such payment is made under this Guarantee for such purpose.

 

3.             Rightof Contribution.  Each Guarantorhereby agrees that to the extent that a Guarantor shall have paid more than itsproportionate share of any payment made hereunder, such Guarantor shall beentitled to seek and receive contribution from and against any other Guarantorhereunder who has not paid its proportionate share of such payment.  Each Guarantor’s right of contribution shallbe subject to the terms and conditions of Section 5 hereof.  The provisions of this Section 3 shallin no respect limit the obligations and liabilities of any Guarantor to theAdministrative Agent and the other Secured Parties, and each Guarantor shallremain liable to the Administrative Agent and the other Secured Parties for thefull amount guaranteed by such Guarantor hereunder.

 

4.             Rightof Set-off.  In addition to anyrights and remedies of the Secured Parties provided by law, each Guarantorhereby irrevocably authorizes each Secured Party at any time and from time totime following the occurrence and during the continuance of an Event of Defaultwithout notice to such Guarantor or any other Guarantor, any such notice beingexpressly waived by each Guarantor, upon any amount becoming due and payable bysuch Guarantor hereunder (whether at stated maturity, by acceleration orotherwise) to set-off and appropriate and apply against such amount any and alldeposits (general or special, time or demand, provisional or final), in anycurrency, and any other credits, indebtedness or claims, in any currency, ineach case whether direct or indirect, absolute or contingent, matured orunmatured, at any time held or owing by such Secured Party to or for the creditor the account of such Guarantor.  EachSecured Party shall notify such Guarantor promptly of any such set-off and theappropriation and application made by such Secured Party, provided thatthe failure to give such notice shall not affect the validity of such set-offand application.

 

5.             NoSubrogation.  Notwithstanding anypayment or payments made by any of the Guarantors hereunder or any set-off orappropriation and application of funds of any of the Guarantors by theAdministrative Agent or any other Secured Party, no Guarantor shall be entitledto be subrogated to any of the rights of the Administrative Agent or any otherSecured Party against the Borrowers or any other Guarantor or any collateralsecurity or guarantee or right of offset held by the Administrative Agent orany other Secured Party for the payment of the Obligations, nor shall anyGuarantor seek or be entitled to seek any contribution or reimbursement fromthe Borrowers or any other Guarantor in respect of payments made by suchGuarantor hereunder, until all amounts owing to the Administrative Agent andthe other Secured

 

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Parties by the Credit Parties on account of theObligations under the Credit Documents are paid in full, the Commitments areterminated and no Letters of Credit shall be outstanding.  If any amount shall be paid to any Guarantoron account of such subrogation rights at any time when all the Obligationsshall not have been paid in full, such amount shall be held by such Guarantorin trust for the Administrative Agent and the other Secured Parties, segregatedfrom other funds of such Guarantor, and shall, forthwith upon receipt by suchGuarantor, be turned over to the Administrative Agent in the exact formreceived by such Guarantor (duly indorsed by such Guarantor to theAdministrative Agent, if required), to be applied against the Obligations,whether due or to become due, in such order as the Administrative Agent maydetermine.

 

6.             Amendments, etc.with Respect to the Obligations; Waiver of Rights.  Each Guarantor shall remain obligatedhereunder notwithstanding that, without any reservation of rights against anyGuarantor and without notice to or further assent by any Guarantor,(a) any demand for payment of any of the Obligations made by theAdministrative Agent or any other Secured Party may be rescinded by such partyand any of the Obligations continued, (b) the Obligations, or theliability of any other party upon or for any part thereof, or any collateralsecurity 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 theAdministrative Agent or any other Secured Party, (c) the Credit Agreement,the other Credit Documents, the Letters of Credit and any other documentsexecuted and delivered in connection therewith and the Hedge Agreements and anyother documents executed and delivered in connection therewith and anydocuments entered into with the Administrative Agent or any of its Affiliatesin connection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds may be amended,modified, supplemented or terminated, in whole or in part, as theAdministrative Agent (or the Required Lenders, as the case may be, or, in thecase of any Hedge Agreement or documents entered into with the AdministrativeAgent or any of its Affiliates in connection with treasury, depositary or cashmanagement services or in connection with any automated clearinghouse transferof funds, the party thereto) may deem advisable from time to time, and (d) anycollateral security, guarantee or right of offset at any time held by theAdministrative Agent or any other Secured Party for the payment of theObligations may be sold, exchanged, waived, surrendered or released.  Neither the Administrative Agent nor anyother Secured Party shall have any obligation to protect, secure, perfect orinsure any Lien at any time held by it as security for the Obligations or forthis Guarantee or any property subject thereto. When making any demand hereunder against any Guarantor, theAdministrative Agent or any other Secured Party may, but shall be under noobligation to, make a similar demand on the Borrowers or any Guarantor orguarantor, and any failure by the Administrative Agent or any other SecuredParty to make any such demand or to collect any payments from the Borrowers orany Guarantor or guarantor or any release of the Borrowers or any Guarantor orguarantor shall not relieve any Guarantor in respect of which a demand orcollection is not made or any Guarantor not so released of its severalobligations or liabilities hereunder, and shall not impair or affect the rightsand remedies, express or implied, or as a matter of law, of the AdministrativeAgent or any other Secured Party against any Guarantor.  For the purposes hereof, “demand” shallinclude the commencement and continuance of any legal proceedings.

 

7.             GuaranteeAbsolute and Unconditional.  EachGuarantor waives any and all notice of the creation, contraction, incurrence,renewal, extension, amendment, waiver or

 

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accrual of any of the Obligations, and notice of orproof of reliance by the Administrative Agent or any other Secured Party uponthis Guarantee or acceptance of this Guarantee, the Obligations or any of them,shall conclusively be deemed to have been created, contracted or incurred, orrenewed, extended, amended, waived or accrued, in reliance upon this Guarantee;and all dealings between the Borrowers and any of the Guarantors, on the onehand, and the Administrative Agent and the other Secured Parties, on the otherhand, likewise shall be conclusively presumed to have been had or consummatedin reliance upon this Guarantee.  EachGuarantor waives diligence, presentment, protest, demand for payment and noticeof default or nonpayment to or upon the Borrowers or any of the Guarantors withrespect to the Obligations.  EachGuarantor understands and agrees that this Guarantee shall be construed as acontinuing, 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 ofthe Obligations or any other collateral security therefor or guarantee or rightof offset with respect thereto at any time or from time to time held by theAdministrative Agent or any other Secured Party, (b) any defense, set-offor counterclaim (other than a defense of payment or performance) that may atany time be available to or be asserted by the Borrowers against theAdministrative Agent or any other Secured Party or (c) any othercircumstance whatsoever (with or without notice to or knowledge of theBorrowers or such Guarantor) that constitutes, or might be construed toconstitute, an equitable or legal discharge of the Borrowers for theObligations, or of such Guarantor under this Guarantee, in bankruptcy or in anyother instance.  When pursuing its rightsand remedies hereunder against any Guarantor, the Administrative Agent and anyother Secured Party may, but shall be under no obligation to, pursue suchrights and remedies as it may have against the Borrowers or any other Person oragainst any collateral security or guarantee for the Obligations or any rightof offset with respect thereto, and any failure by the Administrative Agent orany other Secured Party to pursue such other rights or remedies or to collectany payments from the Borrowers or any such other Person or to realize upon anysuch 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 collateralsecurity, guarantee or right of offset, shall not relieve such Guarantor of anyliability hereunder, and shall not impair or affect the rights and remedies,whether express, implied or available as a matter of law, of the AdministrativeAgent and the other Secured Parties against such Guarantor.  This Guarantee shall remain in full force andeffect and be binding in accordance with and to the extent of its terms uponeach Guarantor and the successors and assigns thereof, and shall inure to thebenefit of the Administrative Agent and the other Secured Parties, and theirrespective successors, indorsees, transferees and assigns, until all theObligations under the Credit Documents shall have been satisfied by payment infull, the Commitments shall be terminated and no Letters of Credit shall beoutstanding, notwithstanding that from time to time during the term of theCredit Agreement and any Hedge Agreement the Credit Parties may be free fromany Obligations.  A Guarantor shallautomatically be released from its obligations hereunder and the Guarantee of suchGuarantor shall be automatically released upon the consummation of anytransaction permitted by the Credit Agreement as a result of which suchGuarantor ceases to be a Domestic Subsidiary of the Borrower.  In connection with any such release, theAdministrative Agent shall execute and deliver to any Guarantor, at suchGuarantor’s expense, all documents that such Guarantor shall reasonably requestto evidence such termination or release. Any execution and delivery of documents pursuant to the precedingsentence of this Section 7 shall be without recourse to or warranty by theAdministrative Agent.

 

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8.             Reinstatement.  This Guarantee shall continue to beeffective, or be reinstated, as the case may be, if at any time payment, or anypart thereof, of any of the Obligations is rescinded or must otherwise berestored or returned by the Administrative Agent or any other Secured Partyupon the insolvency, bankruptcy, dissolution, liquidation or reorganization ofthe Borrowers or any Guarantor, or upon or as a result of the appointment of areceiver, intervenor or conservator of, or trustee or similar officer for, theBorrowers or any Guarantor or any substantial part of its property, orotherwise, all as though such payments had not been made.

 

9.             Payments.  Each Guarantor hereby guarantees thatpayments hereunder will be paid to the Administrative Agent without set-off orcounterclaim in Dollars at the Administrative Agent’s Office.

 

10.          Representationsand Warranties; Covenants.

 

(a)           EachGuarantor hereby represents and warrants that the representations andwarranties set forth in Section 8 of the Credit Agreement as they relateto such Guarantor or in the other Credit Documents to which such Guarantor is aparty, each of which is hereby incorporated herein by reference, are true andcorrect, and the Administrative Agent and each other Secured Party shall beentitled to rely on each of them as if they were fully set forth herein.

 

(b)           EachGuarantor hereby covenants and agrees with the Administrative Agent and eachother Secured Party that, from and after the date of this Guarantee until theObligations under the Credit Documents are paid in full, the Commitments areterminated and no Letter of Credit remains outstanding, such Guarantor shalltake, or shall refrain from taking, as the case may be, all actions that arenecessary to be taken or not taken so that no violation of any provision,covenant or agreement contained in Section 9 or 10 of the CreditAgreement, and so that no Default or Event of Default, is caused by any act orfailure to act of such Guarantor or any of its Subsidiaries.

 

11.          Authorityof Agent.  Each Guarantoracknowledges that the rights and responsibilities of the Administrative Agentunder this Guarantee with respect to any action taken by the AdministrativeAgent or the exercise or non-exercise by the Administrative Agent of anyoption, right, request, judgment or other right or remedy provided for hereinor resulting or arising out of this Guarantee shall, as between the AdministrativeAgent and the other Secured Parties, be governed by the Credit Agreement and bysuch other agreements with respect thereto as may exist from time to time amongthem, but, as between the Administrative Agent and such Guarantor, theAdministrative Agent shall be conclusively presumed to be acting as agent forthe Secured Parties with full and valid authority so to act or refrain fromacting, and no Guarantor shall be under any obligation, or entitlement, to makeany inquiry respecting such authority.

 

12.          Notices.  All notices, requests and demands pursuanthereto shall be made in accordance with Section 14.2 of the CreditAgreement.  All communications andnotices hereunder to each Guarantor shall be given to it in care of theUS Borrower at the US Borrower’s address set forth inSection 14.2 of the Credit Agreement.

 

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13.          Counterparts.  This Guarantee may be executed by one or moreof the parties to this Guarantee on any number of separate counterparts (includingby facsimile or other electronic transmission), and all of said counterpartstaken together shall be deemed to constitute one and the same instrument.  A set of the copies of this Guarantee signedby all the parties shall be lodged with the Administrative Agent and theUS Borrower.

 

14.          Severability.  Any provision of this Guarantee that isprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability without invalidatingthe remaining provisions hereof, and any such prohibition or unenforceabilityin any jurisdiction shall not invalidate or render unenforceable such provisionin any other jurisdiction.  The partieshereto shall endeavor in good-faith negotiations to replace the invalid,illegal or unenforceable provisions with valid provisions the economic effectof which comes as close as possible to that of the invalid, illegal orunenforceable provisions.

 

15.          Integration.  This Guarantee represents the agreement ofeach Guarantor and the Administrative Agent with respect to the subject matterhereof, and there are no promises, undertakings, representations or warrantiesby the Administrative Agent or any other Secured Party relative to the subjectmatter hereof not expressly set forth or referred to herein or in the otherCredit Documents.

 

16.          Amendmentsin Writing; No Waiver; Cumulative Remedies.

 

(a)           Noneof the terms or provisions of this Guarantee may be waived, amended,supplemented or otherwise modified except by a written instrument executed bythe affected Guarantor(s) and the Administrative Agent in accordance withSection 14.1 of the Credit Agreement.

 

(b)           Neitherthe Administrative Agent nor any other Secured Party shall by any act (exceptby a written instrument pursuant to Section 16(a) hereof), delay,indulgence, omission or otherwise be deemed to have waived any right or remedyhereunder or to have acquiesced in any Default or Event of Default or in anybreach of any of the terms and conditions hereof.  No failure to exercise, nor any delay inexercising, 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 exercisethereof or the exercise of any other right, power or privilege.  A waiver by the Administrative Agent or anyother Secured Party of any right or remedy hereunder on any one occasion shallnot be construed as a bar to any right or remedy that the Administrative Agentor any Secured Party would otherwise have on any future occasion.

 

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

 

17.          Section Headings.  The Section headings used in thisGuarantee are for convenience of reference only and are not to affect theconstruction hereof or be taken into consideration in the interpretationhereof.

 

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18.          Successorsand Assigns.  This Guarantee shall bebinding upon the successors and assigns of each Guarantor and shall inure tothe benefit of the Administrative Agent and the other Secured Parties and theirrespective successors and assigns except that no Guarantor may assign, transferor delegate any of its rights or obligations under this Guarantee without theprior written consent of the Administrative Agent.

 

19.          AdditionalGuarantors.  Each Subsidiary of theUS Borrower that is required to become a party to this Guarantee pursuant to Section 9.11of the Credit Agreement shall become a Guarantor, with the same force andeffect as if originally named as a Guarantor herein, for all purposes of thisGuarantee upon execution and delivery by such Subsidiary of a Supplement in theform of Annex B hereto.  The executionand delivery of any instrument adding an additional Guarantor as a party tothis Guarantee shall not require the consent of any other Guarantorhereunder.  The rights and obligations ofeach Guarantor hereunder shall remain in full force and effect notwithstandingthe addition of any new Guarantor as a party to this Guarantee.

 

**20.          WAIVEROF JURY TRIAL.  EACH GUARANTOR HEREBYIRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION ORPROCEEDING RELATING TO THIS GUARANTEE, ANY OTHER CREDIT DOCUMENT AND FOR ANYCOUNTERCLAIM THEREIN.**

 

21.          Submissionto Jurisdiction; Waivers.  EachGuarantor hereby irrevocably and unconditionally:

 

(a)           submitsfor itself and its property in any legal action or proceeding relating to thisGuarantee and the other Credit Documents to which it is a party, or forrecognition and enforcement of any judgment in respect thereof, to thenon-exclusive general jurisdiction of the courts of the State of New York, thecourts of the United States of America for the Southern District ofNew York and appellate courts from any thereof;

 

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

 

(c)           agreesthat service of process in any such action or proceeding may be effected bymailing a copy thereof by registered or certified mail (or any substantiallysimilar form of mail), postage prepaid, to such Guarantor at its address referredto in Section 12 or at such other address of which the AdministrativeAgent shall have been notified pursuant thereto;

 

(d)           agreesthat nothing herein shall affect the right of the Administrative Agent or anyother Secured Party to effect service of process in any other manner permittedby law or shall limit the right of the Administrative Agent or any otherSecured 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 orrecover in any legal action or proceeding referred to in this Section 21any special, exemplary, punitive or consequential damages.

 

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**22.          GOVERNINGLAW.  THIS GUARANTEE AND THE RIGHTSAND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUEDAND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.**

 

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IN WITNESS WHEREOF, each of the undersigned hascaused this Guarantee to be duly executed and delivered by its duly authorizedofficer as of the day and year first above written.

 

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ANNEX A

TO THE GUARANTEE

 

SUBSIDIARY GUARANTORS

 

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ANNEX A

TO THE GUARANTEE

 

SUPPLEMENT NO. [  ]dated as of[            ], tothe Guarantee dated as of July 30, 2004, among ROCKWOOD SPECIALTIESINTERNATIONAL, INC., a Delaware corporation (“Holdings”), each ofthe subsidiaries of ROCKWOOD SPECIALTIES GROUP, INC., a Delawarecorporation (the “US Borrower”) listed on Annex A thereto (each suchsubsidiary individually, a “Subsidiary Guarantor”, and, collectively,the “Subsidiary Guarantors”; the Subsidiary Guarantors and Holdings arereferred to collectively as the “Guarantors”) and CREDIT SUISSE FIRSTBOSTON, acting through its Cayman Islands Branch, as administrative agent (insuch capacity, the “Administrative Agent”) for the lenders to theBorrowers (the “Lenders”) from time to time parties to the CreditAgreement referred to below.

 

A.  Referenceis made to (a) the Credit Agreement dated as of July 30, 2004 (asamended, supplemented or otherwise modified from time to time, the “CreditAgreement”), among Holdings, the US Borrower, Rockwood Specialties Limited,a company incorporated under the laws of England and Wales, the Lenders fromtime to time party thereto, the Administrative Agent and UBS Securities LLC andGoldman Sachs Credit Partners L.P., as co-syndication agents (in suchcapacities, the “Co-Syndication Agents”).

 

B. Capitalized terms used herein and not otherwise defined herein shallhave the meanings assigned to such terms in the Guarantee (or, if not definedtherein, in the Credit Agreement).

 

C.  TheGuarantors have entered into the Guarantee in order to induce theAdministrative Agent, the Co-Syndication Agents and the Lenders and the Letterof Credit Issuer to enter into the Credit Agreement and to induce the Lendersand the Letter of Credit Issuer to make their respective Extensions of Creditto the Borrowers under the Credit Agreement and to induce one or more Lendersor Affiliates of Lenders to enter into Hedge Agreements with theBorrowers.  Section 9.11 of theCredit Agreement and Section 19 of the Guarantee provide that additionalSubsidiaries may become Guarantors under the Guarantee by execution anddelivery of an instrument in the form of this Supplement.  Each undersigned Subsidiary (each a “NewGuarantor”) is executing this Supplement in accordance with therequirements of the Credit Agreement to become a Guarantor under the Guaranteein order to induce the Lenders and the Letter of Credit Issuer to makeadditional Extensions of Credit and as consideration for Extensions of Credit previouslymade.

 

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Accordingly, the Administrative Agent and each NewGuarantor agrees as follows:

 

SECTION 1. In accordance with Section 19 of the Guarantee, each New Guarantorby its signature below becomes a Guarantor under the Guarantee with the sameforce and effect as if originally named therein as a Guarantor and each NewGuarantor hereby (a) agrees to all the terms and provisions of theGuarantee applicable to it as a Guarantor thereunder and (b) representsand warrants that the representations and warranties made by it as a Guarantorthereunder are true and correct on and as of the date hereof. Each reference toa Guarantor in the Guarantee shall be deemed to include each NewGuarantor.  The Guarantee is herebyincorporated herein by reference.

 

SECTION 2. Each New Guarantor represents and warrants to the Administrative Agentand the other Secured Parties that this Supplement has been duly authorized,executed and delivered by it and constitutes its legal, valid and bindingobligation, enforceable against it in accordance with its terms.

 

SECTION 3. This Supplement may be executed by one or more of the parties to thisSupplement on any number of separate counterparts (including by facsimile orother electronic transmission), and all of said counterparts taken togethershall be deemed to constitute one and the same instrument.  A set of the copies of this Supplement signedby all the parties shall be lodged with the US Borrower and the AdministrativeAgent.  This Supplement shall becomeeffective as to each New Guarantor when the Administrative Agent shall havereceived counterparts of this Supplement that, when taken together, bear thesignatures of such New Guarantor and the Administrative Agent.

 

SECTION 4. Except as expressly supplemented hereby, the Guarantee shall remain infull force and effect.

 

**SECTION 5. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDERSHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWOF THE STATE OF NEW YORK.**

 

SECTION 6. Any provision of this Supplement that is prohibited or unenforceable inany jurisdiction shall, as to such jurisdiction, be ineffective to the extentof such prohibition or unenforceability without invalidating the remainingprovisions hereof and in the Guarantee, and any such prohibition orunenforceability in any jurisdiction shall not invalidate or renderunenforceable such provision in any other jurisdiction.  The parties hereto shall endeavor ingood-faith negotiations to replace the invalid, illegal or unenforceableprovisions with valid provisions the economic effect of which comes as close aspossible to that of the invalid, illegal or unenforceable provisions.

 

SECTION 7. All notices, requests and demands pursuant hereto shall be made inaccordance with Section 14.2 of the Credit Agreement.  All communications and notices hereunder toeach New Guarantor shall be given to it in care of the US Borrower at theUS Borrower’s address set forth in Section 14.2 of the CreditAgreement.

 

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SECTION 8. Each New Guarantor agrees to reimburse the Administrative Agent for itsout-of-pocket expenses in connection with this Supplement, including the fees,disbursements and other charges of counsel for the Administrative Agent.

 

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IN WITNESS WHEREOF, each New Guarantor and theAdministrative Agent have duly executed this Supplement to the Guarantee as ofthe 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: |   |

 

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EXHIBIT E-1

 

FORM OFITALIAN GUARANTEE

 

 

Private & Confidential

 

**Dated 30 July 2004**

 

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**Rockwood Italia S.p.A.    (1)**

 

 

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**GUARANTEE**

 

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***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      |

 

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[LETTERHEAD OF ROCKWOOD ITALIA S.P.A.]

Milan 30 July 2004

 

CreditSuisse First BostonCayman Islands BranchEleven Madison AvenueNew YorkNew York 10010, USA

 

UBSLoan Finance LLC677 Washington BoulevardStamford, Connecticut 06901, USA

 

GoldmanSachs Credit Partners L.P.Clarendon House2 Church StreetHamiltonHM CX Bermuda

 

DearSirs,

 

Followingour recent discussions, we hereby propose the constitution of a guarantee inthe 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 itsregistered office in Turin, Via Reiss Romoli no. 44/12, Italy, sharecapital of Euro 3,819,930, fiscal code and number of registration in theCompanies Register of Turin 02146370263, (the “**Guarantor**”), representedby 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 Guarantorauthorised to execute the present deed by virtue of the powers conferred to himby a resolution of the Board of Directors meeting held on 30 July 2004which is attached hereto sub AnnexA;

 

(2)                                 **Credit Suisse First Boston, acting through its Cayman Islands Branch**, Eleven Madison Avenue, New York, New York 10010, USA (hereafter the “**AdministrativeAgent**”) acting for the purposes of this Agreement asAdministrative Agent for the Secured Parties, as secured creditors andbeneficiaries 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 ofa special power of attorney, duly certified and apostilled, which is attachedhereto Annex B;

 

(3)                                 **UBS Loan Finance LLC**, 677 WashingtonBoulevard, Stanford, Connecticut 06901, USA (“**UBS**”), representedby 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 ofa special power of attorney, duly certified and apostilled, which is attachedhereto Annex B;

 

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(4)                                 **Goldman Sachs Credit Partners L.P.**, ClarendonHouse, 2 Church Street, Hamilton, HM CX Bermuda (the “**GS Co-Syndication Agent**”), representedby 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 ofa special power of attorney, duly certified and apostilled, which is attachedhereto Annex B;

 

theAdministrative Agent, UBS and the GS Co-Syndication Agent together the “**Beneficiaries**”.

 

**WHEREAS**

 

(A)                               On 30 July 2004a credit agreement (as the same may be amended, supplemented, otherwisemodified from time to time, the “**Credit Agreement**”) has been enteredinto among (1) Rockwood Specialties Group Inc., a Delaware corporation, (2) RockwoodSpecialties Limited, as UK Borrower (“**UK Borrower**”), (3) RockwoodSpecialties International, Inc., a Delaware corporation, (4) thelending institutions from time to time parties thereto (collectively the “**Lenders**”),(5) Credit Suisse First Boston, acting through its Cayman Islandsbranch as administrative agent and (6) the Co-Syndication Agents;

 

(B)                               Pursuant to theCredit Agreement, (a) the Lenders have, inter alia, severally agreed tomake Loans to, inter alia, the UK Borrower and the Letter of Credit Issuer hasagreed to issue Letters of Credit for the account of the UK Borrower(collectively, the “**Extensions of Credit**”) upon theterms and subject to the conditions set out in the Credit Agreement and subjectto the interest rate provided in Section 2.8 of the Credit Agreement andrepayable on the terms and conditions provided in Section 2.5 of theCredit Agreement (b) one or more Lenders or Affiliates of Lenders may fromtime to time enter into Hedge Agreements with the UK Borrower;

 

(C)                               The Guarantoris a Subsidiary of the US Borrower;

 

(D)                               The proceeds ofthe Extensions of Credit will be used in part to enable the UK Borrower to makevaluable transfers to the Guarantor in connection with the operation of theirrespective businesses;

 

(E)                                The Guarantoracknowledges that it will derive substantial direct and indirect benefit fromthe making of the Extensions of Credit; and

 

(F)                                 It is acondition precedent to the obligation of the Lenders and the Letter of CreditIssuer to make their respective Extensions of Credit to the UK Borrower underthe Credit Agreement that the Guarantor shall have executed and delivered thisguarantee to the Administrative Agent, for itself and the rateable benefit ofthe Secured Parties, UBS and the GS Co-Syndication Agent;

 

NOW,THEREFORE, in consideration of the recitals (which constitute an integral andsubstantial part of this agreement, the “**Agreement**”) and to induce theAdministrative Agent, the Co-Syndication Agents and the Lenders and the Letterof Credit Issuer to enter into the Credit Agreement and to induce the Lendersand the Letter of Credit Issuer to make their respective

 

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Extensionsof Credit to the UK Borrower under the Credit Agreement and to induce one ormore Lenders or Affiliates of Lenders to enter into Hedge Agreements with theUK Borrower, the Guarantor hereby agrees guarantee the Secured Parties asfollows:

 

**1****                                        ****Defined Terms**

 

1.1                               Unlessotherwise defined herein, terms defined in the Credit Agreement and used hereinshall 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 paymentof (i) the principal of and premium, if any, and interest at theapplicable rate provided in the Credit Agreement (including interest accruingduring the pendency of any bankruptcy, insolvency, receivership or othersimilar 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 prepaymentor otherwise, (ii) each payment required to be made by the UK Borrowerunder the Credit Agreement in respect of any Letter of Credit, when and as due,and (iii) all other monetary obligations, including fees, costs, expensesand indemnities, whether primary, secondary, direct, contingent, fixed orotherwise (including monetary obligations incurred during the pendency of anybankruptcy, insolvency, receivership or other similar proceeding), of the UKBorrower or any other Credit Party that is a Foreign Subsidiary of any of theSecured Parties under the Credit Agreement and the other Credit Documents;

 

(b)                                 the due and punctualperformance of all covenants, agreements, obligations and liabilities of the UKBorrower under or pursuant to the Credit Agreement and the other CreditDocuments;

 

(c)                                  the due and punctual paymentand performance of all the covenants, agreements, obligations and liabilitiesof each other Credit Party that is a Foreign Subsidiary under or pursuant tothis Agreement or the other Credit Documents;

 

(d)                                 the due and punctual paymentand performance of all obligations of the UK Borrower and each Credit Partythat is a Foreign Subsidiary under each Hedge Agreement that (i) is ineffect on the Closing Date with a counterparty that is a Lender or an Affiliateof a Lender as of the Closing Date or (ii) is entered into after theClosing Date with any counterparty that is a Lender or an Affiliate of a Lenderat the time such Hedge Agreement is entered into; and

 

(e)                                  the due and punctual paymentand performance of all obligations in respect of overdrafts and relatedliabilities owed to the Secured Parties or their Affiliates by the UK Borroweror any other Credit Party that is a Foreign Subsidiary, arising from or inconnection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds.

 

1.3                               “**Secured Parties**” means (i) theLenders (including UBS), (ii) the Letter of Credit Issuer, (iii) theSwingline Lender, (iv) the Administrative Agent, (v) theCo-Syndication Agents

 

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(including the GS Co-Syndication Agent), (vi) eachcounterparty to a Hedge Agreement the obligations under which constituteObligations, (vii) the beneficiaries of each indemnification obligationundertaken by any Credit Party under any Credit Document and (viii) anysuccessors, 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 mayfrom time to time enter into Hedge Agreements with the UK Borrower.

 

1.5                               The meaningsgiven to terms defined herein shall be equally applicable to both the singularand plural forms of such terms.

 

**2****                                        ****Guarantee**

 

2.1                               Subject to theprovisions of Section 2.2, the Guarantor hereby, unconditionally andirrevocably, guarantees, as primary obligor and not merely as surety, to theAdministrative Agent, for itself and the rateable benefit of the SecuredParties, the GS Co-Syndication Agent and UBS and their respective successors,indorsees, transferees and assigns, the prompt and complete payment andperformance of the Secured Obligations.

 

2.2                               The Guaranteeis offered up to a maximum of Euro 6,713,940.00 (six million seven hundredthirteen thousand nine hundred and forty). Under no circumstances shall theGuarantor be required to make any payment pursuant to the Guarantee if, withsuch payment the aforementioned limits and amounts are exceeded.

 

2.3                               The Guarantorfurther agrees to pay any and all expenses (including all fees anddisbursements of counsel) that may be paid or incurred by the Beneficiaries inenforcing, or obtaining advice of counsel in respect of, any rights withrespect to, or collecting, any or all of the Secured Obligations and/orenforcing any rights with respect to, or collecting against, the Guarantorunder this Guarantee. Any taxes, fees or costs owed for the signing orexecution of this Guarantee shall be borne by the Guarantor.

 

2.4                               No payment orpayments made by the UK Borrower, the Guarantor, any other guarantor or anyother Person or received or collected by the Beneficiaries or any other SecuredParty from the UK Borrower, the Guarantor, any other guarantor or any otherPerson by virtue of any action or proceeding or any set-off or appropriation orapplication at any time or from time to time in reduction of or in payment ofthe Secured Obligations shall be deemed to modify, reduce, release or otherwiseaffect the liability of the Guarantor hereunder, which shall, notwithstandingany such payment or payments other than payments made by the Guarantor inrespect of the Secured Obligations or payments received or collected from theGuarantor in respect of the Secured Obligations, remain liable for the SecuredObligations up to the maximum liability of the Guarantor hereunder until theSecured Obligations are paid in full, the Commitments are terminated and noLetters of Credit drawn by the UK Borrower shall be outstanding.

 

2.5                               The Guarantoragrees that whenever, at any time, or from time to time, it shall make anypayment to the Beneficiaries or any other Secured Party on account of itsliability

 

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hereunder, it will notify the Beneficiaries in writing that such payment is made under this Guarantee for such purpose.

 

2.6                               The Guarantoroffers and creates such Guarantee with formal waiver of any rights underarticle 1944 of the Italian Civil Code, and shall remain jointly and severallybound 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 theBeneficiaries provided by law, the Guarantor hereby irrevocably authorizes theBeneficiaries at any time and from time to time following the occurrence andduring the continuance of an Event of Default without notice to the Guarantor,any such notice being expressly waived by the Guarantor, upon any amountbecoming due and payable by the Guarantor hereunder (whether at statedmaturity, by acceleration or otherwise) to set-off and appropriate and applyagainst such amount any and all deposits, in any currency, and any othercredits, indebtedness or claims, in any currency, in each case whether director indirect, absolute or contingent, matured or unmatured, at any time held orowing by the Beneficiaries to or for the credit or the account of theGuarantor. The Beneficiaries shall notify the Guarantor promptly of any suchset-off and the appropriation and application made, provided that thefailure to give such notice shall not affect the validity of such set-off andapplication.

 

**4****                                        ****Effectiveness and Discharge of the Guarantee**

 

4.1                               This Guaranteeshall remain in full force and effect and be binding in accordance with and tothe extent of its terms upon the Guarantor and the successors and assignsthereof, and shall inure to the benefit of the Beneficiaries and the otherSecured Parties, and their respective successors, indorsees, transferees andassigns, until all the Secured Obligations and the Secured Obligations of theGuarantor under this Guarantee shall have been satisfied by payment in full,the Commitments shall be terminated and no Letters of Credit drawn by the UKBorrower shall be outstanding, notwithstanding that from time to time duringthe term of the Credit Agreement and any Hedge Agreement the Credit Parties maybe free from any Secured Obligations.

 

4.2                               The Guarantorshall automatically be released from its obligations hereunder and theGuarantee of the Guarantor shall be automatically released upon theconsummation of any transaction permitted by the Credit Agreement as a resultof which the Guarantor ceases to be a Subsidiary of the US Borrower.

 

4.3                               In connectionwith any such release, the Beneficiaries shall execute and deliver to theGuarantor, at the Guarantor’s expense, all documents that the Guarantor shallreasonably request to evidence such termination or release. Any execution anddelivery of documents pursuant to this Section 4.3 shall be withoutrecourse to or warranty by the Beneficiaries.

 

4.4                               The Guarantorwaives the benefits, rights and exceptions pursuant to articles 1945, 1955 and1957 of the Italian Civil Code.

 

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**5****                                        ****Payments**

 

The Guarantor hereby guarantees that paymentshereunder will be paid to the Administrative Agent without set-off orcounterclaim in Dollars at the Administrative Agent’s Office.

 

**6****                                        ****Representations and Warranties; Covenants.**

 

6.1                               The Guarantoris a company duly incorporated and validly existing under Italian law. TheGuarantor is not insolvent.

 

6.2                               The Guarantor’sbalance sheets comply with the laws in force and, in particular, represent,truthfully and accurately, the assets and liabilities, financial position andthe economic results for the relevant period.

 

6.3                               The Guarantorhereby represents and warrants that the representations and warranties setforth in Section 8 of the Credit Agreement as they relate to the Guarantoror in the other Credit Documents to which such Guarantor is a party are trueand correct, and the Beneficiaries shall be entitled to rely on each of them asif they were fully set forth herein.

 

6.4                               The Guarantorhereby covenants and agrees with the Beneficiaries that, from and after thedate of this Guarantee until the Obligations are paid in full, the Commitmentsare terminated and no Letter of Credit drawn by the UK Borrower remainsoutstanding, the Guarantor shall take, or shall refrain from taking, as thecase may be, all actions that are necessary to be taken or not taken so that noviolation of any provision, covenant or agreement contained in Section 9or 10 of the Credit Agreement, and so that no Default or Event of Default, iscaused by any act or failure to act of the Guarantor or any of itsSubsidiaries.

 

**7****                                        ****Authority of the Administrative Agent**

 

The Guarantor acknowledges that the rights andresponsibilities of the Administrative Agent under this Guarantee with respectto any action taken by the Administrative Agent or the exercise or non-exerciseby the Administrative Agent of any option, right, request, judgment or otherright or remedy provided for herein or resulting or arising out of thisGuarantee shall, as between the Administrative Agent and the other SecuredParties, be governed by the Credit Agreement and by such other agreements withrespect thereto as may exist from time to time among them, but, as between theAdministrative Agent and the Guarantor, the Administrative Agent shall beconclusively presumed to be acting as agent for the Secured Parties with fulland valid authority so to act or refrain from acting, and Guarantor shall beunder no obligation, or entitlement, to make any inquiry respecting suchauthority.

 

**8****                                        ****Notices**

 

All notices, requests and demands pursuant heretoshall be made in accordance with Section 14.2 of the Credit Agreement. Allcommunications and notices hereunder to the

 

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Guarantor shall be given to it in care of the UKBorrower at the UK Borrower’s address set forth in Section 14.2 of theCredit Agreement. For the purposes of this Agreement, the Beneficiaries electdomicile at the registered office of the Administrative Agent.

 

**9****                                        ****Severability**

 

9.1                               Any provisionof this Guarantee that is prohibited or unenforceable in any jurisdictionshall, as to such jurisdiction, *be*ineffectiveto the extent of such prohibition or unenforceability without invalidating theremaining provisions hereof, and any such prohibition or unenforceability inany jurisdiction shall not invalidate or render unenforceable such provision inany other jurisdiction.

 

9.2                               The partieshereto shall endeavor in good-faith negotiations to replace the invalid,illegal or unenforceable provisions with valid provisions the economic effectof which comes as close as possible to that of the invalid, illegal orunenforceable provisions.

 

**10****                                 ****Amendmentsin Writing; No Waiver; Cumulative Remedies.**

 

10.1                        None of theterms or provisions of this Guarantee may be waived, amended, supplemented orotherwise 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 theBeneficiaries shall by any act (except by a written instrument pursuant to Section 10.1hereof), delay, indulgence, omission or otherwise be deemed to have waived anyright or remedy hereunder or to have acquiesced in any Default or Event ofDefault or in any breach of any of the terms and conditions hereof. No failureto exercise, nor any delay in exercising, on the part of the Beneficiaries, anyright, power or privilege hereunder shall operate as a waiver thereof. Nosingle or partial exercise of any right, power or privilege hereunder shallpreclude any other or further exercise thereof or the exercise of any otherright, power or privilege. A waiver by the Beneficiaries of any right or remedyhereunder on any one occasion shall not be construed as a bar to any right orremedy that the Beneficiaries would otherwise have on any future occasion.

 

10.3                        The rights,remedies, powers and privileges herein provided are cumulative, may beexercised singly or concurrently and are not exclusive of any other rights orremedies provided by law.

 

**11****                                 ****Section Headings**

 

The Section headings used in this Guarantee arefor convenience of reference only and are not to affect the construction hereofor be taken into consideration in the interpretation hereof.

 

**12****                                 ****Successorsand Assigns**

 

This Guarantee shall be binding upon the successorsand assigns of the Guarantor and shall inure to the benefit of theBeneficiaries and the other Secured Parties and their respective successors andassigns except that the Guarantor may not assign, transfer or

 

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delegate any of its rights or obligations under thisGuarantee without the prior written consent of the Beneficiaries.

 

**13****                                 ****Jurisdiction**

 

Unless otherwise established by law, the courts ofMilan shall have exclusive jurisdiction to settle any dispute between theparties which may arise out of or in connection with this Guarantee. Nevertheless,nothing shall limit the right of the Beneficiaries to initiate proceedings inany other competent court pursuant to the current laws in force.

 

**14****                                 ****GoverningLaw**

 

This guarantee and the rights and obligations of theparties hereunder shall be governed by, and construed and interpreted inaccordance with, the law of the Republic of Italy.

 

 

Shouldyou agree with the above, you are kindly requested to return a signed copy ofthe text above as express acceptance of the terms and conditions thereincontained.

 

Yoursfaithfully,

 

 

RockwoodSpecialties Group Inc.

 

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EXHIBITE-2

 

FORMSOF ITALIAN SHARE PLEDGE AGREEMENTS

 

Private & Confidential

 

 

**Dated 30 July 2004**

 

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**Rockwood Specialties Group, Inc. (1)**

 

**and**

 

**Credit Suisse First Boston, acting through its Cayman Islands Branch(2)**

 

 

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**Share Pledge Agreement**

 

**(US OBLIGATIONS)**

 

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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         |

 

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[LETTERHEAD OF ROCKWOOD SPECIALTIES GROUP INC

 

Milan 30 July 2004

 

CreditSuisse First BostonCayman Islands BranchEleven Madison AvenueNew YorkNew York 10010, USA

 

UBSLoan Finance LLC677 Washington BoulevardStamford, Connecticut 06901, USA

 

GoldmanSachs Credit Partners L.P.Clarendon House2 Church StreetHamiltonHM CX Bermuda

 

DearSirs,

 

Followingour recent discussions, we hereby propose the constitution of a pledge in theterms 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 itsregistered office at Corporation Trust Centre, 1209 Orange Street, NewcastleCounty, Delaware, USA with fully paid up share capital equal to US$343,988,000registered in the State of Delaware, USA under no.3304314, represented by itsagent Adriana Lamberto Floristan, born in Pamplona (Spain), on 11 September 1973,domiciled for the purposes of this document in via Principe Amadeo 3, 20121Milan (Italy), duly authorised to act on behalf of Rockwood Specialties Group, Inc.by virtue of special power of attorney, a certified extract of which isreproduced 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 “**AdministrativeAgent**”), acting for the purposes of this Agreement asAdministrative Agent for the Secured Parties, as secured creditors andbeneficiaries 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 ofa special power of attorney, duly certified and apostilled, which is attachedhereto Annex B;

 

(3)                                 **UBS Loan Finance LLC**, 677 WashingtonBoulevard, 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 inPiazza Diaz 1, Milan 20123 (Italy), duly

 

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authorisedto act in the capacity referred to below by virtue of a special power ofattorney, duly certified and apostilled, which is attached hereto Annex B; and

 

(4)                                 **Goldman Sachs Credit Partners L.P.**, ClarendonHouse, 2 Church Street, Hamilton, HM CX Bermuda (the “**GS Co-Syndication Agent**”), representedby 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 ofa special power of attorney, duly certified and apostilled, which is attachedhereto Annex B;

 

theAdministrative Agent, UBS and the GS Co-Syndication Agent together the “**Beneficiaries**”.

 

**WHEREAS:**

 

(A)                               On 30 July 2004a credit agreement (as the same may be amended, supplemented, otherwisemodified from time to time, the “**Credit Agreement**”) has been enteredinto among (1) the Pledgor, (2) Rockwood Specialties Limited, as UKBorrower (“**UK Borrower**”), (3) Rockwood SpecialtiesInternational, Inc., a Delaware corporation, (4) the lendinginstitutions from time to time parties thereto (collectively the “**Lenders**”),(5) the Administrative Agent and (6) the Co-SyndicationAgents;

 

(B)                               Pursuant to theCredit Agreement, (a) the Lenders have severally agreed to make Loans to,inter alia, the US Borrower, and the Letter of Credit Issuer has agreed toissue Letters of Credit for the account of the US Borrower (collectively, the “**Extensionsof Credit**”) upon the terms and subject to the conditions setforth therein, and (b) one or more Lenders or Affiliates of Lenders mayfrom time to time enter into Hedge Agreements with the Borrowers;

 

(C)                               The Pledgoracknowledges that it will derive substantial direct and indirect benefit fromthe making of the Extensions of Credit;

 

(D)                               It is acondition precedent to the obligation of the Lenders and the Letter of CreditIssuer to make their respective Extensions of Credit to the Borrowers under theCredit Agreement that the Pledgor shall have executed and delivered thisAgreement in favour of the Administrative Agent, for itself and for therateable benefit of the Secured Parties, UBS and the GS Co-Syndication Agent;

 

(E)                                The Pledgor isthe 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 SecuredObligations (as defined below) granting a pledge over part of its Shares (theCollateral, as defined below) in the Company.

 

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**Now, therefore**, havingacknowledged that the above recitals and the attachments hereto constitute anintegral and substantial part of this Agreement, it is hereby agreed and stipulatedas follows:

 

**1****                                        ****Definitions**

 

1.1                               Definitions

 

Thefollowing 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’ bookin the name of the Pledgor. The word Collateral also includes all relevantrights deriving therefrom and, in particular:

 

(i)                                     dividends, cash, stocks andshares and any benefit arising either in connection with or in exchange for theshares constituting Collateral;

 

(ii)                                  option or first refusalrights and any other rights of whatever nature exercised or to be exercised inconnection with or in exchange for the Collateral;

 

(iii)                               any amount accruing on theCollateral in favour of the Pledgor and any other option rights, dividends,cash received or to be received, or distributed or to be distributed, inconnection with or in exchange for the Collateral;

 

Forthe avoidance of doubt, unless the context otherwise requires “Collateral”should include any additional shares in the Company (and the relevant rightsderiving therefrom) required to be pledged hereunder pursuant to Section 8hereof.

 

“**SecuredObligations**” means the collective reference to:

 

(i)                                     the due and punctual paymentof (i) the principal of and premium, if any, and interest at theapplicable rate provided in the Credit Agreement (including interest accruingduring the pendency of any bankruptcy, insolvency, receivership or othersimilar proceeding) on the Loans, when and as due, whether at maturity, byacceleration, upon one or more dates set for prepayment or otherwise, (ii) eachpayment required to be made by the Borrowers under the Credit Agreement inrespect of any Letter of Credit, when and as due, and (iii) all othermonetary obligations, including fees, costs, expenses and indemnities, whetherprimary, secondary, direct, contingent, fixed or otherwise (including monetaryobligations incurred during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding), of the Borrowers or any other CreditParty under the Credit Agreement and the other Credit Documents;

 

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(ii)                                  the due and punctualperformance of all covenants, agreements, obligations and liabilities of theBorrowers under or pursuant to the Credit Agreement and the other CreditDocuments;

 

(iii)                               the due and punctual paymentand performance of all the covenants, agreements, obligations and liabilitiesof each other Credit Party under or pursuant to this Agreement or the otherCredit Documents;

 

(iv)                              the due and punctual paymentand performance of all obligations of each Credit Party under each HedgeAgreement that (i) is in effect on the Closing Date with a counterpartythat is a Lender or an Affiliate of a Lender as of the Closing Date or (ii) isentered into after the Closing Date with any counterparty that is a Lender oran Affiliate of a Lender at the time such Hedge Agreement is entered into; *and*

 

(v)                                 the due and punctual paymentand performance of all obligations in respect of overdrafts and relatedliabilities owed to the Secured Parties or their Affiliates arising from or inconnection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds.

 

“**Secured Parties**”means (i) the Lenders (including UBS), (ii) the Letter ofCredit Issuer, (iii) the Swingline Lender, (iv) the AdministrativeAgent, (v) the Co-Syndication Agents (including the GS Co-SyndicationAgent), (vi) each counterparty to a Hedge Agreement the obligations underwhich constitute Obligations, (vii) the beneficiaries of eachindemnification obligation undertaken by any Credit Party under any CreditDocument and (viii) any successors, indorsees, transferees and assigns ofeach of the foregoing.

 

1.2                               Successors andassignees

 

Referencesto each of the parties to this Agreement and to the Secured Parties, includesreferences to his successors, transferees or assignees.

 

1.3                               Headings

 

Clause headings and the table of contents areinserted for convenience of reference only and shall be ignored in theinterpretation of this Agreement.

 

1.4                               Construction ofcertain terms

 

In this Agreement, including the premises, unlessthe context otherwise requires:

 

(a)                                 references to the time ofday are to Italian time; and

 

(b)                                 References to “Lenders” inthis Agreement shall be deemed to include Affiliates of Lenders that may fromtime to time enter into Hedge Agreements with the Borrowers;

 

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1.5                               CreditAgreement definitions

 

Unless the context otherwise requires or unlessotherwise defined in this Agreement, words and expressions defined in theCredit 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 ofthe Collateral, hereby pledges to the Administrative Agent, for itself and forthe rateable benefit of the Secured Parties, UBS and the GS Co-SyndicationAgent, the Collateral (numbering 248,295 shares of Euro 10 each for theaggregate amount of Euro 2,482,950 representing 65% of the paid up sharecapital of the Company) represented by share certificate no. 7 (the “**Certificate**”). The Beneficiaries accept such pledge.

 

**3****                                        ****Secured Obligations**

 

3.1                               The pledgerights hereby created secure the payment of all the Secured Obligations of eachCredit Party.

 

**4****                                        ****Registration of the Pledge**

 

4.1                               The Pledgoragrees and undertakes to:

 

(a)                                 no later than Monday, 2 August 2004,endorse the Certificate, authenticated by a notary or other qualifiedindividual, in favour of the Administrative Agent, for itself and for therateable benefit of the Secured Parties, UBS and the GS Co-Syndication Agentand to deliver such Certificate to the Administrative Agent for the purposes ofarticle 2786, paragraph 2 of the Italian Civil Code.

 

(b)                                 within 5 (five) days of theexecution of this Agreement, register the pledge in the shareholders’ book ofthe Company in the form as provided in Schedule 1 of this Agreement and todeliver to the Administrative Agent a copy of the pages of the shareholders’book of the Company evidencing such registration, certified as a conformed copyof the original by a public notary.

 

**5****                                        ****Representations and Warranties**

 

5.1                               Representationsand warranties

 

ThePledgor hereby represents and warrants to the Beneficiaries that:

 

(a)                                 Title toCollateral

 

ThePledgor is the sole registered and beneficial owner of, and has full title tothe Collateral. Such Collateral are free from any encumbrance (other than thepledge created herein) and are not, nor shall they be, subject to any thirdparty rights;

 

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(b)                                 Release of theShares

 

TheCollateral have been duly subscribed and paid up.

 

(c)                                  Security

 

Theexecution and delivery by the Pledgor of this Agreement and the charge of theCollateral by the Pledgor hereunder create a valid and perfected first-prioritycharge over the Collateral, securing the payment of the Secured Obligations, infavour of the Administrative Agent, for itself and for the rateable benefit ofthe Secured Parties, UBS and the GS Co-Syndication Agent.

 

(d)                                 Authority

 

ThePledgor has full power, authority and legal right to charge all the Collateralpursuant to this Agreement.

 

(e)                                  Bindingobligations

 

ThisAgreement creates valid and legally binding obligations for the Pledgor anddoes not violate any law of Italy, Delaware or any other State of the UnitedStates of America, nor any judgement, order, legal or administrative measure orany obligation assumed by the Company or by the Pledgor.

 

**6****                                        ****Covenants by the Pledgor**

 

6.1                               Continuingcovenants

 

6.1.1                     The Pledgor will execute anyand all further documents, financing statements, agreements and instruments,and take all such further actions (including the filing and recording offinancing statements, fixture filings, mortgages and other documents), which maybe required under any applicable law, or which the Beneficiaries or theRequired Lenders may reasonably request, in order to (v) perfect andprotect any pledge, assignment or security interest granted or purported to begranted hereby (including the priority thereof) or (y) enable theBeneficiaries to exercise and enforce their rights and remedies hereunder withrespect to any Collateral, all at the expense of the Pledgor.

 

6.1.2                     The Pledgor shall:

 

(a)                                 not (i) except aspermitted by the Credit Agreement, sell or otherwise dispose of, or grant anyoption or warrant with respect to, any of the Collateral or (ii) create orsuffer to exist any consensual Lien upon or with respect to any of theCollateral, except for the Lien under this Agreement, provided that inthe event the Pledgor sells or otherwise disposes of assets as permitted by theCredit Agreement and such assets are or include any of the Collateral, theBeneficiaries shall release such Collateral free and clear of the Lien underthis Agreement concurrently with the consummation of such sale; and

 

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(b)                                 defend its and theBeneficiaries title or interest in and to all the Collateral (and in theproceeds thereof) against any and all Liens (other than the Lien of thisAgreement), however arising, and any and all Persons whomsoever.

 

6.1.3                     The Pledgor shall, onrequest 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*(companylimited by quotas) or into any other type of company, with continuation of thepledge on the share capital represented by quotas or shares, different from theCollateral pledged herein, without novation of this Agreement, in whole or inpart, and with express consent of the Pledgor, hereby granted, so as to havesuch additional share pledge agreements effective, to the extend possible underthe law, as of the date of this Agreement.

 

**7****                                        ****Voting Rights and Dividends**

 

7.1                               TheBeneficiaries agree with the Pledgor that so long as no Event of Default shallhave occurred and be continuing:

 

(a)                                 The Pledgor shall beentitled to exercise any and all voting and other consensual rights pertainingto the Collateral or any part thereof for any purpose not prohibited by the termsof this Agreement or the other Credit Documents.

 

(b)                                 The Beneficiaries shallexecute and deliver (or cause to be executed and delivered) to the Pledgor allsuch proxies and other instruments as the Pledgor may reasonably request forthe purpose of enabling the Pledgor to exercise the voting and other rightsthat it is entitled to exercise pursuant to paragraph (a) above.

 

(c)                                  The Pledgor shall receivefrom the Administrative Agent, also in the name of an on behalf of the otherBeneficiaries, the admission ticket in order to participate in the ordinary andextraordinary shareholders’ meetings pursuant to article 2370 of the ItalianCivil Code.

 

7.2                               Subject to Section 9.1below, the Pledgor shall be entitled to receive and retain and use, free andclear of the lien of this Agreement, any and all dividends and distributionsmade or paid in respect of the Collateral to the extent permitted by the CreditAgreement.

 

**8****                                        ****Increased Share Capital**

 

8.1                               In the case ofan increase in share capital of the Company, both free and paid, the pledgecreated hereby shall extend to the shares of the Pledgor issued and subscribedin connection with such increase in share capital, provided that the percentageof the shares subject to the pledge does not exceed 65% of the capital of thenew issue.

 

8.2                               In such case,the Pledgor hereby undertakes to:

 

(a)                                 note the existence of thepledge in favour of the Administrative Agent, for itself and for the rateablebenefit of the Secured Parties, UBS and the GS Co-

 

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SyndicationAgent on the share certificates of the shares covered by the pledge, upon theirissuance, by means of a guaranteed endorsement authenticated by a notary infavour of the Administrative Agent, for itself and for the rateable benefit ofthe Secured Parties, UBS and the GS Co-Syndication Agent and to deliver suchcertificates to the Administrative Agent, or to one of its Italiansubsidiaries, for the purposes pursuant to article 2786, paragraph 2 of theItalian Civil Code.

 

(b)                                 register in the Company’sshareholders’ book, in the form provided in Attachment 1 of this Agreement, thepledge over the shares of the Pledgor issued following the increase in sharecapital; and

 

(c)                                  deliver to theAdministrative Agent a copy of the pages of the Company’s shareholders’book evidencing such registration, certified as a conformed copy of theoriginal by a notary public.

 

8.3                               The pledgerights over the shares of the Pledgor following any increase in share capitalof the Company, as provided for in this Section, are understood to be the samepledge rights as created pursuant to this Agreement and shall be subject to thesame terms as contained herein.

 

**9****                                        ****Enforcement**

 

9.1                               Upon theoccurrence and during the continuance of an Event of Default:

 

(a)                                 all rights of the Pledgor toexercise or refrain from exercising the voting and other consensual rights thatit would otherwise be entitled to exercise pursuant to Section 7.1(a) shallcease, and all such rights shall thereupon become vested in the Beneficiaries,who shall thereupon have the sole right to exercise or refrain from exercisingsuch voting and other consensual rights during the continuance of such Event ofDefault, provided that, unless otherwise directed by the RequiredLenders, the Beneficiaries shall have the right from time to time following theoccurrence and during the continuance of an Event of Default to permit thePledgor to exercise such rights. After all Events of Default have been cured orwaived and the Pledgor has delivered to the Administrative Agent a certificateto that effect, the Pledgor will have the right to exercise the voting andconsensual rights that the Pledgor would otherwise be entitled to exercisepursuant to the terms of Section 7.1(a);

 

(b)                                 all rights of the Pledgor toreceive the dividends and distributions that the Pledgor would otherwise beauthorized to receive and retain pursuant to Section 7.2 shall cease, andall such rights shall thereupon become vested in the Beneficiaries, who shallthereupon have the sole rights to receive and hold as collateral security forthe Secured Obligations such dividends and distributions during the continuanceof such Event of Default. After all Events of Default have been cured or waivedand the Pledgor has delivered to the Administrative Agent a certificate to thateffect, the Beneficiaries shall repay to the Pledgor (without interest) alldividends

 

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anddistributions that the Pledgor would otherwise be permitted to receive, retainand use pursuant to the terms of Section 7.2;

 

(c)                                  all dividends anddistributions that are received by the Pledgor contrary to the provisions of Section 7.2of this Agreement shall be segregated from other property or funds of thePledgor and shall forthwith be delivered to the Beneficiaries as collateralsecurity for the Secured Obligations in the same form as so received (with anynecessary indorsements); and

 

(d)                                 in order to permit theBeneficiaries to receive all dividends and distributions to which they may beentitled under Section 7.2 of this Agreement, to exercise the voting andother 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 beentitled to under Sections 9.1(b) and (c) above, the Pledgor shall,if necessary, upon written notice from the Administrative Agent, from time totime execute and deliver to the Beneficiaries, appropriate proxies, dividendpayment orders and other instruments as the Administrative Agent may reasonablyrequest.

 

(e)                                  The Beneficiaries and anynominee of the Beneficiaries may exercise in respect of all or any of theCollateral, in addition to other rights and remedies provided for herein orotherwise available to it, all the rights and remedies of the registered holderof the Collateral and may sell the Collateral or any part thereof at public orprivate 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 priceor prices and upon such other terms as are commercially reasonable irrespectiveof the impact of any such sales on the market price of the Collateral. ThePledgor hereby waives (to the extent permitted by law) all rights ofredemption, stay and/or appraisal that it now has or may at any time in thefuture have under any rule of law or statute. The Beneficiaries or anySecured Party shall have the right upon any such public sale, and, to theextent permitted by law, upon any such private sale, to purchase the whole orany part of the Collateral so sold.

 

(f)                                   The Beneficiaries mayexercise any and all rights and remedies of the Pledgor in respect of theCollateral.

 

(g)                                  All payments received by thePledgor after the occurrence and during the continuance of an Event of Defaultin respect of the Collateral shall be segregated from other property or fundsof the Pledgor and shall be forthwith delivered to the Administrative Agent ascollateral security for the Secured Obligations in the same form as so received(with any necessary indorsement).

 

9.2                               TheAdministrative Agent shall not be entitled to sell, transfer or request thetransfer of the Collateral to itself until the Pledgor has received at leastfive days’ notice of the decision to sell, together with the demand to the UKBorrower and the US Borrower to pay the sums owed pursuant to the CreditAgreement. In derogation from the provisions of article 2797, paragraph one ofthe Italian Civil Code, the Pledgor agrees that the

 

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demand for payment to the UK Borrower shall conformto that provided for in Section 14.2 of the Credit Agreement fornotification of legal documents.

 

9.3                               Unless otherwiseprovided in this Section 9, the provisions of Article 2797 of theCivil Code shall apply.

 

**10****                                 ****Proceeds**

 

10.1                        Use of proceeds

 

Any sum resulting from the sale of the Collateralshall be applied by the Beneficiaries:

 

(a)                                 first, to the payment of allreasonable and documented costs and expenses incurred by the Beneficiaries inconnection with such collection or sale or otherwise in connection with thisAgreement, the other Credit Documents or any of the Secured Obligations,including all court costs and the reasonable fees and expenses of its agentsand legal counsel, the repayment of all advances made by the Beneficiarieshereunder or under any other Credit Document on behalf of any Pledgor and anyother reasonable and documented costs or expenses incurred in connection withthe exercise of any right or remedy hereunder or under any other CreditDocument;

 

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

 

(c)                                  third, any surplus thenremaining shall be paid to the Pledgor or its successors or assigns or towhomsoever may be lawfully entitled to receive the same or as a court ofcompetent jurisdiction may direct.

 

**11****                                 ****Effectivenessand Discharge of the Pledge**

 

11.1                        This Agreementand the obligations of the Pledgor under this Agreement shall:

 

(a)                                 be effective only from 31 July 2004at 24:00 hours;

 

(b)                                 be in addition to, andwithout prejudice to or in conflict with any other additional guarantees orsecurity, obligation, right or remedy, present or future, existing or availableto the Beneficiaries;

 

(c)                                  not be superseded or in anyway prejudiced or affected by the existence of any such additional guarantee orsecurity, obligation, right or remedy, nor are they, wholly or in part, in anyway null, void or unenforceable by the Beneficiaries in the event that theBeneficiaries negotiate, transfer, abandon, modify or fail to perfect or toexecute any of the aforementioned additional guarantees or security,

 

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obligations,rights, remedies or agrees terms for fulfilment, extension or compromises withany other party.

 

11.2                        Subject toclause 11.3, this Agreement and the obligations of the Pledgor under thisAgreement shall remain in full force and effect and be binding in accordancewith its terms upon the Pledgor, and shall inure to the benefit of theAdministrative Agent, for itself and for the rateable benefit of the SecuredParties, UBS and the GS Co-Syndication Agent until all the Secured Obligationsunder the Credit Documents shall have been satisfied by payment in full, theCommitments shall be terminated and no Letters of Credit drawn by the UKBorrower and the US Borrower shall be outstanding, notwithstanding that fromtime to time during the term of the Credit Agreement and any Hedge Agreementthe Credit Parties may be free from any Secured Obligations

 

11.3                        Upon any saleor other transfer by the Pledgor of any Collateral that is permitted under theCredit Agreement, or upon the effectiveness of any written consent to therelease of pledge hereby created over any Collateral pursuant to Section 14.1of the Credit Agreement, the Beneficiaries shall (a) release the pledgecreated hereby over such Collateral and (b) at the Pledgor’s expenses,perform all the acts and formalities that are necessary for the purpose of suchrelease. Any execution and delivery of documents by the Beneficiaries pursuantto Clause 11 shall be without recourse or warranty by the Beneficiaries.

 

**12****                                 ****Authorityof Administrative Agent**

 

The Pledgor acknowledges that the rights and responsibilities of theAdministrative Agent under thisAgreement with respect to any action taken by the Administrative Agent or theexercise or non-exercise by the Administrative Agent of any option, right,request, judgment or other right or remedy provided for herein or resulting orarising out of this Agreement shall, as between the Administrative Agent andthe other Secured Parties, be governed by the Credit Agreement and by suchother agreements with respect thereto as may exist from time to time amongthem, but, as between the Administrative Agent and the Pledgor, theAdministrative Agent shall be conclusively presumed to be acting as agent forthe Secured Parties with full and valid authority so to act or refrain fromacting, and Pledgor shall be under no obligation, or entitlement, to make anyinquiry respecting such authority.

 

**13****                                 ****Miscellaneous**

 

13.1                        Amendment andModification

 

No modification of any type made to this Agreementshall be effective among the parties unless undertaken in writing by theparties in accordance with Section 14.1 of the Credit Agreement, and nowaiver of any provision of this Agreement and no consent to any departure bythe Pledgor therefrom, shall be effective unless made in writing and signed bythe Beneficiaries and, in any event, such waiver or consent shall be effectiveonly in the specific instance and for the specific purpose for which it wasgiven.

 

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13.2                        CumulativeRemedies

 

No omission or delay on the part of theBeneficiaries to exercise any power, right or remedy under this Agreement,shall operate as a waiver thereof nor shall any single or any partial exerciseor waiver of *any power,*right orremedy preclude its further *exercise*orthe exercise of any other power, right or remedy.

 

13.3                        Severability

 

Each of the provisions of this Agreement isseverable and distinct from the others and, as such, if at any time one or moreof such provisions is or becomes invalid, illegal or unenforceable thevalidity, legality and enforceability of the remaining provisions of thisAgreement shall not in any way be affected or impaired thereby. The partieshereto shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions withvalid provisions the economic effect of which comes as close as possible tothat of the invalid, illegal or unenforceable provisions.

 

13.4                        ApplicableCosts

 

Any tax, fee or cost owed for the signing orexecution of this Agreement, including any expenditure for formalities relatedto the pledge as well as for all necessary notarised or otherwise authenticatedcopies, shall be borne by the Pledgor.

 

**14****                                 ****Notices**

 

All notices, requests and demands pursuant heretoshall be made in accordance with Section 14.2 of the Credit Agreement. Forthe purposes of this Agreement, the Beneficiaries elect domicile at theregistered office of the Administrative Agent.

 

**15****                                 ****GoverningLaw and Jurisdiction**

 

15.1                        Law

 

This Agreement shall be governed by the laws of theRepublic of Italy.

 

15.2                        Jurisdiction

 

Any dispute which may arise in connection with thisAgreement is subject to the exclusive jurisdiction of the Milan courts. Nothingin this clause shall limit the right of the Beneficiaries to take any legalaction or proceedings in any other competent Court.

 

**16****                                 ****Power ofAttorney**

 

The Pledgor hereby appoints, which appointment isirrevocable and coupled with an interest, the Administrative Agent as thePledgor’s attorney, with full authority in the place and stead of the Pledgorand in the name of the Pledgor or otherwise to take any action and to executeany instrument, in each case after the occurrence and during the continuance ofan Event of Default, that the Administrative Agent may deem reasonablynecessary or advisable to accomplish the purposes of this Agreement, includingto receive, indorse and collect all instruments made payable to the Pledgorrepresenting any

 

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dividend or distribution payment in respect of theCollateral or any part thereof and to give full discharge for the same.

 
|   | Rockwood  Specialities Group, Inc. |   |
|--------|-----------------------------------------|--------|
|   |                                    |   |
|   |                                    |   |

 

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**Schedule 1Text of the registration of the pledge in the shareholder’s book of the Company**

 

Itis hereby acknowledged that Rockwood Specialities Group, Inc. (the “**Pledgor**”) whose registered office is at Corporation TrustCentre, 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 parvalue of Euro 10 each, representing 65% of the paid up share capital of theCompany, by virtue of a pledge agreement executed on [·] (the “**Agreement**”), with endorsement dated[·1 certified under the handand seal of the notary [·] in Milan, haspledged in favour of Credit Suisse First Boston, acting through its CaymanIslands Branch (the “**Administrative Agent**”) for itselfand for the benefit of the Secured Parties (as defined in the Agreement), UBSLoan Finance LLC and Goldman Sachs Credit Partners L.P. its Shares in the Company, to secure the performance of theSecured Obligations (as defined in the Agreement) arising from the CreditAgreement (as defined in the Agreement) executed on 30 July 2004.

 

Thepledge constituted by the Agreement will be extended to the shares owned by thePledgor or its beneficiaries as a result of any increased share capital of theCompany, free or paid.

 

Thevoting rights connected to the Shares shall be exercised pursuant to Section 7of the Agreement.

 

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**ATTO DI COSTITUZIONE DI PEGNOSU MARCHIO**

 

II presente contratto (di seguito I “Atto”) adatato 30 luglio 2004 e viene stipulato tra:

 

(1) **Rockwood Italia S.p.A.**(qui di seguito identificata come it “Costituente Pegno”), con sede legalein Torino, via Guglielmo Reiss Romoli n. 44/12, capitale sociale di euro3.819.930,00.= interamente versato, codice fiscale e numero di iscrizione pressoit registro delle imprese di Torino 02146370263, in persona del signor GabrieleCeracchi, nato a Spoleto (Perugia) it 5 aprile 1952, domiciliato per glieffetti del presente Atto a Torino, via Guglielmo Reiss Romoli n. 44/12, nellasua qualita di presidente del consiglio di amministrazione del Garante, alpresente atto autorizzato in virtu dei poteri a lui conferiti con delibera delconsiglio di amministrazione del 30 luglio 2004; e

 

(2) Credit SuisseFirst Boston, con sede legale inUetlibergstrasse, CH 8070 Zurich, Svizzera che agisce per it tramite della suasede secondaria delle (sole Cayman, Eleven Madison Avenue, New York, New York10010, elettivamente domiciliata ai fini del presente Atto in Italia a Milano,piazza Diaz n. 1, codice fiscale 97382310155, che agisce ai fini del presenteAtto in qualita di admistrative agent delle Parti Garantite, in qualita dicreditori garantiti e beneficiari del pegno costituito in forza del presenteAtto (qui di seguito identificata come l’”**Administrative Agent**”), in personadel suo procuratore speciale signora Enrica Padani, nata a Codogno(Lodi) it 30 agosto 1974, domiciliata per gli effetti del presente Atto inMilano, piazza Diaz 1, debitamente autorizzata ad agire per quanto *infra*in forza di procura speciale autenticatain 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 rogitoNotaio Renato Giacosa al numero 42.047/6.383 di repertorio;

 

(3) **UBS Loan Finance LLC**,677 Washington Boulevard, Stamford, Connecticut 06901, USA, elettivamentedomiciliata ai fini del presente Atto in Italia a Milano, piazza Diaz n. 1,codice fiscale 97382320154 (d’ora in poi “**UBS**”), societache agisce ai fini del presente atto in qualità di Finanziatore, in persona delsuo procuratore speciale signora Enrica Pagani, sullodata, debitamenteautorizzata ad agire per quanto *infra* in forzadi procura speciale autenticata in data 27 luglio 2004 dal Notaio Denise Conzodi Stamford — Connecticut (Stati Uniti d’America), depositata con atto in data30 luglio 2004 a rogito Notaio Renato Giacosa al numero 42.047/6.383 direpertorio;

 

(4) **Goldman Sachs CreditPartners L.P.**, Clarendon House, 2 Church Street, Hamilton, HM CX_Bermuda, elettivamente domiciliata ai fini del presente Atto in Italia aMilano, piazza Diaz n.1, codice fiscale 97382330153 (il “GS Co-SyndicationAgent”), 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 NotaioCatherina Kim dello Stato di New York (Stati Uniti d’America), depositata conatto in data 30 luglio 2004 a rogito Notaio Renato Giacosa al numero42.047/6.383 di repertorio;

 

(l’Administrative Agent, UBS e il GSCo-Syndication Agent d’ora in poi collettivamente i “Beneficiari”)

 

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**PREMESSO CHE**

 

(A)  In data 30 luglio 2004 é statosottoscritto un contratto di finanziamento per un ammontare fino ad euro931.762.400,00.=(novecentotrentunomilionisettecentosessantaduemilaquattro-cento virgola zerozero) e per un ammontare fino a USDollari 1.585.000.000,00.=(unmilardocinquecentoottantacinquemilioni) (come lo stesso potrebbe essereintegrato o comunque modificato di volta in volta, il “**Credit Agreement**”) tra:(1) Rockwood Specialities Group, Inc., societa costituita secondo itdiritto dello Stato del Delaware; (2) Rockwood Specialties Limited,societa costituita secondo it diritto inglese (“**UK Borrower**”); (3) RockwoodSpecialties International, Inc., societa costituita secondo tl dirittodello Stato del Delaware; (4) gli istituti di credito che di volta involta saranno parti del Credit Agreement in qualita di finanziatori (compresoUBS) (i “**Finanziatori**”); (5) Credit Suisse First Boston,per it tramite della sua sede secondaria delle Isole Cayman, in qualita diadministrative agent (l “**Administrative Agent**”) e (6) iCo-Syndication Agents (compreso il GS Co-Syndication Agent);

 

(B)  Ai sensi del Credit Agreement, (a) iFinanziatori hanno disgiuntamente concordato di concedere alcuni Finanziamentiin favore, tra l’altro, di UK Borrower, e I’Emittente di Lettere di Credito haconcordato di emettere Lettere di Credito a favore di UK Borrower (ilFinanziamento e le Lettere di Credito d’ora in poi collettivamente indicaticome “**Estensionidel Credito**”), nei termini ed alle condizioni previste dalCredit Agreement e (b) uno o pit) dei Finanziatori o Societa Collegata aiFinanziatori stessi, potranno di volta in volta stipulare dei Contratti diHedge con il UK Borrower;

 

(C)  Le Estensioni del Credito saranno usatein parte per consentire a UK Borrower di effettuare trasferimenti di valore afavore del Costituente Pegno in connessione alle esigenze derivanti dalla suarispettiva attivita commerciale, ragion per cui it Costituente Pegno beneficeradirettamente ed indirettamente dall’erogazione dell’Estensioni del Credito;

 

(D)  II Costituente Pegno a proprietario delseguente marchio italiano n. 380597 denominato SILO S (di seguito it “**Marchio**”o la “**Garanzia**”);

 

(E)  Gli obblighi dei Finanziatori e dell’Emittentedelle Lettere di Credito di concedere le proprie rispettive Estensioni delCredito in favore dell’ UK Borrower ai sensi del Credit Agreement sonosubordinati alla stipula ed alla consegna, da parte del Costituente Pegno, delpresente Atto in favore dell’Administrative Agent, nell’interesse proprio enell’interesse pro quota delle Parti Garantite, e in favore di UBS e del GSCo-Syndication Agent;

 

TUTTO CIO PREMESSO e dato atto che le suespostepremesse costituiscono parte integrante e sostanziale del presente Atto, sistipula quanto segue:

 

**1              Definizioni**

 

1.1                                 Salvo ove diversamente definito dal presente Atto, parole ed espressionidefinite nel Credit Agreement hanno tl medesimo significato quando usate nelpresente Atto.

 

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1.2                                 Quando usato nel presente atto, “Obbligazioni Garantite” indica, collettivamente:

 

(a)                                  tl puntuale rimborso (i) del capitale e dell’eventualepremio, ove esistente, e it pagamento degli interessi al tasso applicabile aisensi del Credit Agreement (compresi gli interessi maturati in pendenza diprocedure fallimentari, concorsuali, di amministrazione controllata o altraprocedura analoga) su tutti i Finanziamenti concessi al UK Borrower quando esecondo le modalita in cui sono dovuti, o a scadenza, o a seguito di rimborsoanticipato, alla data o alle date nelle quali a prevista la possibility dieffettuare tl rimborso anticipato o diversamente, (ii) it pagamento ditutto quanto dovuto dal UK Borrower ai sensi del Credit Agreement in relazionealle Lettere di Credito quando e secondo le modalita dovute, e (iii) tuttele altre obbligazioni di tipo monetario, ivi compresi gli onorari, i costi, lespese e le indennita, di tipo primario, secondario, diretto, contingente, fisseo altro (ivi comprese le obbligazioni monetarie sostenute durante Ia pendenzadi ogni procedura fallimentare, concorsuale, di amministrazione controllata, oaltra procedure analoga), del UK Borrower o di ogni altra Credit Party the auna Foreign Subsidiary di una delle Parti Garantite ai sensi del CreditAgreement 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 CreditAgreement e degli altri Documenti di Credito;

 

(c)                                  tl puntuale pagamento ed adempimento di tutte lepattuizioni, accordi, obbligazioni ed impegni di ogni altra Credit Party the auna Foreign Subsidiary, ai sensi di o in forza del presente Atto o degli altriDocumenti di Credito;

 

(d)                                 tl puntuale pagamento e adempimento di tutti gli obblighidel UK Borrower e di ciascuna Credit Party che sia una Foreign Subsidiarysecondo Ia definizione contenuta in ciascun Contratto di Hedge che (i) sianoin essere ally Data del Closing nei confronti di una controparte che e unFinanziatore o una Societe Collegate a un Finanziator del Closing, o (ii) sianostipulate dopo la Data del Closing con una un controparte che e un Finanziatoreo una Societe Collegata a un Finanziatore nel momen in cur detto Contratto diHedge viene stipulato; e

 

(e)                                  it puntuale pagamento e adempimento di tutte leobbligazioni relative a concessioni di scoperto e a relative responsabilita delUK Borrower, o di ogni altra Credit Party che sia Foreign Subsidiary, neiconfronti delle Parti Garantite e delle Societe Collegate alle Parti Garantite,derivanti da, o in relazione a, servizi di tesoreria, servizi di deposito o digestione di cassa o in relazione ad ogni trasferimento di fondi e ettuato inmodo automatico in una stanza di compensazione.

 

1.3                                 Quando usato nel presente Atto, “PartiGarantite” significa i) i Finanziatori (compreso UBS), (ii) l’Emittentedelle Lettere di Credito (iii) it Swingline Lender, (iv) (‘AdministrativeAgent, (v) i Co-Syndacation Agents (compreso it GS Co-Syndication Agent), (vi) ognicontroparte nei Contratti di Hedge, le cui obbligazioni costituiscono 

 

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Obbligazioni,(vii) i beneficiari di ogni obbligazione di indennizzo assunta da ciascunaCredit Party ai sensi dei Documenti di Credito e (viii) ogni successore oavente causa dei sovramenzionati.

 

1.4                                 I riferimenti a “**Finanziatori**” nel presente Atto comprendele society collegate di questi ultimo che possono stipulare di volta in voltaHedge Agreements con it UK Borrower.

 

**2              Oggettodella Garanzia**

 

II Costituente Pegno conla presente costituisce un diritto reale di garanzia ai sensi degli articoli 49e seguenti del Regio Decreto 21 giugno 1942, n. 929, come modificato dalDecreto Legislativo 4 dicembre 1992, n. 480 (d’ora innanzi Ia “**Legge Marchi**”) sul Marchio fino aconcorrenza di euro 133.762,00.= (centotrentatremilasettecentosessantaduevirgola zero zero) a favore dell’Administrative Agent, nell’interesse proprio enell’interesse pro quota delle Parti Garantite, e a favore di UBS e del GSCo-Syndication Agent a garanzia delle Obbligazioni Garantite (cosi comedefinite al successivo articolo 3). I Beneficiari accettano detto pegno.

 

**3              ObbligazioniGarantite**

 

3.1                                 II pegno costituito in forza della presente scrittura a favore dell’AdministrativeAgent, nell’interesse proprio e nell’interesse pro quota delle Parti Garantite,e a favore di UBS e del GS Co-Syndication Agent, garantisce le ObbligazioniGarantite.

 

**4              Dichiarazionie Garanzie**

 

II Costituente Pegno conit presente Atto dichiara e garantisce di avere la piena propriety e Ia liberadisponibilita del Marchio e garantisce altresi:

 

(a)                                  di essere I’unico legittimo titolare del Marchio e diavere pieno titolo sullo stesso, che risulta libero da qualsiasi vincolo,garanzia reale, onere, gravame, pignoramento, diritto di prelazione, sequestroo 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 Marchiodavanti ad autorita giudiziarie, collegi arbitrali o commissioni od altrepubbliche autorita italiane o straniere;

 

(c)                                  che it Marchio a valido, none nullo ne annullabile, nondecaduto e non viola alcun diritto di terzi;

 

(d)                                 che, per quanto a sua conoscenza, iI Marchio non 6violato o contraffatto da terzi;

 

(e)                                  che gli obblighi assunti in forza del presente Atto sonovalidi e legalmente vincolanti per il Costituente Pegno e non violano alcunanorma dell’ordinamento della Repubblica Italiana;

 

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(f)                                    che le dichiarazioni e garanzie riguardanti itCostituente Pegno indicate nell’Articolo 8 del Credit Agreement, o negli altriDocumenti di Credito di cui it Costituente Pegno 6 parte, e le quali devonoessere considerate parte integrante anche del presente Atto, sono veritiere ecorrette, e i Beneficiari potranno fare affidamento su ognuna di esse come sefossero integralmente previste net presente Atto; e

 

(g)                                 iI presente Atto costituisce un pegno ed un gravame diprimo grado sul Marchio e non 6 soggetto ad ulteriori gravami.

 

**5              Obblighidel Costituente Pegno**

 

5.1                                 II Costituente Pegno con it presente Atto si obbliga nei confronti deiBeneficiari, dalla data del presente Atto e fino al completo soddisfacimentodelle Obbligazioni Garantite ai sensi dei Documenti di Credito, e alla scadenzadel termine relativo ai Commitments e fino a quando vi siano Lettere di Creditoemesse a favore del UK Borrower in essere, a fare, o, a seconda del caso, adastenersi dal fare, tutto cio che sara necessario at fine di non violare alcunadisposizione, accordo o obbligazione di cui agli articoli 9 e 10 del CreditAgreement, e affinche qualsiasi comportamento od omissione da parte delCostituente Pegno non causino alcun Default o Evento di Default.

 

5.2                                 II Costituente Pegno si impegna a stipulare, in ogni momento, di volta involta ed a proprie spese, t utti gli eventuali ed ulteriori accordi, documentie dichiarazioni a contenuto finanziario, ed intraprendera tutti gli ulterioriatti che possano essere richiesti ai sensi di qualsiasi legge applicabile, oche i Beneficiari o i Required Lenders possano ragionevolmente richieder- al fine di (a) tutelaree conservare validi i pegni, le garanzie ed i vincoli costituiti o da cosh zadel presente Atto, incluso it diritto di prelazione, e (b) permettere aiBeneficiari eseguire i loro diritti e rimedi ai sensi del presente Atto, inrelazione al Marchio.

 

**6              Registrazionedel Pegno**

 

6.1                                 II Costituente Pegno acconsente a che, su istanza di chiunque, vengaeffettuata la pubblicita del presente atto di pegno presso l’Ufficio Italianodei Brevetti e Marchi con eson ro per gli ste da ogni responsabilita at riguardo.

 

**7              Esecutivitadel Pegno**

 

7.1                                 Al verificarsi di un Evento di Default, i Beneficiari e ogni delegato diquesti ultimi, potranno altrimenti disponibili ai Beneficiari stessi, tutti idiritti e rimedi del titolare registrato del Marchio ed avranno diritto divendere it Marchio, in tutto o in parte, attraverso una vendita private o un’astapubblica, presso uno qualsiasi degli uffici dei Beneficiari o altrove, percontanti, a credito, o per consegna futura, al prezzo o prezzi ed secondocondizioni commercialmente ragionevoli, e senza riguardo per l’effetto the talevendita potra avere sul prezzo di mercato del Marchio. II Costituente Pegno conit 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 infuturo, in forza di norme di legge. I 

 

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Beneficiariavranno diritto, in caso di vendita pubblica, e, nei limiti di Iegge, divendita privata, di acquistare it Marchio in tutto o in parte.

 

7.2                                 Se non diversamente previsto in questo articolo, si applicheranno ledisposizioni di cui all’art.2797 del Codice Civile.

 

7.3                                 Qualsiasi somma risultante dalla vendita del Marchio sara imputata daiBeneficiari:

 

7.3.1                        inprimo luogo, al rimborso di tutti i ragionevoli e documentati costi e spese,sopportati da o per conto dei Beneficiari in relazione a tale recupero delcredito o vendita o altrimenti dipendenti dal presente Atto, dagli altriDocumenti di Credito o dalle Obbligazioni Garantite, ivi inclusi i costigiudiziali e i ragionevoli onorari e spese dei propri procuratori e legali, itrimborso di tutte le anticipazioni fatte dai Beneficiari ai sensi del presenteAtto e ogni ulteriore ragionevole e documentato costo e spesa sopportati inrelazione all’esercizio di qualsivoglia diritto o mezzo di soddisfacimento aisensi del presente Atto;

 

7.3.2                        insecondo luogo, alle Parti Garantite, per una somma pad al totale delleObbligazioni Garantite ai sensi dei Documenti di Credito alle stesse spettantialla data dell’incasso ovvero, qualora it ricavato non dovesse esseresufficiente a coprire tale somma per intero, allora pro rata a ciascuna ParteGarantita (senza prevalenza di una parte sull’altra), proporzionalmente allaquota di credito dovuta; e

 

7.3.3                        interzo luogo, qualsiasi somma residua sara pagata al Costituente Pegno e ai suoisuccessori o aventi causa o a chiunque ne abbia legalmente diritto o comestabilito da una corte competente.

 

**8              Efficaciaed Estinzione del Pegno**

 

8.1                                 II presente Atto e tutte le obbligazioni del Costituente Pegno ai sensidello stesso:

 

(a)                                  saranno efficaci soltanto a partire dalle ore 24:00 (oratedesca) del 31 luglio 2004;

 

(b)                                 si aggiungono a e non pregiudicano ne contrastanoqualsiasi altra presente o futura garanzia accessoria, vincolo, diritto o rimediopresente o futuro esistente o disponibile a favore dei Beneficiari;

 

(c)                                  non sono assorbiti ne sono in alcun modo pregiudicati oaffetti 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 ultimitrattino, permutino, rinuncino, modifichino od omettano di perfezionare oeseguire alcuna delle predette garanzie accessorie, vincoli, diritti, rimedi o concedanotermini per adempiere o proroghe o transigano con terzi.

 

8.2                                 Nel momento in cui (x) venga posta in essere qualunque vendita o altrotrasferimento del Marchio da parte del Costituente Pegno che sia ammessa aisensi del Credit Agreement oppure (y) it Costituente Pegno cessi di essereuna Society Co!legate del US Borrower a seguito di un’operazione permessa aisensi del Credit Agreement, oppure (z) net 

 

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momentoin cui sia stato rilasciato consenso scritto all’estinzione del pegno di cui atpresente Atto sul Marchio ai sensi dell’art. 14.1 del Credit Agreement, iBeneficiari si impegnano a (a) estinguere it pegno costituito con itpresente Atto sul Marchio e (b), a spese del Costituente Pegno, porre in esseretutte le azioni ed effettuare tutte le formality necessarie a tat fine.

 

**9              Poteridell’Administrative Agent**

 

II Costituente Pegnoriconosce che i diritti e le responsabilita dell’Administrative Agent ai sensidel presente Atto con riferimento a qualsivoglia azione intrapresa dall’AdministrativeAgent o all’esercizio o mancato esercizio da parte dell’Administrative Agent diqualsiasi opzione, diritto di voto, richiesta, procedimento giudiziario, oaltro diritto o rimedio previsto, risultante o derivante dal presente Atto,saranno regolati, per quanto riguarda i rapporti tra (‘Administrative Agent ele altre Parti Garantite, dal Credit Agreement e da qualunque altro accordo inrelazione alto stesso che potra esistere di volta in volta tra dette parti,tuttavia, per quanto riguarda i rapporti tra (‘Administrative Agent e itCostituente Pegno, (‘Administrative Agent verra definitivamente consideratocome parte che agisce per le Parti Garantite con pien valido potere di agire oastenersi dall’agire, e it Costituente Pegno non avra alcun obblig richiederealcunche in merito a tale potere.

 

**10           Elezione di domicilio e comunicazioni**

 

10.1                           Ai finidel presente Atto e dei diritti di garanzia in esso aventi causa, it CostituentPegno clegge domicilio presso la propria sede legate.

 

10.2                           Qualsiasiavviso, richiesta o altra comunicazione in forza del presente Atto araeffettuat ai sensi dell’articolo 14.2 del Credit Agreement. Qualsiasi avviso orichiesta al ostituente Pe no aisensi del presente Atto sara inviato allo stesso presso il UK Borrower all’indirizzodel UK Borrower di cui all’Articolo 14.2 del Credit Agreement.

 

**11           Costi**

 

11.1                           CostituentePegno si impegna a tenere indenne i Beneficiari da ogni eventuale ragionevolecosto o spesa (ivi compresi tutti gii onorari e le spese generali degliavvocati) che potra essere da questi sostenuta per applicare od ottenere itparere di un avvocato con riferimento a qualunque dei diritti relativamente aqualunque delle Obbligazioni Garantite e l’adempimento di qualunque dirittorelativo alle Obbligazioni Garantite, o la riscossione di tutte le ObbligazioneGarantite, e/o per esercitare i propri diritti contro it Costituente Pegno aisensi del presente Atto. Qualsiasi imposta, tassa, onorario o costo dovuto perla stipulazione o l’esecuzione del presente Atto, delle conseguenti formality edelle future cancellazioni sono a carico del Costitutente Pegno.

 

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**12           Modifiche**

 

12.1                           Itermini o le previsione della presente Atto potranno essere rinunciati,modificati, integrati o altrimenti modificati solamente se concordate per iscrittoe sottoscritte dal Costituente Pegno e dai Beneficiari, in conformity all’articolo14.1 del Credit Agreement.

 

12.2                           IBeneficiari non potranno in alcun modo (salvo che con atto scritto ai sensi delprecedente articolo 11.1) ritardare, concedere dilazioni, omettere, o in altrorinunciare a qualsiasi diritto o rimedio ai sensi del presente Atto o accettareun Default o Evento di Default o un qualsiasi inadempimento dei termini e dellecondizioni del presente Atto. Nessun mancato esercizio, ne ritardo nell’eserciziodi un qualsiasi diritto, potere o privilegio da parte dei Beneficiari saraconsiderato come una rinuncia allo stesso. L’esercizio anche parziale di unqualsiasi diritto, potere o privilegio ai sensi del presente Atto nonprecludera l’ulteriore o altro esercizio dello stesso, o l’esercizio diqualsiasi altro diritto, potere o privilegio. Una rinuncia da parte deiBeneficiari a qualsiasi diritto o rimedio ai sensi del presente Atto, in unaqualsiasi occasione, non sara interpretato come un impedimento o divieto aesercitare qualsiasi diritto o rimedio che i Beneficiari potrebbero altrimentiavere in occasioni future.

 

12.3                           Idiritti, i poteri, e i privilegi previsti nel presente Atto sono cumulativi,possono essere esercitati singolarmente o congiuntamente, e non escludono altridiritti previsti della legge.

 

**13           Giurisdizione**

 

13.1                           Fattisalvi i casi di competenza inderogabile stabiliti della legge, qualsivogliacontroversia inerente it presente Atto ed i diritti di garanzia derivanti dellostesso a devoluta alla competenza esclusiva del Foro di Milano. Resta comunqueimpregiudicata la facolta dei Beneficiari di adire ogni altro giudice e forocompetente ai sensi di legge.

 

**14           Legge Applicabile**

 

II presente Atto ed idiritti e le obbligazioni parti ai sensi dello stesso saranno regolati einterpretati ai sensi della legge Italiana.

 

F.ti Gabriele Ceracchi —Enrica Pagani.

 

N. 42.058 di Repertorio

 

Milano, via Alberto daGiussano n. 18, trenta (30) luglio (7) duemilaquattro (2004).

 

Previa espressa econcorde rinunzia doe parti ai testi con ii mio consenso, certifico iosottoscritto dottor Renato Giacosa Notaio alla residenza di Milano, iscrittopresso it Collegio Notarile di Milano, essere vere e autentiche le premessefirme dei signori:

 

·  CERACCHI GABRIELE nato a Spoleto (Perugia) it5 aprile 1952, domiciliato a Torino, via Guglielmo Reiss Romoli n. 44/12,dirigente;

 

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·   PAGANI ENRICA nata a Codogno (Lodi) il 30agosto 1974, domiciliata a Milano, piazza Diaz n. 1, avvocato;

 

Persone della cui identitypersonale, qualifica e poteri io Notaio sono certo, che hanno firmato in miavista e presenza l’atto che precede in calce e sui fogli intermedi, entrambifirmando nella quality indicata in atto.

 

Le parti hanno richiestoespressamente la restituzione del presente originale.

 

F.to Renato GiacosaNotaio.

 

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* * *

 

Registrato presso l’Agenzia delle Entrate —Ufficio di Milano 2 - in data 5 agosto 2004.

 

* * *

 

Copia conforme all’originale in carta liberaper gli usi consentiti.Milano, 6 agosto 2004.

 

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*** ***

***Working translaton into English                 ***

 

EXHIBIT E-3

 

FORMOF ITALIAN TRADEMARK PLEDGE AGREEMENT

 

Private& Confidential

 
| ** ** | ** ** | **Dated** | **30  July 2004** |   |
|------------|------------|-----------|-------------------|--------|

 

 

**Rockwood Italia S.p.A.                             (1)**

 

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**Trademark Pledge Agreement**

 

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**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

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[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 proposethe constitution of a pledge in the terms and conditions set out in thefollowing agreement (the “Agreement”) dated [·]made between:

 

(1)        Rockwood Italia S.p.A. (hereafter the “Pledgor”),a company incorporated andexisting under the laws of Italy, having its registered office in Turin, ViaReiss Romoli no. 44/12, Italy, share capital of Euro 3,819,930, fiscal code andnumber 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 theGuarantor authorised to execute the present deed by virtue of the powers conferred to him by a resolution ofthe Board of Directors meeting held on30 July 2004 which is attached hereto subAnnex A;

 

(2)        Credit Suisse First Boston, acting through its Cayman Islands Branch ( Eleven Madison Avenue, New York, NewYork 10010 USA (hereafter the “Administrative Agent”) acting for the purposesof this Agreement as Administrative Agent for the Secured Parties, as securedcreditors and beneficiaries of the pledge constituted by virtue of thisAgreement, represented by itsagent Enrica Pagani, born in Codogno (LO), on 30 August 1974, domiciled for thepurposes of this Agreement in Piazza Diaz 1, Milan 20123 (Italy), dulyauthorised to act in the capacity referred to below by virtue of a special power of attorney, duly certified andapostilled, which is attached hereto AnnexB

 

(3)        UBS Loan Finance LLC, 677 Washington Boulevard, Stamford, Connecticut06901, 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

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Agreement in Piazza Diaz1, Milan 20123 (Italy), duly authorised to act in the capacity referred tobelow 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 “GSCo-Syndication Agent”) acting for the purposes of this Agreement asCo-Syndication Agent, represented by its agent Enrica Pagani, born in Codogno(LO), on 30 August 1974, domiciled for the purposes of this Agreement in PiazzaDiaz 1, Milan 20123 (Italy), duly authorised to act in the capacity referred tobelow by virtue of a special power of attorney, duly certified and apostilled,which is attached hereto Annex B;

 

the Administrative Agent, UBS and the GSCo-Syndication Agent together the “Beneficiaries”.

 

WHEREAS

 

(A)                    On30 July 2004 a credit agreement (as the same may be amended, supplemented,otherwise modified from time to time, the “Credit Agreement”) has been enteredinto among (1) Rockwood Specialties Group Inc. a Delaware corporation (2)Rockwood Specialties Limited, as UK Borrower (“UK Borrower”), (3) RockwoodSpecialties International, Inc., a Delaware corporation, (4) the lendinginstitutions from time to time parties thereto (collectively the “Lenders”),(5) Credit Suisse First Boston, acting through its Cayman Islands Branch asadministrative agent and (6) the Co-Syndication Agents;

 

(B)                      Pursuant to the Credit Agreement, (a) the Lenders have severally agreedto make Loans to, inter alia, the UK Borrower and the Letter of Credit Issuerhas agreed to issue Letters of Credit for the account of UK Borrower(collectively, the “Extensions of Credit”) upon the terms and subject to theconditions set forth therein and (b) one or more Lenders or Affiliates ofLenders 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 enablethe UK Borrower to make valueabte transfers to the Pledgor in *connection*with the operation of theirrespective businesses. The Pledgor therefore will derive substantial direct andindirect benefit from the making of the Extensions of Credit;

 

(D)                     ThePledgor is the owner of the following Italian trademark no. 380597 filed underthe name SILO S (hereinafter the “Trademark” or the “Collateral”);

 

(E)                       It is a condition precedent to the obligation of the Lenders and theLetter of Credit Issuer to make their respective Extensions of Credit to the UKBorrower under the Credit Agreement that the Pledgor shall have executed anddelivered this Agreement to the Administrative Agent, for itself and for theratable benefit of the Secured Parties, UBS and the GS Co-Syndication Agent.

 

NOW, THEREFORE, having acknowledged that therecitals hereof and the attachments hereto constitute an integral andsubstantial part of this Agreement, it is hereby agreed and stipulated asfollows:

 

4

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1              DefinedTerms

 

1.1                                 Unless**otherwise defined herein, terms defined in the Credit Agreement and usedherein shall have the meanings given to them in the Credit Agreement.

 

1.2                                 As used herein, the term “Secured Obligations” means the collectivereference 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 (includinginterest accruing during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding) on the Loans, extended to the UKBorrower, when and as due, whether at maturity, by acceleration, upon one ormore dates set for prepayment or otherwise, (ii) each payment required to bemade by the UK Borrower under the Credit Agreement in respect of any Letter ofCredit, when and as due, and (iii) all other monetary obligations, includingfees, costs, expenses *and indemnities,*whetherprimary, secondary, direct, contingent, fixed or otherwise (including monetaryobligations incurred during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding), of the UK Borrower or any otherCredit Party that is a Foreign Subsidiary of any of the Secured Parties underthe 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 CreditAgreement 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 aForeign Subsidiary under or pursuant to this Agreement or the other CreditDocuments;

 

(d)                                 the due and punctual payment and performance of all obligations of the UKBorrower and each Credit Party that is a Foreign Subsidiary under each HedgeAgreement that (i) is in effect on the Closing Date with a counterparty that isa Lender or an Affiliate of a Lender as of the Closing Date or (ii) is *entered into*after the Closing Date withany counterparty that is a Lender or an Affiliate of a Lender at the time suchHedge Agreement is entered into; and

 

(e)                                  the due and punctual payment and performance of all obligations inrespect of overdrafts and related liabilities owed to the Secured Parties ortheir Affiliates by the UK Borrower or any other Credit Party that is a ForeignSubsidiary, arising from or in connection with treasury, depositary or cashmanagement services or in connection with any automated clearinghouse transferof 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 GSCo-Syndication Agent), (vi) each counterparty to a Hedge Agreement theobligations under which constitute Obligations, (vii) the beneficiaries of eachindemnification obligation undertaken by any Credit Party 

 

5

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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 shallbe deemed to include Affiliates of Lenders that may from time to time enterinto Hedge Agreements with the UK Borrower.

 

2              TrademarkPledge

 

The Pledgor herebycreates security, pursuant toarticle 49 *of seq.*of RoyalDecree no. 929 of 21 June 1942, as amended by Legislative Decree no. 480 of 4December 1992 (hereinafter the “Trademark Law”), over the Trademark up to Euro133,762.00 (one hundred thirty three thousand seven hundred sixty two) infavour of the Administrative Agent, for itself and the rateable benefit of theSecured Parties, UBS and the GS Co-Syndication Agent, as security for theSecured Obligations (as defined in Article 3 below). The Beneficiaries acceptsuch a pledge.

 

3              SecuredObligations

 

The pledge rights hereby created in favour of theAdministrative Agent, for itself and the rateable benefit of the Secured Parties,UBS and the GS Co-Syndication Agent, secure the Secured Obligations.

 

4              Representationsand Warranties

 

The Pledgor hereby represents and warrants that ithas good title and is able to freely transfer the Trademark and furtherrepresents and warrants that:

 

(a)                                  the Pledgoris the sole legal owner of, and has full and legaltitle 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 proceedingspending or threatened against or affecting the Trademark before any court,arbitration panel, commission or other governmental agency, whether in Italy orabroad;

 

(c)                                  the Trademark is valid, neither void, voidable, nor expired and does notinfringe any third party rights;

 

(d)                                 to its knowledge, the Trademark has not been infringed or counterfeitedby third parties;

 

(e)                                  the obligations assumed under this Agreement are valid and legallybinding 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 CreditAgreement as they relate to the Pledgor or in the other Credit Documents towhich such Pledgor is a party, each of which is hereby incorporated herein byreference, are 

 

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true and correct, and theBeneficiaries shall be entitled to rely on each of them as if they were fullyset forth herein;

 

(g)                                 this Agreement shall constitute a first pledge and lien on the Trademark,subject to no prior liens.

 

5              Covenantsby the Pledgor

 

5.1                                 The Pledgor hereby covenants and agrees with the Beneficiaries that, fromand after the date of this Agreement until the Secured Obligations under theCredit Documents are paid in full, *the*Commitmentsare terminated and no Letter of Credit drawn by the UK Borrower remainsoutstanding, the Pledgor shall take, or shall refrain from taking, as the casemay be, all actions that are necessary to be taken or not taken so that noviolation of any provision, covenant or agreement contained *in*Section 9 or 10 of the CreditAgreement, and so that no Default or Event of Default, is caused by any act orfailure to act of such Pledgor.

 

5.2                                 The Pledgor agrees that at any time and from time to time, at the expenseof the Pledgor, it will execute any and all further documents, financingstatements, agreements and instruments, and take all such further actions whichmay be required under any applicable law, or which the Beneficiaries or theRequired Lenders may reasonably request, in order (x) to perfect and protectany pledge, assignment or security interest granted or purported to be grantedhereby, including the priority hereof, (y) to enable the Beneficiaries toexercise and enforce their rights and remedies hereunder with respect to theCollateral.

 

6                                          Registration of the Pledge

 

6.1                                 The Pledgor consents to the publication of the present agreement, bywhatever interested party requests it, with the Italian Office of Trademarksand Copyrights, exonerating the competent office from any liability inconnection therewith.

 

7                                          Enforcement of the Pledge

 

7.1                                 Upon the occurrence of an Event of Default, the Beneficiaries and anynominee of the Beneficiaries may exercise in respect of all or any of theCollateral, in addition to other rights and remedies provided for herein orotherwise available to it, all the rights and remedies of the registered holderof the Collateral and may sell the Collateral or any part thereof at public orprivate sale, at any of the Beneficiaries’ offices or elsewhere, for cash, oncredit or for future delivery, at such price or prices and upon such otherterms as are commercially reasonable irrespective of the impact of any suchsales on *the market price*of theCollateral. The Pledgor hereby waives (to the extent permitted by law) allrights of redemption, stay and/or appraisal that it now has or may at any timein the future have under any rule of law or statute. The Beneficiaries shallhave 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 Collateralso sold.

 

7.2                                 Unless otherwise provided in this article 7, the provisions of Article2797 of the Civil Code shall apply.

 

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7.3                                 Any sum resulting from the sale of the Collateral shall be applied byBeneficiaries:

 

7.3.1                        first, to the payment of all reasonable and documented costs and expensesincurred by or on behalf of the Beneficiaries in connection with suchcollection or sale or otherwise in connection with this Agreement, includingall court costs and the reasonable fees and expenses of its agents and legalcounsel, the repayment of all advances made by the Beneficiaries hereunder andany other reasonable and documented costs or expenses incurred in connectionwith the exercise of any right or remedy hereunder;

 

7.3.2                        second, to the Secured Parties, an amount equal to all the SecuredObligations under the Credit Documents owing to them on the date of any suchdistribution, and, if such moneys shall be insufficient to pay such amounts infull, then ratably (without priority of any one over any other) to such SecuredParties in proportion to the unpaid amounts thereof; and

 

7.3.3                        third, any surplus then remaining shall be paid to the Pledgor or itssuccessors or assigns or to whomsoever may be lawfully entitled to receive thesame or as a court of competent jurisdiction may direct.

 

8              Effectivenessand Discharge of the Pledge

 

8.1           ThisAgreement 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 otheradditional guarantees or security, obligation, right or remedy, present orfuture, 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 orsecurity, obligation, right or remedy, nor are they, wholly or in part, in anyway null, void or unenforceable by the Beneficiaries in the event that theBeneficiaries negotiate, transfer, abandon, modify or fail to perfect or toexecute any of

 

(d)                                 the aforementioned additional guarantees or security, obligations,rights, remedies or agrees terms for fulfilment, extension or compromises withany other party.

 

8.2                                 Upon (x) any sale or other transfer by the Pledgor of any collateral thatis permitted *under*the CreditAgreement, or (y) upon the Pledgor ceasing to be a Subsidiary of the USBorrower pursuant to a transaction permitted by the Credit Agreement, or (z)upon the effectiveness of any written consent to the release of pledge herebycreated over any Collateral pursuant to Section 14.1 of the Credit Agreement,the Beneficiaries shall (a) release the pledge created hereby over suchCollateral and *(b)*at the Pledgor’sexpenses, perform all the acts and formalities that are necessary for thepurpose of such release.

 

9                                          Authority of Administrative Agent

 

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The Pledgor acknowledges that the rights andresponsibilities of the Administrative Agent *under*this Pledge with respect to any action taken by the AdministrativeAgent or the exercise or non-exercise by the Administrative Agent of anyoption, right, request, judgment or other right or remedy provided for hereinor resulting or arising out of this Pledge shall, as between the AdministrativeAgent and the other Secured Parties, be governed by the Credit Agreement and bysuch other agreements with respect thereto as may exist from time to time amongthem, but, as between the Administrative Agent and the Pledgor, theAdministrative Agent shall be conclusively presumed to be acting as agent forthe Secured Parties with full and valid authority so to act or refrain fromacting, and Pledgor shall be under no obligation, or entitlement, to make anyinquiry 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 domiciledat its own registered office and the Beneficiaries elect domicile at *the*Administrative Agent’s registeredoffice.

 

10.2                           All notices, requests and demands pursuant hereto shall be made inaccordance with Section 14.2 of the Credit Agreement. All communications andnotices hereunder to the Pledgor shall be given to it in care of the UKBorrower 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 anddisbursements of counsel) that may be paid or incurred by the Beneficiaries *in*enforcing, or obtaining advice ofcounsel in respect of, any rights with respect to, or collecting, any or all ofthe Secured Obligations and/or enforcing any rights with respect to, orcollecting against, the Pledgor under this Agreement. Any tax, fee or cost owedfor the creation or execution of this agreement and any further formalities andeventual 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 theBeneficiaries in accordance with Section 14.1 of the Credit Agreement.

 

12.2                           None of the Beneficiaries shall by any act (except by a writteninstrument pursuant to Section 12.1 hereof), delay, indulgence, omission orotherwise *be deemed*to have waivedany right or remedy hereunder or to have acquiesced in any Default or Event ofDefault or in any breach of any of the terms and conditions hereof. No failureto exercise, nor any delay in exercising, on the part of the Beneficiaries, anyright, power or privilege hereunder shall operate as a waiver thereof. Nosingle or partial exercise of any right, power or privilege hereunder shallpreclude any other or further exercise thereof or the exercise of any otherright, power or privilege. A waiver by the Beneficiaries of any right 

 

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or remedy hereunder on any one occasion shall not beconstrued as a bar to any right or remedy that the Beneficiaries wouldotherwise have on any future occasion.

 

12.3                           The rights, *remedies, powers*andprivileges herein provided are cumulative, may be exercised singly orconcurrently and are not exclusive of any other rights or remedies provided bylaw.

 

13                                    Jurisdiction

 

Unless otherwise established by law, the courts ofMilan shall have exclusive jurisdiction to settle any dispute between theparties which may arise out of or in connection with this Agreement and thesecurity rights created herein. Nevertheless, nothing shall limit the right ofthe Beneficiaries to initiate proceedings in any other competent court pursuantto the current laws in force.

 

14                                    Governing Law

 

This Agreement and the rights *and*obligations of the parties hereundershall be governed by, and construed and interpreted in accordance with, the lawof the Republic of Italy.

 

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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**

 

 

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Dated: July 30, 2004

 

Premises:

 

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This document prepared by and after recording return to: 

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Latham & Watkins LLP 885 Third Avenue New York, NY 10022

 

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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       |

 

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| 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 |                                          |

 

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THISMORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY AGREEMENT AND FIXTUREFILING/FINANCING STATEMENT dated as of July 30, 2004 (this “*Mortgage*”), by[                            ]a [                            ]corporation, having an office at[                            ](the “*Mortgagor*”), to CREDITSUISSE FIRST BOSTON, acting through its Cayman Islands Branch, having an officeat Eleven Madison Avenue, New York, NY 10010 (the “*Mortgagee*”) as Administrative Agent for the benefit of theSecured Parties (as defined below);

 

**WITNESSETH THAT:**

 

WHEREAS, pursuant to the Credit Agreement dated asof July 30, 2004, by and among Rockwood Specialties Group, Inc., a Delawarecorporation (the “*US Borrower*”),Rockwood Specialties Limited, a company incorporated under the laws of Englandand 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, UBSLoan Finance LLC and Goldman Sachs Credit Partners L.P., as Co-SyndicationAgent, and[                    ],as Documentation Agent (such Credit Agreement, and as it may hereafter beamended, restated, supplemented or otherwise modified from time to time, the “*Credit Agreement*”), the Lenders madecertain Commitments, subject to the terms and conditions set forth in theCredit Agreement, to extend certain credit facilities (as described in thefollowing paragraph) to the Borrowers. Capitalized terms used herein and not defined herein shall have themeanings 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 inexcess of [$1,050,000,000] plus €[460,983,991] and (b) Revolving CreditLoans to the Borrowers, at any time and from time to time in an aggregateprincipal amount at any time outstanding not in excess of [$250,000,000],(ii) Mortgagee has agreed to make Swingline Loans to the US Borrower atany time and from time to time in an aggregate principal amount at any timeoutstanding not in excess of [$75,000,000] and (iii) the Letter of CreditIssuer has issued or agreed to issue from time to time Letters of Credit forthe account of the Borrowers in an aggregate face amount at any timeoutstanding not in excess of [$100,000,000], in each case pursuant to, and uponthe terms, and subject to the conditions specified in, the CreditAgreement.  Subject to the terms of theCredit Agreement, the Borrowers may borrow, prepay and reborrow RevolvingCredit Loans.  Amounts paid in respect ofTerm Loans may not be reborrowed.

 

WHEREAS, the Borrowers or any of their RestrictedSubsidiaries may from time to time enter, or may from time to time haveentered, into one or more Hedge Agreements (collectively, the “*Lender Hedge Agreements*”) with one or morePersons that are Lenders or Affiliates of Lenders at the time such HedgeAgreements are entered into (in such capacity, collectively, the “*Interest Rate Exchangers*”), and it isdesired that the obligations of the Borrowers or any of their RestrictedSubsidiaries under the Hedge Agreements, including without limitation theobligations of the Borrowers or any of their Restricted Subsidiaries to makepayments thereunder in the event of early termination thereof, together withall obligations of the Borrowers under the Credit Agreement and the otherCredit Documents, be secured hereunder;

 

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WHEREAS, pursuant to the Guarantee, dated as of July30, 2004 (the “*Guarantee*”), infavor of the Administrative Agent, for the ratable benefit of the Lenders,Holdings and each US Subsidiary Guarantor have guaranteed the prompt paymentand performance when due of the Obligations (as defined below); and

 

WHEREAS, as used in this Mortgage, the term (a) “*Obligations*” shall mean collectivereference to (i) the due and punctual payment of (x) the principal ofand premium, if any, and interest at the applicable rate provided in the CreditAgreement (including interest accruing during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding) on the Loans, when and as due, whetherat maturity, by acceleration, upon one or more dates set for prepayment orotherwise, (y) each payment required to be made by the Borrowers under theCredit Agreement in respect of any Letter of Credit, when and as due, includingpayments in respect of reimbursement of disbursements, interest thereon andobligations to provide cash collateral, and (z) all other monetaryobligations, including fees, costs, expenses and indemnities, whether primary,secondary, direct, contingent, fixed or otherwise (including monetaryobligations incurred during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding, regardless of whether allowed orallowable in such proceeding), of the Borrowers or any other Credit Party toany of the Secured Parties under the Credit Agreement and the other CreditDocuments, (ii) the due and punctual performance of all covenants,agreements, obligations and liabilities of the Borrowers under or pursuant tothe Credit Agreement and the other Credit Documents, (iii) the due andpunctual payment and performance of all the covenants, agreements, obligationsand liabilities of each other Credit Party under or pursuant to this Mortgageor the other Credit Documents, (iv) the due and punctual payment andperformance of all obligations of each Credit Party under each Hedge Agreementthat (x) is in effect on the Closing Date with a counterparty that is aLender or an affiliate of a Lender as of the Closing Date or (y) is enteredinto after the Closing Date with any counterparty that is a Lender or anaffiliate of a Lender at the time such Hedge Agreement is entered into and(v) the due and punctual payment and performance of all obligations inrespect of overdrafts and related liabilities owed to the Administrative Agentor its affiliates arising from or in connection with treasury, depositary orcash management services or in connection with any automated clearinghousetransfer of funds; and (b) “*SecuredParties*” shall mean (i) the Lenders, (ii) the Letter ofCredit Issuer, (iii) the Swingline Lender, (iv) the AdministrativeAgent, (v) the Co-Syndication Agents, (vi) the Documentation Agent,(vii) each counterparty to a Hedge Agreement the obligations under whichconstitute Obligations, (viii) the beneficiaries of each indemnificationobligation undertaken by any Credit Party under any Credit Document and(ix) any successors, indorsees, transferees and assigns of each of theforegoing.

 

WHEREAS, pursuant to the requirements of the CreditAgreement, the Mortgagor is entering into this Mortgage to create a lien on anda 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 thegranting by other Credit Parties of mortgages, deeds of trust and deeds tosecure debt (the “*Other Mortgages*”)that create liens on and security interests in certain Mortgaged Propertiesother than the Mortgaged Property to secure the performance of the Obligations.

 

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***GRANTING CLAUSES***

 

NOW, THEREFORE, IN CONSIDERATION OF the foregoingand in order to secure the due and punctual payment and performance of any andall present and future indebtedness of the Mortgagor to the Mortgagee,including but not limited to the payment of the Obligations for the benefit ofthe Secured Parties and the payment of any and all amounts due and owing underthe Guarantee, Mortgagor hereby grants, conveys, mortgages, assigns and pledgesto the Mortgagee, a mortgage and/or a security interest in, all Mortgagor’sright title and interest in and to the following described property (the “*Mortgaged Property*”) whether now owned orheld or hereafter acquired; provided however, that the maximum principal debtor obligation which is, or under any contingency may be secured at the date ofexecution hereof or any time thereafter by this Mortgage (exclusive of interestand protective payments) is$[                        ]:

 

(1) the land more particularly described on ExhibitA hereto (the “*Land*”), togetherwith all rights appurtenant thereto, including the easements over certain otheradjoining land granted by any easement agreements, covenant or restrictiveagreements and all air rights, mineral rights, water rights, oil and gas rightsand development rights, if any, relating thereto, and also together with all ofthe other easements, rights, privileges, interests, hereditaments andappurtenances thereunto belonging or in any way appertaining and all of theestate, right, title, interest, claim or demand whatsoever of Mortgagor thereinand in the streets and ways adjacent thereto, either in law or in equity, inpossession or expectancy, now or hereafter acquired (the “*Premises*”);

 

(2) all buildings, improvements, structures, paving,parking areas, walkways and landscaping now or hereafter erected or locatedupon the Land, and all fixtures of every kind and type affixed to the Premisesor attached to or forming part of any structures, buildings or improvements andreplacements thereof now or hereafter erected or located upon the Land (the “*Improvements*”);

 

(3) all apparatus, movable appliances, buildingmaterials, equipment, fittings, furnishings, furniture, machinery and otherarticles of tangible personal property of every kind and nature, andreplacements thereof, now or at any time hereafter placed upon or used in anyway in connection with the use, enjoyment, occupancy or operation of theImprovements or the Premises, including all of Mortgagor’s books and recordsrelating thereto and including all pumps, tanks, goods, machinery, tools,equipment, lifts (including fire sprinklers and alarm systems, fire preventionor 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 allother equipment of every kind), restaurant, bar and all other indoor or outdoorfurniture (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-incoolers, signs (indoor and outdoor), computer systems, cash registers andinventory control systems, and all other apparatus, equipment, furniture,furnishings, and articles used in connection with the use or operation of theImprovements or the Premises, it being understood that the enumeration of any 

 

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specific articles of property shall in no way resultin or be held to exclude any items of property not specifically mentioned (theproperty referred to in this subparagraph (3), the “*Personal Property*”);

 

(4) all general intangibles owned by Mortgagor andrelating to design, development, operation, management and use of the Premisesor the Improvements, all certificates of occupancy, zoning variances, building,use or other permits, approvals, authorizations and consents obtained from andall materials prepared for filing or filed with any governmental agency inconnection with the development, use, operation or management of the Premisesand 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, feasibilitystudies, appraisals, environmental studies, engineering reports and similarmaterials relating to any portion of or all of the Premises and Improvements,and all payment and performance bonds or warranties or guarantees relating tothe 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 whichMortgagor is sublandlord), concession, management, mineral or other agreementsof a similar kind that permit the use or occupancy of the Premises or theImprovements for any purpose in return for any payment, or the extraction ortaking of any gas, oil, water or other minerals from the Premises in return forpayment of any fee, rent or royalty (all amendments, extensions, renewals,guarantees thereof, and all security therefor, collectively, “*Leases*”), and all agreements or contractsfor the sale or other disposition of all or any part of the Premises or theImprovements, now or hereafter entered into by Mortgagor, together with allcharges, fees, income, issues, profits, receipts, rents, revenues or royaltiespayable thereunder (“*Rents*”);

 

(6) all real estate tax refunds and all proceeds ofthe conversion, voluntary or involuntary, of any of the Mortgaged Property intocash or liquidated claims (“*Proceeds*”),including Proceeds of insurance maintained by the Mortgagor and condemnationawards, any awards that may become due by reason of the taking by eminentdomain or any transfer in lieu thereof of the whole or any part of the Premisesor Improvements or any rights appurtenant thereto, and any awards for change ofgrade of streets, together with any and all moneys now or hereafter on depositfor the payment of real estate taxes, assessments or common area charges leviedagainst the Mortgaged Property, unearned premiums on policies of fire and otherinsurance maintained by the Mortgagor covering any interest in the MortgagedProperty or required by the Credit Agreement; and

 

(7) all extensions, improvements, betterments,renewals, substitutes and replacements of and all additions and appurtenancesto, the Land, the Premises, the Improvements, the Personal Property, thePermits, Plans and Warranties and the Leases, hereinafter acquired by orreleased to the Mortgagor or constructed, assembled or placed by the Mortgagoron the Land, the Premises or the Improvements, and all conversions of thesecurity constituted thereby, immediately upon such acquisition, release,construction, assembling, placement or conversion, as the case may be, and ineach such case, without any further mortgage, deed of trust, conveyance,assignment or other act by the Mortgagor, all of which shall 

 

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become subject to the lien of this Mortgage as fullyand completely, and with the same effect, as though now owned by the Mortgagorand specifically described herein.

 

TO HAVE AND TO HOLD the Mortgaged Property unto theMortgagee, its successors and assigns, for the ratable benefit of the SecuredParties, forever, subject only to the Permitted Liens and any Liens permittedpursuant to Section 10.2 of the Credit Agreement (together, the “*Permitted Encumbrances*”) and tosatisfaction and cancellation as provided in Section 3.09.

 

SECTION 20.

 

Representations, Warranties and Covenants ofMortgagor

 

Mortgagor agrees, covenants, represents and/orwarrants 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;                               |

 

subjectonly to the Permitted Encumbrances.

 

(b)  To thebest of Mortgagor’s knowledge, there are no Leases affecting the Land or theImprovements except for (i) Leases which (x) in the aggregate do notaffect more than 10% of the total area of the Land or 10% of the gross buildingarea of the Improvements and (y) are subordinate to the lien of thisMortgage or (ii) Leases which cannot reasonably be expected to have a MaterialAdverse Effect.

 

(c)  To thebest of Mortgagor’s knowledge, except as permitted or created by the CreditDocuments and except for any Permitted Encumbrances, Mortgagor is not obligatedunder, and the Mortgaged Property is not bound by or subject to, any right, offirst refusal, option or other contractual right to sell, assign or otherwisedispose of any Mortgaged Property or any interest therein.

 

(d)  Thegranting of this Mortgage is within Mortgagor’s corporate powers and has beenduly authorized by all necessary corporate, and, if required, stockholderaction.  This Mortgage has been dulyexecuted and delivered by Mortgagor and constitutes a legal, valid and bindingobligation of Mortgagor, enforceable in accordance with its terms, subject toapplicable bankruptcy, insolvency, reorganization, moratorium or other lawsaffecting the creditors’ rights generally and subject to general principles ofequity, regardless of whether considered in a proceeding in equity or at law.

 

(e)  To thebest of Mortgagor’s knowledge, adequate ingress and egress is available to andfrom the Land and the Improvements for any reasonable purpose.

 

(f)  ThisMortgage and the Uniform Commercial Code Financing Statements described inSection 1.09 of this Mortgage, when duly recorded in the public recordsidentified in the Perfection Certificate will create a valid, perfected andenforceable lien upon and 

 

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mortgageand security interest in all of the Mortgaged Property subject only to thePermitted Liens.  Mortgagor will foreverwarrant and defend its title to the Mortgaged Property, the rights of Mortgageetherein under this Mortgage and the validity and priority of the lien of thisMortgage thereon against the claims of all persons and parties except thosehaving 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 rightsand responsibilities of the Mortgagee under this Mortgage with respect to anyaction taken by the Mortgagee or the exercise or non-exercise by the Mortgageeof any option, right, request, judgment or other right or remedy provided forherein or resulting or arising out of this Mortgage shall, as between theMortgagee and the Lenders, be governed by the Credit Agreement and by suchother agreements with respect thereto as may exist from time to time amongthem, but, as between the Mortgagee and the Mortgagor, the Mortgagee shall beconclusively presumed to be acting as agent for the Lenders with full and validauthority so to act or refrain from acting, and the Mortgagor shall not beunder any obligation, or entitlement, to make any inquiry respecting suchauthority.

 

(b)  Withoutlimiting any of the relevant provisions of the Credit Agreement, if Mortgageeexercises any of its rights or remedies under this Mortgage, or if any actionsor proceedings (including any bankruptcy, insolvency, receivership,reorganization or similar proceedings) are commenced in which Mortgagee is madea party and is obliged to defend or uphold or enforce this Mortgage or therights of Mortgagee hereunder or the terms of any Lease, or if a condemnationproceeding is instituted affecting the Mortgaged Property, Mortgagor will payall reasonable sums, including reasonable attorneys’ fees and disbursements,incurred by Mortgagee related to the exercise of any remedy or right ofMortgagee pursuant hereto and the reasonable expenses of any such action orproceeding together with all statutory or other costs, disbursements andallowances, interest thereon from the date of demand for payment thereof at therate per annum then applicable under Section 2.8(a) of the Credit Agreementplus 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 inor claim upon the Mortgaged Property attaching or accruing subsequent to therecording of this Mortgage and shall be secured by this Mortgage to the extentpermitted by law.  Any payment of amountsdue under this Mortgage not made on or before the due date for such paymentsshall accrue interest daily without notice from the due date until paid at theDefault Interest Rate, and such interest at the Default Interest Rate shall be immediatelydue upon demand by Mortgagee.

 

(c)  TheMortgagor hereby represents and warrants that the representations andwarranties set forth in Section 8 of the Credit Agreement as they relate to theMortgagor or the Credit Documents to which the Mortgagor is a party, each ofwhich is hereby incorporated herein by reference, are true and correct, and theMortgagee and each Lender shall be entitled to rely on each of them as if theywere fully set forth herein.

 

(d)  TheMortgagor hereby covenants and agrees with the Administrative Agent and eachLender that, from and after the date of this Mortgage until the Obligationsunder the Credit Documents are paid or satisfied in full, the Commitments areterminated and no Letter of Credit drawn by either of the Borrowers remainsoutstanding, the Mortgagor shall take, or shall 

 

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refrainfrom taking, as the case may be, all actions that are necessary to be taken ornot taken so that no violation of any provision, covenant or agreementcontained in Section 9 or 10 of the Credit Agreement, and so that no Default orEvent of Default, is caused by any act or failure to act of the Mortgagor orany of its Subsidiaries.

 

20.3.        Compliance with Legal Requirements.  Mortgagor shall promptly, fully,and faithfully comply in all material respects with all applicable laws andlegal requirements relating to its ownership, use and occupancy of the Land andthe Improvements, except to the extent the failure to do so could not reasonablybe 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 anddischarge from time to time prior to the date on which material penalties attachthereto, all taxes of every kind and nature, all general and specialassessments, levies, permits, inspection and license fees, all water and sewerrents, all vault charges, and all other public charges, and all servicecharges, common area charges, private maintenance charges, utility charges andall other private charges, whether created or evidenced by recorded orunrecorded documents or of a like or different nature, imposed upon or assessedagainst the Mortgaged Property or any part thereof or upon the Rents from theMortgaged Property or arising in respect of the occupancy, use or possessionthereof.

 

(b)  In theevent of the passage of any state, Federal, municipal or other governmentallaw, order, rule or regulation subsequent to the date hereof (i) in anymanner changing or modifying the laws now in force governing the taxation ofthis Mortgage (other than laws governing income, franchise and similar taxesgenerally) or the manner of collecting taxes thereon and (ii) imposing atax to be paid by Mortgagee, either directly or indirectly, on this Mortgage orrequiring an amount of taxes to be withheld or deducted therefrom, Mortgagorwill promptly notify Mortgagee of such event. In such event Mortgagor shall (i) agree to enter into such furtherinstruments as may be reasonably necessary or desirable to obligate Mortgagorto make any applicable additional payments and (ii) Mortgagor shall makesuch 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 connectionwith future permitted alterations, Mortgagor shall, at the request of theAdministrative Agent, use reasonable commercial efforts to obtain, and shallthereafter maintain, a complete set of final plans, specifications, blueprintsand drawings for the Mortgaged Property either at the Mortgaged Property or ina particular office at the headquarters of Mortgagor to which Mortgagee shallhave access upon reasonable advance notice and at reasonable times.

 

(b)  Mortgagorshall not:

 

(i)  demolishor remove all or any material portion of the Improvements, except as may berequired by law, if such demolition or removal could reasonably be expected tohave a Material Adverse Effect;

 

(ii)  erectany additions to the Improvements or any other structures on the Premises, ifsuch erection could reasonably be expected to have a Material Adverse Effect;

 

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(iii)  commitany waste on the Mortgaged Property or make any alterations to the MortgagedProperty if such waste or alterations could reasonably be expected to have aMaterial Adverse Effect;

 

(iv)  changethe use of the Mortgaged Property or take any other action with respect to theMortgaged Property if it would (A) materially increase the risk of fire orany other hazard (unless Mortgagor obtains additional insurance customarilyattained in connection with such increased risk),(B) violate the terms of anyinsurance policy required by Section 1.05 hereof or (C) reasonably beexpected to have a Material Adverse Effect;

 

ineach case without the consent of the Mortgagee in each instance, which consentshall not be unreasonably withheld or delayed.

 

(c)  Mortgagorwill keep and maintain the Improvements and the Personal Property in goodrepair, working order and condition, reasonable wear and tear excepted, andwill schedule and perform preventive maintenance thereon in accordance with thestandards observed by reasonably prudent owners of properties in the same orsimilar businesses as the Mortgagor.

 

20.6.        Insurance.  Mortgagor will keep or cause to be kept theImprovements and Personal Property insured against such risks and shallpurchase such additional insurance to the extent that is required from time totime pursuant to Section 9.3 of the Credit Agreement.  Mortgagor shall pay promptly when due anypremiums on such insurance policies and on any renewals thereof.  In the event of the foreclosure of thisMortgage or any other transfer of the Premises or Improvements inextinguishment of the indebtedness and other sums secured hereby, all right,title and interest of Mortgagor in and to all casualty insurance policies, andrenewals thereof then in force, to the extent assignable shall pass to thepurchaser or grantee in connection therewith; provided that Mortgagor’sobligations shall be reduced accordingly.

 

20.7.        Casualty Condemnation/Eminent Domain.  Mortgagor shall give Mortgageeprompt written notice of any casualty or other damage to the Mortgaged Propertyor any proceeding for the taking of the Mortgaged Property or any portionthereof or interest therein under power of eminent domain or by condemnation orany similar proceeding, in each case that could reasonably be expected to havea Material Adverse Effect.

 

20.8.        Assignment of Leases and Rents(a)  .  (a)Mortgagor hereby irrevocably and absolutely grants, transfers and assigns allof its right title and interest in all Leases, together with any and allextensions and renewals thereof for purposes of securing and discharging theperformance by Mortgagor of the Obligations. Mortgagor has not assigned or executed any assignment of, and will notassign or execute any assignment of, any other Lease or their respective Rentsto anyone other than Mortgagee.

 

(b)  If anEvent 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 toMortgagee and that all rents and other obligations are to be paid directly toMortgagee, whether or not Mortgagee has commenced or completed foreclosure ortaken possession of the Premises or the Improvements.

 

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(c)  WithoutMortgagee’s prior written consent, which consent shall not be unreasonablywithheld or delayed, Mortgagor will not enter into, modify, amend, terminate orconsent 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 ofthis Mortgage or (ii) such Lease and all other Leases affecting the Landor the Improvements demise in the aggregate more than 10% of the gross buildingarea of the Improvements or 10% of the total area of the Land.

 

(d)  Subjectto Section 1.08(e), Mortgagor has assigned and transferred to Mortgagee all ofMortgagor’s right, title and interest in and to the Rents now or hereafterarising 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 Mortgageeand not merely to grant a security interest therein.  Subject to Section 1.08(e), Mortgagee may inMortgagor’s name and stead (with or without first taking possession of any ofthe Mortgaged Property personally or by receiver as provided herein) operatethe Mortgaged Property and rent, lease or let all or any portion of any of theMortgaged Property to any party or parties at such rental and upon such termsas Mortgagee shall, in its sole discretion, determine, and may collect and havethe benefit of all of said Rents arising from or accruing at any timethereafter or that may thereafter become due under any Lease.

 

(e)  So longas an Event of Default shall not have occurred and be continuing, Mortgageewill not exercise any of its rights under Section 1.08(c), and Mortgagor shallhave a license to receive and collect, and shall receive and collect, the Rentsaccruing under any Lease, to enforce the obligations of tenants under theLeases and to exercise all rights and remedies of Landlord under the Leases,and to operate and maintain the Mortgaged Property, subject in each case tocompliance with the terms of this Mortgage; but after the happening and duringthe continuance of any Event of Default, Mortgagee may, at its option, receiveand collect all Rents and enter upon the Land, the Premises and Improvementsthrough its officers, agents, employees or attorneys for such purpose and forthe 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 byMortgagee 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 toinquire as to whether an Event of Default actually exists and even if somenotice to the contrary is received from the Mortgagor, who shall have no rightor claim against any such tenant or successor in interest for any such Rents sopaid to Mortgagee.  Each tenant or any ofsuch tenant’s successors in interest from whom Mortgagee or any officer, agent,attorney or employee of Mortgagee shall have collected any Rents, shall beauthorized to pay Rents to Mortgagor only after such tenant or any of theirsuccessors in interest shall have received written notice from Mortgagee that theEvent of Default is no longer continuing (such notice to be given by theMortgagee promptly after the Event of Default is no longer continuing), unlessand until a further notice of an Event of Default is given by Mortgagee to suchtenant or any of its successors in interest.

 

(f)  Mortgageewill not become a mortgagee in possession so long as it does not enter or takeactual possession of the Mortgaged Property. In addition, Mortgagee, except where Mortgagee or Mortgagee’s agentshave acted in bad faith, have been grossly negligent or have committed wilfulmisconduct in relation to any of the following, shall not be responsible orliable for performing any of the obligations of the landlord under any Lease,for any waste by any 

 

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tenant,or others, for any dangerous or defective conditions of any of the MortgagedProperty, for negligence in the management, upkeep, repair or control of any ofthe Mortgaged Property or any other act or omission by any other person.

 

(g)  Mortgagorshall furnish to Mortgagee, within 30 days after a request by Mortgagee to doso, a written statement containing the names of all tenants, subtenants andconcessionaires of the Land, the Premises or Improvements, the terms of anyLease, the space occupied and the rentals or license fees payable thereunder.

 

20.9.        Restrictions on Transfers andEncumbrances.  Except as permitted by the Credit Agreement(including, without limitation, pursuant to Sections 10.2, 10.3 and 10.4thereof), Mortgagor shall not directly or indirectly sell, convey, alienate,assign, lease, sublease, license, mortgage, pledge, encumber or otherwisetransfer, create, consent to or suffer the creation of any lien, charges or anyform 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 thereinin any manner or way, whether voluntarily or involuntarily (other thanresulting 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 reasonablecommercial standards, enter into easement or covenant agreements that relate toand/or benefit the operation of the Mortgaged Property and that do notmaterially or adversely affect the use and operation of the same.

 

20.10.      Security Agreement.  This Mortgage is both a mortgageof real property and a grant of a security interest in personal property, andshall constitute and serve as a “*SecurityAgreement*” within the meaning of the uniform commercial code asadopted in the state wherein the Premises are located (“*UCC*”). Mortgagor has hereby granted unto Mortgagee a security interest in andto all the Mortgaged Property described in this Mortgage that is not realproperty.  Mortgagor hereby appointsMortgagee as its true and lawful attorney-in-fact and agent, for Mortgagor andin its name, place and stead, in any and all capacities, to execute anydocument and to file the same in the appropriate offices (to the extent it maylawfully do so), and to perform each and every act and thing reasonablyrequisite and necessary to be done to perfect the security interestcontemplated by the preceding sentence. Mortgagee shall have all rights with respect to the part of theMortgaged Property that is the subject of a security interest afforded by theUCC in addition to, but not in limitation of, the other rights affordedMortgagee hereunder and under the Security Agreement.

 

20.11.      Filing and Recording.  Mortgagor will cause thisMortgage, any other security instrument creating a mortgage or securityinterest in or evidencing the lien hereof upon the Mortgaged Property and eachinstrument of further assurance to be filed, registered or recorded in suchmanner and in such places as may be required by any present or future law inorder to publish notice of and fully to protect the lien hereof upon, and themortgage and security interest of Mortgagee in, the Mortgaged Property.  Mortgagor will pay all filing, registrationand recording fees, all Federal, state, county and municipal recording,documentary or intangible taxes and other taxes, duties, imposts, assessmentsand charges, and all reasonable expenses incidental to or arising out of or inconnection with the execution, delivery and recording of this Mortgage, anymortgage supplemental hereto, any security instrument with respect to thePersonal Property or any instrument of further assurance.

 

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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 asMortgagee shall from time to time reasonably require for the better assuring,conveying, assigning, transferring and confirming unto Mortgagee the propertyand 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 toMortgagee, or for carrying out the intention or facilitating the performance ofthe terms of this Mortgage, or for filing, registering or recording thisMortgage, and on demand, Mortgagor will also execute and deliver and herebyappoints Mortgagee as its true and lawful attorney-in-fact and agent, forMortgagor and in its name, place and stead, in any and all capacities, toexecute and file to the extent it may lawfully do so, one or more financingstatements, chattel mortgages or comparable security instruments reasonablyrequested by Mortgagee to evidence more effectively the lien hereof upon thePersonal Property and to perform each and every act and thing requisite andnecessary to be done to accomplish the same.

 

20.13.      Additions to Mortgaged Property.  All right, title and interest ofMortgagor in and to all extensions, improvements, betterments, renewals,substitutes and replacements of, and all additions and appurtenances to, theMortgaged Property hereafter acquired by or released to Mortgagor orconstructed, assembled or placed by Mortgagor upon the Premises or theImprovements, and all conversions of the security constituted thereby,immediately upon such acquisition, release, construction, assembling, placementor conversion, as the case may be, and in each such case without any furthermortgage, conveyance, assignment or other act by Mortgagor, shall becomesubject to the lien and mortgage and security interest of this Mortgage asfully and completely and with the same effect as though now owned by Mortgagorand specifically described in the grant of the Mortgaged Property above, but atany and all times Mortgagor will execute and deliver to Mortgagee any and allsuch further assurances, mortgages, conveyances or assignments thereof asMortgagee may reasonably require for the purpose of expressly and specificallysubjecting the same to the lien and mortgage and security interest of thisMortgage.

 

20.14.      No Claims Against Mortgagee.  Nothing contained in thisMortgage shall constitute any consent or request by Mortgagee, express orimplied, for the performance of any labor or services or the furnishing of anymaterials or other property in respect of the Mortgaged Property or any partthereof, nor as giving Mortgagor any right, power or authority to contract foror permit the performance of any labor or services or the furnishing of anymaterials or other property in such fashion as would permit the making of anyclaim against Mortgagee in respect thereof.

 

20.15.      Fixture Filing.  Certain portions of the Mortgaged Propertyare or will become “*fixtures*” (asthat term is defined in the UCC) on the Land, and this Mortgage, upon beingfiled for record in the real estate records of the city or town wherein suchfixtures are situated, shall operate also as a financing statement filed as afixture filing in accordance with the applicable provisions of said UCC uponsuch portions of the Mortgaged Property that are or become fixtures.

 

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SECTION 21.

 

Defaults and Remedies

 

21.1.        Events of Default.  Any Event of Default under theCredit Agreement (as such term is defined therein) shall constitute an Event ofDefault under this Mortgage.

 

21.2.        Demand for Payment.  If an Event of Default shalloccur and be continuing, then, upon written demand of Mortgagee, Mortgagor willpay to Mortgagee all amounts due hereunder and under the Guarantee or, if theMortgagor is the US Borrower, under the Credit Agreement, as applicable, andsuch further amount as shall be sufficient to cover the costs and expenses ofcollection, including attorneys’ fees, disbursements and expenses incurred byMortgagee, and Mortgagee shall be entitled and empowered to institute an actionor proceedings at law or in equity for the collection of the sums so due andunpaid, to prosecute any such action or proceedings to judgment or finaldecree, to enforce any such judgment or final decree against Mortgagor and tocollect, in any manner provided by law, all moneys adjudged or decreed to bepayable.

 

21.3.        Rights To Take Possession, Operate andApply Revenues(a)  .  (a) If an Event of Default shall occur and becontinuing, Mortgagor shall, upon demand of Mortgagee, forthwith surrender toMortgagee actual possession of the Mortgaged Property and, if and to the extentnot prohibited by applicable law, Mortgagee itself, or by such officers oragents as it may appoint, may then enter and take possession of all theMortgaged Property without the appointment of a receiver or an applicationtherefor, exclude Mortgagor and its agents and employees wholly therefrom, andhave access to the books, papers and accounts of Mortgagor.

 

(b)  IfMortgagor shall for any reason fail to surrender or deliver the MortgagedProperty or any part thereof after such demand by Mortgagee, Mortgagee may, tothe extent not prohibited by applicable law, obtain a judgment or decreeconferring upon Mortgagee the right to immediate possession or requiringMortgagor to deliver immediate possession of the Mortgaged Property toMortgagee, to the entry of which judgment or decree Mortgagor herebyspecifically consents.  Mortgagor will payto Mortgagee, upon demand, all reasonable expenses of obtaining such judgmentor decree, including reasonable compensation to Mortgagee’s attorneys andagents with interest thereon at the Default Interest Rate; and all suchexpenses and compensation shall, until paid, be secured by this Mortgage.

 

(c)  Uponevery such entry or taking of possession, Mortgagee may, to the extent notprohibited by applicable law, hold, store, use, operate, manage and control theMortgaged 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 andother property, (iii) insure or keep the Mortgaged Property insured,(iv) manage and operate the Mortgaged Property and exercise all the rightsand powers of Mortgagor to the same extent as Mortgagor could in its own nameor otherwise with respect to the same, or (v) enter into any and allagreements with respect to the exercise by others of any of the powers hereingranted Mortgagee, all as may from time to time be directed or determined byMortgagee to be in its best interest and Mortgagor hereby appoints Mortgagee asits true and lawful attorney-in-fact and agent, for 

 

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Mortgagorand in its name, place and stead, in any and all capacities, to perform any ofthe foregoing acts.  Mortgagee maycollect and receive all the Rents, issues, profits and revenues from theMortgaged Property, including those past due as well as those accruingthereafter, and, after deducting (i) all expenses of taking, holding,managing and operating the Mortgaged Property (including compensation for theservices of all persons employed for such purposes), (ii) the costs of allsuch 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 atits option pay, (v) other proper charges upon the Mortgaged Property orany part thereof and (vi) the compensation, expenses and disbursements ofthe attorneys and agents of Mortgagee, Mortgagee shall apply the remainder ofthe moneys and proceeds so received first to the payment of the Mortgagee forthe satisfaction of the Obligations in accordance with Section 2.08, andsecond, if there is any surplus, to Mortgagor, subject to the entitlement ofothers thereto under applicable law.

 

(d)  Whenever,before any sale of the Mortgaged Property under Section 2.06, all Obligationsthat are then due shall have been paid and all Events of Default fully cured,Mortgagee will surrender possession of the Mortgaged Property back toMortgagor, its successors or assigns. The same right of taking possession shall, however, arise again if anysubsequent Event of Default shall occur and be continuing.

 

21.4.        Right To Cure Mortgagor’s Failure toPerform. Should Mortgagor fail in the payment, performance or observance of anyterm, covenant or condition required by this Mortgage or the Security Agreement(with respect to the Mortgaged Property), Mortgagee may pay, perform or observethe same.  Pursuant to the exercise ofits rights under this Section 2.04, Mortgagee is hereby empowered to enter andto authorize others to enter upon the Premises or the Improvements or any partthereof for the purpose of performing or observing any such defaulted term,covenant or condition without having any obligation to so perform or observeand without thereby becoming liable to Mortgagor, to any person in possessionholding under Mortgagor or to any other person. The expenses of the Administrative Agent incurred in connection withactions undertaken as provided in this Section, together with interest thereonat a rate per annum equal to the highest rate per annum at which interest wouldthen be payable on any category of past due ABR Loans under the CreditAgreement, from the date of payment by the Administrative Agent to the date reimbursedby the Mortgagor, shall be payable by such Mortgagor to the AdministrativeAgent on demand.

 

21.5.        Right to a Receiver.  If an Event of Default shalloccur and be continuing, Mortgagee, upon application to a court of competentjurisdiction, shall be entitled as a matter of right to the appointment of areceiver to take possession of and to operate the Mortgaged Property and tocollect and apply the Rents.  Thereceiver shall have all of the rights and powers permitted under the laws ofthe state wherein the Mortgaged Property is located.  Mortgagor shall pay to Mortgagee upon demandall reasonable expenses, including receiver’s fees, reasonable attorney’s feesand disbursements, costs and agent’s compensation incurred pursuant to theprovisions of this Section 2.05; and all such expenses shall be secured by thisMortgage and shall be, without demand, immediately repaid by Mortgagor toMortgagee with interest thereon at the Default Interest Rate.

 

21.6.        Foreclosure and Sale(a)  .  (a)If an Event of Default shall occur and be 

 

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continuing, Mortgagee shall have the STATUTORY POWEROF SALE.

 

(b)  TheMortgaged Property may be sold subject to unpaid taxes, leases and PermittedEncumbrances, and, after deducting all costs, fees and expenses of Mortgagee(including costs of evidence of title in connection with the sale), Mortgageeor an officer that makes any sale shall apply the proceeds of sale in themanner set forth in Section 2.08.

 

(c)  Anyforeclosure or other sale of less than the whole of the Mortgaged Property orany defective or irregular sale made hereunder shall not exhaust the power offoreclosure or of sale provided for herein; and subsequent sales may be madehereunder until the Obligations have been satisfied, or the entirety of theMortgaged Property has been sold.

 

(d)  If anEvent of Default shall occur and be continuing, Mortgagee may instead of, or inaddition to, exercising the rights described in Section 2.06(a) above andeither with or without entry or taking possession as herein permitted, proceedby a suit or suits in law or in equity or by any other appropriate proceedingor remedy (i) to specifically enforce payment of some or all of theObligations, or the performance of any term, covenant, condition or agreementof this Mortgage or any other Credit Document or any other right, or(ii) to pursue any other remedy available to Mortgagee, all as Mortgageeshall determine most effectual for such purposes, subject to any applicableterms 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 alsoexercise, to the extent not prohibited by law, any or all of the remediesavailable to a secured party under the UCC.

 

(b)  Inconnection with a sale of the Mortgaged Property or any Personal Property andthe application of the proceeds of sale as provided in Section 2.08, Mortgageeshall be entitled to enforce payment of and to receive up to the principalamount of the Obligations, plus all other charges, payments and costs due underthis Mortgage.

 

(c)  Subjectto the provisions of the Credit Agreement, to the extent permitted by law, ifafter foreclosure of this Mortgage or Mortgagee’s sale hereunder, there shallremain any deficiency with respect to any amounts payable under the CreditDocuments, including hereunder, or any amounts secured hereby, Mortgagee shallbe entitled to recover a deficiency judgment for any portion of the aggregateprincipal amount of the Obligations remaining unpaid, with interest.  If Mortgagee shall institute any proceedingsto recover such deficiency or deficiencies, all such amounts shall continue tobear interest at the Default Rate. Subject to the provisions of the Credit Agreement, to the extentpermitted by law, Mortgagor waives any defense to Mortgagee’s recovery againstMortgagor of any deficiency after any foreclosure sale of the MortgagedProperty.  Subject to the provisions ofthe Credit Agreement, to the extent permitted by law, Mortgagor expresslywaives any defense or benefits that may be derived from any statute grantingMortgagor any defense to any such recovery by Mortgagee. Subject to theprovisions of the Credit Agreement, in addition, Mortgagee shall be entitled torecovery of all of their reasonable costs and expenditures (including any courtimposed costs) in connection with such proceedings, including their reasonableattorneys’ fees, appraisal fees and any other costs, 

 

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feesand expenditures.  This provision shallsurvive any foreclosure or sale of the Mortgaged Property, any portion thereofand/or the extinguishment of the lien hereof.

 

21.8.        Application of Sale Proceeds and Rents.  After any foreclosure sale ofall or any of the Mortgaged Property, Mortgagee shall receive and at any timethereafter apply the proceeds of the sale together with any Rents that may havebeen collected and any other sums that then may be held by Mortgagee under thisMortgage as follows:

 

FIRST, to the payment of all reasonable anddocumented costs and expenses incurred by the Administrative Agent inconnection with such collection or sale or otherwise in connection with thisMortgage, the other Credit Documents or any of the Obligations, including allcourt costs and the reasonable fees and expenses of its agents and legalcounsel, the repayment of all advances made by the Administrative Agenthereunder or under any other Credit Document on behalf of any Mortgagor and anyother reasonable and documented costs or expenses incurred in connection withthe exercise of any right or remedy hereunder or under any other CreditDocument;

 

SECOND, to the Secured Parties, an amount equal toall Obligations owing to them on the date of any distribution, and, if suchmoneys shall be insufficient to pay such amounts in full, then ratably (withoutpriority of any one over any other) to such Secured Parties in proportion tothe unpaid amounts thereof; and

 

THIRD, any surplus then remaining shall be paid toMortgagor or its successor or assign or to whomsoever may be lawfully entitledto receive the same or as a court of competent jurisdiction may direct.

 

Borrowershall remain liable for any deficiency in the proceeds.  Upon any sale of the Mortgaged Property bythe Mortgagee (including pursuant to a power of sale granted by statute orunder a judicial proceeding), the receipt of the Mortgagee or of the officermaking the sale shall be a sufficient discharge to the purchaser or purchasersof the Mortgaged Property so sold and such purchaser or purchasers shall not beobligated to see to the application of any part of the purchase money paid overto the Mortgagee or such officer or be answerable in any way for the misapplicationthereof.

 

21.9.        Mortgagor as Tenant Holding Over.  Mortgagor agrees for itself andall Persons claiming by, through or under it, that, to the extent allowed byapplicable law, subsequent to foreclosure hereunder in accordance with thisMortgage and applicable law, if Mortgagor shall hold possession of theMortgaged Property or any part thereof, Mortgagor or the Persons so holdingpossession shall be guilty of trespass and shall be deemed a tenant holdingover and any such tenant failing or refusing to surrender possession upondemand shall be guilty of forcible detainer and shall be liable to suchpurchasers for reasonable rental on said premises, and shall be summarilydispossessed or evicted according to provisions of law applicable to tenants holdingover.

 

21.10.      Waiver of Appraisement, Valuation, Stay,Extension and Redemption Laws.  Mortgagor waives, to the extent notprohibited by law, (i) the benefit of all laws now existing or thathereafter may be enacted (x) providing for any appraisement or valuationof any 

 

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portion of the MortgagedProperty and/or (y) in any way extending the time for the enforcement orthe collection of amounts due under any of the Obligations or creating orextending a period of redemption from any sale made in collecting said debt orany other amounts due Mortgagee, (ii) any right to at any time insistupon, plead, claim or take the benefit or advantage of any law now or hereafterin 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 ofdeficiency, and (iii) all rights of redemption, valuation, appraisement,stay of execution, notice of election to mature or declare due the whole of oreach of the Obligations and marshaling in the event of foreclosure of thisMortgage.

 

21.11.      Discontinuance of Proceedings.  In case Mortgagee shall proceedto enforce any right, power or remedy under this Mortgage by foreclosure, entryor otherwise, and such proceedings shall be discontinued or abandoned for anyreason, or shall be determined adversely to Mortgagee, then and in every suchcase Mortgagor and Mortgagee shall be restored to their former positions andrights hereunder, and all rights, powers and remedies of Mortgagee shallcontinue 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, toinstitute and maintain suits and proceedings to prevent any impairment of theMortgaged Property by any acts that may be unlawful or in violation of thisMortgage, (b) to preserve or protect its interest in the MortgagedProperty and in the Rents arising therefrom and (c) to restrain theenforcement of or compliance with any legislation or other governmentalenactment, rule or order that may be unconstitutional or otherwise invalid ifthe enforcement of or compliance with such enactment, rule or order wouldimpair 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 orother proceedings affecting Mortgagor, Mortgagee shall, to the extent permittedby law, be entitled to file such proofs of claim and other documents as may benecessary or advisable in order to have the claims of Mortgagee allowed in suchproceedings for the Obligations secured by this Mortgage at the date of theinstitution of such proceedings and for any interest accrued, late charges andadditional interest or other amounts due or that may become due and payable hereunderafter such date.

 

21.14.      Possession by Mortgagee.  After the occurrence and duringthe continuance of an Event of Default, notwithstanding the appointment of anyreceiver, liquidator or trustee of Mortgagor, any of its property or theMortgaged Property, Mortgagee shall be entitled, to the extent not prohibitedby law, to remain in possession and control of all parts of the MortgagedProperty now or hereafter granted under this Mortgage to Mortgagee inaccordance with the terms hereof and applicable law.

 

21.15.      Waiver.  (a) No delay or failure by Mortgagee toexercise any right, power or remedy accruing upon any breach or Event ofDefault shall exhaust or impair any such right, power or remedy or be construedto 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 beexercised from time to time and as often as may be deemed expedient byMortgagee.  No

 

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consent or waiver by Mortgagee to or of any breachor Event of Default by Mortgagor in the performance of the Obligations shall bedeemed or construed to be a consent or waiver to or of any other breach orEvent of Default in the performance of the same or of any other Obligations byMortgagor hereunder.  No failure on thepart of Mortgagee to complain of any act or failure to act or to declare anEvent of Default, irrespective of how long such failure continues, shallconstitute 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 ifMortgagee (i) grants some forbearance or an extension of time for thepayment of any sums secured hereby, (ii) takes other or additionalsecurity for the payment of any sums secured hereby, (iii) waives or doesnot 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 oragreements of any of the Credit Documents, (vi) consents to the filing ofa map, plat or replat affecting the Premises, (vii) consents to thegranting of an easement or other right affecting the Premises or (viii) makesor consents to an agreement subordinating Mortgagee’s lien on the MortgagedProperty hereunder; no such act or omission shall preclude Mortgagee fromexercising any other right, power or privilege herein granted or intended to begranted in the event of any breach or Event of Default then made or of anysubsequent default; nor, except as otherwise expressly provided in aninstrument executed by Mortgagee, shall this Mortgage be altered thereby.  In the event of the sale or transfer byoperation of law or otherwise of all or part of the Mortgaged Property,Mortgagee is hereby authorized and empowered to deal with any vendee ortransferee with reference to the Mortgaged Property secured hereby, or withreference to any of the terms, covenants, conditions or agreements hereof, asfully and to the same extent as it might deal with the original parties heretoand without in any way releasing or discharging any liabilities, obligations orundertakings.

 

21.16.      Remedies Cumulative.  No right, power or remedyconferred upon or reserved to Mortgagee by this Mortgage is intended to beexclusive 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 anyother right, power and remedy given hereunder or now or hereafter existing atlaw or in equity or by statute.

 

SECTION 22.

 

Miscellaneous

 

22.1.        Partial Invalidity.  In the event any one or more ofthe provisions contained in this Mortgage shall for any reason be held to beinvalid, illegal or unenforceable in any respect, such validity, illegality orunenforceability shall, at the option of Mortgagee, not affect any otherprovision of this Mortgage, and this Mortgage shall be construed as if suchinvalid, illegal or unenforceable provision had never been contained herein ortherein.

 

22.2.        Application of Payments.  In the event that any part ofthe Obligations cannot lawfully be secured hereby, or in the event that themortgage and security interest hereof cannot be lawfully enforced to pay any partof the Obligations, or in the event that the mortgage or security interestcreated by this Mortgage shall be invalid or unenforceable as to any part of 

 

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theObligations, then all payments on the Obligations shall be deemed to have beenfirst applied to the complete payment and liquidation of that part of theObligations which is not secured by this Mortgage and the unsecured portion ofthe Obligations shall be completely paid and liquidated prior to the paymentand liquidation of the remaining secured portion of the Obligations.

 

22.3.        Amendments; Etc.  This Mortgage may not beamended, modified or supplemented, except in a writing signed by each of theparties hereto and otherwise in accordance with the provisions of the CreditAgreement.

 

22.4.        Renewal; Etc.  Mortgagee may at any time and from time totime renew or extend this Mortgage, or alter or modify the same in any way, orwaive any of the terms, covenants or conditions hereof in whole or in part andmay release any portion of the Mortgaged Property or any other security, andgrant such extensions and indulgences in relation to the Obligations asMortgagee may determine, without the consent of any junior lienor orencumbrancer and without any obligation to give notice of any kind thereto andwithout in any manner affecting the priority of the mortgage and securityinterest hereof on any part of the Mortgaged Property; provided thatnothing in this Section 3.04 shall grant Mortgagee the right to alter ormodify the Mortgage without the written consent of the Mortgagor.

 

22.5.        Future Advances.  This Mortgage is executed anddelivered to secure, among other things, Mortgagor’s guaranty of futureadvances under the Credit Agreement.  Itis understood and agreed that this Mortgage secures Mortgagor’s guaranty ofpresent and future advances made pursuant to the Credit Agreement and that thelien of such future advances shall relate to the date of this Mortgage.

 

22.6.        Compliance With Usury Law.  The Credit Documents areintended to be performed in accordance with, and only to the extent permittedby, all applicable governmental rules and legal requirements.  It is expressly stipulated and agreed to bethe intent of Mortgagor and Mortgagee at all times to comply with theapplicable [STATE] law governing the maximum rate or amount of interest payableon or in connection with the Obligations (or applicable United States federallaw to the extent that it permits Mortgagee to contract for, charge, take, reserveor receive a greater amount of interest than under [STATE] law).  If the applicable law is ever judiciallyinterpreted so as to render usurious any amount called for under the CreditDocuments, or contracted for, charged, taken, reserved or received with respectto the extension of credit evidenced by the Credit Documents or if accelerationof the maturity of the Obligations or if any prepayment by Mortgagor results inMortgagor having paid any interest in excess of that permitted by law, then itis Mortgagor’s and Mortgagee’s express intent that all excess amountstheretofore collected by Mortgagee be credited on the principal balance dueunder the Credit Documents (or, if the Credit Documents have been or wouldthereby be paid in full, refunded to Mortgagor), and the provisions of theCredit Documents immediately be deemed reformed and the amounts thereaftercollectible thereunder reduced, without the necessity of the execution of anynew document, so as to comply with the applicable law, but so as to permit therecovery of the fullest amount otherwise called for hereunder andthereunder.  The right to acceleratematurity of Obligations does not include the right to accelerate any interestthat has not otherwise accrued on the date of such acceleration, and Mortgageedoes not intend to collect any unearned interest in the event ofacceleration.  All sums paid or agreed tobe paid to Mortgagee for the use, 

 

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forbearanceor detention of the Obligations shall, to the extent permitted by applicablelaw, be amortized, prorated, allocated and spread throughout the full term ofthe Obligations until payment in full so that the rate or amount of interest onaccount of the Obligations does not exceed the applicable usury ceiling.

 

22.7.        Notices.  All notices (including any notice to theMortgagee pursuant to Sections 34-25-10(b) and 34-25-11 of the [STATE] GeneralLaws, as amended), requests and demands to or upon the respective partieshereto to be effective shall be in writing (including by facsimiletransmission), and, unless otherwise expressly provided herein, shall be deemedto have been duly given or made when delivered, or three days after beingdeposited in the mail, postage prepaid, or, in the case of telecopy notice,when received, addressed to the Mortgagor and/or the Mortgagee at the addressesset 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 theImprovements and shall apply to, bind and inure to, the benefit of thepermitted successors and assigns of Mortgagor and the successors and assigns ofMortgagee.

 

22.9.        Satisfaction and Cancellation(a)  .  (a)The conveyance to Mortgagee of the Mortgaged Property as security created andconsummated by this Mortgage shall be null and void when all the Obligationsunder the Credit Documents have been indefeasibly paid in full in accordancewith the terms of the Credit Documents and the Lenders have no furthercommitment to make Loans under the Credit Agreement, no Letters of Credit areoutstanding and the Letter of Credit Issuer has no further obligation to issueLetters of Credit under the Credit Agreement.

 

(b)  Upon asale, conveyance, lease, assignment, transfer, pledge or financing permittedpursuant 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 theMortgaged Property that is permitted by the Credit Agreement and theapplication of the net proceeds of such sale or financing in accordance withthe Credit Agreement, the lien of this Mortgage shall be released from theapplicable portion of the Mortgaged Property.

 

(c)  Mortgagorshall automatically be released from its obligations hereunder and the Lien onthe Mortgaged Property shall be automatically released upon the consummation ofany transaction permitted by the Credit Agreement as a result of which suchMortgagor ceases to be a Domestic Subsidiary of the US Borrower.

 

(d)  Inconnection 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 andat the expense of the Mortgagor, and the lien of this Mortgage shall bereleased from the applicable portion of the Mortgaged Property.  Mortgagee shall execute any documentsreasonably requested by Mortgagor to accomplish the foregoing or to accomplishany release contemplated by this Section 3.09 and Mortgagor will pay all costsand expenses, including reasonable attorneys’ fees, disbursements and othercharges, incurred by Mortgagee in connection with the preparation and executionof such documents.

 

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(e)  Inconnection with any termination or release pursuant to paragraph (a), (b) or(c), the Administrative Agent shall execute and deliver to Mortgagor, atMortgagor’s expense, all documents that Mortgagor shall reasonably request toevidence such termination or release. Any execution and delivery of documents pursuant to this subsection 3.09shall be without recourse to or warranty by the Administrative Agent.

 

22.10.      Definitions.  As used in this Mortgage, the singular shallinclude the plural as the context requires and the following words and phrasesshall 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 anypart thereof or interest therein*”. Any act that Mortgagee is permitted to perform hereunder may beperformed at any time and from time to time by Mortgagee or any person orentity designated by Mortgagee.  Any actthat is prohibited to Mortgagor hereunder is also prohibited to all lessees ofany of the Mortgaged Property.  Eachappointment of Mortgagee as attorney-in-fact for Mortgagor under the Mortgageis 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 acceptanceor 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 headingshave been inserted in this Mortgage as a matter of convenience for referenceonly and it is agreed that such article and section headings are not a part ofthis Agreement and shall not be used in the interpretation of any provision ofthis Mortgage.

 

22.12.      Entire Agreement.  This Mortgage, together with anyother agreement executed in connection herewith, is intended by the parties asa final expression of their agreement and is intended as a complete andexclusive 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 anynumber of counterparts and by different parties hereto in separatecounterparts, each of which when so executed and delivered shall be deemed anoriginal, but all such counterparts together shall constitute but one and thesame instrument; signature pages may be detached from multiple separate counterpartsand attached to a single counterpart so that all signature pages are physicallyattached to the same document.

 

22.14.      Governing Law.  THIS MORTGAGE SHALL BE GOVERNED BY THEINTERNAL LAWS (AND NOT THE LAWS RELATING TO CONFLICT OF LAWS) OF THE STATE OFNEW YORK, EXCEPT AS SUPERSEDED BY FEDERAL LAW; PROVIDED, HOWEVER, THAT THECREATION, PERFECTION, PRIORITY OR ENFORCEMENT OF LIENS ON THE MORTGAGEDPROPERTY (OTHER THAN ANY UCC COLLATERAL) SHALL BE GOVERNED BY THE LAWS OF THESTATE IN WHICH THE LAND IS LOCATED AND PROVIDED FURTHER THAT FOR ANY UCC 

 

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COLLATERAL THEPERFECTION, EFFECT OF PERFECTION OR NON-PERFECTION AND PRIORITY OF THE SECURITYINTEREST SHALL BE SUBJECT TO ANY MANDATORY CHOICE OF LAW RULES IN THE UCC.

 

22.15.      Waiver of Jury Trial.  MORTGAGOR AND MORTGAGEE HEREBYKNOWINGLY, VOLUNTARILY, AND INTENTIONALLY WAIVE ANY RIGHTS THEY MAY HAVE TO ATRIAL 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, ORANY COURSE OR CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL ORWRITTEN), OR ACTIONS OF MORTGAGOR OR MORTGAGEE. THIS PROVISION IS A MATERIAL INDUCEMENT FOR EACH PARTY TO ENTER INTOTHIS MORTGAGE.

 

22.16.      Multisite Real Estate Transaction.  Mortgagor acknowledges that thisMortgage is one of a number of Other Mortgages and Credit Documents that securethe Obligations.  Mortgagor agrees thatthis Mortgage shall be absolute and unconditional and shall not in any mannerbe affected or impaired by any acts or omissions whatsoever of Mortgagee(except Mortgagee and Mortgagee’s agents’ willful misconduct, bad faith andgross negligence), and without limiting the generality of the foregoing, itshall not be impaired by any acceptance by the Mortgagee of any security for orguarantees of any of the Obligations hereby secured, or by any failure, neglector omission on the part of Mortgagee to realize upon or protect any Obligationor indebtedness hereby secured or any collateral security therefor includingthe Other Mortgages and other Credit Documents. This mortgage shall not in any manner be impaired or affected by anyrelease (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 thecollateral security therefor, including the Other Mortgages and other CreditDocuments or of any guarantee thereof, and Mortgagee may at its discretionforeclose, exercise any power of sale, or exercise any other remedy availableto it under any or all of the Other Mortgages and other Credit Documentswithout first exercising or enforcing any of its rights and remedieshereunder.  Such exercise of Mortgagee’srights and remedies under any or all of the Other Mortgages and other CreditDocuments shall not in any manner impair the indebtedness hereby secured andany exercise of the rights or remedies of Mortgagee hereunder shall not impairthe lien of any of the Other Mortgages and other Credit Documents or any ofMortgagee’s rights and remedies thereunder. Mortgagor specifically consents and agrees that Mortgagee may exerciseits rights and remedies hereunder and under the Other Mortgages and otherCredit Documents separately or concurrently and in any order that it may deemappropriate and waives any rights of subrogation.

 

SECTION 23.

 

Particular Provisions

 

This Mortgage is subject to the following provisionsrelating to the particular laws of the state wherein the Premises are located:

 

23.1.        Applicable Law; Certain ParticularProvisions. Mortgagor and Mortgagee agree to submit to jurisdiction and the layingof venue for any suit on this Mortgage in such state.

 

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IN WITNESS WHEREOF, this Mortgage has been dulyexecuted and delivered to Mortgagee by Mortgagor on the date first writtenabove.

 
|   | [NAME OF MORTGAGOR], a                      corporation |
|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|
|   |                                                                                                                                              |   |
|   | By:                                                                                                                                               |   |
|   |                                                                                                                                              | Name: |
|   |                                                                                                                                              | Title: |

 

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Appendix A to Mortgage

 

**DESCRIPTION OF THE LAND**

 

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EXHIBIT G

 

FORM OFPERFECTION CERTIFICATE

 

PERFECTION CERTIFICATE

 

Reference is made to (a) the Credit Agreementdated as of July 30, 2004 (as amended, supplemented or otherwise modifiedfrom 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”) , thelending institutions from time to time parties thereto, Credit Suisse FirstBoston, acting through its Cayman Islands Branch, as Administrative Agent andas Collateral Agent, UBS Securities LLC and Goldman Sachs Credit Partners L.P.,as Co-Syndication Agents, and the other parties thereto, (b) the SecurityAgreement dated as of July 30, 2004 (as amended, supplemented or otherwisemodified from time to time, the “Security Agreement”), among Holdings,the US Borrower, the Subsidiary Grantors and the Administrative Agent and (c) thePledge Agreement dated as of July 30, 2004 (as amended, supplemented orotherwise 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 theCredit Agreement, the Security Agreement or the Pledge Agreement, asapplicable.

 

The undersigned, an Authorized Officer and the chieflegal officer of the US Borrower and an authorized officer of each Grantor,hereby certify to the Administrative Agent and each other Secured Party asfollows:

 

1. Names.(a) The exact legal name of each Grantor, as such name appears in itsrespective certificate of incorporation or formation, is as follows:

 

(b) Set forth below is each other legal nameeach Grantor has had in the past five years, together with the date of therelevant change:

 
| **Grantor’s Legal Name** | ** ** | **Former Name** | ** ** | **Date of Name  Change** | ** ** |
|-----------------------------------------|------------|----------------------|------------|------------------------------------|------------|
|                                    |       |                 |       |                               |       |
|                                    |       |                 |       |                               |       |
|                                    |       |                 |       |                               |       |

 

(c)           Exceptas set forth in Schedule 1 hereto, no Grantor has changed its identity orcorporate structure in any way within the past five years. Changes in identityor corporate structure would include mergers, consolidations and acquisitions,as well as any change in the form, nature or jurisdiction of organization. Ifany such change has occurred, include in Schedule 1 the 

 

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information required by Sections 1(a), 1(b), 1(d) and2(c) of this certificate as to each acquiree or constituent party to amerger or consolidation.

 

(d)           Thefollowing is a list of all other names (including trade names or similarappellations) used by each Grantor or any of its divisions or other businessunits in connection with the conduct of its business or the ownership of itsproperties at any time during the past five years:

 

 

 
| **Grantor’s Legal Name** | ** ** | **Other Name(s)** | ** ** |
|-----------------------------------------|------------|------------------------|------------|
|                                    |       |                   |       |
|                                    |       |                   |       |
|                                    |       |                   |       |

 

(e) Set forth below is the OrganizationalIdentification Number, if any, issued by the jurisdiction of organization orformation of each Grantor that is a registered organization:

 
| **Grantor** | ** ** | **Organizational Identification Number** | ** ** |
|-------------|------------|----------------------------------------------------|------------|
|        |       |                                               |       |
|        |       |                                               |       |
|        |       |                                               |       |

 

(f) Set forth below is the Federal TaxpayerIdentification Number of each Grantor:

 

 

 
| **Grantor** | ** ** | **Federal Taxpayer Identification Number** | ** ** |
|-------------|------------|-----------------------------------------------------------|------------|
| ** **  | ** ** | ** **                                                | ** ** |
| ** **  | ** ** | ** **                                                | ** ** |
| ** **  | ** ** | ** **                                                | ** ** |

 

2. Current Locations. (a) The chief executiveoffice of each Grantor is located at the address set forth opposite its namebelow:

 
| **Grantor** | ** ** | **Address** | ** ** | **County** | ** ** | **State**  | ** ** |
|-------------|------------|-------------|------------|------------|------------|------------|------------|
| ** **  | ** ** | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **  | ** ** | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **  | ** ** | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |

 

(b) Set forth below opposite the name of eachGrantor are all locations where such Grantor maintains any books or recordsrelating to any Accounts and/or General Intangibles (with each location atwhich chattel paper, if any, is kept being indicated by an “*”):

 
| **Grantor** | ** ** | **Address** | ** ** | **County** | ** ** | **State**  | ** ** |
|-------------|------------|-------------|------------|------------|------------|------------|------------|
| ** **  | ** ** | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **  | ** ** | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **  | ** ** | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |

 

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(c) The sole jurisdiction of organization orformation of each Grantor that is a registered organization is set forthopposite its name below:

 
| **Grantor** | ** ** | **Jurisdiction of Organization or Formation** | ** ** |
|-------------|------------|-------------------------------------------------------------------|------------|
|        |       |                                                              |       |
|        |       |                                                              |       |
|        |       |                                                              |       |

 

(d) Set forth below opposite the name of eachGrantor are all the locations where such Grantor maintains any Inventory orEquipment 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 eachGrantor are all the places of business of such Grantor not identified inparagraph (a), (b), (c) or (d) above:

 
| **Grantor** | ** ** | **Address** | ** ** | **County** | ** ** | **State** | ** ** |
|-------------|------------|-------------|------------|------------|------------|-----------|------------|
|        |       |        |       |       |       |      |       |
|        |       |        |       |       |       |      |       |
|        |       |        |       |       |       |      |       |

 
| **Grantor** | ** ** | **Address** | ** ** | **County** | ** ** | **State**  | ** ** |
|-------------|------------|-------------|------------|------------|------------|------------|------------|
| ** **  | ** ** | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **  | ** ** | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |
| ** **  | ** ** | ** **  | ** ** | ** ** | ** ** | ** ** | ** ** |

 

(f) Set forth below is a list of all realproperty held by each Grantor, whether owned or leased, 

 

the name of the Grantor that owns or leases saidproperty and the fair market value apportioned to each site:

 
| **Address** | ** ** | **Owned/Leased** | ** ** | **Entity** | ** ** | **Fair Market  Value** | ** ** |
|-------------|------------|------------------|------------|------------|------------|-----------------------------|------------|
| ** **  | ** ** | ** **       | ** ** | ** ** | ** ** | ** **                  | ** ** |
| ** **  | ** ** | ** **       | ** ** | ** ** | ** ** | ** **                  | ** ** |
| ** **  | ** ** | ** **       | ** ** | ** ** | ** ** | ** **                  | ** ** |

 

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| **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 insurancerelating to the real property listed in this

 

Section 2(f) have been delivered to theAdministrative Agent.

 

(g) Set forth below opposite the name of eachGrantor are the names and addresses of all Persons other than such Grantor thathave possession of any of the Collateral of such Grantor (with each such Personthat 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 bythe Grantors and all Inventory has been acquired by the Grantors in theordinary course of business.

 

4.        File Search Reports. File search reports have been obtainedfrom each Uniform Commercial Code filing office identified with respect to suchGrantor in Section 2 hereof, and such search reports reflect no Liensagainst any of the Collateral other than those permitted under the CreditDocuments or Liens which shall have been released on or prior to the ClosingDate in a manner in form and substance reasonably satisfactory to theAdministrative Agent.

 

5.        UCC Filings. Financing statements in substantially the formof Schedule 5 hereto have been prepared for filing in the proper UniformCommercial Code filing office in the jurisdiction in which each Grantor is locatedand, to the extent any of the collateral is comprised of fixtures, timber to becut or as extracted collateral from the wellhead or minehead, in the properlocal jurisdiction, in each case as set forth with respect to such Grantor in Section 6hereof. All filing fees and taxes payable in connection with the filingsdescribed in this Section 5 have been paid or will be paid promptly afterthe Closing Date.

 

6.        Schedule of Personal Property Filings. Attached hereto asSchedule 6 is a schedule setting forth, with respect to the personal propertyfilings described in Section 5 above (other than fixture filings), eachfiling and the filing office in which such filing is to be made. The filing andapplicable county recorder’s office in which each fixture filing is to be madeis listed on Schedule 10 hereto.

 

7.        Stock Ownership. Attached hereto as Schedule 7 is a true andcorrect list of all the stock, partnership interests, membership interests orother equity interests owned or held by Holdings, the US Borrower and eachSubsidiary 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 anySubsidiary Pledgor that represents 50% or less of the equity of the entity inwhich such investment was made. Schedule 7 indicates by footnote which entitiesare not required to be pledged pursuant to the Pledge Agreement.

 

----

 

8.        Debt Instruments. Attached hereto as Schedule 8 is a true andcorrect list of all instruments, including any promissory notes and otherevidence of indebtedness held by Holdings, the US Borrower and each SubsidiaryPledgor that are required to be pledged under the Pledge Agreement, includingall intercompany notes between Holdings and each Subsidiary of Holdings andeach Subsidiary of Holdings and each other such Subsidiary.

 

9.        Advances. Attached hereto as Schedule 9 is (a) a trueand correct list of all advances made by Holdings to any Subsidiary of Holdingsor made by any Subsidiary of Holdings to Holdings or to any other Subsidiary ofHoldings (other than those identified on Schedule 8), which advances will be onand after the date hereof evidenced by one or more intercompany notes pledgedto the Administrative Agent under the Pledge Agreement and (b) a true andcorrect list of all unpaid intercompany transfers of goods sold and deliveredby or to Holdings or any Subsidiary of Holdings.

 

10.      Mortgage Filings. Attached hereto as Schedule 10 is a schedulesetting 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 nameappears in its certificate of incorporation or other organizational document, (b) ifdifferent from the name identified pursuant to clause (a), the exact name ofthe current record owner of such property reflected in the records of thefiling office for such property identified pursuant to the following clause and(c) the filing office in which a Mortgage and a fixture filing asdescribed in Section 3 above with respect to such property must be filedor recorded in order for the Administrative Agent to obtain a perfectedsecurity interest therein.

 

11.      Intellectual Property. Attached hereto as Schedule 11(A) inproper form for filing with the United States Patent and Trademark Office is aschedule setting forth all of each Grantor’s Patents (and all applicationstherefor), Patent Licenses, Trademarks (and all applications therefor) andTrademark Licenses, including the name of the registered owner and theregistration number of each Patent and Trademark owned by such Grantor and thelicensor and Patent or Trademark the subject of each such Patent License andTrademark License. Attached hereto as Schedule 11(B) in proper form forfiling with the United States Copyright Office is a schedule setting forth allof each Grantor’s Copyrights (and all applications therefor) and CopyrightLicenses, including the name of the registered owner and the registrationnumber of each Copyright owned by such Grantor and the licensor and Copyrightthe subject of such Copyright License. Each of Schedule 11(A) and Schedule11(B) contain all the requested information for Patents, Trademarks andCopyrights arising under the laws of the United States, any other country orany political subdivision thereof.

 

IN WITNESS WHEREOF, the undersigned have dulyexecuted 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 7Swisher Drive, Cartersville, Georgia 30120. The chief executive office ofSouthern Color of Florida, LLC was 333 Cypress Road, Ocala, Florida 34478. Thechief executive office of Southern Color Company was 333 Cypress Road, Ocala,Florida 34478.

 
| **Name**   | ** ** | **Change in Corporate Structure** | ** ** |
|------------|------------|--------------------------------------------------|------------|
| ** ** | ** ** | ** **                                       | ** ** |
| ** ** | ** ** | ** **                                       | ** ** |
| ** ** | ** ** | ** **                                       | ** ** |

 

----

 

 

 

SCHEDULE 5

 

UCC FILINGSSEE ATTACHED

 

----

 

SCHEDULE 6

 

SCHEDULE OF FILINGS

 
| **Debtor** | ** ** | **Type of Filing** | ** ** | **Jurisdictions** | ** ** |
|------------|------------|------------------------------|------------|-------------------|------------|
| ** ** | ** ** | ** **                   | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                   | ** ** | ** **        | ** ** |
| ** ** | ** ** | ** **                   | ** ** | ** **        | ** ** |

 

----

 

SCHEDULE 7

 

STOCK OWNERSHIP

 
| **Legal Name** | ** ** | **Shareholder(s)** | ** ** | **Percent of Stock  Owned** | ** ** |
|----------------|------------|--------------------|------------|-----------------------------|------------|
| ** **     | ** ** | ** **         | ** ** | ** **                  | ** ** |
| ** **     | ** ** | ** **         | ** ** | ** **                  | ** ** |
| ** **     | ** ** | ** **         | ** ** | ** **                  | ** ** |

 

*              Notrequired 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

 

ADVANCESNONE

 

----

 

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 isnow 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 OFPLEDGE AGREEMENT

 

PLEDGE AGREEMENT dated asof July 30, 2004, among ROCKWOOD SPECIALTIES INTERNATIONAL, INC., aDelaware corporation (“Holdings”), ROCKWOOD SPECIALTIES GROUP, INC.,a Delaware corporation (the “US Borrower”), the undersigned Subsidiariesof the US Borrower listed on Schedule 1 hereto (each a “Subsidiary Pledgor”and, collectively, the “Subsidiary Pledgors”; the US Borrower, Holdingsand the Subsidiary Pledgors are referred to collectively herein as the “Pledgors”)and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, asadministrative agent (in such capacity, the “Administrative Agent”) forthe lenders (the “Lenders”) from time to time parties to the CreditAgreement 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 incorporatedunder the laws of England and Wales (the “UK Borrower” and, togetherwith the US Borrower, the “Borrowers”), Holdings, the Lenders, theAdministrative Agent and UBS Securities LLC and Goldman Sachs Credit PartnersL.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 Letterof Credit Issuer has agreed to issue Letters of Credit for the account of theBorrowers (collectively, the “Extensions of Credit”) upon the terms andsubject to the conditions set forth therein and (b) one or more Lenders orAffiliates of Lenders may from time to time enter into Hedge Agreements withthe 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 hasunconditionally and irrevocably guaranteed, as primary obligor and not merelyas surety, to the Administrative Agent, for the ratable benefit of the SecuredParties the prompt and complete payment and performance when due (whether atthe stated maturity, by acceleration or otherwise) of the Obligations (asdefined below);

 

WHEREAS, each Subsidiary Pledgor is a DomesticSubsidiary of the US Borrower;

 

WHEREAS, the proceeds of the Extensions of Creditwill be used in part to enable the Borrowers to make valuable transfers to theSubsidiary Pledgors in connection with the operation of their respectivebusinesses;

 

WHEREAS, each Pledgor acknowledges that it willderive substantial direct and indirect benefit from the making of theExtensions of Credit;

 

----

 

WHEREAS, it is a condition precedent to theobligation of the Lenders and the Letter of Credit Issuer to make theirrespective Extensions of Credit to the Borrowers under the Credit Agreementthat the US Borrower, Holdings and the Subsidiary Pledgors shall have executedand delivered this Pledge Agreement to the Administrative Agent for the ratablebenefit of the Secured Parties; and

 

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

 

NOW, THEREFORE, in consideration of the premises andto induce the Administrative Agent, the Co-Syndication Agents and the Lendersand the Letter of Credit Issuer to enter into the Credit Agreement and toinduce the Lenders and the Letter of Credit Issuer to make their respectiveExtensions of Credit to the Borrowers under the Credit Agreement and to induceone or more Lenders or Affiliates of Lenders to enter into Hedge Agreementswith the Borrowers and/or the Restricted Subsidiaries, the Pledgors herebyagree with the Administrative Agent, for the ratable benefit of the SecuredParties, as follows:

 

1.             DefinedTerms.

 

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

 

(b)           Asused herein, the term “Closing Time” means 24:00 (German time) on the ClosingDate.

 

(c)           Asused 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 Personof whatever nature, and any warrants, options or other rights entitling theholder thereof to purchase or acquire any of the foregoing.

 

(d)           Asused 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 allowablein such proceeding) on the Loans, when and as due, whether at maturity, byacceleration, upon one or more dates set for prepayment or otherwise, (y) eachpayment required to be made by the Borrowers under the Credit Agreement inrespect of any Letter of Credit, when and as due, including payments in respectof reimbursement of disbursements, interest thereon and obligations to providecash collateral, and (z) all other monetary obligations, including fees,costs, expenses and indemnities, whether primary, 

 

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secondary, direct, contingent, fixed or otherwise(including monetary obligations incurred during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding), of the Borrowers or any other CreditParty to any of the Secured Parties under the Credit Agreement and the otherCredit Documents, (ii) the due and punctual performance of all covenants,agreements, obligations and liabilities of the Borrowers under or pursuant tothe Credit Agreement and the other Credit Documents, (iii) the due andpunctual payment and performance of all the covenants, agreements, obligationsand liabilities of each Credit Party under or pursuant to this Pledge Agreementor the other Credit Documents, (iv) the due and punctual payment andperformance of all obligations of each Borrower or Restricted Subsidiary undereach Hedge Agreement that (x) is in effect on the Closing Date with acounterparty that is a Lender or an Affiliate of a Lender as of the ClosingDate or (y) is entered into after the Closing Date with any counterpartythat is a Lender or an Affiliate of a Lender at the time such Hedge Agreementis entered into and (v) the due and punctual payment and performance ofall obligations in respect of overdrafts and related liabilities owed to theAdministrative Agent or its Affiliates arising from or in connection withtreasury, depositary or cash management services or in connection with anyautomated clearinghouse transfer of funds.

 

(e)           Asused herein, the term “Secured Parties” means (i) the Lenders, (ii) theLetter of Credit Issuer, (iii) the Swingline Lender, (iv) theAdministrative Agent, (v) the Co-Syndication Agents, (vi) eachcounterparty to a Hedge Agreement the obligations under which constituteObligations, (vii) the beneficiaries of each indemnification obligationundertaken by any Credit Party under any Credit Document and (viii) anysuccessors, indorsees, transferees and assigns of each of the foregoing.

 

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

 

(g)           Thewords “hereof,” “herein” and “hereunder” and words of similar import when usedin this Pledge Agreement shall refer to this Pledge Agreement as a whole andnot to any particular provision of this Pledge Agreement, and Section referencesare 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)           Themeanings given to terms defined herein shall be equally applicable to both thesingular and plural forms of such terms.

 

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

 

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

 

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received, receivable or otherwise distributed inrespect of or in exchange for any or all of the Pledged Shares, providedthat the Pledged Shares under this Pledge Agreement shall not include morethan 65 percent of the issued and outstanding Equity Interests in any ForeignSubsidiary;

 

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

 

(c)           tothe 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, theterm “proceeds” shall include all “proceeds” as defined in the NY UCC and shallalso include proceeds of any indemnity or guarantee payable to any Pledgor orthe Administrative Agent from time to time with respect to any of theCollateral.

 

3.             Securityfor Obligations.  This PledgeAgreement secures the payment of all Obligations of each Credit Party.  Without limiting the generality of theforegoing, this Pledge Agreement secures the payment of all amounts thatconstitute part of the Obligations and would be owed by any of the CreditParties to the Administrative Agent or the Lenders under the Credit Documentsbut for the fact that they are unenforceable or not allowable due to theexistence of a bankruptcy, reorganization or similar proceeding involving anyCredit Party.

 

4.             Deliveryof the Collateral.  All certificates or instruments, if any,representing or evidencing the Collateral shall be promptly delivered to andheld by or on behalf of the Administrative Agent pursuant hereto and shall bein suitable form for transfer by delivery, or shall be accompanied by dulyexecuted instruments or documents of transfer or assignment in blank, all inform and substance reasonably satisfactory to the Administrative Agent.  The Administrative Agent shall have theright, at any time after the occurrence and during the continuance of an Eventof Default and without notice to any Pledgor, to transfer to or to register inthe name of the Administrative Agent or any of its nominees any or all of thePledged Shares.  Each delivery ofCollateral (including any After-acquired Shares) shall be accompanied by aschedule describing the securities theretofore and then being pledgedhereunder, which shall be attached hereto as Schedule 1 and made a part hereof,provided that the failure to attach any such schedule hereto shall notaffect the validity of such pledge of such securities.  Each schedule so delivered shall supersedeany prior schedules so delivered.

 

5.             Representationsand Warranties.  Each Pledgorrepresents and warrants as follows:

 

(a)           Schedule2 hereto (i) correctly represents as of the date hereof (A) theissuer, the certificate number, the Pledgor and the record and beneficialowner, the number and class and the percentage of the issued and outstandingEquity Interests of such class of all Pledged Shares and (B) the issuer, theinitial principal amount, the Pledgor and holder, date of and maturity date ofall Pledged Debt and (ii) together with the comparable schedule to eachsupplement hereto, includes all Equity Interests, debt securities andpromissory notes required to be pledged hereunder.  Except as set forth on Schedule 2, thePledged Shares represent all (or 65 percent in the case of pledges of ForeignSubsidiaries) of the issued and outstanding Equity Interests of each class of EquityInterests in the issuer on the date hereof.

 

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

 

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

 

(d)           Theexecution and delivery by such Pledgor of this Pledge Agreement and the pledgeof the Collateral pledged by such Pledgor hereunder pursuant hereto create avalid and perfected first-priority security interest in the Collateral,securing the payment of the Obligations, in favor of the Administrative Agentfor the ratable benefit of the Secured Parties.

 

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

 

6.             Certificationof Limited Liability Company, Limited Partnership Interests and Pledged Debt.  (a) The Equity Interests in any DomesticSubsidiary that is organized as a limited liability company or limited partnershipand pledged hereunder shall be represented by a certificate and in theorganizational documents of such Domestic Subsidiary, the applicable Pledgorshall 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 itsjurisdiction of organization or formation, as applicable, by including in itsorganizational documents language substantially similar to the following and,accordingly, such interests shall be governed by Article 8 of the UniformCommercial Code:

 

“The Partnership/Company hereby irrevocably electsthat all partnership/membership interests in the Partnership/Company shall besecurities governed by Article 8 of the Uniform Commercial Code of[jurisdiction of organization or formation, as applicable].  Each certificate evidencingpartnership/membership interests in the Partnership/Company shall bear thefollowing legend:  “This certificateevidences an interest in [name of Partnership/LLC] and shall be a security forpurposes of Article 8 of the Uniform Commercial Code.”  No change to this provision shall beeffective until all outstanding certificates have been surrendered forcancelation and any new certificates thereafter issued shall not bear the foregoinglegend.”

 

(b)           EachPledgor will cause any Indebtedness for borrowed money owed to such Pledgor andrequired to be pledged hereunder to be evidenced by a duly executed promissorynote that is pledged and delivered to the Administrative Agent pursuant to theterms hereof.

 

7.             FurtherAssurances.  Each Pledgor agrees thatat any time and from time to time, at the expense of such Pledgor, it willexecute any and all further documents, financing statements, agreements andinstruments, and take all such further actions (including the filing andrecording of financing statements, fixture filings, mortgages, deeds of trustand other

 

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documents), which may be required under anyapplicable law, or which the Administrative Agent or the Required Lenders mayreasonably 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 rightsand remedies hereunder with respect to any Collateral.

 

8.             VotingRights; Dividends and Distributions; Etc. (a) So long as no Event of Default shall have occurred and becontinuing:

 

(i)            Each Pledgor shall be entitled to exercise any and allvoting and other consensual rights pertaining to the Collateral or any partthereof for any purpose not prohibited by the terms of this Pledge Agreement orthe other Credit Documents; and

 

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

 

(b)           Subjectto paragraph (c) below, each Pledgor shall be entitled to receive andretain and use, free and clear of the Lien of this Pledge Agreement, any andall dividends, distributions, principal and interest made or paid in respect ofthe Collateral to the extent permitted by the Credit Agreement; provided,however, that any and all noncash dividends, interest, principal orother distributions that would constitute Pledged Shares or Pledged Debt,whether resulting from a subdivision, combination or reclassification of theoutstanding Equity Interests of the issuer of any Pledged Shares or received inexchange for Pledged Shares or Pledged Debt or any part thereof, or inredemption thereof, or as a result of any merger, consolidation, acquisition orother 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 holdas, Collateral and shall, if received by such Pledgor, be received in trust forthe benefit of the Administrative Agent, be segregated from the other propertyor funds of such Pledgor and be forthwith delivered to the Administrative Agentas Collateral in the same form as so received (with any necessary indorsement).

 

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

 

(i)            allrights of such Pledgor to exercise or refrain from exercising the voting andother consensual rights that it would otherwise be entitled to exercisepursuant to Section 8(a)(i) shall cease, and all such rights shallthereupon become vested in the Administrative Agent, which shall thereupon havethe sole right to exercise or refrain from exercising such voting and otherconsensual rights during the continuance of such Event of Default, providedthat, unless otherwise directed by the Required Lenders, the AdministrativeAgent shall have the right from time to time following the occurrence and duringthe continuance of an Event of Default to permit the Pledgors to exercise suchrights.  After all Events of Default havebeen cured or waived and the US Borrower has delivered to the AdministrativeAgent a certificate to that effect, each Pledgor will have the right toexercise the voting and consensual rights that such Pledgor would otherwise

 

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be entitled to exercise pursuant to the terms of Section 8(a)(i) (andthe obligations of the Administrative Agent under Section 8(a)(ii) shallbe reinstated);

 

(ii)           allrights of such Pledgor to receive the dividends, distributions and principaland interest payments that such Pledgor would otherwise be authorized toreceive and retain pursuant to Section 8(b) shall cease, and all suchrights shall thereupon become vested in the Administrative Agent, which shallthereupon have the sole right to receive and hold as Collateral (subject to Section 12)such dividends, distributions and principal and interest payments during thecontinuance of such Event of Default. After all Events of Default have been cured or waived and the USBorrower has delivered to the Administrative Agent a certificate to thateffect, the Administrative Agent shall repay to each Pledgor (unless previouslyapplied to the Obligations) (and, in any event, without interest) alldividends, distributions and principal and interest payments that such Pledgorwould otherwise be permitted to receive, retain and use pursuant to the termsof Section 8(b);

 

(iii)          alldividends, distributions and principal and interest payments that are receivedby such Pledgor contrary to the provisions of Section 8(b) shall bereceived in trust for the benefit of the Administrative Agent, shall besegregated from other property or funds of such Pledgor and shall forthwith bedelivered to the Administrative Agent as Collateral in the same form as soreceived (with any necessary indorsements); and

 

(iv)          inorder to permit the Administrative Agent to receive all dividends, distributionsand 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 toexercise pursuant to Section 8(c)(i) above, and to receive alldividends, distributions and principal and interest payments that it may beentitled to under Sections 8(c)(ii) and (c)(iii) above, suchPledgor shall, if necessary, upon written notice from the Administrative Agent,from time to time execute and deliver to the Administrative Agent, appropriateproxies, dividend payment orders and other instruments or documents as theAdministrative Agent may reasonably request.

 

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

 

(b)           pledgeand, if applicable, cause each Domestic Subsidiary to pledge, to theAdministrative Agent for the benefit of the Secured Parties, immediately uponacquisition thereof, all the capital stock and all evidence of Indebtednessheld or received by such Pledgor or Domestic Subsidiary required to be pledgedhereunder pursuant to Section 9.12 of the Credit Agreement, in each casepursuant to a supplement to this Pledge Agreement substantially in the form ofAnnex A hereto (it being understood that the execution and delivery of such asupplement shall not require the consent of any Pledgor hereunder and that therights and 

 

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obligations of each Pledgor hereunder shall remainin full force and effect notwithstanding the addition of any new SubsidiaryPledgor as a party to this Pledge Agreement); and

 

(c)           defendits and the Administrative Agent’s title or interest in and to all theCollateral (and in the Proceeds thereof) against any and all Liens (other thanthe Lien of this Pledge Agreement), however arising, and any and all Personswhomsoever.

 

10.           AdministrativeAgent Appointed Attorney-in-Fact. Each Pledgor hereby appoints, which appointment is irrevocable andcoupled with an interest, the Administrative Agent as such Pledgor’sattorney-in-fact, with full authority in the place and stead of such Pledgorand in the name of such Pledgor or otherwise, to take any action and to executeany instrument or document, in each case after the occurrence and during thecontinuance of an Event of Default, that the Administrative Agent may deemreasonably necessary or advisable to accomplish the purposes of this Pledge Agreement,including to receive, indorse and collect all instruments made payable to suchPledgor representing any dividend, distribution or principal or interestpayment in respect of the Collateral or any part thereof and to give fulldischarge for the same.

 

11.           TheAdministrative Agent’s Duties.  Thepowers conferred on the Administrative Agent hereunder are solely to protectits interest in the Collateral and shall not impose any duty upon it toexercise any such powers.  Except for thesafe custody of any Collateral in its possession and the accounting for moneysactually received by it hereunder, the Administrative Agent shall have no dutyas to any Collateral, as to ascertaining or taking action with respect tocalls, conversions, exchanges, maturities, tenders or other matters relative toany Pledged Shares, whether or not the Administrative Agent or any otherSecured Party has or is deemed to have knowledge of such matters, or as to thetaking of any necessary steps to preserve rights against any parties or anyother rights pertaining to any Collateral. The Administrative Agent shall be deemed to have exercised reasonablecare in the custody and preservation of any Collateral in its possession ifsuch Collateral is accorded treatment substantially equal to that which theAdministrative Agent accords its own property.

 

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

 

(a)           TheAdministrative Agent may exercise in respect of the Collateral, in addition toother rights and remedies provided for herein or otherwise available to it, allthe 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 maywithout notice except as specified below, sell the Collateral or any partthereof in one or more parcels at public or private sale, at any exchangebroker’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 suchother terms as are commercially reasonable irrespective of the impact of anysuch sales on the market price of the Collateral.  The Administrative Agent shall be authorizedat any such sale (if it deems it advisable to do so) to restrict the prospectivebidders or purchasers of Collateral to Persons who will represent and agreethat they are purchasing the Collateral for their own account for investmentand not with a view to the distribution or sale thereof, and, upon consummationof any such sale, the Administrative Agent shall have the right to assign,transfer and deliver to the purchaser or purchasers thereof the Collateral sosold.  Each purchaser at any such saleshall hold the property sold absolutely free from any claim or right on thepart of any Pledgor, and each Pledgor hereby waives (to the extent permitted bylaw) all rights of redemption, stay and/or

 

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appraisal that it now has or may at any time in thefuture have under any rule of law or statute now existing or hereafterenacted.  The Administrative Agent or anySecured Party shall have the right upon any such public sale, and, to theextent permitted by law, upon any such private sale, to purchase the whole orany part of the Collateral so sold, and the Administrative Agent or suchSecured Party may subject to (x) the satisfaction in full in cash of allpayments due pursuant to Section 12(b)(i), and (y) the ratablesatisfaction of the Obligations in accordance with Section 12(b)(ii) paythe purchase price by crediting the amount thereof against theObligations.  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 timeafter which any private sale is to be made shall constitute reasonablenotification.  The Administrative Agentshall not be obligated to make any sale of Collateral regardless of notice ofsale having been given.  TheAdministrative Agent may adjourn any public or private sale from time to timeby 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 soadjourned.  To the extent permitted bylaw, each Pledgor hereby waives any claim against the Administrative Agentarising by reason of the fact that the price at which any Collateral may havebeen sold at such a private sale was less than the price that might have beenobtained at a public sale, even if the Administrative Agent accepts the firstoffer received and does not offer such Collateral to more than one offeree.

 

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

 

(i)            first,to the payment of all reasonable and documented costs and expenses incurred bythe Administrative Agent in connection with such collection or sale orotherwise in connection with this Pledge Agreement, the other Credit Documentsor any of the Obligations, including all court costs and the reasonable feesand expenses of its agents and legal counsel, the repayment of all advancesmade by the Administrative Agent hereunder or under any other Credit Documenton behalf of any Pledgor and any other reasonable and documented costs orexpenses incurred in connection with the exercise of any right or remedyhereunder or under any other Credit Document;

 

(ii)           second,to the Secured Parties, an amount equal to all Obligations owing to them on thedate of any such distribution, and, if such moneys shall be insufficient to paysuch 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 orassigns or to whomsoever may be lawfully entitled to receive the same or as acourt of competent jurisdiction may direct.

 

Upon any sale of the Collateral by theAdministrative Agent (including pursuant to a power of sale granted by statuteor under a judicial proceeding), the receipt of the Administrative Agent or ofthe officer making the sale shall be a sufficient discharge to the purchaser orpurchasers of the Collateral so sold and such purchaser or purchasers shall notbe obligated to see to the application of any part of the purchase money paidover to the Administrative Agent or such officer or be answerable in any wayfor the misapplication thereof.

 

(c)           TheAdministrative Agent may exercise any and all rights and remedies of eachPledgor in respect of the Collateral.

 

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(d)           Allpayments received by any Pledgor after the occurrence and during thecontinuance of an Event of Default in respect of the Collateral shall bereceived in trust for the benefit of the Administrative Agent, shall besegregated from other property or funds of such Pledgor and shall be forthwithdelivered to the Administrative Agent as Collateral in the same form as soreceived (with any necessary indorsement).

 

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

 

13.           Amendments,etc. with Respect to the Obligations; Waiver of Rights.  Each Pledgor shall remain obligated hereundernotwithstanding that, without any reservation of rights against any Pledgor andwithout notice to or further assent by any Pledgor, (a) any demand for paymentof any of the Obligations made by the Administrative Agent or any other SecuredParty 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 partthereof, or any collateral security or guarantee therefor or right of offsetwith respect thereto, may, from time to time, in whole or in part, be renewed,extended, amended, modified, accelerated, compromised, waived, surrendered orreleased by the Administrative Agent or any other Secured Party, (c) theCredit Agreement, the other Credit Documents, the Letters of Credit and anyother documents executed and delivered in connection therewith and the HedgeAgreements and any other documents executed and delivered in connectiontherewith and any documents entered into with the Administrative Agent or anyof its Affiliates in connection with treasury, depositary or cash managementservices or in connection with any automated clearinghouse transfer of fundsmay be amended, modified, supplemented or terminated, in whole or in part, asthe Administrative Agent (or the Required Lenders, as the case may be, or, inthe case of any Hedge Agreement or documents entered into with theAdministrative Agent or any of its Affiliates in connection with treasury,depositary or cash management services or in connection with any automatedclearinghouse transfer of funds, the party thereto) may deem advisable fromtime to time, and (d) any collateral security, guarantee or right of offset atany time held by the Administrative Agent or any other Secured Party for thepayment of the Obligations may be sold, exchanged, waived, surrendered orreleased.  Neither the AdministrativeAgent 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 theObligations or for this Pledge Agreement or any property subject thereto.  When making any demand hereunder against anyPledgor, the Administrative Agent or any other Secured Party may, but shall beunder no obligation to, make a similar demand on the US Borrower or any Pledgoror pledgor, and any failure by the Administrative Agent or any other SecuredParty to make any such demand or to collect any payments from the US Borroweror any Pledgor or pledgor or any release of the US Borrower or any Pledgor orpledgor shall not relieve any Pledgor in respect of which a demand orcollection is not made or any Pledgor not so released of its severalobligations or liabilities hereunder, and shall not impair or affect the rightsand remedies, express or implied, or as a matter of law, of the AdministrativeAgent or any other Secured Party against any Pledgor.  For the purposes hereof “demand” shallinclude the commencement and continuance of any legal proceedings.

 

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

 

(b)           ASubsidiary Pledgor shall automatically be released from its obligationshereunder and the Pledge of such Subsidiary Pledgor shall be automaticallyreleased upon the consummation of any transaction permitted by the CreditAgreement as a result of which such Subsidiary Pledgor ceases to be a DomesticSubsidiary of the US Borrower.

 

(c)           Uponany sale or other transfer by any Pledgor of any Collateral that is permittedunder the Credit Agreement, or upon the effectiveness of any written consent tothe release of the security interest granted hereby in any Collateral pursuantto Section 14.1 of the Credit Agreement, the obligations of such Pledgor withrespect to such Collateral and the security interest granted hereby in suchCollateral shall be automatically released and such Collateral sold free andclear of the Lien and Security Interests created hereby.

 

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

 

15.           Reinstatement.  This Pledge Agreement shall continue to beeffective, or be reinstated, as the case may be, if at any time payment, or anypart thereof, of any of the Obligations is rescinded or must otherwise berestored or returned by the Administrative Agent or any other Secured Partyupon the insolvency, bankruptcy, dissolution, liquidation or reorganization ofany Pledgor, or upon or as a result of the appointment of a receiver,intervenor or conservator of, or trustee or similar officer for, the USBorrower or any other Pledgor or any substantial part of its property, orotherwise, all as though such payments had not been made.

 

16.           Notices.  All notices, requests and demands pursuanthereto shall be made in accordance with Section 14.2 of the CreditAgreement.  All communications andnotices hereunder to any Subsidiary Pledgor shall be given to it in care of theUS Borrower at the US Borrower’s address set forth in Section 14.2 of theCredit Agreement.

 

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

 

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

 

19.           Integration.  This Pledge Agreement represents theagreement of each of the Pledgors with respect to the subject matter hereof andthere are no promises, undertakings, representations or warranties by theAdministrative Agent or any other Secured Party relative to the subject matterhereof not expressly set forth or referred to herein or in the other CreditDocuments.

 

20.           Amendmentsin Writing; No Waiver; Cumulative Remedies.

 

(a)           Noneof the terms or provisions of this Pledge Agreement may be waived, amended,supplemented or otherwise modified except by a written instrument executed bythe affected Pledgor and the Administrative Agent in accordance with Section14.1 of the Credit Agreement.

 

(b)           Neitherthe Administrative Agent nor any Secured Party shall by any act (except by awritten instrument pursuant to Section 20(a) hereof), delay, indulgence,omission or otherwise be deemed to have waived any right or remedy hereunder orto have acquiesced in any Default or Event of Default or in any breach of anyof the terms and conditions hereof.  Nofailure to exercise, nor any delay in exercising, on the part of the AdministrativeAgent or any other Secured Party, any right, power or privilege hereunder shalloperate as a waiver thereof.  No singleor partial exercise of any right, power or privilege hereunder shall precludeany other or further exercise thereof or the exercise of any other right, poweror privilege.  A waiver by theAdministrative Agent or any other Secured Party of any right or remedyhereunder on any one occasion shall not be construed as a bar to any right orremedy that the Administrative Agent or such other Secured Party wouldotherwise have on any future occasion.

 

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

 

21.           SectionHeadings.  The Section headings usedin this Pledge Agreement are for convenience of reference only and are not toaffect the construction hereof or be taken into consideration in theinterpretation hereof.

 

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

 

**23.          WAIVEROF JURY TRIAL.  EACH PLEDGOR HEREBYIRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY**

 

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**LEGAL ACTION OR PROCEEDING RELATING TO THIS PLEDGE AGREEMENT,ANY OTHER CREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.**

 

24.           Submissionto Jurisdiction; Waivers.  Each ofthe Pledgors hereby irrevocably and unconditionally:

 

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

 

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

 

(c)           agreesthat service of process in any such action or proceeding may be effected bymailing a copy thereof by registered or certified mail (or any substantiallysimilar form of mail), postage prepaid, to such Pledgor at its address referredto in Section 16 or at such other address of which the AdministrativeAgent shall have been notified pursuant thereto;

 

(d)           agreesthat nothing herein shall affect the right of the Administrative Agent or anyother Secured Party to effect service of process in any other manner permittedby law or shall limit the right of the Administrative Agent or any otherSecured 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 orrecover in any legal action or proceeding referred to in this Section 24any special, exemplary, punitive or consequential damages.

 

**25.          GOVERNINGLAW.  THIS PLEDGE AGREEMENT AND THERIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, ANDCONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.**

 

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

 

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SUBSIDIARYPLEDGORS

 

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SCHEDULE 2

TO THE PLEDGE AGREEMENT

 

Pledged Shares

 

[Schedule To Come]

 

Pledged Debt

 

[Schedule To Come]

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SUPPLEMENT NO. [  ]dated as of[            ], tothe 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 “SubsidiaryPledgor” and, collectively, the “Subsidiary Pledgors”; the USBorrower, Holdings and the Subsidiary Pledgors are referred to collectivelyherein as the “Pledgors”) and CREDIT SUISSE FIRST BOSTON, acting throughits Cayman Islands Branch, as administrative agent (in such capacity, the “AdministrativeAgent”) for the lenders (the “Lenders”) from time to time parties tothe Credit Agreement referred to below.

 

A.  Referenceis 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 incorporatedunder the laws of England and Wales, Holdings, the Lenders, the AdministrativeAgent, UBS Securities LLC and Goldman Sachs Credit Partners L.P., asco-syndication agents, and (b) the Guarantee dated as of July 30, 2004 (asamended, supplemented or otherwise modified from time to time, the “Guarantee”),among the US Borrower, Holdings, the Subsidiary Guarantors party thereto andthe Administrative Agent.

 

B. Capitalized terms used herein and not otherwisedefined herein shall have the meanings assigned to such terms in the PledgeAgreement.

 

C.  ThePledgors have entered into the Pledge Agreement in order to induce theAdministrative Agent, the Co-Syndication Agents, the Lenders and the Letter ofCredit Issuer to enter into the Credit Agreement and to induce the Lenders andthe Letter of Credit Issuer to make their respective Extensions of Credit tothe Borrowers under the Credit Agreement and to induce one or more Lenders orAffiliates of Lenders to enter into Hedge Agreements with the Borrowers and/orthe Restricted Subsidiaries.

 

D.  Theundersigned [Pledgors] [Domestic Subsidiaries] (each an “Additional Pledgor”)are (a) the legal and beneficial owners of the Equity Interests described underSchedule 1 hereto and issued by the entities named therein (such pledged EquityInterests, together with any Equity Interests obtained in the future of theissuer 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 “AdditionalPledged Debt”) described under Schedule 1 hereto.

 

E.  Section9.12 of the Credit Agreement and Section 9(b) of the Pledge Agreementprovide that additional Subsidiaries may become Subsidiary Pledgors under thePledge Agreement by execution and delivery of an instrument in the form of thisSupplement.  Each undersigned AdditionalPledgor is executing this Supplement in accordance with the

 

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requirements of Section 9(b) of the Pledge Agreementto pledge to the Administrative Agent for the benefit of the Secured Partiesthe Additional Pledged Shares and the Additional Pledged Debt [and to become aSubsidiary Pledgor under the Pledge Agreement] in order to induce the Lendersand the Letter of Credit Issuer to make additional Extensions of Credit and asconsideration for Extensions of Credit previously made.

 

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

 

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

 

(a)           theAdditional Pledged Shares held by such Additional Pledgor and the certificatesrepresenting such Additional Pledged Shares and any interest of such AdditionalPledgor in the entries on the books of the issuer of the Additional PledgedShares or any financial intermediary pertaining to the Additional PledgedShares and all dividends, cash, warrants, rights, instruments and otherproperty or proceeds from time to time received, receivable or otherwisedistributed in respect of or in exchange for any or all of the AdditionalPledged Shares, provided that the Additional Pledged Shares under thisSupplement shall not include more than 65 percent of the issued andoutstanding Equity Interests in any Foreign Subsidiary;

 

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

 

(c)           tothe extent not covered by clauses (a) and (b) above, respectively, all proceedsof 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 includeproceeds of any indemnity or guarantee payable to any Additional Pledgor or theAdministrative Agent from time to time with respect to any of the AdditionalCollateral.

 

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

 

[SECTION 2. Each Additional Pledgor by its signature below becomes a Pledgor underthe Pledge Agreement with the same force and effect as if originally namedtherein as a Pledgor and each Additional Pledgor hereby agrees to all the termsand 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 AdditionalPledgor.  The Pledge Agreement is herebyincorporated herein by reference.] (10)

 

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(10) Include for new pledgors only.

 

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

 

(a)           Schedule1 hereto (i) correctly represents as of the date hereof (A) the issuer, thecertificate number, the Pledgor and registered owner, the number and class andthe percentage of the issued and outstanding Equity Interests of such class ofall Additional Pledged Shares and (B) the issuer, the initial principal amount,the Pledgor and holder, date of and maturity date of all Additional PledgedDebt and (ii) together with Schedule 2 to the Pledge Agreement, thecomparable schedules to each other Supplement to the Pledge Agreement, includesall Equity Interests, debt securities and promissory notes required to be pledgedhereunder.  Except as set forth onSchedule 1, the Pledged Shares represent all (or 65 percent in the case ofpledges of Foreign Subsidiaries) of the issued and outstanding Equity Interestsof each class of Equity Interests of the issuer on the date hereof.

 

(b)           SuchAdditional Pledgor is the legal and beneficial owner of the AdditionalCollateral pledged or assigned by such Additional Pledgor hereunder free andclear of any Lien, except for the Lien created by this Supplement to the PledgeAgreement.

 

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

 

(d)           Theexecution and delivery by such Additional Pledgor of this Supplement and thepledge of the Additional Collateral pledged by such Additional Pledgorhereunder pursuant hereto create a valid and perfected first-priority securityinterest in the Additional Collateral, securing the payment of the Obligations,in favor of the Administrative Agent for the ratable benefit of the SecuredParties.

 

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

 

SECTION [3][4]. This Supplement may be executed by one or more of the parties to thisSupplement on any number of separate counterparts (including by facsimile orother electronic transmission), and all of said counterparts taken togethershall be deemed to constitute one and the same instrument.  A set of the copies of this Supplement signedby all the parties shall be lodged with the Administrative Agent and the USBorrower.  This Supplement shall becomeeffective as to each Additional Pledgor when the Administrative Agent shallhave received counterparts of this Supplement that, when taken together, bearthe signatures of such Additional Pledgor and the Administrative Agent.

 

SECTION [4][5]. Except as expressly supplemented hereby, the Pledge Agreement shallremain 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 ANDINTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.**

 

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

 

SECTION [7][8]. All notices, requests and demands pursuant hereto shall be made inaccordance with Section 16 of the Pledge Agreement.  All communications and notices hereunder toeach Additional Pledgor shall be given to it in care of the US Borrower at theUS 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 forits reasonable out-of-pocket expenses in connection with this Supplement,including the reasonable fees, other charges and disbursements of counsel forthe Administrative Agent.

 

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IN WITNESS WHEREOF, each Additional Pledgor and theAdministrative Agent have duly executed this Supplement to the Pledge Agreementas 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

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ANNEX A TO THE

PLEDGE AGREEMENT

 

PledgedShares

 
| **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** |
|-------------|------------|------------|------------|----------------------------------------|------------|----------------------------|------------|------------------------|
|        |       |       |       |                                   |       |                       |       |                   |
|        |       |       |       |                                   |       |                       |       |                   |
|        |       |       |       |                                   |       |                       |       |                   |

 

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EXHIBIT I

 

FORMOF SECURITY AGREEMENT

 

SECURITY AGREEMENT

 

THIS SECURITY AGREEMENTdated as of July 30, 2004, among ROCKWOOD SPECIALTIES INTERNATIONAL, INC., aDelaware corporation (“Holdings”), ROCKWOOD SPECIALTIES GROUP,INC., a Delaware corporation (the “US Borrower”), each of theSubsidiaries of the US Borrower listed on Annex A hereto (each such undersignedSubsidiary being a “Subsidiary Grantor” and collectively the “SubsidiaryGrantors”; the Subsidiary Grantors, Holdings and the US Borrower arereferred to collectively as the “Grantors”) and CREDIT SUISSE FIRSTBOSTON, acting through its Cayman Islands Branch, as administrative agent (insuch capacity, the “Administrative Agent”) for the lenders (“Lenders”)from time to time party to the Credit Agreement dated as of July 30, 2004 (asthe same may be amended, supplemented or otherwise modified from time to time,the “Credit Agreement”), among the US Borrower, Rockwood SpecialtiesLimited, a company incorporated under the laws of England and Wales (the “UKBorrower” and, together with the US Borrower, the “Borrowers”),Holdings, the Lenders, the Administrative Agent, and UBS Securities LLC andGoldman 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, theLenders have severally agreed to make Loans to the Borrowers and the Letter ofCredit Issuer has agreed to issue Letters of Credit for the account of theBorrowers (collectively, the “Extensions of Credit”) upon the terms andsubject to the conditions set forth therein and (b) one or more Lenders orAffiliates of Lenders may from time to time enter into Hedge Agreements withthe 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 theretohas unconditionally and irrevocably guaranteed, as primary obligor and notmerely as surety, to the Administrative Agent, for the ratable benefit of theSecured Parties the prompt and complete payment and performance when due(whether at the stated maturity, by acceleration or otherwise) of theObligations;

 

WHEREAS, each Subsidiary Grantor is a DomesticSubsidiary of the US

 

Borrower;

 

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WHEREAS, the proceeds of the Extensions of Creditwill be used in part to enable the Borrowers to make valuable transfers to theSubsidiary Grantors in connection with the operation of their respectivebusinesses;

 

WHEREAS, each Grantor acknowledges that it willderive substantial direct and indirect benefit from the making of theExtensions of Credit; and

 

WHEREAS, it is a condition precedent to theobligation of the Lenders and the Letter of Credit Issuer to make theirrespective Extensions of Credit to the Borrowers under the Credit Agreementthat the Grantors shall have executed and delivered this Security Agreement tothe Administrative Agent for the ratable benefit of the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises andto induce the Administrative Agent, the Co-Syndication Agents, the Lenders andthe Letter of Credit Issuer to enter into the Credit Agreement and to inducethe Lenders and the Letter of Credit Issuer to make their respective Extensionsof Credit to the Borrowers under the Credit Agreement and to induce one or moreLenders or Affiliates of Lenders to enter into Hedge Agreements with theBorrowers and/or the Restricted Subsidiaries, the Grantors hereby agree withthe Administrative Agent, for the ratable benefit of the Secured Parties, asfollows:

 

1. Defined Terms.

 

(a)        Unless otherwise defined herein, termsdefined in the Credit Agreement and used herein shall have the meanings givento them in the Credit Agreement and all terms defined in the Uniform CommercialCode from time to time in effect in the State of New York (the “NY UCC”) andnot 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 thefollowing meanings:

 

“Administrative Agent” shall have the meaningassigned 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 tosuch term in Section 2.

 

“Collateral Account” shall mean anycollateral account established by the Administrative Agent as provided inSection 5.1.

 

“Copyright License” means any writtenagreement, now or hereafter in effect, granting any right to any third partyunder any copyright now or hereafter owned by any Grantor (including allCopyrights) or that any Grantor otherwise has the right to license, or grantingany right to any Grantor under any copyright now or hereafter owned by anythird party, and all rights of any Grantor under any such agreement, includingthose listed on Schedule 1.

 

“copyrights” means, with respect to anyPerson, 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 theUnited States or any other country, whether as author, assignee, transferee or

 

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otherwise, and (ii) all registrations andapplications for registration of any such copyright in the United States or anyother country, including registrations, recordings, supplemental registrationsand pending applications for registration in the United States CopyrightOffice.

 

“Copyrights” means all copyrights now ownedor hereafter acquired by any Grantor, including those listed on Schedule 2.

 

“Equipment” shall mean any “equipment,” assuch term is defined in the NY UCC, now or hereafter owned by any Grantor and,in any event, shall include all machinery, equipment, furnishings, movabletrade fixtures and vehicles now or hereafter owned by any Grantor and any andall additions, substitutions and replacements of any of the foregoing, whereverlocated, together with all attachments, components, parts, equipment andaccessories installed thereon or affixed thereto; but excluding Equipment tothe extent it is subject to a Permitted Lien and the terms of the Indebtednesssecuring such Permitted Lien prohibit assignment of, or granting of a securityinterest in, such Grantor’s rights and interests therein, provided, thatimmediately upon the repayment of all Indebtedness secured by such PermittedLien, such Grantor shall be deemed to have granted a Security Interest in allthe rights and interests with respect to such Equipment.

 

“General Intangibles” shall mean all “generalintangibles” as such term is defined in Section 9-102 of the NY UCC and, in anyevent, including with respect to any Grantor, all contracts, agreements,instruments and indentures in any form, and portions thereof, to which suchGrantor is a party or under which such Grantor has any right, title or interestor to which such Grantor or any property of such Grantor is subject, as thesame may from time to time be amended, supplemented or otherwise modified,including (a) all rights of such Grantor to receive moneys due and to becomedue to it thereunder or in connection therewith, (b) all rights of such Grantorto receive proceeds of any insurance, indemnity, warranty or guarantee withrespect thereto, (c) all claims of such Grantor for damages arising out of anybreach thereof or default thereunder and (d) all rights of such Grantor toterminate, amend, supplement, modify or exercise rights or options thereunder,to perform thereunder and to compel performance and otherwise exercise allremedies thereunder, in each case to the extent the grant by such Grantor of aSecurity Interest pursuant to this Security Agreement in its right, title andinterest in any such contract, agreement, instrument or indenture is notprohibited by such contract, agreement, instrument or *indenture*without the consent of any otherparty thereto, would not give any other party to any such contract, agreement,instrument or indenture the right to terminate its obligations thereunder or ispermitted with consent if all necessary consents to such grant of a SecurityInterest have been obtained from the other parties thereto (it being understoodthat the foregoing shall not be deemed to obligate such Grantor to obtain suchconsents), provided, that the foregoing limitation shall not affect,limit, restrict or impair the grant by such Grantor of a Security Interestpursuant to this Security Agreement in any Account or any money or otheramounts due or to become due under any such contract, agreement, instrument orindenture.

 

“Guarantors” shall mean each Grantor otherthan the US Borrower. “Grantor” shall have the meaning assigned to suchterm in the recitals hereto.

 

“Intellectual Property” shall mean allrights, priorities and privileges relating to intellectual property, whetherarising under United States, multinational or foreign laws or

 

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otherwise now owned or hereafter acquired, including(a) all information used or useful arising from the business including allgoodwill, 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 inequity for any infringement or other impairment thereof, including the right toreceive all proceeds and damages therefrom, in *eachcase*to the extent the grant by such Grantor of a Security Interestpursuant to this Security Agreement in any such rights, priorities andprivileges relating to intellectual property is not prohibited by any contract,agreement or other instrument governing such rights, priorities and privilegeswithout the consent of any other party thereto, would not give any other partyto any such contract, agreement or other instrument the right to terminate itsobligations thereunder or is permitted with consent if all necessary consentsto such grant of a Security Interest have been obtained from the relevantparties (it being understood that the foregoing shall not be deemed to obligatesuch Grantor to obtain such consents).

 

“Investment Property” shall mean allSecurities (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 extentthe grant by a Grantor of a Security Interest therein pursuant to this SecurityAgreement in its right, title and interest in any such Investment Property isnot prohibited by any contract, agreement, instrument or indenture governingsuch Investment Property without the consent of any other party thereto, wouldnot give any other party to any such contract, agreement, instrument orindenture the right to terminate its obligations thereunder or is permittedwith consent if all necessary consents to such grant of a Security Interesthave been obtained from the other parties thereto (it being understood that theforegoing shall not be deemed to obligate such Grantor to obtain suchconsents).

 

“License” shall mean any Patent License,Trademark License, Copyright License or other license or sublicense to whichany Grantor is a party.

 

“NY UCC” has the meaning assigned to suchterm in Section 1(a).

 

“Obligations” shall mean the collectivereference to (i) the due and punctual payment of (x) the principal of andpremium, if any, and interest at the applicable rate provided in the CreditAgreement (including interest accruing during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding) on the Loans, when and as due, whetherat maturity, by acceleration, upon one or more dates set for prepayment orotherwise, (y) each payment required to be made by the Borrowers under theCredit Agreement in respect of any Letter of Credit, when and as due, includingpayments in respect of reimbursement of disbursements, interest thereon andobligations 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 incurredduring the pendency of any bankruptcy, insolvency, receivership or othersimilar proceeding, regardless of whether allowed or allowable in suchproceeding), of the Borrowers or any other Credit Party to any of the SecuredParties under the Credit Agreement and the other Credit Documents, (ii) the dueand punctual performance of all covenants, agreements, obligations andliabilities of the Borrowers under or

 

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pursuant to the Credit Agreement and the otherCredit Documents, (iii) the due and punctual payment and performance of all thecovenants, agreements, obligations and liabilities of each Credit Party underor pursuant to this Security Agreement or the other Credit Documents, (iv) thedue and punctual payment and performance of all obligations of each Borrower orRestricted Subsidiary under each Hedge Agreement that (x) is in effect on theClosing Date with a counterparty that is a Lender or an Affiliate of a Lenderas of the Closing Date or (y) is entered into after the Closing Date with anycounterparty that is a Lender or an Affiliate of a Lender at the time suchHedge Agreement is entered into and (v) the due and punctual payment andperformance of all obligations in respect of overdrafts and related liabilitiesowed to the Administrative Agent or its Affiliates arising from or inconnection with treasury, depositary or cash management services or inconnection 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, useor 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 anyinvention on which a patent, now or hereafter owned by any third party, is inexistence, and all rights of any Grantor under any such agreement, includingthose listed on Schedule 3.

 

“patents” means, with respect to any Person,all of the following now owned or hereafter acquired by such Person: (a) allletters patent of the United States or the equivalent thereof in any othercountry, all registrations and recordings thereof, and all applications forletters patent of the United States or the equivalent thereof in any othercountry, including registrations, recordings and pending applications in theUnited States Patent and Trademark Office or any similar offices in any othercountry, and (b) all reissues, continuations, divisions, continuations-in-part,renewals or extensions thereof, and the inventions disclosed or claimedtherein, including the right to make, use and/or sell the inventions disclosedor claimed therein.

 

“Patents” means all patents now owned orhereafter acquired by any Grantor, including those listed on Schedule 4.

 

“Proceeds” shall mean all “proceeds” as suchterm is defined in Section 9-102 of the NY UCC and, in any event, shall includewith respect to any Grantor, any consideration received from the sale,exchange, license, lease or other disposition of any asset or property thatconstitutes Collateral, any value received as a consequence of the possessionof any Collateral and any payment received from any insurer or other person orentity as a result of the destruction, toss, theft, damage or other involuntaryconversion of whatever nature of any asset or property that constitutesCollateral, and shall include (a) all cash and negotiable instruments receivedby or held on behalf of the Administrative Agent, (b) any claim of any Grantoragainst any third party for (and the right to sue and recover for and therights to damages or profits due or accrued arising out of or in connectionwith) (i) past, present or future infringement of any Patent now or hereafterowned by any Grantor, or licensed under a Patent License, (ii) past, present orfuture infringement or dilution of any Trademark now or hereafter owned by anyGrantor or licensed under a Trademark License or injury to the goodwillassociated with or symbolized by any Trademark now or hereafter owned by anyGrantor, (iii) past, present or future breach of any License and (iv) past,present or future infringement of any Copyright now or hereafter owned by anyGrantor or licensed *under*aCopyright License and (c) any and all

 

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other amounts from time to time paid or payableunder 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) theAdministrative Agent, (v) the Co-Syndication Agents, (vi) each counterparty toa Hedge Agreement the obligations under which constitute Obligations, (vii) thebeneficiaries of each indemnification obligation undertaken by any Credit Partyunder any Credit Document and (viii) any successors, indorsees, transferees andassigns of each of the foregoing.

 

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

 

“Security Interest” shall have the meaningassigned to such term in Section 2.

 

“Trademark License” means any writtenagreement, now or hereafter in effect, granting to any third party any right touse any trademark now or hereafter owned by any Grantor (including anyTrademark) or that any Grantor otherwise has the right to license, or grantingto any Grantor any right to use any trademark now or hereafter owned by anythird party, and all rights of any Grantor under any such agreement, includingthose listed on Schedule 5.

 

“trademarks” means, with respect to anyPerson, 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 likenature, now existing or hereafter adopted or acquired, all registrations andrecordings thereof (if any), and all registration and recording applicationsfiled in connection therewith, including registrations and registrationapplications in the United States Patent and Trademark Office or any similaroffices in any State of the United States or any other country or any politicalsubdivision thereof, and all extensions or renewals thereof, (ii) all goodwillassociated therewith or symbolized thereby and (iii) all other assets, rightsand interests that uniquely reflect or embody such goodwill.

 

“Trademarks” means all trademarks now ownedor hereafter acquired by any Grantor, including those listed on Schedule 6hereto.

 

(c)        The words “hereof’, “herein”, “hereto”and “hereunder” and words of similar import when used in this SecurityAgreement shall refer to this Security Agreement as a whole and not to anyparticular provision of this Security Agreement, and Section and Schedulereferences 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 definedherein shall be equally applicable to both the singular and plural forms ofsuch terms.

 

(e)        Where the context requires, terms relatingto 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.

 

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(f)         References to “Lenders” in thisSecurity Agreement shall be deemed to include Affiliates of Lenders that mayfrom 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 theAdministrative Agent, and hereby grants to the Administrative Agent, for theratable benefit of the Secured Parties, a security interest, which securityinterest shall attach immediately upon the Closing Time (the “Security Interest”),in all of the following property now owned or hereafter acquired by suchGrantor or in which such Grantor now has or at any time in future may acquireany right, title or interest (collectively, the “Collateral”), ascollateral security for the prompt and complete payment and performance whendue (whether at the stated maturity, by acceleration or otherwise) of theObligations:

 

(i)            allAccounts;

 

(ii)           allEquipment;

 

(iii)          allGeneral Intangibles;

 

(iv)          allIntellectual Property;

 

(v)           allInventory;

 

(vi)          allcash and cash accounts;

 

(vii)         allInvestment Property;

 

(viii)        allbooks and records pertaining to the Collateral; and

 

(ix)           tothe extent not otherwise included, all Proceeds and products of any and all ofthe foregoing.

 

(b) Each Grantor hereby irrevocably authorizes theAdministrative Agent at any time and from time to time to file in any relevantjurisdiction any initial financing statements with respect to the Collateral orany part thereof and amendments thereto that contain the information requiredby Article 9 of the Uniform Commercial Code of each applicable jurisdiction forthe filing of any financing statement or amendment, including whether suchGrantor is an organization, the type of organization and any organizationalidentification number issued to such Grantor. Such financing statements maydescribe the Collateral as “all assets” or “all property” or such otherdescription as the Administrative Agent determines in its sole discretion. EachGrantor agrees to provide such information to the Administrative Agent promptlyupon request.

 

Each Grantor also ratifies its authorization for theAdministrative Agent to file in any relevant jurisdiction any initial financingstatements or amendments thereto if filed prior to the date hereof.

 

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The Administrative Agent is further authorized tofile with the United States Patent and Trademark Office or United StatesCopyright Office (or any successor office or any similar office in any othercountry) such documents as may be necessary or advisable for the purpose ofperfecting, confirming, continuing, enforcing or protecting the SecurityInterest granted by each Grantor, without the signature of any Grantor, andnaming any Grantor or the Grantors as debtors and the Administrative Agent assecured party.

 

The Security Interests are granted as security onlyand 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 withrespect to or arising out of the Collateral.

 

3. Representations And Warranties.

 

Each Grantor hereby represents and warrants to theAdministrative Agent and each Secured Party that:

 

3.1. Title: No Other Liens. Except for theSecurity Interest granted to the Administrative Agent for the ratable benefitof the Secured Parties pursuant to this Security Agreement, the Liens permittedby the Credit Agreement and any Liens securing Indebtedness which is no longeroutstanding or any Liens with respect to commitments to lend which have beenterminated, such Grantor owns each item of the Collateral free and clear of anyand all Liens or claims of others. No security agreement, financing statementor other public notice with respect to all or any part of the Collateral thatevidences a Lien securing any material Indebtedness is on file or of record inany public office, except such as have been filed in favor of theAdministrative Agent, for the ratable benefit of the Secured Parties, pursuantto 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, theSecurity Interests granted pursuant to this Security Agreement (i) willconstitute valid perfected Security Interests in the Collateral in favor of theAdministrative Agent, for the ratable benefit of the Secured Parties, ascollateral security for the Obligations, upon (A) completion of all filings,registrations, recordings and other actions specified in Section 6 of thePerfection Certificate (as such information is updated pursuant to Section9.1(d) of the Credit Agreement) to the extent that a Security Interest may beperfected by the filing of any UCC financing statement, (B) in the case ofEquipment that is covered by a certificate of title, the filing with theregistrar of motor vehicles or other appropriate authority in the applicablejurisdiction (as specified in the Perfection Certificate (as such informationis updated pursuant to Section 9.1(d) of the Credit Agreement)) of anapplication requesting the notation of the Security Interest created hereunderon such certificate of title and (C) completion of the filing, registration andrecording of a fully executed agreement in the form hereof (or a supplementhereto) and containing a description of all Collateral constitutingIntellectual Property in the United Stated Patent and Trademark Office withinthe three-month period (commencing as of the date hereof) or, in the case of Collateralconstituting Intellectual Property acquired after the date hereof, thereafterpursuant to 35 USC §261 and 15 USC § 1060 and the regulations thereunder withrespect to United States Patents and United States registered Trademarks and inthe United States Copyright Office within the one-month period (commencing asof the date hereof) or, in the case of Collateral constituting IntellectualProperty acquired after the date hereof, thereafter with

 

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respect to United States registered Copyrightspursuant to 17 USC §205 and the regulations thereunder and otherwise as may berequired pursuant to the laws of any other necessary jurisdiction to the extentthat a security interest may be perfected by such filings, registrations andrecordings, and (ii) are prior to all other Liens on the Collateral other thanLiens 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 thisSecurity Agreement (including Security Interests in cash, cash accounts andInvestment Property) by any means other than by (i) filings pursuant to theUniform Commercial Codes of the relevant State(s), (ii) filings with theregistrars of motor vehicles or other appropriate authorities in the relevantjurisdictions, (iii) filings approved by United States government offices withrespect to Intellectual Property or (iv) when applicable, possession by theAdministrative Agent in the United States. No Grantor shall be required tocomplete any filings or other action with respect to the perfection of SecurityInterests in any jurisdiction outside the United States.

 

(c) It is understood and agreed that the Security Interestsin cash, cash accounts and Permitted Investments created hereunder shall notprevent the Grantors from using such assets in the ordinary course of theirrespective businesses.

 

4. Covenants.

 

Each Grantor herebycovenants and agrees with the Administrative Agent and the Secured Partiesthat, from and after the date of this Security Agreement until the Obligationsunder the Credit Documents are paid in full, the Commitments are terminated andno Letter of Credit remains outstanding:

 

4.1. Maintenance ofPerfected Security Interest: Further Documentation. (a) Such Grantor shallmaintain the Security Interest created by this Security Agreement as aperfected Security Interest having at least the priority described in Section3.2 and shall defend such Security Interest against the claims and demands ofall Persons whomsoever, in each case subject to Section 3.2(b).

 

(b)         Such Grantor will furnish to theAdministrative Agent and the Lenders from time to time statements and schedulesfurther identifying and describing the assets and property of such Grantor andsuch other reports in connection therewith as the Administrative Agent mayreasonably request. In addition, within 30 days after the end of each calendarquarter, such Grantor will deliver to the Administrative Agent (i) copies ofall such certificates of title issued during such calendar quarter with thenotation thereon of the Administrative Agent’s Security Interest createdhereunder in the items of Equipment covered hereby and (ii) a written supplementhereto substantially in the form of Annex 2 hereto with respect to anyadditional Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarksand Trademark Licenses acquired by such Grantor after the date hereof, all inreasonable detail.

 

(c)          Subject to clause (d) below andSection 3.2(b), each Grantor agrees that at any time and from time to time, atthe expense of such Grantor, it will execute any and all further documents,financing statements, agreements and instruments, and take all such furtheractions

 

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(including the filing andrecording of financing statements, fixture filings, mortgages, deeds of trustand other documents), which may be required under any applicable law, or whichthe Administrative Agent or the Required Lenders may reasonably request, inorder (x) to grant, preserve, protect and perfect the validity and priority ofthe Security Interests created or intended to be created hereby or (y) toenable the Administrative Agent to exercise and enforce its rights and remedieshereunder with respect to any Collateral, including the filing of any financingor continuation statements under the Uniform Commercial Code in effect in anyjurisdiction with respect to the Security Interests created hereby, all at theexpense of such Grantor.

 

(d)         Notwithstanding anything in thisSection 4.1 to the contrary, (i) with respect to any assets acquired by suchGrantor after the date hereof that are required by the Credit Agreement to besubject 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 isrequired by the Credit Agreement to become a party hereto, the relevant Grantorafter the acquisition or creation thereof shall promptly take all actionsrequired 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 writtennotice of any change (i) in its legal name, (ii) in its jurisdiction ofincorporation or organization, (iii) in the location of its chief executiveoffice, its principal place of business, any office in which it maintains booksor records relating to Collateral owned by it (including the establishment ofany such new office), (iv) in its identity or type of organization or corporatestructure or (v) in its Federal Taxpayer Identification Number ororganizational identification number. Each Grantor agrees promptly to providethe Administrative Agent with certified organizational documents reflecting anyof the changes described in the first sentence of this paragraph. Each Grantoragrees not to effect or permit any change referred to in the preceding sentenceunless all filings have been made under the Uniform Commercial Code orotherwise that are required in order for the Administrative Agent to continueat all times following such change to have a valid, legal and perfectedsecurity interest in all the Collateral having at least the priority describedin Section 3.2. Each Grantor also agrees promptly to notify the AdministrativeAgent if any material portion of the Collateral is damaged or destroyed.

 

4.3. Notices. Each Grantor will advise theAdministrative Agent and the Lenders promptly, in reasonable detail, of anyLien of which it has knowledge (other than the Security Interests createdhereby or Liens permitted under the Credit Agreement) on any of the Collateralwhich would adversely affect, in any material respect, the ability of theAdministrative 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 anyitem of Equipment that is covered by a certificate of title under a statute of anyjurisdiction under the law of which indication of a Security Interest on suchcertificate is required as a condition of perfection thereof, execute and filewith the registrar of motor vehicles or other appropriate authority in suchjurisdiction an application or other document requesting the notation or otherindication of the Security Interest created hereunder on such certificate oftitle.

 

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(b)         Upon the occurrence and during thecontinuation of any Event of Default, all insurance payments in respect of suchEquipment shall be paid to and applied by Administrative Agent as specified inSection 5.5 hereof.

 

(c)          At the Administrative Agent’s requestat any time after the occurrence and during the continuance of an Event ofDefault, each Grantor shall deliver to the Administrative Agent thecertificates of title covering each item of Equipment the perfection of whichis governed by the notation on the certificate of title of the AdministrativeAgent’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 ofDefault, the Administrative Agent shall have the right to make testverifications of the Accounts in any manner and through any medium that itreasonably considers advisable, and each Grantor shall furnish all suchassistance and information as the Administrative Agent may require inconnection with such test verifications. The Administrative Agent shall havethe absolute right to share any information it gains from such inspection orverification with any Secured Party.

 

(b)           The Administrative Agent herebyauthorizes each Grantor to collect such Grantor’s Accounts and theAdministrative Agent may curtail or terminate said authority at any time afterthe occurrence and during the continuance of an Event of Default. If requiredin writing by the Administrative Agent at any time after the occurrence andduring the continuance of an Event of Default, any payments of Accounts, whencollected by any Grantor, (i) shall be forthwith (and, in any event, within twoBusiness Days) deposited by such Grantor in the exact form received, dulyendorsed by such Grantor to the Administrative Agent if required, in aCollateral Account maintained under the sole dominion and control of and onterms and conditions reasonably satisfactory to the Administrative Agent,subject to withdrawal by the Administrative Agent for the account of theSecured 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 theSecured Parties, segregated from other funds of such Grantor. Each such depositof Proceeds of Accounts shall be accompanied by a report identifying inreasonable detail the nature and source of the payments included in thedeposit.

 

(c)           At the Administrative Agent’s requestat any time after the occurrence and during the continuance of an Event ofDefault, each Grantor shall deliver to the Administrative Agent all originaland other documents evidencing, and relating to, the agreements andtransactions which gave rise to the Accounts, including all original orders,invoices and shipping receipts.

 

(d)           Upon the occurrence and during thecontinuance of an Event of Default, a Grantor shall not grant any extension ofthe time of payment of any of the Accounts, compromise, compound or settle thesame for less than the full amount thereof, release, wholly or partly, anyperson liable for the payment thereof, or allow any credit or discountwhatsoever thereon if the Administrative Agent shall have instructed theGrantors not to grant or make any

 

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such extension, credit,discount, compromise, or settlement under any circumstances during thecontinuance of such Event of Default.

 

5.2. Communications with Obligors: GrantorsRemain Liable. (a) The Administrative Agent in its own name or in the nameof others may at any time after the occurrence and during the continuance of anEvent of Default, after giving reasonable notice to the relevant Grantor of itsintent to do so, communicate with obligors under the Accounts to verify withthem to the Administrative Agent’s satisfaction the existence, amount and termsof any Accounts. The Administrative Agent shall have the absolute right toshare any information it gains from such inspection or verification with anySecured Party.

 

(b)         Upon the written request of theAdministrative Agent at any time after the occurrence and during thecontinuance of an Event of Default, each Grantor shall notify obligors on theAccounts that the Accounts have been assigned to the Administrative Agent forthe ratable benefit of the Secured Parties and that payments in respect thereofshall be made directly to the Administrative Agent.

 

(c)          Anything herein to the contrarynotwithstanding, each Grantor shall remain liable under each of the Accounts toobserve and perform all the conditions and obligations to be observed andperformed by it thereunder, all in accordance with the terms of any agreementgiving rise thereto. Neither the Administrative Agent nor any Secured Partyshall have any obligation or liability under any Account (or any agreementgiving rise thereto) by reason of or arising out of this Security Agreement orthe receipt by the Administrative Agent or any Secured Party of any paymentrelating thereto, nor shall the Administrative Agent or any Secured Party beobligated in any manner to perform any of the obligations of any Grantor underor pursuant to any Account (or any agreement giving rise thereto), to make anypayment, to make any inquiry as to the nature or the sufficiency of any paymentreceived by it or as to the sufficiency of any performance by any partythereunder, to present or file any claim, to take any action to enforce anyperformance or to collect the payment of any amounts which may have beenassigned to it or to which it may be entitled at any time or times.

 

5.3. Proceeds to be Turned Over To AdministrativeAgent. In addition to the rights of the Administrative Agent and theSecured Parties specified in Section 5.1 with respect to payments of Accounts,if an Event of Default shall occur and be continuing and the AdministrativeAgent so requires by notice in writing to the relevant Grantor (it beingunderstood that the exercise of remedies by the Secured Parties in connectionwith an Event of Default under Section 11.5 of the Credit Agreement shall bedeemed to constitute a request by the Administrative Agent for the purposes ofthis sentence and in such circumstances, no such written notice shall berequired), all Proceeds received by any Grantor consisting of cash, checks andother near-cash items shall be held by such Grantor in trust for theAdministrative Agent and the Secured Parties, segregated from other funds ofsuch Grantor, and shall, forthwith upon receipt by such Grantor, be turned overto the Administrative Agent in the exact form received by such Grantor (dulyendorsed by such Grantor to the Administrative Agent, if required). AllProceeds received by the Administrative Agent hereunder shall be held by theAdministrative Agent in a Collateral Account maintained under its sole dominionand control and on terms and conditions reasonably satisfactory to theAdministrative Agent. All Proceeds while held by the Administrative Agent in aCollateral Account (or by such Grantor in trust for the Administrative

 

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Agent and the Secured Parties) shall continue to beheld as collateral security for all the Obligations and shall not constitutepayment thereof until applied as provided in Section 5.5.

 

5.4. Application of Proceeds. TheAdministrative Agent shall apply the proceeds of any collection or sale of theCollateral as well as any Collateral consisting of cash, at any time afterreceipt as follows:

 

(i)            first, to the payment of allreasonable and documented costs and expenses incurred by the AdministrativeAgent in connection with such collection or sale or otherwise in connectionwith this Security Agreement, the other Credit Documents or any of theObligations, including all court costs and the reasonable fees and expenses ofits agents and legal counsel, the repayment of all advances made by theAdministrative Agent hereunder or under any other Credit Document on behalf ofany Grantor and any other reasonable and documented costs or expenses incurredin connection with the exercise of any right or remedy hereunder or under anyother Credit Document;

 

(ii)           second, to the Secured Parties, anamount 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, thenratably (without priority of any one over any other) to such Secured Parties inproportion to the unpaid amounts thereof; and

 

(iii)          third, any surplus then remainingshall be paid to the Grantors or their successors or assigns or to whomsoevermay be lawfully entitled to receive the same or as a court of competentjurisdiction may direct.

 

Upon any sale of the Collateral by theAdministrative Agent (including pursuant to a power of sale granted by statuteor under a judicial proceeding), the receipt of the Administrative Agent or ofthe officer making the sale shall be a sufficient discharge to the purchaser orpurchasers of the Collateral so sold and such purchaser or purchasers shall notbe obligated to see to the application of any part of the purchase money paidover to the Administrative Agent or such officer or be answerable in any wayfor the misapplication thereof.

 

5.5. Code and Other Remedies. If an Event ofDefault shall occur and be continuing, the Administrative Agent may exercise inrespect of the Collateral, in addition to all other rights and remediesprovided for herein or otherwise available to it, all the rights and remediesof a secured party upon default under the NY UCC or any other applicable lawand also may without notice except as specified below, sell the Collateral orany part thereof in one or more parcels at public or private sale, at anyexchange broker’s board or at any of the Administrative Agent’s offices orelsewhere, for cash, on credit or for future delivery, at such price or pricesand upon such other terms as are commercially reasonable irrespective of theimpact of any such sales on the market price of the Collateral. TheAdministrative Agent shall be authorized at any such sale (if it deems it advisableto do so) to restrict the prospective bidders or purchasers of Collateral toPersons who will represent and agree that they are purchasing the Collateralfor their own account for investment and not with a view to the distribution orsale thereof, and, upon consummation of any such sale, the Administrative Agentshall have the right

 

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to assign, transfer and deliver to the purchaser orpurchasers thereof the Collateral so sold. Each purchaser at any such saleshall hold the property sold absolutely free from any claim or right on thepart of any Grantor, and each Grantor hereby waives (to the extent permitted bylaw) all rights of redemption, stay and/or appraisal that it now has or may atany time in the future have under any rule of law or statute now existing orhereafter enacted. The Administrative Agent or any Secured Party shall have theright upon any such public sale, and, to the extent permitted by law, upon anysuch 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) thesatisfaction 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 Section5.4(ii), pay the purchase price by crediting the amount thereof against theObligations. Each Grantor agrees that, to the extent notice of sale shall berequired by law, at least ten days’ notice to such Grantor of the time andplace of any public sale or the time after which any private sale is to be madeshall constitute reasonable notification. The Administrative Agent shall not beobligated to make any sale of Collateral regardless of notice of sale havingbeen given. The Administrative Agent may adjourn any public or private salefrom time to time by announcement at the time and place fixed therefor, andsuch sale may, without further notice, be made at the time and place to whichit was so adjourned. To the extent permitted by law, each Grantor hereby waivesany claim against the Administrative Agent arising by reason of the fact thatthe price at which any Collateral may have been sold at such a private sale wasless than the price that might have been obtained at a public sale, even if theAdministrative Agent accepts the first offer received and does not offer suchCollateral to more than one offeree. Each Grantor further agrees, at theAdministrative Agent’s request, to assemble the Collateral and make itavailable to the Administrative Agent at places which the Administrative Agentshall reasonably select, whether at such Grantor’s premises or elsewhere. TheAdministrative Agent shall apply the net proceeds of any action taken by itpursuant to this Section 5.5 in accordance with the provisions of Section 5.4.

 

5.6. Deficiency. Each Grantor shall remainliable for any deficiency if the proceeds of any sale or other disposition ofthe Collateral are insufficient to pay its Obligations and the fees anddisbursements of any attorneys employed by the Administrative Agent or anySecured Party to collect such deficiency.

 

5.7. Amendments, etc. with Respectto the Obligations; Waiver of Rights. Each Grantor shall remain obligatedhereunder notwithstanding that, without any reservation of rights against anyGrantor and without notice to or further assent by any Grantor, (a) any demandfor payment of any of the Obligations made by the Administrative Agent or anyother 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 partthereof, or any collateral security or guarantee therefor or right of offsetwith respect thereto, may, from time to time, in whole or in part, be renewed,extended, amended, modified, accelerated, compromised, waived, surrendered orreleased by the Administrative Agent or any other Secured Party, (c) the CreditAgreement, the other Credit Documents, the Letters of Credit and any otherdocuments executed and delivered in connection therewith and the HedgeAgreements and any other documents executed and delivered in connectiontherewith and any documents entered into with the Administrative Agent or anyof its Affiliates in connection with treasury, depositary or cash managementservices or in connection with any automated clearinghouse transfer of fundsmay be amended, modified, supplemented or terminated, in whole or in part, asthe Administrative Agent (or the Required

 

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Lenders, as the case may be, or, in the case of anyHedge Agreement or documents entered into with the Administrative Agent or anyof its Affiliates in connection with treasury, depositary or cash managementservices or in connection with any automated clearinghouse transfer of funds,the party thereto) may deem advisable from time to time, and (d) any collateralsecurity, guarantee or right of offset at any time held by the AdministrativeAgent or any other Secured Party for the payment of the Obligations may besold, exchanged, waived, surrendered or released. Neither the AdministrativeAgent 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 theObligations or for this Security Agreement or any property subject thereto.When making any demand hereunder against any Grantor, the Administrative Agentor any other Secured Party may, but shall be under no obligation to, make asimilar demand on the US Borrower or any Grantor or grantor, and any failure bythe Administrative Agent or any other Secured Party to make any such demand orto collect any payments from the US Borrower or any Grantor or grantor or anyrelease of the US Borrower or any Grantor or grantor shall not relieve anyGrantor in respect of which a demand or collection is not made or any Grantornot so released of its several obligations or liabilities hereunder, and shallnot impair or affect the rights and remedies, express or implied, or as amatter of law, of the Administrative Agent or any other Secured Party againstany Grantor. For the purposes hereof “demand” shall include the commencementand continuance of any legal proceedings.

 

6. The Administrative Agent.

 

6.1. Administrative Agent’s Appointment asAttorney-in-Fact, etc.              (a) Each Grantor hereby appoints, whichappointment is irrevocable and coupled with an interest, effective upon andduring the occurrence of an Event of Default, the Administrative Agent and anyofficer or agent thereof, with full power of substitution, as its true andlawful attorney-in-fact with full irrevocable power and authority in the placeand stead of such Grantor and in the name of such Grantor or otherwise, for thepurpose of carrying out the terms of this Security Agreement, to take any andall appropriate action and to execute any and all documents and instrumentswhich may be necessary or desirable to accomplish the purposes of this SecurityAgreement, and, without limiting the generality of the foregoing, each Grantorhereby gives the Administrative Agent the power and right, on behalf of suchGrantor, either in the Administrative Agent’s name or in the name of suchGrantor or otherwise, without assent by such Grantor, to do any or all of thefollowing, in each case after and during the occurrence of an Event of Defaultand after written notice by the Administrative Agent of its intent to do so:

 

(i)            take possession of and endorse andcollect any checks, drafts, notes, acceptances or other instruments for the paymentof moneys due under any Account or with respect to any other Collateral andfile any claim or take any other action or proceeding in any court of law orequity or otherwise deemed appropriate by the Administrative Agent for thepurpose of collecting any and all such moneys due under any Account or withrespect to any other Collateral whenever payable;

 

(ii)           in the case of any IntellectualProperty, execute and deliver, and have recorded, any and all agreements,instruments, documents and papers as the Administrative Agent may request toevidence the Administrative Agent’s and the Secured Parties’ Security Interestin such Intellectual Property and the

 

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goodwill and generalintangibles of such Grantor relating thereto or represented thereby;

 

(iii)          pay or discharge taxes and Lienslevied or placed on or threatened against the Collateral;

 

(iv)          execute, in connection with any saleprovided for in Section 5.5, any endorsements, assignments or other instrumentsof conveyance or transfer with respect to the Collateral;

 

(v)           obtain and adjust insurance requiredto be maintained by such Grantor or paid to the Administrative Agent pursuantto Section 4.4;

 

(vi)          direct any party liable for anypayment under any of the Collateral to make payment of any and all moneys dueor to become due thereunder directly to the Administrative Agent or as theAdministrative Agent shall direct;

 

(vii)         ask or demand for, collect and receivepayment of and receipt for, any and all moneys, claims and other amounts due orto become due at any time in respect of or arising out of any Collateral;

 

(viii)        sign and endorse any invoices, freightor express bills, bills of lading, storage or warehouse receipts, draftsagainst debtors, assignments, verifications, notices and other documents inconnection with any of the Collateral;

 

(ix)           commence and prosecute any suits,actions or proceedings at law or in equity in any court of competentjurisdiction to collect the Collateral or any portion thereof and to enforceany other right in respect of any Collateral;

 

(x)            defend any suit, action orproceeding brought against such Grantor with respect to any Collateral (withsuch Grantor’s consent to the extent such action or its resolution could materiallyaffect such Grantor or any of its Affiliates in any manner other than withrespect to its continuing rights in such Collateral);

 

(xi)           settle, compromise or adjust any suchsuit, action or proceeding and, in connection therewith, give such dischargesor releases as the Administrative Agent may deem appropriate (with such Grantor’sconsent to the extent such action or its resolution could materially affectsuch Grantor or any of its Affiliates in any manner other than with respect toits continuing rights in such Collateral);

 

(xii)          assign any Copyright, Patent orTrademark (along with the goodwill of the business to which any such Copyright,Patent or Trademark pertains), throughout the world for such term or terms, onsuch conditions, and in such manner, as the Administrative Agent shall in itssole discretion determine; and

 

(xiii)         generally, sell, transfer, pledge andmake any agreement with respect to or otherwise deal with any of the Collateralas fully and completely as though

 

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the Administrative Agentwere the absolute owner thereof for all purposes, and do, at the AdministrativeAgent’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 theSecured Parties’ Security Interests therein and to effect the intent of thisSecurity Agreement, all as fully and effectively as such Grantor might do.

 

Anything in this Section 6.1(a) to the contrarynotwithstanding, the Administrative Agent agrees that it will not exercise anyrights under the power of attorney provided for in this Section 6.1(a) unlessan Event of Default shall have occurred and be continuing.

 

(b)           If any Grantor fails to perform orcomply with any of its agreements contained herein, the Administrative Agent,at its option, but without any obligation so to do, may perform or comply, orotherwise cause performance or compliance, with such agreement.

 

(c)           The expenses of the AdministrativeAgent incurred in connection with actions undertaken as provided in thisSection 6.1, together with interest thereon at a rate per annum equal to thehighest rate per annum at which interest would then be payable on any categoryof past due ABR Loans under the Credit Agreement, from the date of payment bythe Administrative Agent to the date reimbursed by the relevant Grantor, shallbe payable by such Grantor to the Administrative Agent on demand.

 

(d)           Each Grantor hereby ratifies all thatsaid attorneys shall lawfully do or cause to be done by virtue hereof. Allpowers, authorizations and agencies contained in this Security Agreement arecoupled with an interest and are irrevocable until this Security Agreement isterminated and the Security Interests created hereby are released.

 

6.2. Duty of Administrative Agent. TheAdministrative Agent’s sole duty with respect to the custody, safekeeping andphysical preservation of the Collateral in its possession, under Section 9-207of the NY UCC or otherwise, shall be to deal with it in the same manner as theAdministrative Agent deals with similar property for its own account. TheAdministrative Agent shall be deemed to have exercised reasonable care in thecustody and preservation of any Collateral in its possession if such Collateralis accorded treatment substantially equal to that which the AdministrativeAgent accords its own property. Neither the Administrative Agent, any SecuredParty nor any of their respective officers, directors, employees or agentsshall be liable for failure to demand, collect or realize upon any of theCollateral or for any delay in doing so or shall be under any obligation tosell or otherwise dispose of any Collateral upon the request of any Grantor orany other Person or to take any other action whatsoever with regard to theCollateral or any part thereof. The powers conferred on the AdministrativeAgent and the Secured Parties hereunder are solely to protect the AdministrativeAgent’s and the Secured Parties’ interests in the Collateral and shall notimpose any duty upon the Administrative Agent or any Secured Party to exerciseany such powers. The Administrative Agent and the Secured Parties shall beaccountable only for amounts that they actually receive as a result of theexercise 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 failureto act hereunder, except for their own gross negligence or willful misconduct.

 

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6.3. Authority of Administrative Agent. EachGrantor acknowledges that the rights and responsibilities of the AdministrativeAgent under this Security Agreement with respect to any action taken by theAdministrative Agent or the exercise or non-exercise by the AdministrativeAgent of any option, voting right, request, judgment or other right or remedyprovided for herein or resulting or arising out of this Security Agreementshall, as between the Administrative Agent and the Secured Parties, be governedby the Credit Agreement and by such other agreements with respect thereto asmay exist from time to time among them, but, as between the AdministrativeAgent and the Grantors, the Administrative Agent shall be conclusively presumedto be acting as agent for the Secured Parties with full and valid authority soto act or refrain from acting, and no Grantor shall be under any obligation, orentitlement, to make any inquiry respecting such authority.

 

6.4. Security Interest Absolute. All rightsof the Administrative Agent hereunder, the security interest and allobligations of the Grantors hereunder shall be absolute and unconditional.

 

6.5. Continuing Security Interest; AssignmentsUnder the Credit Agreement  Release.(a) This Security Agreement shall remain in full force and effect and bebinding in accordance with and to the extent of its terms upon each Grantor andthe successors and assigns thereof and shall inure to the benefit of theAdministrative Agent and the other Secured Parties and their respectivesuccessors, indorsees, transferees and assigns until all Obligations under theCredit Documents and the obligations of each Grantor under this SecurityAgreement shall have been satisfied by payment in full, the Commitments shallbe terminated and no Letters of Credit shall be outstanding, notwithstandingthat from time to time during the term of the Credit Agreement and any HedgeAgreement the Credit Parties may be free from any Obligations. This SecurityAgreement and the security interest granted hereby shall terminate on the firstdate on which all the Obligations under the Credit Documents shall have beensatisfied by payment in full, the Commitments shall be terminated and noLetters of Credit shall be outstanding.

 

(b)                A Subsidiary Grantor shallautomatically be released from its obligations hereunder and the SecurityInterest in the Collateral of such Subsidiary Grantor shall be automaticallyreleased upon the consummation of any transaction permitted by the CreditAgreement as a result of which such Subsidiary Grantor ceases to be a DomesticSubsidiary of the US Borrower.

 

(c)                 Upon any sale or other transferby 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 securityinterest granted hereby in any Collateral pursuant to Section 14.1 of theCredit Agreement, the Security Interest in such Collateral shall be automaticallyreleased and such Collateral sold free and clear of the Lien and SecurityInterests created hereby.

 

(d)                In connection with anytermination or release pursuant to paragraph (a), (b) or (c), theAdministrative Agent shall execute and deliver to any Grantor, at such Grantor’sexpense, all documents that such Grantor shall reasonably request to evidencesuch termination or release. Any execution and delivery of documents pursuantto this Section 6.5 shall be without recourse to or warranty by theAdministrative Agent.

 

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6.6. Reinstatement. This Security Agreementshall continue to be effective, or be reinstated, as the case may be, if at anytime payment, or any part thereof, of any of the Obligations is rescinded ormust otherwise be restored or returned by the Administrative Agent or any otherSecured Party upon the insolvency, bankruptcy, dissolution, liquidation orreorganization of the US Borrower or any other Credit Party, or *upon*or as a result of the appointment ofa receiver, intervenor or conservator of, or trustee or similar officer for,the US Borrower or any other Credit Party or any substantial part of itsproperty, or otherwise, all as though such payments had not been made.

 

7. Administrative Agent As Agent.

 

(a)           Credit Suisse First Boston has beenappointed to act as Administrative Agent hereunder by the Lenders and, by theiracceptance of the benefits hereof, the other Secured Parties. TheAdministrative Agent shall be obligated, and shall have the right hereunder, tomake demands, to give notices, to exercise or refrain from exercising anyrights, and to take or refrain from taking any action (including the release orsubstitution of Collateral), solely in accordance with this Security Agreementand the Credit Agreement, provided that the Administrative Agent shallexercise, or refrain from exercising, any remedies provided for in Section 5 inaccordance with the instructions of (i) Required Lenders or (ii) after thetermination of this Security Agreement. In furtherance of the foregoingprovisions of this Section 7(a), each Secured Party, by its acceptance of thebenefits hereof, agrees that it shall have no right individually to realizeupon any of the Collateral hereunder, it being understood and agreed by suchSecured Party that all rights and remedies hereunder may be exercised solely bythe Administrative Agent for the ratable benefit of the Lenders and SecuredParties in accordance with the terms of this Section 7(a).

 

(b)           The Administrative Agent shall at alltimes be the same Person that is the Administrative Agent under the CreditAgreement. Written notice of resignation by the Administrative Agent pursuantto Section 12.9 of the Credit Agreement shall also constitute notice ofresignation as Administrative Agent under this Security Agreement; removal ofthe Administrative Agent shall also constitute removal as Administrative Agentunder this Security Agreement; and appointment of a successor AdministrativeAgent pursuant to Section 12.9 of the Credit Agreement shall also constituteappointment of a successor Administrative Agent under this Security Agreement.Upon the acceptance of any appointment as Administrative Agent under Section12.9 of the Credit Agreement by a successor Administrative Agent, thatsuccessor Administrative Agent shall thereupon succeed to and become vestedwith all the rights, powers, privileges and duties of the retiring or removedAdministrative Agent under this Security Agreement, and the retiring or removedAdministrative Agent under this Security Agreement shall promptly (i) transferto such successor Administrative Agent all sums, securities and other items ofCollateral held hereunder, together with all records and other documentsnecessary or appropriate in connection with the performance of the duties ofthe successor Administrative Agent under this Security Agreement, and (ii)execute and deliver to such successor Administrative Agent such amendments tofmancing statements and take such other actions, as may be necessary orappropriate in connection with the assignment to such successor AdministrativeAgent of the Security Interests created hereunder, whereupon such retiring orremoved Administrative Agent shall be discharged from its duties andobligations under this Security Agreement. After any retiring or removedAdministrative Agent’s resignation or

 

20

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removal hereunder asAdministrative Agent, the provisions of this Security Agreement shall inure toits benefit as to any actions taken or omitted to be taken by it under thisSecurity Agreement while it was Administrative Agent hereunder.

 

(c) The Administrative Agent shall not bedeemed to have any duty whatsoever with respect to any Secured Party that is acounterparty to a Hedge Agreement the obligations under which constituteObligations, until it shall have received written notice in form and substancesatisfactory to the Administrative Agent from a Grantor or any such SecuredParty as to the existence and terms of the applicable Hedge Agreement.

 

8. Miscellaneous.

 

8.1. Amendments in Writing. None of the termsor provisions of this Security Agreement may be waived, amended, supplementedor otherwise modified except by a written instrument executed by the affectedGrantor and the Administrative Agent in accordance with Section 14.1 ofthe Credit Agreement.

 

8.2. Notices. All notices, requests and demandspursuant hereto shall be made in accordance with Section 14.2 of theCredit Agreement. All communications and notices hereunder to any SubsidiaryGrantor shall be given to it in care of the US Borrower at the US Borrower’saddress set forth in Section 14.2 of the Credit Agreement.

 

8.3. No Waiver by Course of Conduct; CumulativeRemedies. Neither the Administrative Agent nor any Secured Party shall byany act (except by a written instrument pursuant to Section 8.1 hereof),delay, indulgence, omission or otherwise be deemed to have waived any right orremedy hereunder or to have acquiesced in any Default or Event of Default or inany 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 anyother Secured Party, any right, power or privilege hereunder shall operate as awaiver thereof. No single or partial exercise of any right, power or privilegehereunder shall preclude any other or further exercise thereof or the exerciseof any other right, power or privilege. A waiver by the Administrative Agent orany other Secured Party of any right or remedy hereunder on any one occasionshall not be construed as a bar to any right or remedy that the AdministrativeAgent or such other Secured Party would otherwise have on any future occasion.The rights, remedies, powers and privileges herein provided are cumulative, maybe exercised singly or concurrently and are not exclusive of any other rightsor remedies provided by law.

 

8.4. Enforcement Expenses; Indemnification. (a) EachGrantor agrees to pay any and all expenses (including all reasonable fees anddisbursements of counsel) that may be paid or incurred by any Secured Party inenforcing, or obtaining advice of counsel in respect of, any rights withrespect to, or collecting, any or all of the Obligations and/or enforcing anyrights with respect to, or collecting against, such Grantor under this SecurityAgreement.

 

(b)         Each Grantor agrees to pay, and to savethe Administrative Agent and the Secured Parties harmless from, any and allliabilities with respect to, or resulting from any delay in paying, any and allstamp, excise, sales or other taxes which may be payable or determined to

 

21

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be payable with respect toany of the Collateral or in connection with any of the transactionscontemplated by this Security Agreement.

 

(c)          Each Grantor agrees to pay, and tosave the Administrative Agent and the Secured Parties harmless from, any andall liabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses or disbursements of any kind or nature whatsoever withrespect to the execution, delivery, enforcement, performance and administrationof this Security Agreement to the extent either of the Borrowers would berequired to do so pursuant to Section 12.7 of the Credit Agreement.

 

(d)         The agreements in this Section 8.4shall survive repayment of the Obligations and all other amounts payable underthe Credit Agreement and the other Credit Documents.

 

8.5. Successors and Assigns. The provisionsof this Security Agreement shall be binding upon and inure to the benefit ofthe parties hereto and their respective successors and assigns permittedhereby, except that no Grantor may assign, transfer or delegate any of itsrights or obligations under this Security Agreement without the prior writtenconsent of the Administrative Agent except pursuant to a transaction permittedby the Credit Agreement.

 

8.6. Counterparts. This Security Agreementmay be executed by one or more of the parties to this Security Agreement on anynumber of separate counterparts (including by facsimile or other electronictransmission), and all of said counterparts taken together shall be deemed toconstitute one and the same instrument. A set of the copies of this SecurityAgreement signed by all the parties shall be lodged with the AdministrativeAgent and the US Borrower.

 

8.7. Severability. Any provision of thisSecurity Agreement that is prohibited or unenforceable in any jurisdictionshall, as to such jurisdiction, be ineffective to the extent of suchprohibition or unenforceability without invalidating the remaining provisionshereof, and any such prohibition or unenforceability in any jurisdiction shallnot invalidate or render unenforceable such provision in any otherjurisdiction. The parties hereto shall endeavor in good-faith negotiations toreplace the invalid, illegal or unenforceable provisions with valid provisionsthe economic effect of which comes as close as possible to that of the invalid,illegal or unenforceable provisions.

 

8.8. Section Headings. The Section headingsused in this Security Agreement are for convenience of reference only and arenot to affect the construction hereof or be taken into consideration in theinterpretation hereof.

 

8.9. Integration. This Security Agreementrepresents the agreement of each of the Grantors with respect to the subjectmatter hereof and there are no promises, undertakings, representations orwarranties by the Administrative Agent or any other Secured Party relative to thesubject matter hereof not expressly set forth or referred to herein or in theother Credit Documents.

 

8.10. GOVERNING LAW. THIS SECURITY AGREEMENTAND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED

 

22

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BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCEWITH, 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 inany legal action or proceeding relating to this Security Agreement and theother Credit Documents to which it is a party, or for recognition andenforcement of any judgment in respect thereof, to the non-exclusive generaljurisdiction of the courts of the State of New York, the courts of the UnitedStates of America for the Southern District of New York, and appellate courtsfrom any thereof;

 

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

 

(c)          agrees that service of process in anysuch action or proceeding may be effected by mailing a copy thereof byregistered or certified mail (or any substantially similar form of mail),postage prepaid, to such Grantor at its address referred to in Section 8.2or at such other address of which the Administrative Agent shall have beennotified pursuant thereto;

 

(d)         agrees that nothing herein shall affectthe right of the Administrative Agent or any other Secured Party to effectservice of process in any other manner permitted by law or shall limit theright of the Administrative Agent or any Secured Party to sue in any otherjurisdiction; and

 

(e)          waives, to the maximum extent notprohibited by law, any right it may have to claim or recover in any legalaction or proceeding referred to in this Section 8.11 any special,exemplary, punitive or consequential damages.

 

8.12. Acicnowledgments. Each Grantor herebyacknowledges that:

 

(a)          it has been advised by counsel in thenegotiation, execution and delivery of this Security Agreement and the otherCredit Documents to which it is a party;

 

(b)         neither the Administrative Agent norany other Secured Party has any fiduciary relationship with or duty to anyGrantor arising out of or in connection with this Security Agreement or any ofthe other Credit Documents, and the relationship between the Grantors, on theone hand, and the Administrative Agent and the other Secured Parties, on theother hand, in connection herewith or therewith is solely that of debtor andcreditor; and

 

(c) no joint venture is created hereby or bythe other Credit Documents or otherwise exists by virtue of the transactionscontemplated hereby among the Lenders and any other Secured Party or among theGrantors and the Lenders and any other Secured Party.

 

8.13. Additional Grantors. Each Subsidiary ofthe US Borrower that is required to become a party to this Security Agreementpursuant to Section 9.11 of the Credit Agreement

 

23

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shall become a Grantor, with the same force andeffect as if originally named as a Grantor herein, for all purposes of thisAgreement upon execution and delivery by such Subsidiary of a Supplementsubstantially in the form of Annex 1 hereto. The execution and delivery of anyinstrument adding an additional Grantor as a party to this Security Agreementshall not require the consent of any other Grantor hereunder. The rights andobligations of each Grantor hereunder shall remain in full force and effectnotwithstanding the addition of any new Grantor as a party to this SecurityAgreement.

 

8.14. WAIVER OF JURY TRIAL. EACH GRANTORHEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTIONOR PROCEEDING RELATING TO THIS SECURITY AGREEMENT, ANY OTHER CREDIT DOCUMENTAND FOR ANY COUNTERCLAIM THEREIN.

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

ANNEX 1 TO THE

SECURITY AGREEMENT

 

SUPPLEMENTNO. [  ] dated as of[                  ],tothe Security Agreement dated as of July 30, 2004, among ROCKWOODSPECIALTIES 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 suchsubsidiary individually a “Subsidiary Grantor” and, collectively, the “SubsidiaryGrantors”; the Subsidiary Grantors, Holdings and the US Borrower arereferred to collectively herein as the “Grantors”), CREDIT SUISSE FIRSTBOSTON, acting through its Cayman Islands Branch, as administrative agent (insuch 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 CreditAgreement dated as of July 30, 2004 (as amended, supplemented or otherwisemodified from time to time, the “Credit Agreement”), among the USBorrower, Rockwood Specialties Limited, a company incorporated under the lawsof England and Wales (the “UK Borrower” and, together with the USBorrower, the “Borrowers”), Holdings, the Lenders, the AdministrativeAgent, UBS Securities LLC and Goldman Sachs Credit Partners L.P., asco-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 andthe Administrative Agent.

 

B.      Capitalized terms used herein and nototherwise defined herein shall have the meanings assigned to such terms in theSecurity Agreement.

 

C.      The Grantors have entered into theSecurity Agreement in order to induce Administrative Agent, the Co-SyndicationAgents, the Lenders and the Letter of Credit Issuer to enter into the CreditAgreement and to induce the Lenders and the Letter of Credit Issuer to maketheir respective Extensions of Credit to the Borrowers under the CreditAgreement and to induce one or more Lenders or Affiliates of Lenders to enterinto Hedge Agreements with the Borrowers and/or the Restricted Subsidiaries.

 

D.      Section 9.11 of the Credit Agreementand Section 8.13 of the Security Agreement provide that each Subsidiary ofthe US Borrower that is required to become a party to the Security Agreementpursuant 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, forall purposes of the Security Agreement upon execution and delivery by suchSubsidiary of an instrument in the form of this Supplement. Each undersignedSubsidiary (each a “New Grantor”) is executing this Supplement inaccordance with the requirements of the Security Agreement to become aSubsidiary Grantor under the Security Agreement in order to induce the Lendersand

 

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the Letter of CreditIssuer to make additional Extensions of Credit and as consideration forExtensions of Credit previously made.

 

Accordingly, the Administrative Agent and the NewGrantors agree as follows:

 

SECTION 1. In accordance with Section 8.13of the Security Agreement, each New Grantor by its signature below becomes aGrantor under the Security Agreement with the same force and effect as iforiginally named therein as a Grantor and each New Grantor hereby (a) agreesto all the terms and provisions of the Security Agreement applicable to it as aGrantor thereunder and (b) represents and warrants that therepresentations and warranties made by it as a Grantor thereunder are true andcorrect on and as of the date hereof. In furtherance of the foregoing, each NewGrantor, as security for the payment and performance in full of theObligations, does hereby bargain, sell, convey, assign, set over, mortgage,pledge, hypothecate and transfer to the Administrative Agent, and hereby grantsto the Administrative Agent, for the ratable benefit of the Secured Parties, aSecurity Interest in all of the Collateral of such New Grantor. Each referenceto a “Grantor” in the Security Agreement shall be deemed to include each NewGrantor. The Security Agreement is hereby incorporated herein by reference.

 

SECTION 2. Each New Grantor represents andwarrants to the Administrative Agent and the other Secured Parties that thisSupplement has been duly authorized, executed and delivered by it andconstitutes its legal, valid and binding obligation, enforceable against it inaccordance with its terms.

 

SECTION 3. This Supplement may be executed byone or more of the parties to this Supplement on any number of separatecounterparts (including by facsimile or other electronic transmission), and allof said counterparts taken together shall be deemed to constitute one and thesame instrument. A set of the copies of this Supplement signed by all theparties shall be lodged with the Administrative Agent and the US Borrower. ThisSupplement shall become effective as to each New Grantor when theAdministrative Agent shall have received counterparts of this Supplement that,when taken together, bear the signatures of such New Grantor and theAdministrative Agent.

 

SECTION 4. Each New Grantor hereby representsand warrants that (a) set forth on Schedule I attached hereto is a trueand correct schedule of the location of any and all Collateral of such NewGrantor, (b) set forth under its signature hereto is (i) the legalname of such New Grantor, (ii) the jurisdiction of incorporation ororganization of such New Grantor, (iii) the true and correct location ofthe chief executive office and principal place of business and any office inwhich it maintains books or records relating to Collateral owned by it, (iv) theidentity or type of organization or corporate structure of such New Grantor and(v) the Federal Taxpayer Identification Number and organizational numberof such New Grantor and (c) as of the date hereof (i) Schedule IIhereto sets forth all of each New Grantor’s Copyright Licenses, (ii) ScheduleIII hereto sets forth, in proper form for filing with the United StatesCopyright Office, all of each New Grantor’s Copyrights (and all applicationstherefor), (iii) Schedule IV hereto sets forth all of each New Grantor’sPatent Licenses, (iv) Schedule V hereto sets forth, in proper form forfiling with the United States Patent and Trademark Office, all of each NewGrantor’s Patents (and all applications therefor), (v) Schedule VI heretosets forth all of each New Grantor’s Trademark Licenses, (vi) Schedule VIIhereto sets forth, in proper form for filing

 

2

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with the United States Patent and Trademark Office,all of each New Grantor’s Trademarks (and all applications therefor).

 

SECTION 5. Except as expressly supplementedhereby, the Security Agreement shall remain in full force and effect.

 

SECTION 6. THIS SUPPLEMENT AND THE RIGHTS ANDOBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED ANDINTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

 

SECTION 7. Any provision of this Supplementthat is prohibited or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof and inthe Security Agreement, and any such prohibition or unenforceability in anyjurisdiction shall not invalidate or render unenforceable such provision in anyother jurisdiction. The parties hereto shall endeavor in good-faithnegotiations to replace the invalid, illegal or unenforceable provisions withvalid provisions the economic effect of which comes as close as possible tothat of the invalid, illegal or unenforceable provisions.

 

SECTION 8. All notices, requests and demandspursuant hereto shall be made in accordance with Section 14.2 of theCredit Agreement. All communications and notices hereunder to each New Grantorshall be given to it in care of the US Borrower at the US Borrower’s addressset forth in Section 14.2 of the Credit Agreement.

 

SECTION 9. Each New Grantor agrees to reimbursethe Administrative Agent for its reasonable out-of-pocket expenses inconnection with this Supplement, including the reasonable fees, other chargesand disbursements of counsel for the Administrative Agent.

 

IN WITNESS WHEREOF, each New Grantor and theAdministrative Agent have duly executed this Supplement to the SecurityAgreement 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: |

 

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|   |   |   | Title: |
|--------|--------|--------|--------|
|   |   |   |   |
|   |   |
|   |   | By     |   |
|   |   |   |   |
|   |   |   | Name:  |
|   |   |   | Title: |

 

4

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE I

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

COLLATERAL

 

Legal Name Jurisdiction of Location of Chief

Incorporation or Executive Office Organization andPrincipal

Place of Business

 

 

Type of Organization or Corporate Structure

 

Federal Taxpayer Identification Number and  Organizational Identification  Number

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE II

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

COPYRIGHT LICENSES

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE III

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

COPYRIGHTS

 
| ** **                        | ** ** | ** ** | ** ** | **Registration** |
|-----------------------------------|------------|------------|------------|------------------|
| **Registered Owner/Grantor** | ** ** | **Title**  | ** ** | **Number**       |
|                              |       |       |       |             |
|                              |       |       |       |             |
|                              |       |       |       |             |

** **

----

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE IV

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

PATENT LICENSES

 

----

 

ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE V

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

PATENTS

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE VI

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

TRADEMARK LICENSES

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE VII

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

TRADEMARKS

 

*Domestic Trademarks*

 

| **Registered**    | ** ** | ** **    | ** ** | **Registration** | ** ** | **Application** |
|-------------------|------------|---------------|------------|------------------|------------|-----------------|
| **Owner/Grantor** | ** ** | **Trademark** | ** ** | **No.**          | ** ** | **No.**         |
|              |       |          |       |             |       |            |
|              |       |          |       |             |       |            |
|              |       |          |       |             |       |            |

 

*Foreign Trademarks*

 

| **Registered**    | ** ** | ** **    | ** ** | **Registration** | ** ** | **Application Country** |
|-------------------|------------|---------------|------------|------------------|------------|-------------------------|
| **Owner/Grantor** | ** ** | **Trademark** | ** ** | **No.**          | ** ** | **No.**                 |
|              |       |          |       |             |       |                    |
|              |       |          |       |             |       |                    |
|              |       |          |       |             |       |                    |

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

ANNEX 2 TO THE

SECURITY AGREEMENT

 

SUPPLEMENTNO. [ ] dated as of[          ], to the SecurityAgreement 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 suchsubsidiary individually a “Subsidiary Grantor” and, collectively, the “SubsidiaryGrantors”; the Subsidiary Grantors, Holdings and the US Borrower arereferred to collectively herein as the “Grantors”), CREDIT SUISSE FIRSTBOSTON, acting through its Cayman Islands Branch, as administrative agent (insuch 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 CreditAgreement dated as of July 30, 2004 (as amended, supplemented or otherwisemodified from time to time, the “Credit Agreement”), among the USBorrower, Rockwood Specialties Limited, a company incorporated under the lawsof England and Wales (the “UK Borrower” and, together with the USBorrower, the “Borrowers”), Holdings, the Lenders, the AdministrativeAgent, UBS Securities LLC and Goldman Sachs Credit Partners L.P., asco-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 andthe Administrative Agent.

 

B.        Capitalized terms used herein and nototherwise defined herein shall have the meanings assigned to such terms in theSecurity Agreement.

 

C.        The Grantors have entered into theSecurity Agreement in order to induce the Administrative Agent, theCo-Syndication Agents, the Lenders and the Letter of Credit Issuer to enterinto the Credit Agreement and to induce the Lenders and the Letter of CreditIssuer to make their respective Extensions of Credit to the Borrowers under theCredit Agreement and to induce one or more Lenders or Affiliates of Lenders toenter into Hedge Agreements with the Borrowers. Pursuant to Section 4.1(b) ofthe Security Agreement, within 30 days after the end of each calendar quarter,each Grantor has agreed to deliver to the Administrative Agent a writtensupplement substantially in the form of Annex 2 thereto with respect to anyadditional Copyrights, Copyright Licenses, Patents, Patent Licenses, Trademarksand Trademark Licenses acquired by such Grantor after the date of the CreditAgreement. The Grantors have identified the additional Copyrights, CopyrightLicenses, Patents, Patent Licenses, Trademarks and Trademark Licenses acquiredby 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 inorder to facilitate supplemental filings to be made by the Administrative Agentwith the United States Copyright Office and the United States Patent andTrademark Office.

 

Accordingly, the Administrative Agent and theGrantors agree as follows:

 

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SECTION 1. (a) Schedule 1 of the SecurityAgreement is hereby supplemented, as applicable, by the information set forthin Schedule I hereto, (b) Schedule 2 of the Security Agreement is herebysupplemented, as applicable, by the information set forth in Schedule IIhereto, (c) Schedule 3 of the Security Agreement is hereby supplemented,as applicable, by the information set forth in Schedule III hereto, (d) Schedule4 of the Security Agreement is hereby supplemented, as applicable, by theinformation set forth in Schedule IV hereto, (e) Schedule 5 of theSecurity Agreement is hereby supplemented, as applicable, by the informationset forth in Schedule V hereto, and (f) Schedule 6 of the SecurityAgreement is hereby supplemented, as applicable, by the information set forthin Schedule VI hereto.

 

SECTION 3. Each Grantor hereby represents andwarrants that the information set forth on Schedules I, H, III, IV, Vand VI hereto is true and correct.

 

SECTION 2. This Supplement may be executed byone or more of the parties to this Supplement on any number of separatecounterparts (including by facsimile or other electronic transmission), and allof said counterparts taken together shall be deemed to constitute one and thesame instrument. A set of the copies of this Supplement signed by all theparties shall be lodged with the Administrative Agent and the US Borrower. ThisSupplement shall become effective as to each Grantor when the AdministrativeAgent shall have received counterparts of this Supplement that, when takentogether, bear the signatures of such Grantor and the Administrative Agent.

 

SECTION 4. Except as expressly supplementedhereby, the Security Agreement shall remain in full force and effect.

 

SECTION 5. THIS SUPPLEMENT AND THE RIGHTS ANDOBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED ANDINTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 

SECTION 6. Any provision of this Supplementthat is prohibited or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such prohibition or unenforceabilitywithout invalidating the remaining provisions hereof and in the SecurityAgreement, and any such prohibition or unenforceability in any jurisdictionshall not invalidate or render unenforceable such provision in any otherjurisdiction. The parties hereto shall endeavor in good-faith negotiations toreplace the invalid, illegal or unenforceable provisions with valid provisionsthe economic effect of which comes as close as possible to that of the invalid,illegal or unenforceable provisions.

 

SECTION 7. All notices, requests and demandspursuant hereto shall be made in accordance with Section 14.2 of theCredit Agreement. All communications and notices hereunder to each Grantorshall be given to it in care of the US Borrower at the US Borrower’s addressset forth in Section 14.2 of the Credit Agreement.

 

SECTION 8. Each Grantor agrees to reimburse theAdministrative Agent for its reasonable out-of-pocket expenses in connectionwith this Supplement, including the reasonable fees, other charges and disbursementsof counsel for the Administrative Agent.

 

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IN WITNESS WHEREOF, each Grantor and theAdministrative Agent have duly executed this Supplement to the SecurityAgreement 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

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE I

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

COPYRIGHT LICENSES

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE II

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

COPYRIGHTS

 
| **Registered Owner/Grantor** | ** ** | **Title**  | ** ** | **Registration  Number** |
|-----------------------------------|------------|------------|------------|--------------------------|
| ** **                        | ** ** | ** ** | ** ** | ** **               |
| ** **                        | ** ** | ** ** | ** ** | ** **               |
| ** **                        | ** ** | ** ** | ** ** | ** **               |

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE III

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

PATENT LICENSES

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE IV

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

PATENTS

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE V

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

TRADEMARK LICENSES

 

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ANNEX A TO THE

PLEDGE AGREEMENT

 

SCHEDULE VI

TO SUPPLEMENT NO.      TOTHE

SECURITY AGREEMENT

 

TRADEMARKS

 

*Domestic Trademarks*

 
| **Registered**    | ** ** | ** **    | ** ** | **Registration** | ** ** | **Application** |
|-------------------|------------|---------------|------------|------------------|------------|-----------------|
| **Owner/Grantor** | ** ** | **Trademark** | ** ** | **No.**          | ** ** | **No.**         |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **      |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **      |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **      |

* *

*Foreign Trademarks*

 
| **Registered**    | ** ** | ** **    | ** ** | **Registration** | ** ** | **Application Country** |
|-------------------|------------|---------------|------------|------------------|------------|------------------------------|
| **Owner/Grantor** | ** ** | **Trademark** | ** ** | **No.**          | ** ** | **No.**                      |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **                   |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **                   |
| ** **        | ** ** | ** **    | ** ** | ** **       | ** ** | ** **                   |

 

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EXHIBIT J-2

 

FORMS OF SINGAPORE PLEDGE AGREEMENTS

 

SINGAPORE PLEDGE dated 30 July 2004and intended to come into effect on 31 July 2004, among ROCKWOODSPECIALTIES GROUP, INC., a Delaware corporation (the “Pledgor”) andCREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, asadministrative agent and collateral agent (in such capacity, the “AdministrativeAgent”) for the lenders (the “Lenders”) from time to time parties tothe 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 underthe laws of England and Wales (the “UK Borrower” and, together with thePledgor, the “Borrowers”), Rockwood Specialties International, Inc.,a Delaware corporation (“Holdings”), the Lenders, theAdministrative Agent and Goldman Sachs Credit Partners L.P. and UBS LoanFinance LLC, as co-syndication agents (in such capacity, the “Co-SyndicationAgents”) for the Lenders.

 

WITNESSETH:

 

WHEREAS, (a) pursuant to the Credit Agreement,the Lenders have severally agreed to make Loans to the Borrowers and the Letterof Credit Issuer has agreed to issue Letters of Credit for the account of theBorrowers (collectively, the “Extensions of Credit”) upon the terms andsubject to the conditions set forth therein and (b) one or more Lenders orAffiliates of Lenders may from time to time enter into Hedge Agreements withthe Borrowers;

 

WHEREAS, the Pledgor acknowledges that it willderive substantial direct and indirect benefit from the making of theExtensions of Credit;

 

WHEREAS, it is a condition precedent to theobligation of the Lenders and the Letter of Credit Issuer to make theirrespective Extensions of Credit to the Borrowers under the Credit Agreementthat the Pledgor shall have executed and delivered this Pledge to theAdministrative Agent for the ratable benefit of the Secured Parties; and

 

WHEREAS, the Pledgor is the legal and beneficialowner of the shares described under Schedule 1 hereto and issued by RockwoodSpecialties (Singapore) Pte Limited (the “Charged Company”) (the pledgedshares described above are, together with any shares obtained in the future ofthe Charged Company (the “After-acquired Shares”), referred tocollectively herein as the “Pledged Shares”).

 

NOW, THEREFORE, in consideration of the premises andto induce the Administrative Agent, the Co-Syndication Agents, the Lenders andthe Letter of Credit Issuer to enter into the Credit Agreement and to inducethe Lenders and the Letter of Credit Issuer to make their respective Extensionsof Credit to the Borrowers under the Credit Agreement and to 

 

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induce one or more Lenders or Affiliates of Lendersto enter into Hedge Agreements with the Borrowers, the Pledgor hereby agreeswith 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 Agreementand 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 PropertyAct, Chapter 61 of Singapore.

 

(c)                                       As used herein, the term “Equity Interests” means securities andinvestments of any kind in a limited liability company, shares of capitalstock, partnership interests, membership interests in a limited liabilitycompany, beneficial interests in a trust or other equity ownership interests ina Person of whatever nature, any warrants, options or other rights entitlingthe holder thereof to subscribe for, purchase or acquire any of the foregoingand all other rights attaching or relating to securities or investments orother securities or investments in the future deriving from any of theforegoing.

 

(d)                                      As used herein, the term “Obligations” means the collectivereference to (i) the due and punctual payment of (x) the principal ofand premium, if any, and interest at the applicable rate provided in the CreditAgreement (including interest accruing during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding) on the Loans, when and as due, whetherat maturity, by acceleration, upon one or more dates set for prepayment orotherwise, (y) each payment required to be made by the Borrowers under theCredit Agreement in respect of any Letter of Credit, when and as due, includingpayments in respect of reimbursement of disbursements, interest thereon andobligations to provide cash collateral, and (z) all other monetaryobligations, including fees, costs, expenses and indemnities, whether primary,secondary, direct, contingent, fixed or otherwise (including monetaryobligations incurred during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding, regardless of whether allowed orallowable in such proceeding), of the Borrowers or any other Credit Party toany of the Secured Parties under the Credit Agreement and the other CreditDocuments, (ii) the due and punctual performance of all covenants,agreements, obligations and liabilities of the Borrowers under or pursuant tothe Credit Agreement and the other Credit Documents, (iii) the due andpunctual payment and performance of all the covenants, agreements, obligationsand liabilities of each other Credit Party under or pursuant to this Pledge orthe other Credit Documents, (iv) the due and punctual payment andperformance of all obligations of each Credit Party under each Hedge Agreementthat (x) is in effect on the Closing Date with a counterparty that is aLender or an Affiliate of a Lender as of the Closing Date or (y) isentered into after the Closing Date with any counterparty that is a Lender oran Affiliate of a Lender at the time such Hedge Agreement is entered into and (v) thedue and punctual payment and performance of all obligations in respect ofoverdrafts and related liabilities owed to the Administrative Agent or itsAffiliates arising from or in connection with treasury, depositary or cashmanagement services or in connection with any automated clearinghouse transferof funds.

 

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(e)                                       As used herein, the term “Secured Parties” means (i) theLenders, (ii) the Letter of Credit Issuer, (iii) the SwinglineLender, (iv) the Administrative Agent, (v) the Co-Syndication Agents,(vi) each counterparty to a Hedge Agreement the obligations under whichconstitute Obligations, (vii) the beneficiaries of each indemnificationobligation undertaken by any Credit Party under any Credit Document and (viii) anysuccessors, indorsees, transferees and assigns of each of the foregoing.

 

(f)                                         References to “Lenders” in this Pledge shall be deemed to includeAffiliates of Lenders that may from time to time enter into Hedge Agreementswith the Borrowers.

 

(g)                                      The words “hereof,” “herein” and “hereunder” and words of similar importwhen used in this Pledge shall refer to this Pledge as a whole and not to anyparticular provision of this Pledge, and Section references are toSections of this Pledge unless otherwise specified. The words “include”, “includes”and “including” shall be deemed to be followed by the phrase “withoutlimitation”.

 

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

 

(i)                                          Unless expressly provided to the contrary, a Person (other than theSecured 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 enjoythe benefit of any term of this Pledge. Notwithstanding any terms herein, theconsent of any Person not party hereto is not required for any variation(including any release or compromise of any liability under) or termination ofthis Pledge.

 

2.Grantof Security. The Pledgor, asbeneficial owner and as a continuing security for the due and punctual paymentand discharge of all Obligations, hereby charges and agrees to charge in favourof the Administrative Agent (for the ratable benefit of the Secured Parties) byway of first fixed charge and assigns, and agrees to assign absolutely to theAdministrative Agent (for the ratable benefit of the Secured Parties), all ofthe Pledgor’s right, title and interest in the following, whether now owned orexisting or hereafter acquired or existing (collectively, the “Collateral”):

 

(a)                                       the Pledged Shares held by the Pledgor and the certificates representingsuch Pledged Shares and any interest of the Pledgor in the entries on the booksof the issuer of the Pledged Shares or any financial intermediary pertaining tothe Pledged Shares and all dividends, cash, warrants, options or other rightsto 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 allof the Pledged Shares, provided that the Pledged Shares under thisPledge shall not include more than 65 percent of the issued and outstandingEquity Interests in the Charged Company; and

 

(b)                                      to the extent not covered by clause (a) above, all proceeds of anyor all of the foregoing Collateral. For purposes of this Pledge, the term “proceeds”includes whatever is receivable or received when Collateral or proceeds aresold, exchanged, collected or otherwise 

 

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disposed of, whether suchdisposition is voluntary or involuntary, and includes proceeds of any indemnityor guarantee payable to the Pledgor or the Administrative Agent from time totime with respect to any of the Collateral.

 

3.                                       Security for Obligations.This Pledge secures the payment and discharge of all Obligations of the CreditParties. Without limiting the generality of the foregoing, this Pledge securesthe payment of all amounts that constitute part of the Obligations and would beowed by the Credit Parties to the Administrative Agent or the Lenders under theCredit Documents but for the fact that they are unenforceable or not allowabledue to the existence of a bankruptcy, reorganization or similar proceedinginvolving the Credit Parties.

 

4.                                            Delivery of the Collateral.All certificates or instruments, if any, representing or evidencing theCollateral shall be promptly delivered to and held by or on behalf of theAdministrative Agent pursuant hereto and shall be in suitable form for transferby delivery, or shall be accompanied by duly executed instruments of transferor assignment in blank, all in form and substance reasonably satisfactory tothe Administrative Agent. The Administrative Agent shall have the right, at anytime after the occurrence and during the continuance of an Event of Default andwithout notice to the Pledgor, to transfer to or to register in the name of theAdministrative Agent or any of its nominees any or all of the Pledged Shares.Each delivery of Collateral (including any After-acquired Shares) shall beaccompanied by a schedule describing the securities theretofore and then beingpledged hereunder, which shall be attached hereto as Schedule 1 and made a parthereof, provided that the failure to attach any such schedule heretoshall not affect the validity of such pledge of such securities. Each scheduleso 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 theissuer, the certificate number, the Pledgor and the record and beneficial owner,the number and class and the percentage of the issued and outstanding EquityInterests of such class of all Pledged Shares and (ii) includes all EquityInterests required to be pledged hereunder. Except as set forth on Schedule 1,the Pledged Shares represent 65 percent of the issued and outstanding EquityInterests of each class of Equity Interests in the Charged Company on the datehereof.

 

(b)                                      The Pledgor is a corporation established and existing and is in goodstanding under the laws of the state of Delaware, United States of America, andis not a foreign company for the purposes of, and which should be registeredunder, Division 2 of Part XI of the Companies Act, Chapter 50 ofSingapore.

 

(c)                                       The Pledgor is the legal and beneficial owner of the Collateral chargedby the Pledgor hereunder free and clear of any Lien, except for the Liencreated by this Pledge.

 

(d)                                      As of the date of this Pledge, the Pledged Shares pledged by the Pledgorhereunder have been duly authorized and validly issued and are fully paid andnon-assessable.

 

4

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(e)                                       The execution and delivery by the Pledgor of this Pledge and the chargeof the Collateral by the Pledgor hereunder pursuant hereto create a valid andperfected first-priority

 

charge over the Collateral, securing the payment ofthe Obligations, in favor of the Administrative Agent for the ratable benefitof the Secured Parties.

 

(f)ThePledgor has full power, authority and legal right to charge all the Collateralpursuant to this Pledge.

 

6.                                       Further Assurances. The Pledgoragrees 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, agreementsand instruments, and take all such further actions (including the filing andrecording of financing statements, fixture filings, mortgages, deeds of trustand other documents), which may be required under any applicable law, or whichthe Administrative Agent or the Required Lenders may reasonably request, inorder (x) to perfect and protect any pledge, assignment or securityinterest granted or purported to be granted hereby (including the prioritythereof) or (y) to enable the Administrative Agent to exercise and enforceits 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 becontinuing:

 

(i)                                          The Pledgor shall be entitled to exercise any and all voting and otherconsensual rights pertaining to the Collateral or any part thereof for anypurpose not prohibited by the terms of this Pledge or the other CreditDocuments.

 

(ii)                                       The Administrative Agent shall execute and deliver (or cause to beexecuted and delivered) to the Pledgor all such proxies and other instrumentsas the Pledgor may reasonably request for the purpose of enabling the Pledgorto exercise the voting and other rights that it is entitled to exercisepursuant to paragraph (i) above.

 

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

 

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

 

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(i)                                     all rights of the Pledgor to exercise or refrain from exercising thevoting and other consensual rights that it would otherwise be entitled toexercise pursuant to Section 7(a)(i) shall cease, and all such rightsshall thereupon become vested in the Administrative Agent, which shallthereupon have the sole right to exercise or refrain from exercising suchvoting and other consensual rights during the continuance of such Event ofDefault, provided that, unless otherwise directed by the RequiredLenders, the Administrative Agent shall have the right from time to timefollowing the occurrence and during the continuance of an Event of Default topermit the Pledgor to exercise such rights. After all Events of Default havebeen cured or waived and the Pledgor has delivered to the Administrative Agenta certificate to that effect, the Pledgor will have the right to exercise thevoting and consensual rights that the Pledgor would otherwise be entitled toexercise pursuant to the terms of Section 7(a)(i) (and theobligations of the Administrative Agent under Section 7(a)(ii) shallbe reinstated);

 

(ii)                                  all rights of the Pledgor to receive the dividends and distributions thatthe Pledgor would otherwise be authorized to receive and retain pursuant to Section 7(b) shallcease, and all such rights shall thereupon become vested in the AdministrativeAgent, which shall thereupon have the sole right to receive and hold asCollateral such dividends and distributions during the continuance of suchEvent of Default. After all Events of Default have been cured or waived and thePledgor has delivered to the Administrative Agent a certificate to that effect,the Administrative Agent shall repay to the Pledgor (without interest) alldividends, distributions and principal and interest payments that the Pledgorwould otherwise be permitted to receive, retain and use pursuant to the termsof Section 7(b);

 

(iii)                               all dividends and distributions that are received by the Pledgor contraryto the provisions of Section 7(b) and 7(c)(ii) shall be receivedin trust for the benefit of the Administrative Agent, shall be segregated fromother property or funds of the Pledgor and shall forthwith be delivered to theAdministrative Agent as Collateral in the same form as so received (with anynecessary indorsements); and

 

(iv)                              in order to permit the Administrative Agent to receive all dividends anddistributions to which it may be entitled under Section 7(b) above,to exercise the voting and other consensual rights that it may be entitled toexercise pursuant to Section 7(c)(i) above, and to receive alldividends, distributions and principal and interest payments that it may beentitled to under Sections 7(c)(ii) and (c)(iii) above, the Pledgorshall, if necessary, upon written notice from the Administrative Agent, fromtime to time execute and deliver to the Administrative Agent, appropriateproxies, dividend payment orders and other instruments as the AdministrativeAgent may reasonably request.

 

8.                                       Transfers and Other Liens.The Pledgor shall (a) not (i) except as permitted by the CreditAgreement, sell or otherwise dispose of, or grant any option or warrant withrespect to, any of the Collateral or (ii) create or suffer to exist anyconsensual Lien upon or with respect to any of the Collateral, except for theLien under this Pledge, provided that in the event the Pledgor sells orotherwise disposes of assets permitted by the Credit Agreement and such assetsare or include any of the Collateral, the Administrative Agent shall releasesuch 

 

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Collateral free and clear of the Lien underthis Pledge concurrently with the consummation of such sale;

 

(b)                                 defend its and the Administrative Agent’s title or interest in and to allthe Collateral (and in the proceeds thereof) against any and all Liens (otherthan the Lien of this Pledge), however arising, and any and all Personswhomsoever.

 

9.                                            Administrative Agent Appointed Attorney.The Pledgor by way of security appoints, which appointment shall (for so longas any of the Obligations under the Credit Documents and the obligations of thePledgor under this Pledge have not been satisfied by payment in full, any ofthe Commitments are still in force or any of the Letters of Credit areoutstanding) be irrevocable, the Administrative Agent as the Pledgor’sattorney, with full authority in the place and stead of the Pledgor and in thename of the Pledgor or otherwise to take any action and to execute anyinstrument, in each case after the occurrence and during the continuance of anEvent of Default, that the Administrative Agent may deem reasonably necessaryor advisable to accomplish the purposes of this Pledge, including to receive,indorse and collect all instruments made payable to the Pledgor representingany dividend or distribution payment in respect of the Collateral or any partthereof and to give full discharge for the same.

 

10.                                      The Administrative Agent’s Duties.The powers conferred on the Administrative Agent hereunder are solely toprotect its interest in the Collateral and shall not impose any duty upon it toexercise any such powers. Except for the safe custody of any Collateral in itspossession and the accounting for moneys actually received by it hereunder, theAdministrative Agent shall have no duty as to any Collateral, as toascertaining or taking action with respect to calls, conversions, exchanges,maturities, tenders or other matters relative to any Pledged Shares, whether ornot the Administrative Agent or any other Secured Party has or is deemed tohave knowledge of such matters, or as to the taking of any necessary steps topreserve rights against any parties or any other rights pertaining to anyCollateral. The Administrative Agent shall be deemed to have exercisedreasonable care in the custody and preservation of any Collateral in itspossession if such Collateral is accorded treatment substantially equal to thatwhich the Administrative Agent accords its own property.

 

11.                                      Remedies. If any Event of Defaultshall have occurred and be continuing:

 

(a)                                  The Administrative Agent and any nominee of the Administrative Agent mayexercise in respect of all or any of the Collateral, in addition to otherrights and remedies provided for herein or otherwise available to it andwithout the restrictions contained in section 21 of the Act, all the rights andremedies of the registered holder of the Collateral and all other powersconferred 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 anypart thereof in one or more parcels at public or private sale, at any exchangebroker’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 uponsuch other terms as are commercially reasonable irrespective of the impact ofany such sales on the market price of the Collateral. The Administrative Agentshall be authorized at any such sale (if it deems it advisable to do so) torestrict the prospective bidders or purchasers of Collateral to Persons whowill represent and agree that they are purchasing the Collateral for their ownaccount for investment and not with a view to the distribution or sale thereof,and, 

 

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upon consummation of any such sale, theAdministrative Agent shall have the right to assign, transfer and deliver tothe purchaser or purchasers thereof the Collateral so sold. Each purchaser atany such sale shall hold the property sold absolutely free from any claim orright on the part of the Pledgor, and the Pledgor hereby waives (to the extentpermitted by law) all rights of redemption, stay and/or appraisal that it nowhas or may at any time in the future have under any rule of law or statutenow existing or hereafter enacted. The Administrative Agent or any SecuredParty shall have the right upon any such public sale, and, to the extentpermitted by law, upon any such private sale, to purchase the whole or any partof the Collateral so sold, and the Administrative Agent or such Secured Partymay subject to (x) the satisfaction in full in cash of all payments duepursuant to Section 11(b)(i), and (y) the ratable satisfaction of theObligations in accordance with Section 11(b)(ii) pay the purchaseprice by crediting the amount thereof against the Obligations. The Pledgoragrees that, to the extent notice of sale shall be required by law, at leastten days’ notice to the Pledgor of the time and place of any public sale or thetime after which any private sale is to be made shall constitute reasonablenotification. The Administrative Agent shall not be obligated to make any saleof Collateral regardless of notice of sale having been given. TheAdministrative Agent may adjourn any public or private sale from time to timeby 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 soadjourned. To the extent permitted by law, the Pledgor hereby waives any claimagainst the Administrative Agent arising by reason of the fact that the priceat which any Collateral may have been sold at such a private sale was less thanthe price that might have been obtained at a public sale, even if theAdministrative Agent accepts the first offer received and does not offer suchCollateral to more than one offeree. Section 25 of the Act shall not applyto this Pledge or to any security given pursuant hereto. Any third partyreferred to in this sub-Section (a) may enjoy the benefit or enforcethe terms of this sub-Section (a) in accordance with the provisionsof the Contracts (Rights of Third Parties) Act, Chapter 53B of Singapore.

 

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

 

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

 

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

 

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

 

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Upon any sale of the Collateral by theAdministrative Agent (including pursuant to a power of sale granted by statuteor under a judicial proceeding), the receipt of the Administrative Agent or ofthe officer making the sale shall be a sufficient discharge to the purchaser orpurchasers of the Collateral so sold and such purchaser or purchasers shall notbe obligated to see to the application of any part of the *purchase*money paid over to theAdministrative Agent or such officer or be answerable in any way for themisapplication thereof. Any third party referred to in this sub-Section (b) mayenjoy the benefit or enforce the terms of this sub-Section (b) inaccordance 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 ofthe Pledgor in respect of the Collateral.

 

(d)                                 All payments received by the Pledgor after the occurrence and during thecontinuance of an Event of Default in respect of the Collateral shall bereceived in trust for the benefit of the Administrative Agent, shall besegregated from other property or funds of the Pledgor and shall be forthwithdelivered to the Administrative Agent as Collateral in the same form as soreceived (with any necessary indorsement).

 

(e)                                  The Pledgor and Administrative Agent agree and acknowledge that theAdministrative Agent is entering into this Pledge, and holds its rights andbenefits hereunder, as trustee for and on behalf of the Secured Parties.

 

12.                                 Amendments, etc. withRespect to the Obligations., Waiver of Rights. The Pledgor shallremain obligated hereunder, and the charges created hereby shall not beadversely affected, notwithstanding that, without any reservation of rightsagainst the Pledgor and without notice to or further assent by the Pledgor, (a) anydemand for payment of any of the Obligations made by the Administrative Agentor any other Secured Party may be rescinded by such party and any of theObligations continued, (b) the Obligations, or the liability of any otherparty upon or for any part thereof, or any collateral security or guaranteetherefor or right of offset with respect thereto, may, from time to time, inwhole or in part, be renewed, extended, amended, modified, accelerated,compromised, waived, surrendered or released by the Administrative Agent or anyother Secured Party, (c) the Credit Agreement, the other Credit Documents,the Letters of Credit and any other documents executed and delivered inconnection therewith and the Hedge Agreements and any other documents executedand delivered in connection therewith and any documents entered into with theAdministrative Agent or any of its Affiliates in connection with treasury,depositary or cash management services or in connection with any automatedclearinghouse transfer of funds may be amended, modified, supplemented orterminated, in whole or in part, as the Administrative Agent (or the RequiredLenders, as the case may be, or, in the case of any Hedge Agreement, ordocuments entered into with the Administrative Agent or any of its Affiliatesin connection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds, the partythereto) may deem advisable from time to time, and (d) any collateralsecurity, guarantee or right of offset at any time held by the AdministrativeAgent or any other Secured Party for the payment of the Obligations may besold, exchanged, waived, surrendered or released. Neither the AdministrativeAgent 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 theObligations or for this Pledge 

 

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or any property subject thereto. When makingany demand hereunder against the Pledgor, the Administrative Agent or any otherSecured Party may, but shall be under no obligation to, make a similar demandon the Pledgor or any pledgor and any failure by the Administrative Agent orany other such Secured Party to make any such demand or to collect any paymentsfrom the Pledgor or any pledgor or any release of the Pledgor or any pledgorshall not relieve the Pledgor in respect of which a demand or collection is notmade or the Pledgor not so released of its several obligations or liabilitieshereunder, and shall not impair or affect the rights and remedies, express orimplied, or as a matter of law, of the Administrative Agent or any otherSecured Party against the Pledgor. For the purposes hereof “demand” shallinclude the commencement and continuance of any legal proceedings.

 

13.                                 Continuing Security Interest; Assignments Under the CreditAgreement;  Release. (a) This Pledge shall remain in full force and effect and bebinding in accordance with and to the extent of its terms upon the Pledgor andthe successors and assigns thereof, and shall inure to the benefit of theAdministrative Agent and the other Secured Parties and their respectivesuccessors, indorsees, transferees and assigns until all the Obligations underthe Credit Documents and the obligations of the Pledgor under this Pledge shallhave been satisfied by payment in full, the Commitments shall be terminated andno Letters of Credit shall be outstanding, notwithstanding that from time totime during the term of the Credit Agreement and any Hedge Agreement the CreditParties may be free from any Obligations.

 

(b)                                      Upon any sale or other transfer by the Pledgor of any Collateral that ispermitted under the Credit Agreement to any Person, or upon the effectivenessof any written consent to the release of the security interest granted herebyin any Collateral pursuant to Section 14.1 of the Credit Agreement, theobligations of such Pledgor with respect to such Collateral shall beautomatically released and such Collateral sold free and clear of the Liencreated 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 thePledgor’s expense, all documents that the Pledgor shall reasonably request toevidence such termination or release. Any execution and delivery of documentspursuant to this Section 13 shall be without recourse to or warranty bythe Administrative Agent.

 

14.                                 Reinstatement. This Pledge shallcontinue to be effective, or be reinstated, as the case may be, if at any timepayment, or any part thereof, of any of the Obligations is rescinded or mustotherwise be restored or returned by the Administrative Agent or any otherSecured Party upon the insolvency, bankruptcy, dissolution, administration,liquidation or reorganization of the Pledgor or any Credit Party, or upon or asa result of the appointment of a receiver, intervenor or conservator of, ortrustee or similar officer for, the Pledgor or any Credit Party or anysubstantial part of its property, or otherwise, all as though such payments hadnot been made.

 

15.                                 Notices. All notices, requestsand demands pursuant hereto shall be made in accordance with Section 14.2of the Credit Agreement.

 

16.                                 Counterparts. This Pledge may beexecuted by one or more of the parties to this Pledge on any number of separatecounterparts (including by facsimile or other electronic 

 

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transmission), and all of said counterpartstaken together shall be deemed to constitute one and the same instrument. A setof the copies of this Pledge signed by all the parties hereto shall be lodgedwith the Administrative Agent and the Pledgor.

 

17.                                 Severability. Any provision of thisPledge that is prohibited or unenforceable in any jurisdiction shall, as tosuch jurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall not invalidateor render unenforceable such provision in any other jurisdiction. The partiesshall endeavour in good faith negotiations to replace the invalid, illegal orunenforceable provisions with valid provisions the economic effect of whichcomes as close as possible to that of the invalid, illegal or unenforceableprovisions.

 

18.                                 Integration. This Pledge representsthe agreement of the Pledgor with respect to the subject matter hereof andthere are no promises, undertakings, representations or warranties by theAdministrative Agent or any other Secured Party relative to the subject matterhereof not expressly set forth or referred to herein or in the other CreditDocuments.

 

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 bythe affected Pledgor and the Administrative Agent in accordance with Section 14.1of 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 remedyhereunder or to have acquiesced in any Default or Event of Default or in anybreach of any of the terms and conditions hereof No failure to exercise, norany delay in exercising, on the part of the Administrative Agent or any otherSecured Party, any right, power or privilege hereunder shall operate as awaiver thereof. No single or partial exercise of any right, power or privilegehereunder shall preclude any other or further exercise thereof or the exerciseof any other right, power or privilege. A waiver by the Administrative Agent orany other Secured Party of any right or remedy hereunder on any one occasionshall not be construed as a bar to any right or remedy that the AdministrativeAgent or such other Secured Party would otherwise have on any future occasion.

 

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

 

20.                                 Section Headings.The Section headings used in this Pledge are for convenience of referenceonly and are not to affect the construction hereof or be taken intoconsideration in the interpretation hereof.

 

21.Successorsand Assigns. This Pledge shall bebinding upon the successors and assigns of the Pledgor and shall inure to thebenefit of the Administrative Agent and the other Secured Parties and theirrespective successors and assigns, except that the Pledgor may not 

 

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assign, transfer or delegate any of itsrights or obligations under this Pledge without the prior written consent ofthe 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 thenon-exclusive general jurisdiction of the courts of Singapore, the courts ofthe State of New York, the courts of the United States of America for theSouthern District of New York and appellate courts from any thereof;

 

(b)                                           consents that any such action or proceeding may be brought in such courtsand waives any objection that it may now or hereafter have to the venue of anysuch action or proceeding in any such court or that such action or proceedingwas 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 beeffected by mailing a copy thereof by registered or certified mail (or anysubstantially similar form of mail), postage prepaid, to Rockwood Specialties(Singapore) Pte Ltd (which the Pledgor hereby irrevocably appoints as its agentfor receipt of service of process) do One Marina Boulevard #28-00 Singapore018989 or at such other address of which the Administrative Agent shall havebeen notified pursuant thereto;

 

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

 

(e)                                            waives, to the maximum extent not prohibited by law, any right it mayhave to claim or recover in any legal action or proceeding referred to in this Section 22any special, exemplary, punitive or consequential damages.

 

24. GOVERNING LAW. THIS PLEDGE AND THE RIGHTSAND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUEDAND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF SINGAPORE.

 

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EXHIBIT K

 

FORMSOF TAIWAN PLEDGE AGREEMENTS

 

FORM OF TAIWAN PLEDGE AGREEMENT (USObligations)

 

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, asadministrative agent (in such capacity, the “Administrative Agent”) forand on behalf of the Secured Parties (as defined below) in respect of theCredit 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 underthe laws of England and Wales (the “UK Borrower” and together with thePledgor, the “Borrowers”), Rockwood Specialties International, Inc.,a Delaware corporation (“Holdings”), the Lenders (as defined inthe Credit Agreement), the Administrative Agent, Goldman Sachs Credit PartnersL.P., and UBS Securities LLC, together with the Administrative Agent, as jointlead arrangers and joint bookrunners (in such capacity, the “Joint LeadArrangers and Joint Bookrunners”) for the Lenders, and UBS Securities LLCand Goldman Sachs Credit Partners L.P., as co-syndication agents (in suchcapacities, 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 Letterof Credit Issuer has agreed to issue Letters of Credit for the account of theBorrowers (collectively, the “Extensions of Credit”) upon the terms andsubject to the conditions set forth therein and (b) one or more Lenders oraffiliates of Lenders may from time to time enter into Hedge Agreements withthe Borrowers;

 

WHEREAS, the Pledgor acknowledges that it willderive substantial direct and indirect benefit from the making of theExtensions of Credit;

 

WHEREAS, it is a condition precedent to theobligation of the Lenders and the Letter of Credit Issuer to make theirrespective Extensions of Credit to the Borrowers under the Credit Agreementthat the Pledgor shall have executed and delivered this Pledge Agreement to theAdministrative Agent for the ratable benefit of the Secured Parties; and

 

WHEREAS, the Pledgor is the legal and beneficialowner of the shares described under Schedule 1 hereto and issued by RockwoodElectrochemicals Asia Limited (the “Issuer”) (the pledged shares describedabove are, together with any shares acquired by the Pledgor in the future ofthe Issuer (the “After-acquired Shares”) referred to collectively hereinas the “Pledged Shares”).

 

NOW, THEREFORE, in consideration of the premises andto induce the Administrative Agent, the Joint Lead Arrangers and JointBookrunners, the Co-Syndication Agents and the Lenders and the Letter of CreditIssuer to enter into the Credit Agreement and 

 

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to induce the Lenders and the Letter of CreditIssuer to make their respective Extensions of Credit to the Borrowers under theCredit Agreement and to induce one or more Lenders or affiliates of Lenders toenter into Hedge Agreements with the Borrowers, the Pledgor hereby agrees withthe Administrative Agent, for the ratable benefit of the Secured Parties, asfollows:

 

1.                                                 Defined Terms.

 

(a)                                            Unless otherwise defined herein, terms defined in the Credit Agreementand used herein shall have the meanings given to them in the Credit Agreement.

 

(b)                                           As used herein, the term “Equity Interests” means shares ofcapital stock, partnership interests, membership interests in a limitedliability company, beneficial interests in a trust or other equity ownershipinterests in a Person of whatever nature, and any warrants, options or otherrights entitling the holder thereof to purchase or acquire any of theforegoing.

 

(c)                                            As used herein, the term “Obligations” means the collectivereference to (i) the due and punctual payment of (x) the principal ofand premium, if any, and interest at the applicable rate provided in the CreditAgreement (including interest accruing during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding) on the Loans, when and as due, whetherat maturity, by acceleration, upon one or more dates set for prepayment orotherwise, (y) each payment required to be made by the Borrowers under theCredit Agreement in respect of any Letter of Credit, when and as due, includingpayments in respect of reimbursement of disbursements, interest thereon andobligations to provide cash collateral, and (z) all other monetaryobligations, including fees, costs, expenses and indemnities, whether primary,secondary, direct, contingent, fixed or otherwise (including monetaryobligations incurred during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding, regardless of whether allowed orallowable in such proceeding), of the Borrowers or any other Credit Party toany of the Secured Parties under the Credit Agreement and the other CreditDocuments, (ii) the due and punctual performance of all covenants,agreements, obligations and liabilities of the Borrowers under or pursuant tothe Credit Agreement and the other Credit Documents, (iii) the due andpunctual payment and performance of all the covenants, agreements, obligationsand liabilities of each other Credit Party under or pursuant to this PledgeAgreement or the other Credit Documents, (iv) the due and punctual paymentand performance of all obligations of each Credit Party under each HedgeAgreement that (x) is in effect on the Closing Date with a counterpartythat is a Lender or an affiliate of a Lender as of the Closing Date or (y) isentered into after the Closing Date with any counterparty that is a Lender oran affiliate of a Lender at the time such Hedge Agreement is entered into and (v) thedue and punctual payment and performance of all obligations in respect ofoverdrafts and related liabilities owed to the Administrative Agent or itsaffiliates arising from or in connection with treasury, depositary or cashmanagement services or in connection with any automated clearinghouse transferof funds.

 

(d)                                           As used herein, the term “Secured Parties” means (i) theLenders, (ii) the Letter of Credit Issuer, (iii) the SwinglineLender, (iv) the Administrative Agent, (v) the Co-Syndication Agents,(vi) each counterparty to a Hedge Agreement the obligations under 

 

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which constituteObligations, (vii) the beneficiaries of each indemnification obligationundertaken by any Credit Party under any Credit Document and (viii) anysuccessors, indorsees, transferees and assigns of each of the foregoing.

 

(e)                                            References to “Lenders” in this Pledge Agreement shall be deemed toinclude affiliates of Lenders that may from time to time enter into Hedge Agreementswith the Borrowers.

 

(f)                                              The words “hereof,” “herein” and “hereunder” and words of similar importwhen used in this Pledge Agreement shall refer to this Pledge Agreement as awhole and not to any particular provision of this Pledge Agreement, and Section referencesare to Sections of this Pledge Agreement unless otherwise specified. The words “include”,“includes” and “including” shall be deemed to be followed by the phrase “withoutlimitation”.

 

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

 

2.                                       Grant of Security. The Pledgorhereby charges to the Administrative Agent and the other Secured Parties fortheir ratable benefit with full title guarantee all of the Pledgor’s right,title and interest in the following, whether now owned or existing or hereafteracquired or existing (collectively, the “Collateral”):

 

(a)                                            the Pledged Shares and the certificates representing such Pledged Sharesand any interest of the Pledgor in the entries on the books of the Issuer ofthe Pledged Shares or any financial intermediary pertaining to the PledgedShares and all dividends, cash, warrants, rights, instruments and otherproperty or proceeds from time to time received, receivable or otherwisedistributed in respect of or in exchange for any or all of the Pledged Shares, providedthat the Pledged Shares under this Pledge Agreement shall not include more than65 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 anyor all of the foregoing Collateral. For purposes of this Pledge Agreement, theterm “proceeds” includes whatever is receivable or received when Collateral orproceeds are sold, exchanged, collected or otherwise disposed of, whether suchdisposition is voluntary or involuntary, and includes proceeds of any indemnityor guarantee payable to the Pledgor or the Administrative Agent or any SecuredParties 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 CreditParty. Without limiting the generality of the foregoing, this Pledge Agreementsecures the payment of all amounts that constitute part of the Obligations andwould be owed by any of the Credit Parties to the Administrative Agent or theLenders under the Credit Documents but for the fact that they are unenforceableor not allowable due to the existence of a bankruptcy, reorganization orsimilar proceeding involving any Credit Party.

 

4.                                                 Delivery of the Collateral.Subject to Sections 7 (b) and (c), all certificates or instruments, ifany, representing or evidencing the Collateral shall be promptly duly endorsedin blank by the Pledgor, and delivered to the Administrative Agent, for and onbehalf of the Secured Parties, pursuant hereto and shall be accompanied by dulyexecuted 

 

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instruments in blank, allin form and substance reasonably satisfactory to the Administrative Agent. Inaddition, the Pledgor shall on the date of this Pledge Agreement jointly withthe Administrative Agent issue a notification (in the form of Schedule 2hereto) to the Issuer to (i) state that the Pledgor is entitled to retainand dispose of the dividends and distributions prior to a notice is given bythe Administrative Agent to the Issuer indicating that an Event of Default hasoccurred, and stating that the Administrative Agent and the Secured Parties areentitled to receive and retain any dividends and distributions made by theIssuer after serving such notice to the Issuer and (ii) cause the Issuerto register the share pledge created hereby onto its shareholders’ register.Each delivery of Collateral (including any After-acquired Shares) shall beaccompanied by a schedule describing the securities theretofore and then beingpledged hereunder, which shall be attached hereto as Schedule 1 and made a parthereof, provided that the failure to attach any such schedule heretoshall not affect the validity of such pledge of such securities. Each scheduleso 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 theissuer, the certificate number, the Pledgor and the record and beneficialowner, the number and class and the percentage of the issued and outstandingEquity Interests of such class of all Pledged Shares and (ii) includes allEquity Interests required to be pledged hereunder. Except as set forth onSchedule 1, the Pledged Shares represent 65 percent of the issued andoutstanding Equity Interests of each class of Equity Interests in the Issuer onthe date hereof.

 

(b)                                           The Pledgor is the legal and beneficial owner of the Collateral chargedby the Pledgor hereunder free and clear of any Lien, except for the Liencreated by this Pledge Agreement.

 

(c)                                            As of the date of this Pledge Agreement, the Pledged Shares pledged bythe Pledgor hereunder have been duly authorized and validly issued and arefully paid and non-assessable.

 

(d)                                      The execution and delivery by the Pledgor of this Pledge Agreement andthe charge of the Collateral by the Pledgor hereunder pursuant hereto create avalid and perfected first-priority charge over the Collateral, securing thepayment of the Obligations, in favor of the Administrative Agent and the otherSecured Parties for their ratable benefit.

 

(e)                                       The Pledgor has full power, authority and legal right to charge all theCollateral pursuant to this Pledge Agreement and this Pledge Agreementconstitutes a legal, valid and binding obligation of the Pledgor, enforceablein accordance with its terms, except as enforceability thereof may be limitedby bankruptcy, insolvency or other similar laws affecting creditors’ rightsgenerally and subject to general principles of equity.

 

6.                                            Further Assurances. The Pledgoragrees 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, agreementsand instruments, and take all such further actions (including the filing andrecording of financing statements, fixture filings, mortgages, deeds of trustand other 

 

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documents), which may berequired under any applicable law, or which the Administrative Agent or theRequired Lenders may reasonably request, in order (x) to perfect andprotect any pledge, assignment or security interest granted or purported to begranted hereby (including the priority thereof) or (y) to enable theAdministrative Agent and the other Secured Parties to exercise and enforce itsrights 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 becontinuing , each Pledgor shall be entitled to exercise any and all voting andother consensual rights pertaining to the Collateral or any part thereof for anypurpose not prohibited by the terms of this Pledge Agreement or the otherCredit Documents.

 

(b) Subject to paragraph (c) below, thePledgor shall be entitled to receive and retain and use, free and clear of theLien of this Pledge Agreement, any and all dividends and distributions made orpaid in respect of the Collateral to the extent permitted by the CreditAgreement; provided, however, that any and all noncash dividendsor other distributions that would constitute Pledged Shares, whether resultingfrom a subdivision, combination or reclassification of the outstanding EquityInterests of the issuer of any Pledged Shares or received in exchange forPledged Shares or any part thereof, or in redemption thereof, or as a result ofany merger, consolidation, acquisition or other exchange of assets to whichsuch issuer may be a party or otherwise, shall be, and shall be forthwith dulyendorsed by the Pledgor in favor of the Administrative Agent and the otherSecured Parties, delivered to the Administrative Agent to hold as, Collateraland shall, if received by the Pledgor, be received in trust for the benefit ofthe Administrative Agent and the other Secured Parties, be segregated from theother property or funds of the Pledgor and be forthwith delivered to theAdministrative Agent as Collateral in the same form as so received (with anynecessary indorsement).

 

(c) Upon written notice to the Pledgor by theAdministrative Agent following the occurrence and during the continuance of anEvent of Default,

 

(i)                                     all rights of the Pledgor to exercise or refrain from exercising thevoting and other consensual rights that it would otherwise be entitled toexercise pursuant to Section 7(a) shall cease, and all such rightsshall thereupon become vested in the Administrative Agent and the other SecuredParties, which shall thereupon have the sole right to, through theAdministrative Agent, exercise or refrain from exercising such voting and otherconsensual rights during the continuance of such Event of Default, providedthat, unless otherwise directed by the Required Lenders, the AdministrativeAgent shall have the right from time to time following the occurrence andduring the continuance of an Event of Default to permit the Pledgor to exercisesuch rights. After all Events of Default have been cured or waived and thePledgor has delivered to the Administrative Agent a certificate to that effect,the Pledgor will have the right to exercise the voting and consensual rightsthat the Pledgor would otherwise be entitled to exercise pursuant to the termsof Section 7(a);

 

(ii)                                  all rights of the Pledgor to receive the dividends and distributions thatthe Pledgor would otherwise be authorized to receive and retain pursuant to Section 7(b) shallcease, and all such rights shall thereupon become vested in the AdministrativeAgent and the other Secured Parties, which shall thereupon have the 

 

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soleright to, through the Administrative Agent, receive and hold as Collateral suchdividends and distributions during the continuance of such Event of Default.After all Events of Default have been cured or waived and the Pledgor hasdelivered to the Administrative Agent a certificate to that effect, theAdministrative Agent shall repay to the Pledgor (without interest) alldividends and distributions that the Pledgor would otherwise be permitted toreceive, retain and use pursuant to the terms of Section 7(b);

 

(iii)                               all dividends and distributions that are received by the Pledgor contraryto the provisions of Section 7(b) and 7(c)(ii) shall be receivedin trust for the benefit of the Administrative Agent and the other SecuredParties, shall be segregated from other property or funds of the Pledgor andshall forthwith be delivered to the Administrative Agent as Collateral in thesame form as so received (with any necessary indorsements); and

 

(iv)                              in order to permit the Administrative Agent to receive all dividends anddistributions to which the Administrative Agent and the other Secured Partiesmay be entitled under Section 7(b) above, to exercise the voting andother consensual rights that it may be entitled to exercise for and on behalfof 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 Agentand 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 fromthe Administrative Agent, from time to time execute and deliver to theAdministrative Agent, appropriate proxies, dividend payment orders and otherinstruments as the Administrative Agent may reasonably request.

 

8.                                       Transfers and Other Liens.The Pledgor shall (a) not (i) except as permitted by the CreditAgreement, sell or otherwise dispose of, or grant any option or warrant withrespect to, any of the Collateral or (ii) create or suffer to exist anyconsensual Lien upon or with respect to any of the Collateral, except for theLien under this Pledge Agreement, provided that in the event the Pledgor sellsor otherwise disposes of assets permitted by the Credit Agreement and suchassets are or include any of the Collateral, the Administrative Agent shallrelease such Collateral to the Pledgor free and clear of the Lien under thisPledge Agreement concurrently with the consummation of such sale;

 

(b)                defendits 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 ofthis 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 withan interest, the Administrative Agent as the Pledgor’s attorney, with fullauthority in the place and stead of the Pledgor and in the name of the Pledgoror otherwise to take any action and to execute any instrument, in each caseafter the occurrence and during the continuance of an Event of Default, thatthe Administrative Agent may deem reasonably necessary or advisable toaccomplish the purposes of this Pledge Agreement, including to receive, indorseand collect all instruments made payable to the Pledgor 

 

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representing any dividendor distribution payment in respect of the Collateral or any part thereof and togive full discharge for the same.

 

10.                                 The Administrative Agent’s Duties.The powers conferred on the Administrative Agent hereunder are solely toprotect its interest in the Collateral and shall not impose any duty upon it toexercise any such powers. Except for the safe custody of any Collateral in itspossession and the accounting for moneys actually received by it hereunder, theAdministrative Agent shall have no duty as to any Collateral, as toascertaining or taking action with respect to calls, conversions, exchanges,maturities, tenders or other matters relative to any Pledged Shares, whether ornot the Administrative Agent or any other Secured Party has or is deemed tohave knowledge of such matters, or as to the taking of any necessary steps topreserve rights against any parties or any other rights pertaining to anyCollateral. The Administrative Agent shall be deemed to have exercisedreasonable care in the custody and preservation of any Collateral in itspossession if such Collateral is accorded treatment substantially equal to thatwhich the Administrative Agent accords its own property.

 

11. Remedies. If any Event of Default shallhave 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 theCollateral, in addition to other rights and remedies provided for herein orotherwise available to it all the rights and remedies of a pledgee under thelaw of the Republic of China. The Administrative Agent and any nominee of theAdministrative Agent may, on behalf of the Secured Parties and with priornotice to the Pledgor, except as specified below, sell the Collateral or anypart thereof at a public sale. To the extent permitted by the law of theRepublic of China, the Administrative Agent shall be authorized at any suchsale (if it deems it advisable to do so) to restrict the prospective bidders orpurchasers of Collateral to Persons who will represent and agree that they arepurchasing the Collateral for their own account for investment and not with aview to the distribution or sale thereof, and, upon consummation of any suchsale, the Administrative Agent shall have the right to assign, transfer anddeliver to the purchaser or purchasers thereof the Collateral so sold. Eachpurchaser at any such sale shall hold the property sold absolutely free fromany 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/orappraisal that it now has or may at any time in the future have under any rule oflaw or statute now existing or hereafter enacted. The Administrative Agent orany Secured Party shall have the right upon any such public sale to purchasethe whole or any part of the Collateral so sold, and the Administrative Agentor such Secured Party may subject to (x) the satisfaction in full in cashof all payments due pursuant to Section 11(b)(i), and (y) the ratablesatisfaction of the Obligations in accordance with Section 11(b)(ii) paythe purchase price by crediting the amount thereof against the Obligations. ThePledgor agrees that, to the extent notice of sale shall be required by law, atleast ten days’ notice to the Pledgor of the time and place of any public saleshall constitute reasonable notification. The Administrative Agent shall not beobligated to make any sale of Collateral regardless of notice of sale havingbeen given. The Administrative Agent may adjourn any public sale from time totime 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 soadjourned. To the extent permitted by law, the Pledgor hereby waives any claimagainst the Administrative Agent arising by reason of the fact that the priceat which any Collateral may have been sold at such a public sale was less thanthe price that might have 

 

7

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been obtained through anyother means of disposal of the Collateral, even if the Administrative Agentaccepts the first offer received and does not offer such Collateral to more thanone offeree.

 

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

 

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

 

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

 

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

 

Upon any sale of the Collateral by theAdministrative Agent (including pursuant to a power of sale granted by statuteor under a judicial proceeding), the receipt of the Administrative Agent or ofthe officer making the sale shall be a sufficient discharge to the purchaser orpurchasers of the Collateral so sold and such purchaser or purchasers shall notbe obligated to see to the application of any part of the purchase money paidover to the Administrative Agent or such officer or be answerable in any wayfor the misapplication thereof.

 

(c)                                  The Administrative Agent may, on behalf of the Secured Parties, exerciseany 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 thecontinuance of an Event of Default in respect of the Collateral shall bereceived in trust for the benefit of the Administrative Agent and the otherSecured Parties, shall be segregated from other property or funds of thePledgor and shall be forthwith delivered to the Administrative Agent for thebenefit 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 theAdministrative Agent is entering into this Pledge Agreement, and holds itsrights and benefits hereunder, as trustee for and on behalf of the SecuredParties until the date this Pledge Agreement is released in accordance with itsterms.

 

12. Amendments.etc. with Respect to the Obligations: Waiver of Rights. The Pledgorshall remain obligated hereunder, and the charges created hereby shall not beadversely

 

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affected, notwithstanding that, without anyreservation of rights against the Pledgor and without notice to or furtherassent by the Pledgor, (a) any demand for payment of any of theObligations made by the Administrative Agent or any other Secured Party may berescinded by such party and any of the Obligations continued, (b) theObligations, or the liability of any other party upon or for any part thereof,or any collateral security or guarantee therefor or right of offset withrespect thereto, may, from time to time, in whole or in part, be renewed,extended, amended, modified, accelerated,

 

compromised, waived, surrendered or released by theAdministrative Agent or any other Secured Party, (c) the Credit Agreement,the other Credit Documents, the Letters of Credit and any other documentsexecuted and delivered in connection therewith and the Hedge Agreements and anyother documents executed and delivered in connection therewith and anydocuments entered into with the Administrative Agent or any of its affiliatesin connection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds may be amended,modified, supplemented or terminated, in whole or in part, as theAdministrative Agent (or the Required Lenders, as the case may be, or, in thecase of any Hedge Agreement, or documents entered into with the AdministrativeAgent or any of its affiliates in connection with treasury, depositary or cashmanagement services or in connection with any automated clearinghouse transferof funds, the party thereto) may deem advisable from time to time, and (d) anycollateral security, guarantee or right of offset at any time held by theAdministrative Agent or any other Secured Party for the payment of the Obligationsmay be sold, exchanged, waived, surrendered or released. Neither theAdministrative Agent nor any other Secured Party shall have any obligation toprotect, secure, perfect or insure any Lien at any time held by it as securityfor the Obligations or for this Pledge Agreement or any property subjectthereto.

 

13. Continuing SecurityInterest: Assignments Under the Credit Agreement: Release. (a) ThisPledge Agreement shall remain in full force and effect and be binding inaccordance with and to the extent of its terms upon the Pledgor and thesuccessors and assigns thereof, and shall inure to the benefit of theAdministrative Agent and the other Secured Parties and their respectivesuccessors, indorsees, transferees and assigns until all the Obligations underthe Credit Documents shall have been satisfied by payment in full, theCommitments shall be terminated and no Letters of Credit shall be outstanding,notwithstanding that from time to time during the term of the Credit Agreementand any Hedge Agreement the Credit Parties may be free from any Obligations.

 

(b)           Uponany sale or other transfer by the Pledgor of any Collateral that is permittedunder the Credit Agreement to any person, or upon the effectiveness of anywritten consent to the release of the security interest granted hereby in anyCollateral pursuant to Section 14.1 of the Credit Agreement, theobligations of such Pledgor with respect to such Collateral shall beautomatically released and such Collateral sold free and clear of the Lien createdhereby.

 

(c)           Inconnection with any termination or release pursuant to paragraph (a) or(b), the Administrative Agent shall execute and deliver to the Pledgor, at thePledgor’s expense, all documents that the Pledgor shall reasonably request toevidence such termination

 

9

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orrelease. Any execution and delivery of documents pursuant to this Section 13shall be without recourse to or warranty by the Administrative Agent.

 

14. Reinstatement.This Pledge Agreement shall continue to be effective, or be reinstated, as thecase may be, if at any time payment, or any part thereof, of any of theObligations is rescinded or must otherwise be restored or returned by theAdministrative Agent or any other Secured Party upon the insolvency,bankruptcy, dissolution, administration, liquidation or reorganization of thePledgor, or upon or as a result of the appointment of a receiver, intervenor orconservator of, or trustee or similar officer for any Pledgor or any substantialpart of its property, or otherwise, all as though such payments had not beenmade.

 

**15.****         **Notices. All notices, requestsand demands pursuant hereto shall be made in accordance with Section 14.2of the Credit Agreement.

 

**16.****         **Counterparts. This Pledge Agreementmay be executed by the parties to this Pledge Agreement on any number ofseparate counterparts (including by facsimile or other electronictransmission), and all of said counterparts taken together shall be deemed toconstitute one and the same instrument. A set of the copies of this PledgeAgreement signed by all the parties hereto shall be lodged with theAdministrative Agent and the Pledgor.

 

**17.****         **Severability. Any provision of thisPledge Agreement that is prohibited or unenforceable in any jurisdiction shall,as to such jurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall not invalidate orrender unenforceable such provision in any other jurisdiction. The partieshereto shall endeavor in good-faith negotiations to replace the invalid,illegal or unenforceable provisions with valid provisions the economic effectof which comes as close as possible to that of the invalid, illegal orunenforceable provisions.

 

**18.****         **Integration. This Pledge Agreementrepresents the agreement of the Pledgor with respect to the subject matterhereof and there are no promises, undertakings, representations or warrantiesby the Administrative Agent or any other Secured Party relative to the subjectmatter hereof not expressly set forth or referred to herein or in the otherCredit Documents.

 

**19.****         **Amendments in Writing: No Waiver: Cumulative Remedies.

 

**(a)          **Noneof the terms or provisions of this Pledge Agreement may be waived, amended,supplemented or otherwise modified except by a written instrument executed bythe Pledgor and the Administrative Agent in accordance with Section 14.1of the Credit Agreement.

 

**(b)          **Neitherthe Administrative Agent nor any Secured Party shall by any act (except by awritten instrument pursuant to Section 19(a) hereof), delay,indulgence, omission or otherwise be deemed to have waived any right or remedyhereunder or to have acquiesced in any Default or Event of Default or in anybreach of any of the terms and conditions hereof. No failure to exercise, norany delay in exercising, on the part of the

 

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Administrative Agent orany other Secured Party, any right, power or privilege hereunder shall operateas a waiver thereof. No single or partial exercise of any right, power orprivilege hereunder shall preclude any other or further exercise thereof or theexercise of any other right, power or privilege. A waiver by the AdministrativeAgent or any other Secured Party of any right or remedy hereunder on any oneoccasion shall not be construed as a bar to any right or remedy that theAdministrative Agent or such other Secured Party would otherwise have on anyfuture occasion.

 

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

 

**20.****           **Section Headings. The Section headings used in this Pledge Agreement are forconvenience of reference only and are not to affect the construction hereof orbe taken into consideration in the interpretation hereof.

 

**21.****           **Successorsand Assigns. This Pledge Agreementshall be binding upon the successors and assigns of the Pledgor and shall inureto the benefit of the Administrative Agent and the other Secured Parties andtheir respective successors and assigns, except that the Pledgor may notassign, transfer or delegate any of its rights or obligations under this PledgeAgreement without the prior written consent of the Administrative Agent.

 

**22.****           **Submissionto Jurisdiction; Waivers. The Pledgorhereby irrevocably and unconditionally:

 

**(a)          **submits itself in any legal action or proceeding relating to this PledgeAgreement, or for recognition and enforcement of any judgment in respectthereof, to the non-exclusive general jurisdiction of the courts of theRepublic of China, the courts of the State of New York, the courts of theUnited States of America for the Southern District of New York and appellatecourts from any thereof;

 

**(b)          **consents that any such action or proceeding may be brought in such courtsand waives any objection that it may now or hereafter have to the venue of anysuch action or proceeding in any such court or that such action or proceedingwas 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 beeffected by mailing a copy thereof by registered or certified mail (or anysubstantially similar form of mail), postage prepaid, to the Pledgor at itsaddress set forth in Section 15 or at such other address of which theAdministrative Agent shall have been notified pursuant thereto;

 

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

 

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**(e)          **waives, to the maximum extent not prohibited by law, any right it mayhave to claim or recover in any legal action or proceeding referred to in this Section 22any special, exemplary, punitive or consequential damages.

 

**23.****         **EffectiveDate. This Pledge Agreement shall becomeeffective at 24:00 (German time) on the Closing Date.

 

**24.****         **GOVERNINGLAW. THIS PLEDGE AGREEMENT AND THE RIGHTS ANDOBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED ANDINTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE REPUBLIC OF CHINA.

 

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SCHEDULE 2

 

NOTIFICATION TO THE COMPANY REGARDING PLEDGEOF 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”), herebynotifies, jointly with the Administrative Agent named below, the Company thatthe Pledgor has created a pledge over the shares described below in favor ofthe Secured Parties (as defined in the Pledge Agreement entered into on July 30,2004 by Pledgors and the Administrative Agent), among which CREDIT SUISSE FIRSTBOSTON acts as the administrative agent (“Administrative Agent”) and herebyrequest the Company to record the pledge on its shareholders’ rosteraccordingly.

 

The Pledgor and the Administrative Agent furthernotifies the Company that the Pledgor and the Administrative Agent have agreedthat (i) before the Administrative Agent serves a notice to the Companyindicating that an Event of Default (as defined in the Pledge Agreement) hasoccurred, 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 theAdministrative Agent serves such notice to the Company, it is entitled toreceive and retain the Distributions; in which case, the Company shall deliverthe Distributions to the Administrative Agent for the ratable benefit of theSecured Parties.

 

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| **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:                                                                                          |   |

 

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EXHIBIT L-1

 

FORMOF UK DEBENTURE

 

 

Dated 30 July 2004

 

ROCKWOOD SPECIALTIES LIMITEDandOTHERSandCREDIT SUISSE FIRST BOSTON

 

 

FIXED AND FLOATING CHARGE

 

 

LATHAM&WATKINS

 

London

 

99 BishopsgateLondon EC2M 3XF+44 020 7710 1000 (Tel)+44 020 7374 4460 (Fax)www.lw.com

 

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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       |

 

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| **24.**                                                       | Choice of law | 29 |
|---------------------------------------------------------------|---------------|----|
|                                                          |          |
| Schedule 1 List of  Charging Companies other than UK Borrower | 30            |
|                                                          |          |
| Schedule 2 List of  Properties                                | 31            |

 

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THIS DEED OF CHARGE is made on 30 July 2004 BETWEEN

 

(1)                                  ROCKWOOD SPECIALTIES LIMITED (the “UK Borrower”), registered in Englandunder number 4050394, and the companies listed in schedule 1 (together the “ChargingCompanies” and each a “Charging Company); and

 

(2)                                  CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, atEleven Madison Avenue, New York, NY 10010, United States of America, asadministrative agent and trustee for the Secured Parties.

 

WHEREAS:

 

(A)                              The Lenders have severally agreed to make the Loans to RockwoodSpecialties Group, Inc. (the “US Borrower”) and the UK Borrower and the Letterof Credit Issuer has agreed to issue Letters of Credit for the account of theUS Borrower and the UK Borrower upon the terms and subject to the conditionsset forth in the credit agreement (the “Credit Agreement”) dated as of 30 July2004, among the US Borrower, the UK Borrower, Rockwood SpecialtiesInternational, Inc., the lending institutions from time to time party theretoas Lenders, Credit Suisse First Boston (acting through its Cayman IslandsBranch) as administrative agent and collateral agent and UBS Securities LLC andGoldman Sachs Credit Partners L.P. as co-syndication agents; and

 

(B)                                Under Section 6.1(h) of the Credit Agreement, the Charging Companies arerequired to execute this Deed in favour of the Administrative Agent for therateable benefit of the Secured Parties.

 

WITNESSES AS FOLLOWS:

 

1.                                       Interpretation

 

1.1                                 Definitions: In this Deed, each of the following expressions has, exceptso far as the context otherwise requires, the meaning shown:

 

“1925 Act” means the Law of Property Act 1925 (asamended); “Act” means the Companies Act 1985 (as amended);

 

“Administrative Agent” means Credit Suisse FirstBoston (acting through its Cayman Island Branch) as administrative agent andtrustee for the Secured Parties under this Deed or such other Person as mayfrom time to time be appointed as successor Administrative Agent to hold thewhole 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 Lienscreated by this Deed; and references to the Charged Property include referencesto any part of it;

 

“Closing Time” means 24:00 (German time) on theClosing Date;

 

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“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 otherdocument by which, pursuant to any of its provisions or otherwise, any ChargingCompany may grant a Lien to the Administrative Agent in respect of the ChargedProperty, as, in each case, from time to time varied in any *manner*or *respectwhatsoever, and “charges*contained in this Deed” and “Lienscontained in this Deed” and similar expressions shall be construed accordingly;

 

“Enforcement Event” means the occurrence of an Eventof Default, provided that the Administrative Agent has served notice upon theUK Borrower to the effect that an Event of Default has occurred and the Liensconstituted under this Deed have become enforceable and provided further that,notwithstanding the provisions of any other Credit Document, the AdministrativeAgent shall not be obliged to enforce the Liens from time to time constitutedby or pursuant to this Deed unless it is satisfied that such action is inaccordance with all applicable laws and regulations;

 

“Incapacity”, in relation to a Person, means theinsolvency, liquidation, dissolution, winding-up, administration, receivership,amalgamation, reconstruction or any analogous proceeding occurring in relationto that Person whatsoever;

 

“Insolvency Act” means the Insolvency Act 1986 asamended by the Insolvency Act 2000 and the Enterprise Act 2002;

 

“Investments” means, in relation to each ChargingCompany, all shares, stocks, options, debentures, bonds, warrants, certificatesand other securities (including all shares in its subsidiaries) of any kindwhatsoever now or in the future owned legally or beneficially *by*such Charging Company or in which suchCharging Company has an interest;

 

“Obligations” means the collective reference to: (i)(x) the principal of and premium, if any, and interest at the applicable rateprovided in the Credit Agreement (including interest accruing during thependency of any bankruptcy, insolvency, receivership or other similarproceeding, regardless of whether allowed or allowable in such proceeding) onthe Loans extended to the UK Borrower, when and as due, whether at maturity, byacceleration, upon one or more dates set for prepayment or otherwise, (y) eachpayment required to be made by the UK Borrower under the Credit Agreement inrespect of any Letter of Credit, when and as due, including payments in respectof reimbursement of disbursements, interest thereon and obligations to providecash collateral, and (z) all other monetary obligations, including fees, costs,expenses and indemnities, whether primary, secondary, direct, contingent, fixedor otherwise (including monetary obligations incurred during the pendency ofany bankruptcy, insolvency, receivership or other similar proceeding,regardless of whether allowed or allowable in such proceeding), of the UKBorrower or any other Credit Party that is a Foreign Subsidiary to any of theSecured Parties under the Credit Agreement and the other Credit Documents; (ii)alt covenants, agreements, obligations and liabilities of the UK Borrower underor pursuant to the Credit Agreement and the other Credit Documents; (iii) allthe covenants, agreements,

 

2

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obligations and liabilities of each other CreditParty that is a Foreign Subsidiary under or pursuant to this Deed or the otherCredit Documents; (iv) all obligations of the UK Borrower and each Credit Partythat is a Foreign Subsidiary under each Hedge Agreement that (x) is in effecton the Closing Date with a counterparty that is a Lender or an Affiliate of aLender as of the Closing Date or (y) is entered into after the Closing Datewith any counterparty that is a Lender or an Affiliate of a Lender at the timesuch Hedge Agreement is entered into; and (v) all obligations in respect ofoverdrafts *and*relatedliabilities owed to the Administrative Agent or its Affiliates by the UKBorrower or any other Credit Party that is a Foreign Subsidiary arising from orin connection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds; and referencesto Obligations include references to any of them;

 

“Properties” means the properties referred to inclauses 3.1.1(a) and (b);

 

“Receiver’ means any Person or Persons appointed(and any additional Person or Persons appointed or substituted) asadministrative receiver, receiver, manager, or receiver and manager by theAdministrative Agent under this Deed or otherwise;

 

“Secured Amounts” means in relation to each ChargingCompany, the moneys, obligations and liabilities which such Charging Companycovenants in clause 2 to pay or discharge and all claims, demands and damagesfor breach of any such covenant; and references to the Secured Amounts includereferences to any of them;

 

“Secured Parties” means (i) the Lenders, (ii) theLetter of Credit Issuer, (iii) the Swingline Lender, (iv) the AdministrativeAgent, (v) the Co-Syndication Agents, (vi) each counterparty to a HedgeAgreement the obligations under which constitute Secured Amounts, (vii) the beneficiariesof each indemnification obligation undertaken by the UK Borrower or any otherCredit 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 withinterest thereon and penalties in respect thereof and “Taxation” shall beconstrued 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 andassigns and Persons deriving title through or under such Charging Company inwhole or in part and whether at law or in equity and to the AdministrativeAgent includes its successors and assigns and Persons deriving title through orunder the Administrative Agent in whole or in part and whether at law or inequity;

 

1.2.2                        references to freehold and leasehold property include all estates, rightsand 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 allcontracts, licences and warranties relating thereto) and references

 

3

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to a mortgage or charge of any freehold or leaseholdproperty includes (i) the proceeds of sale of any part of that property to theextent that the Charging Company of that property is entitled to the benefit ofthose proceeds and (ii) the benefit of any covenants for title given or enteredinto by any predecessor in title of the Charging Company in respect of thatproperty 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 andconfidential information, copyrights, designs, utility models, inventions,computer software, rights in intemet domain names and databases and similarassets or rights (whether or not registered or the subject of an application toregister 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 andreferences to any document (or a provision thereof) shall be construed as areference 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 includeany statutory or legislative modification or re-enactment thereof, or anysubstitution therefor;

 

1.2.7                        references to insurances mean, in relation to each Charging Company, allnon-life present and future contracts or policies of insurance taken out by thatCharging Company or in which that Charging Company from time to time has aninterest;

 

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 thatCharging Company as carried on by it at the date of this Deed or otherwisewithout a breach of the Credit Agreement occurring;

 

1.2.9                        references to “Lenders” shall be deemed to include Affiliates of Lendersthat 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 ofsimilar import when used in this Deed shall refer to this Deed as a whole andnot to any particular provision of this Deed, and Section, subsection, clauseand Schedule references are to this Deed unless otherwise specified. The words “include”,“includes” and “including” shall be deemed to be followed by the phrase “withoutlimitation”; and

 

1.2.11                  the meanings given to terms defined herein shall be equally applicable toboth the singular and plural forms of such terms.

 

1.3                                 Headings: The headings in this Deed shall not affect its interpretation.

 

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1.4                                 Defined terms: Terms and expressions used in this Deed and not defined inthis Deed shall, except so far as the context otherwise requires, have themeanings given to them in the Credit Agreement.

 

1.5                                 Effect as a deed: This Deed is intended to take effect as a deednotwithstanding that the Administrative Agent may have executed it under handonly.

 

2.           Covenantto pay secured amounts

 

Each Charging Company as primary obligor covenantswith the Administrative Agent (on behalf of the Secured Parties) that it willpay when due and payable all moneys and liabilities and discharge allobligations and liabilities whatsoever which now are or at any time hereaftermay (whether on or after any demand) become due, owing or payable or due fordischarge, in any currency, to the Secured Parties by it, actually orcontingently, solely or jointly and/or severally with another or others, asprincipal or surety, under or in connection with the UK Guarantee and/or thisDeed and/or, in the case of the UK Borrower only, the Credit Agreement and anyHedge Agreement and for the avoidance of doubt, including the Obligations.

 

3.           Fixedand 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 Limitedonly), with full title guarantee and effective immediately upon the ClosingTime, hereby charges and mortgages to the Administrative Agent (on behalf ofthe Secured Parties) as a continuing security for the payment or discharge ofthe 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, allleasehold property wheresoever situate (other than any heritable property inScotland) now *owned by*suchCharging Company or *in*which suchCharging Company has an interest provided that, in any such case, the bookvalue or Market Value (as defined in the current Appraisal and Valuation Manualissued by the Royal Institution of Chartered Surveyors) thereof at the date ofthis Deed exceeds US$1,000,000 (or the equivalent thereof in any othercurrency);

 

(b)                                 first fixed charge, all freehold and, subject to any required third partyconsents, leasehold property now owned or hereafter acquired by such ChargingCompany or in which such Charging Company has an interest or obtains aninterest after the date of this Deed, save for any such property the subject ofa legal mortgage pursuant to clauses 3.1.1(a) or 12.1.2;

 

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(c)                                  first fixed charge, all present and future goodwill and uncalled capitalof such Charging Company;

 

(d)                                 first fixed charge, all intellectual property rights for the time beingor hereafter owned by such Charging Company or in which such Charging Companyhas or obtains an interest including all fees, royalties and other rightsderived therefrom or incidental thereto, subject to any required third partyconsents 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 actualor 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 thebenefit of any Liens and securities for the time being held by such ChargingCompany in respect of any such debts or moneys and all cash deposits in anyaccount of such Charging Company with any Person and all bills of exchange,promissory notes and negotiable instruments of any description at any timeowned or held by such Charging Company provided that, to the extent suchCharging Company creates a Lien which is a Permitted Lien within the meaning ofparagraph (k) of the definition of “Permitted Lien” over such assets inaccordance with the terms of the Credit Agreement, the fixed charge created bythis clause 3.1.1(e) shall be subject to such Permitted Lien;

 

(f)                                    first fixed charge, all the right, title and interest of such ChargingCompany to and in any proceeds of any present or future insurances; and

 

(g)                                 first fixed charge, all Investments and rights and options to acquireInvestments for the time being or hereafter owned by such Charging Company orin which such Charging Company has or obtains an interest and all rights inrespect of or incidental thereto including all allotments, dividends, interestand other distributions and all accretions, benefits and advantages whatsoeverand all property accruing or offered at any time by way of conversion orredemption, bonus, preference, option, dividend, distribution, interest orotherwise in respect thereof; and

 

3.1.2                        by way of first floating charge, the undertaking of such Charging Companyand all its property, assets and rights, whatsoever and wheresoever, both presentand future (including all stock in trade and including all freehold andleasehold property) and whether or not expressed to be mortgaged or charged tothe Administrative Agent under clause 3.1.1 above, if and to the extent suchproperty, assets and rights are not or have ceased to be effectively mortgagedor charged by way of first mortgage or fixed charge. The floating chargescreated by each Charging Company pursuant to this clause 3.1.2 are “qualifyingfloating charges” for the purposes of paragraph 14.2(a) of schedule B1 tothe Insolvency Act and paragraph 14 of schedule B1 to the Insolvency Act shallapply to this Deed.

 

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3.2                                 The Credit Documents: The obligation on the part of the Lenders to make furtheradvances under the Credit Agreement shall be deemed to be incorporated in thisDeed and each Charging Company must apply to the Chief Land Registrar to entera note of such obligations on the register of each of *the*titles *referred*to *in*clause3.3.

 

3.3                                 Registration of restriction against registered titles: Each ChargingCompany must apply to the Chief Land Registrar for the registration against theregistered titles (if any) specified in schedule 2 to this Deed of which it isthe owner and any other registered title against which this Deed may be noted(and against any title to any unregistered property specified in any suchschedule which is or ought to be the subject of a first registration of titleat H.M. Land Registry at the date of this Deed) of a restriction in thefollowing terms:

 

“Except under an order of the Registrar, nodisposition or dealing by the proprietor of the land is to be registeredwithout the consent of the proprietor for the time being of the legal chargedated [ ] 2004 between Rockwood Specialties Limited and others (1) andCredit Suisse First Boston (acting through its Cayman Islands Branch) (2)”.

 

3.4                                 Assignment: Each Charging Company, with full title guarantee and as acontinuing security for the payment or discharge of the Secured Amounts (to theextent 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 anyproceeds of claims brought against professional advisers in connection with theacquisition and other transactions consummated pursuant to the PurchaseAgreement, to the extent such proceeds are not used to reinstate or replaceassets or to meet a liability in respect of which such monies are received.

 

3.5                                 Warranty: Each Charging Company warrants to the Administrative Agent thatit is absolutely legally and beneficially entitled to all of the ChargedProperty vested in it as at the date of this Deed (and, *in particular,*to the property and assetsdescribed in the schedules to this Deed) free from all Liens (other than thosearising pursuant to this Deed, the Liens permitted by the Credit Agreement andany Liens securing Indebtedness which is no longer outstanding or any Lienswith 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 theInvestments:

 

(a)                                  such rights and powers shall not be exercised in any manner which isinconsistent with the security intended to be conferred on the AdministrativeAgent by or pursuant to this Deed (save that to the extent such exercise ispermitted by the Credit Agreement it shall be deemed not to be inconsistentwith such security);

 

(b)                                 each Charging Company shall not permit or agree to any variation of the rightsand powers attaching to or conferred by any of the Investments, participate inany rights issue, elect to receive or vote in favour of receiving any dividends

 

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otherthan in the form of cash or participate in any vote concerning a membersvoluntary winding-up or a compromise or arrangement pursuant to Section 425of the Act, in each case other than as permitted by the Credit Documents;

 

(c)                                  subject to paragraph (d) below, each Charging Company shall beentitled to *receive*alldividends, interest *and*othermonies arising from the Investments and the Administrative Agent undertakes topay to the relevant Charging Company all dividends, interest and other moviesarising from the Investments which it may receive promptly upon receipt or toexecute 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) theAdministrative Agent may at the Administrative Agents discretion (in the nameof the relevant Charging Company or otherwise):

 

(i)                                     exercise (or refrain from exercising) any voting rights in respect of theInvestments;

 

(ii)                                  apply all dividends, interest and other monies arising from the Investmentsas though they were the proceeds of sale under this Deed as set out in clause8.1;

 

(iii)                               transfer the Investments into the name of the Administrative Agent or suchnominee(s) of the Administrative Agent as it shall require; and

 

(iv)                              exercise (or refrain from exercising) the powers and rights conferred onor exercisable by the legal or beneficial owner of the Investments to exerciseall powers given to trustees by the Trustee Act 2000 in respect of securitiesor property subject to a trust.

 

4.                                       Continuance of security and release

 

4.1                                 Continuing security: Without prejudice to the generality of clause 2, thecharges contained in this *Deed*aremade for securing the Secured Amounts, *including*further advances and shall be without prejudice and in addition toany other security whatsoever which may be held by the Administrative Agentfrom any Charging Company or any other Person for or in respect of the whole orpart of the Secured Amounts; and the charges, covenants and provisionscontained in this Deed shall remain in force as continuing security to theAdministrative Agent notwithstanding any settlement of account or the existenceat any time of a credit balance on any current or other account or any otheract, event or matter whatsoever, except only the execution by theAdministrative Agent as a deed of an absolute and unconditional release or theexecution by or on behalf of the Administrative Agent of a receipt for all (andnot part only) of the Secured Amounts.

 

4.2              Retentionof security: Subject to clause 4.3, the Administrative Agent shall be entitledto retain the security constituted by this Deed until the date on which all theSecured

 

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Amounts and the obligations of the ChargingCompanies under this Deed shall have been satisfied by payment in full, theCommitments shall be terminated and no Letters of Credit shall be outstanding,notwithstanding that from time to time during the term of the Credit Agreementand any Hedge Agreement the Credit Parties may be free from any SecuredAmounts.

 

4.3                                 Release of security:

 

**(a)****                                 **Upon any sale or other transfer by any Charging Company of any ChargedProperty that is permitted under the Credit Agreement to any Person, or uponthe effectiveness of any written consent to the release of the securityinterest granted hereby in any such Charged Property pursuant to Section 14.1of the Credit Agreement, the obligations of such Charging Company with respectto such Charged Property shall be automatically released.

 

**(b)****                                 **A Charging Company shall automatically be released from its obligationshereunder and the security constituted by this Deed in the assets of suchCharging Company shall *be*automaticallyreleased *upon*the consummation ofany transaction permitted by the Credit Agreement as a result of which suchCharging Company ceases to be a subsidiary of the US Borrower.

 

4.4                                 Documents of release: In connection with any termination or releasepursuant to clause 4.3 the Administrative Agent shall execute and deliver toany Charging Company, at such Charging Company’s expense, all documents thatsuch Charging Company shall reasonably request to evidence such termination orrelease. Any execution and delivery of documents pursuant to this clause 4.4shall 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 thisDeed, each Charging Company in respect of its own Charged Property furthercovenants with the Administrative Agent as follows, subject in each case to theprovisions of the Credit Agreement so that matters not restricted thereundershall not be restricted by this Deed:

 

5.1.1                        it will not create or permit to exist any Lien in, over or affecting anyof the Charged Property;

 

5.1.2                        it will not (i) except as permitted by the Credit Agreement, sell orotherwise dispose of, or grant any option or warrant with respect to, any ofthe 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 ofthe Charged Property, except for the Lien created under this Deed; providedthat in the event a Charging Company sells or otherwise disposes of assetspermitted by the Credit Agreement and such assets are or include any of theCharged Property, the Administrative Agent shall release such Charged Propertyin accordance with clauses 4.3 and 4.4 above;

 

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5.1.3                        it will furnish to the Administrative Agent and the Lenders from time totime statements and schedules further identifying and describing the assets andproperty of such Charging Company and such other reports in connectiontherewith as the Administrative Agent may reasonably request;

 

5.1.4                        it will collect in the usual course of business as agent for theAdministrative Agent in a proper and efficient manner and pay into its accountwith the Administrative Agent or such other account as the Administrative Agentmay from time to time permit all moneys which it may receive in respect of itsDebts forthwith on receipt (such Charging Company acknowledging that it maynot, without the prior written consent of the Administrative Agent, at any timewhen an Enforcement Event is continuing, withdraw any such moneys from suchaccount) and not transfer, factor, discount, sell, release, compound,subordinate, defer or vary the terms of any Debts for the time being due, owingor payable to such Charging Company, nor otherwise set off or otherwise dealwith the same except by getting in the same in the usual course of business;

 

5.1.5                        it will not call *up or receive*inadvance of calls all *or*any partof the uncalled capital of such Charging Company;

 

5.1.6                        it shall maintain the security constituted by this Deed as a perfectedsecurity interest having at least the priority described in clause 5.2(i) andshall defend such security interest against the claims and demands of allPersons whomsoever;

 

5.1.7                        it will advise the Administrative Agent and the Lenders promptly, inreasonable detail, of any Lien of which it has knowledge (other than thesecurity constituted hereby or Permitted Liens) on any of the Charged Propertywhich would adversely affect, in any material respect, the ability of theAdministrative Agent to exercise any of its remedies hereunder;

 

5.1.8                        it will, as soon as reasonably practicable, inform the AdministrativeAgent in writing if it acquires or agrees to acquire:

 

**(a)****                                 **any freehold or leasehold property or any beneficial interest therein andin the case of the acquisition or agreement to acquire any beneficial interestto notify to the Administrative Agent the names and addresses of the trusteesthereof;

 

**(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 clause5.1.8(b), where the relevant Investments are Investments in a Charging Companyor in any other company all or substantially all of the shares of which are atthat 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 bythe Royal Institution of Chartered Surveyors) thereof exceeds US$1,000,000 (orits equivalent in another currency);

 

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5.1.9                        it shall take all such action as is available to it and (prior to theoccurrence 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 othersteps 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 theAdministrative Agent (or procure delivery to the Administrative Agent of), andthe Administrative Agent shall be entitled to hold and retain, all (or suchpart 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 orrepresenting the same held or acquired by the Charging Company or its nominee(s) togetherwith, in each case in form and substance satisfactory to the AdministrativeAgent:

 

**(a)****                                 **if any of *the*Investmentsare not in the sole name of *such*ChargingCompany, a declaration of trust in respect of such Investments (to the extentof such Charging Company’s interest therein) in favour of such Charging Company*executed*by each Person otherthan such Charging Company in whose name such Investments are registered orheld;

 

**(b)****                                 **an instrument or instruments of or relating to the transfer or assignmentof such Investments (with the name of the transferee or assignee, theconsideration and the date left blank, but otherwise duly completed) executedby 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 reasonablyspecify with a view to perfecting or protecting its security over theInvestments,

 

and so that:

 

**(i)****                                   **the Administrative Agent may at any time after the occurrence of anEnforcement Event which is continuing have the Investments registered in itsname or in the name of, or otherwise have the same held by, one or morenominees on its behalf; and

 

**(ii)****                               **notwithstanding any other provisions of this Deed, the AdministrativeAgent shall not register itself or any nominee as the owner (whether by legalmortgage or otherwise) of any of the shares in any Charging Company prior tothe occurrence of an Enforcement Event;

 

5.1.11                  it will promptly upon the accrual, offer or issue of any Investments (inthe form of stocks, shares, warrants or other securities) in which suchCharging Company has a beneficial interest, procure the delivery to theAdministrative Agent of (a) all certificates and other documents of titleto or representing such Investments and (b) each of the other documentsreferred to in paragraphs (a), (b) and (c) of clause 5.1.10;

 

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5.1.12                  it will during the subsistence of the security from time to timeconstituted by or pursuant to this Deed pay on the same becoming due all callsor other payments which may be or become due in respect of any of theInvestments, and in any case of default by such Charging Company in thisrespect, *the*Administrative Agentmay if it thinks fit make any such payment on behalf of such Charging Companyin which event any sums so paid by the Administrative Agent shall be reimbursedby the relevant Charging Company to the Administrative Agent on demand andshall carry interest from the date of payment by the Administrative Agent untilso reimbursed at the rate and otherwise as mentioned in Section 2.8(c)(y) ofthe Credit Agreement;

 

5.1.13                  it will observe and perform all material covenants, requirements andobligations from time to time imposed on, applicable to or otherwise affectingthe Properties and/or the use, ownership, occupation, possession, operation,repair, maintenance or other enjoyment or exploitation of its Propertieswhether imposed by statute, law or regulation, contract, lease, licence, grantor otherwise, carry out all registrations or renewals and generally do allother acts and things (including the taking of legal proceedings) necessary ordesirable to maintain, defend or preserve its right, title and interest to andin the Properties without infringement by any third party and not without theprior written consent of the Administrative Agent (such consent not to beunreasonably withheld or delayed) enter into any onerous or restrictiveobligations affecting any of the same or agree any rent review relating to anyinterest in any of its Properties, save in all such cases to the extent thatany failure to do so could not be reasonably expected to have a MaterialAdverse Effect;

 

5.1.14                  it will not make any structural or material alteration without the priorwritten consent of the Administrative Agent (not to be unreasonably withheld ordelayed) to or to the user of any of the Properties or do or permit to be doneanything which is a “development” within the meaning of the Town and CountryPlanning Acts from time to time or any orders or regulations under such Acts ordo or permit or omit to be done any act, matter or thing as a consequence ofwhich any provision of any statute, bye-law, order or regulation or anycondition of any consent, licence, permission or approval (whether of a publicor private nature) from time to time in force imposed on, applicable to orotherwise affecting any of its Properties is or may be infringed to the extentthat, in all cases, such an action could reasonably be expected to have aMaterial 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 orotherwise) now or at any time during the continuance of this security payablein respect of its Properties or any part thereof or by the owner or occupierthereof 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 SecuredParties and any Receiver (on a several basis) against all present and futurerent, rates, taxes,

 

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duties,charges, assessments, impositions and outgoings whatsoever (whether imposed byagreement, statute or otherwise) now or at any time during the continuance ofthis security payable *in*respectof its Properties or any part thereof or by the owner or occupier thereof tothe extent paid by the Administrative Agent, any Secured Party or any Receiverin 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 withpossession or share occupation of the whole or any part of any of itsProperties or confer any licence, right or interest to occupy or grant anylicence or permission to assign, underlet or part with possession of the sameor any part thereof or permit any Person:

 

(a)                                  to be registered (jointly with the relevant Charging Company orotherwise) as proprietor under the Land Registration Acts of any of itsProperties nor create or permit to arise any overriding interest affecting thesame within the definition in those Acts or within the meaning of the LandRegistration (Scotland) Act 1979; or

 

(b)                                 to become entitled to any right, easement, covenant, interest or othertitle encumbrance which might reasonably be expected to materially adverselyaffect 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 unreasonablywithheld) vary, surrender, cancel or dispose of, or permit to be forfeit, anyleasehold interest in any of its Properties.

 

The obligations of each Charging Company under thisclause 5 shall be in addition to and not in substitution for the covenants fortitle deemed to be included in this Deed by virtue of Part 1 of the Law ofProperty (Miscellaneous Provisions) Act 1994.

 

5.2                                 Representations: During the subsistence of the security constituted bythis Deed, each Charging Company in respect of its own Charged Propertyrepresents to the Administrative Agent that (i) the security constitutedby this Deed constitutes valid and perfected first-priority security in theCharged Property in favour of the Administrative Agent, for the rateablebenefit of the Secured Parties, as security for the Secured Amounts subject to (a) thefiling of the prescribed particulars of such security pursuant to Section 395of the Act and (b) the registration of such security at the Land Registryor the Land Charges Registry (as appropriate) and (ii) except for thesecurity constituted by this Deed, the Liens permitted by the Credit Agreementand any Liens securing Indebtedness which is no longer outstanding or any Lienswith respect to commitments to lend which have been terminated, such ChargingCompany owns each item of the Charged Property free and clear of any and allLiens or claims of others. Each Charging Company covenants with and representsto the Administrative Agent that no security agreement, financing statement orother public notice with *respect*toall or any part of the Charged Property that evidences a Lien securing anymaterial Indebtedness is on file or of record in any public office, except suchas have been filed in favour of the Administrative Agent, for the rateablebenefit of the Secured Parties, pursuant to this Deed or are permitted by theCredit Agreement.

 

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5.3                                 Powers and authorisations: Each Charging Company covenants with andrepresents to the Administrative Agent that the documents which contain orestablish such Charging Company’s constitution include provisions which givepower, and all necessary corporate authority has been obtained and actiontaken, for such Charging Company to grant the charges contained in this Deedand execute and deliver, and perform the covenants and obligations containedin, this Deed and that this Deed constitutes valid and binding obligations ofsuch Charging Company enforceable in accordance with its terms.

 

5.4                                 Non-violation: Each Charging Company further covenants and represents tothe Administrative Agent that neither the execution and delivery of this Deednor the performance of any of the covenants contained in it does or willcontravene or constitute a default under (or result in the creation orimposition of, or the obligation to create or impose, any *Lien*upon any of its property or assetspursuant to), or cause to be exceeded any limitation on it or the powers of itsdirectors 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 isbound.

 

5.5                                 Non-compliance by any Charging Company: If any Charging Company for anyreason fails to perform any of its obligations to the Administrative Agentunder this Deed, the Administrative Agent shall have power but shall not beobliged, on behalf of or in the name of such Charging Company or otherwise, toperform the obligation and to take any steps which the Administrative Agentmay, in its absolute discretion, reasonably consider appropriate with a view toremedying or mitigating the consequences of such failure, but so that theexercise of this power, or the failure to exercise it, shall in no circumstancesprejudice the Administrative Agents rights under this Deed. Any moneys soexpended by the Administrative Agent shall be repayable by such ChargingCompany to the Administrative Agent on demand together with interest at therate specified in Section 2.8(c)(y) of the Credit Agreement from thedate of payment by the Administrative Agent until such repayment, both beforeand after judgment. No exercise by the Administrative Agent of its powers *under*this clause 5.5 *shall*make the Administrative Agent or anyother of the Secured Parties liable to account as a mortgagee or heritablecreditor in possession.

 

5.6                                 Credit Agreement: Each Charging Company hereby warrants and representsthat the representations and warranties set forth in Section 8 of theCredit Agreement as they relate to the Charging Companies or in the otherCredit Documents to which each of the Charging Companies is a party, each ofwhich is hereby incorporated herein by reference, are true and correct, and theAdministrative Agent and each other Secured Party shall be entitled to rely oneach 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 forthe purposes of section 101 of the 1925 Act and the statutory power of sale andof appointing

 

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a receiver which are conferred on the AdministrativeAgent under that Act (as varied or extended by this Deed) and all other powersshall be deemed to arise immediately after execution of this Deed but shallonly be exercisable after the occurrence of an Enforcement Event which iscontinuing.

 

6.2                                 Power of sale: Section 103 of the 1925 Act shall not apply inrelation to any of the charges contained in this Deed and the statutory powerof sale (as extended by this Deed) and all other powers shall be exercisable atany 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 thepower of sale and the other powers conferred by section 101(1) and (2) arehereby extended (as if such extensions were contained therein) to authorise theAdministrative Agent at its absolute discretion, but *only after*the occurrence of an Enforcement Event which iscontinuing:

 

6.3.1                        to sell all of each Charging Company’s title to or interest in theCharged Property, and to do so for any shares, debentures or other securitieswhatsoever, or in consideration of an agreement to pay all or part of thepurchase price at a later date or dates, or an agreement to make periodicalpayments, whether or not the agreement is secured by a Lien or a guarantee, orfor such other consideration whatsoever as the Administrative Agent may thinkfit, 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), torepair, replace and develop the Charged Property and to apply for anyappropriate permission, licence or approval;

 

6.3.3                        with a view to or in connection with the sale of the Charged Property, tocarry out any transaction, scheme or arrangement which the Administrative Agentmay, in its absolute discretion, consider appropriate;

 

6.3.4                        to insure the Charged Property against such risks and for such amounts asthe 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 whichare mentioned or referred to in clause 7.6 as if each of them was expresslyconferred on the Administrative Agent by this Deed and which may not beincluded in clauses 6.3.1 to 6.3.4 above.

 

6.4                                 Delegation to Receiver: In addition and without prejudice to any of itsstatutory powers, the Administrative Agent may at any time by deed delegate tothe Receiver all or any of the extended powers of leasing, surrendering oraccepting surrenders of leases conferred on the Administrative Agent by thisDeed.

 

6.5                                 Statutory power of leasing: The Administrative Agent shall have the powerto lease and make agreements for leases at a *premium*or otherwise, to accept surrenders of leases and to grant options onsuch terms as the Administrative Agent shall consider expedient and without theneed to observe any of the provisions of sections 99 and 100 of the 1925 Act.

 

7.                                       Receiver or Administrator

 

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7.1                                 Appointment: Subject to clause 7.7, the Administrative Agent may bywriting or by deed appoint such Person or Persons (including an officer orofficers of the Administrative Agent) as it thinks fit to be administrator forthe company concerned or Receiver of the Charged Property or any part thereofand, in the case of an appointment of more than one Person, to act together orindependently of the other or others and the Administrative Agent may make suchappointment at any time after it has demanded payment of the Secured Amountswhich are due and payable but unpaid or if it is requested to do so by therelevant Charging Company or upon the presentation of a petition or applicationto the court for an administration order in respect of the relevant ChargingCompany or if any Person who is entitled to do so gives written notice of itsintention to appoint an administrator or files such a notice with the court.Where more than one Receiver is appointed, each joint Receiver shall have thepower to act severally and independently of any other joint Receivers, exceptto the extent the Administrative Agent may specify to the contrary. The powersof appointment of a Receiver shall be in addition to all statutory and otherpowers of appointment under the 1925 Act (as extended by this Deed) orotherwise and such powers shall remain exercisable from time to time by theAdministrative Agent in respect of any part of the Charged Property inaccordance with the terms of this Deed.

 

7.2                                 Removal and replacement: Except as otherwise required by statute, theAdministrative Agent may by writing or by deed remove (so far as it is lawfullyable) a Receiver and appoint another in his place or to act as an additionalReceiver.

 

7.3                                 Extent of appointment: The exclusion of any part of the Charged Propertyfrom the appointment of any Receiver shall not preclude the AdministrativeAgent from subsequently extending his or their appointment (or that of anyReceiver replacing him or them) to that part or appointing another Receiver overany 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 heis appointed and such Charging Company alone shall be responsible for his actsand defaults and liable on any contracts or engagements made *or entered*into or adopted by him; and inno circumstances whatsoever shall the Administrative Agent be in any wayresponsible for or incur any liability in connection with his contracts, engagements,acts, omissions, misconduct, negligence or default and, if a liquidator of suchCharging Company shall be appointed, the Receiver shall act as principal andnot as agent for the Administrative Agent

 

7.5                                 Remuneration: Subject to section 36 of the Insolvency Act 1986, theremuneration of any Receiver may be fixed by the Administrative Agent at a rateappropriate to the work and responsibilities involved (and may be or include acommission calculated by reference to the gross amount of all moneys receivedor otherwise and may include remuneration in connection with claims, actions orproceedings made or brought against such Receiver by any Charging Company orany other Person or the performance or discharge of any obligation imposed uponhim by statute or otherwise) but such remuneration shall be payable by therelevant Charging Company alone; and the amount of such remuneration may bedebited by the Administrative Agent to any account of such Charging Company,

 

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but shall, in any event, form part of the SecuredAmounts and accordingly be secured on the Charged Property under the chargescontained in this Deed.

 

7.6                                 Powers: A Receiver of a Charging Company shall have any and all powersconferred on an administrative receiver, receiver, manager, receiver andmanager, mortgagor and mortgagee in possession by statute or common law. Inaddition, a Receiver of a Charging Company shall have the following powers inrelation 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 ChargedProperty (or such part thereof in respect of which he may be appointed)including rents and income whether accrued before or after the date of hisappointment;

 

7.6.2                        to carry on, manage, concur in or authorise the management of, or appointa manager of the whole or any part of the business of the relevant ChargingCompany;

 

7.6.3                        to sell, exchange, license, surrender, release, disclaim, abandon, returnor otherwise dispose of or in any way whatsoever deal with the Charged Propertyor any interest in the Charged Property for such consideration (if any),including any Investments whatsoever, and upon such terms (including bydeferred payment or payment by instalments) as he may think fit and to concurin 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 easementsover the whole or any part of the Charged Property and (with or withoutconsideration) to rescind, surrender or disclaim or accept or agree to acceptsurrenders or disclaimers of leases, hire purchase contracts or agreementsrelating to or affecting the Charged Property in such circumstances, to suchPersons (including, without limitation, to the Administrative Agent), for suchpurposes and upon such terms whatsoever as he may think fit and also to varythe terms of any lease or contract affecting the Charged Property and to act inrelation to any review of the rent or provide payments under such a lease insuch 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 uponsuch terms as to remuneration and otherwise and for such periods as he maydetermine;

 

7.6.7                        to insure, protect, decorate, maintain, repair, alter, improve, replace,exploit, sever fixtures from, demolish, add to and develop or concur in sodoing the Charged Property or any part thereof in any manner and for anypurpose whatsoever;

 

7.6.8                        for such consideration and on such terms as he may think fit, to purchaseoutright 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 desirablefor the carrying on, improvement or realisation of any of the Charged Propertyor the business of the relevant Charging Company or otherwise for the benefitof the Charged Property;

 

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7.6.9                        in connection with the exercise or the proposed exercise of any of hispowers or in order to obtain payment of his remuneration (whether or not it isalready payable), to borrow or raise money from any Person, including theAdministrative Agent, without security or on the security of the ChargedProperty 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, abandonand settle any claims, disputes and proceedings concerning the Charged Propertyor any part thereof;

 

7.6.11                  to transfer all or any of the Charged Property and/or any of theliabilities of the relevant Charging Company to any other company or bodycorporate, whether or not formed or acquired for the purpose and to form asubsidiary or subsidiaries of the relevant Charging Company;

 

7.6.12                  to call up or require the directors of the relevant Charging Company tocall up all or any portion of the uncalled capital for the time being of suchCharging Company and to enforce payment of any call by action (in the name ofsuch 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 theCharged Property;

 

7.6.14                  to effect or maintain indemnity insurance and other insurance and obtainbonds and performance guarantees;

 

Charging Company or otherwise, as he may think fit,all documents, receipts, registrations, acts or things which he may considerappropriate;

 

7.6.16                  to exercise all powers, discretions, voting, conversion or other rightsor entitlements in relation to any of the Charged Property of an absoluteowner, together with all powers which are incidental to the ownership of orrights in or to any Charged Property and to complete or effect any transactionentered into by the relevant Charging Company and complete, disclaim, abandonor modify all or any of the outstanding contracts or arrangements of suchCharging Company relating to or affecting the Charged Property;

 

7.6.17                  to exercise all powers as are described in Schedule 1 to the InsolvencyAct 1986, whether or not the Receiver is an “administrative receiver” asdefined in that Act; and

 

7.6.18                  generally to carry out, or cause or authorise to be carried out, anytransaction, scheme or arrangement whatsoever, whether similar or not to any ofthe foregoing, in relation to the Charged Property which he may considerexpedient or conducive to any of the functions, powers, authorities ordiscretions on or vested in him and as effectually as if he were solely andabsolutely entitled to the Charged Property.

 

7.7                                 Insolvency Act 2000, void provisions: The Administrative Agent may notappoint a Receiver solely as a result of:

 

7.7.1                        the obtaining of a moratorium by any Charging Company; or

 

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7.7.2                        anything done by any Charging Company with a view to obtaining amoratorium, in each case under section lA of and schedule Al to the InsolvencyAct 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 theReceiver or the Administrative Agent shall be held on trust by theAdministrative Agent for the benefit of itself and the other Secured Parties(for so long as they remain Secured Parties) and (subject to any claims rankingin priority to the Secured Amounts and except as otherwise directed by theAdministrative Agent) shall be applied in or towards discharging, in thefollowing 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 bythe 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 theremuneration of the Receiver, in such order as the Receiver or theAdministrative Agent may from time to time determine;

 

8.1.2                        second, to the payment of all reasonable and documented costs andexpenses incurred by the Administrative Agent in connection with suchcollection or sale or otherwise in connection with this Deed, the other CreditDocuments or any of the Secured Amounts, including all court costs and thereasonable fees and expenses of its agents and legal counsel, the repayment ofall advances made by the Administrative Agent hereunder or under any otherCredit Document on behalf of any Charging Company and any other reasonable anddocumented costs or expenses incurred in connection with the exercise of anyright or remedy hereunder or under any other Credit Document;

 

8.1.3                        third, to the Secured Parties, an amount equal to all Secured Amountsowing to them on the date of any such distribution, and, if such moneys shallbe insufficient to pay such amounts in *full,then rateably*(without priority of any one over any other) to suchSecured Parties in proportion to the unpaid amounts thereof; and

 

8.1.4                        fourth, any surplus then remaining shall be paid to the ChargingCompanies or to whomsoever may be lawfully entitled to receive the same or as acourt of competent jurisdiction may direct.

 

Each Charging Company agrees and acknowledges thatthe Administrative Agent is entering into this Deed, and holds its rights andbenefits hereunder, as trustee for and on behalf of the Secured Parties inaccordance with the terms of clause 20.

 

8.2                                 Accounts: Notwithstanding the provisions of clause 8.1, all moneys fromtime to time received by the Administrative Agent from any Charging Company orany Person or Persons liable to pay the same or from any Receiver or otherwiseon the realisation or enforcement of the charges contained in this Deed may beapplied by the Administrative Agent either as a whole or in such proportion asthe Administrative Agent shall think fit to any account or item of account orany transaction and, without limitation, the Administrative Agent may in itsabsolute discretion at all times pending the payment to

 

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the Administrative Agent of all of the SecuredAmounts place and keep to the credit of a separate or suspense interest bearingaccount (subject to the accrual of interest at market rates for the account ofthe relevant Charging Company) any money received by the Administrative Agentfrom such Charging Company or such other Persons for so long and in such manneras the Administrative Agent may determine without any obligation to apply thesame or any part thereof in or towards the discharge of any of the SecuredAmounts.

 

8.3                                 Receiver’s Receipts: Sections 109(6) and (8) of the 1925 Actshall 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, theAdministrative Agent or any Receiver shall be concerned to enquire whether anyof the powers exercised or purported to be exercised has arisen or becomeexercisable, whether the Secured Amounts remain outstanding, whether theAdministrative Agent or any Receiver is authorised to act or as to *the propriety or*validity of the *exercise*or purported exercise of anypower; and the title of such a purchaser and the position of such a Person shallnot be impeachable by reference to any of those matters and the protectionscontained in sections 104 to 107 of the 1925 Act, section 42(3) of theInsolvency Act or in any other applicable legislation shall apply to any Personpurchasing from or dealing with a Receiver or the Administrative Agent.

 

9.2                                 Receipts: The receipt of the Administrative Agent or any Receiver shallbe an absolute and a conclusive discharge to a purchaser and shall relieve himof any obligation to see to the application of any moneys paid to or by thedirection of the Administrative Agent or the Receiver.

 

9.3                                 Construction: In clauses 9.1 and 9.2, “purchaser” includes any Personacquiring any lease of or Lien over, or any other interest or right whatsoeverin relation to, the Charged Property.

 

10.                Protectionof Administrative Agent and Receiver

 

10.1                           Liability: Neither the Administrative Agent nor any Receiver shall beliable to any Charging Company in respect of any loss or damage which arisesout of the exercise, the attempted or purported exercise or the failure toexercise any of their respective powers. Notwithstanding the foregoing, neitherthe Administrative Agent, any Receiver or any Secured Party shall be entitledto be indemnified in respect of any part of the foregoing if it arises as aresult of such party’s gross negligence or wilful misconduct.

 

10.2                           Possession: Without prejudice to the generality of clause 10.1, entryinto possession of the Charged Property shall not render the AdministrativeAgent or any Receiver liable to account as mortgagee or heritable creditor inpossession; and if and whenever the Administrative Agent or any Receiver entersinto possession of the Charged Property, it shall be entitled at any time to goout of such possession.

 

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11.                Expensesand indemnity

 

11.                                 Expenses: Each Charging Company further covenants with the AdministrativeAgent to reimburse or pay to the Administrative Agent or any Receiver (on thebasis of a full indemnity) the amount of all costs (including legal costs),charges and expenses reasonably incurred or sustained by the AdministrativeAgent or such Receiver (including, for the avoidance of doubt, any such costs,charges and expenses arising from any act or omission of, or proceedingsinvolving, any third party) in connection with:

 

11.1.1                  the investigation of title to or any survey, inspection or valuation ofthe Charged Property vested in such Charging Company under or in connectionwith this Deed, and the preparation, registration or perfecting of this Deed(or any of the charges contained in it), or any other document entered intobetween the relevant Charging Company and the Administrative Agent;

 

11.1.2                  the lawful exercise by or on behalf of the Administrative Agent or anyReceiver of any of the powers of the Administrative Agent or such Receiver, andthe enforcement, preservation or attempted preservation of this Deed or theCharged Property or any other action taken by or on behalf of theAdministrative Agent or any Receiver with a view to or in connection with therecovery by the Administrative Agent of the Secured Amounts from such ChargingCompany or any other Person; and

 

11.1.3                  the carrying out of any other act or matter which the AdministrativeAgent 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 indemnifythe Administrative Agent, the Secured Parties, any Receiver and any attorney,agent or other Person appointed by the Administrative Agent or any Receiverunder this Deed and the Administrative Agent’s officers and employees (each anindemnified Party”) on an after tax basis from and against any and allliabilities, obligations, losses, damages, penalties, actions, judgments,suits, costs, expenses or disbursements of any kind or nature whatsoever withrespect to the execution, delivery, enforcement, performance and administrationof this Deed to the extent either of the Borrowers would be required to do sopursuant to the terms of the Credit Agreement.

 

11.3                           Taxes: All sums of whatsoever nature which are payable by any ChargingCompany under this Deed and which are now or at any time hereafter becomesubject to value added tax or any similar tax shall be deemed to be exclusiveof value added tax or any similar tax and each Charging Company in addition tosuch sums will indemnify the Administrative Agent from and against all claimsand liabilities whatsoever in respect thereof. Each Charging Company agrees topay, and to indemnify the Administrative Agent, any Receiver and the SecuredParties against any and all liabilities with respect to, or resulting from anydelay in paying, any and all stamp, excise, sales or other taxes which may be payableor determined to be payable with respect to any of the Charged Property or inconnection with any of the transactions contemplated by this Deed.

 

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12.                                 Protection of charges

 

12.1                           Fixed mortgage: Each Charging Company further covenants with theAdministrative Agent at such Charging Company’s own cost, as a continuingsecurity for the payment or discharge of the Secured Amounts:

 

12.1.1                  to deposit with the Administrative Agent (which it may, subject to theterms of the Credit Agreement, retain during the continuance of the chargescontained 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 relatingthereto 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 ChargingCompany and all securities in respect of any debts payable to such ChargingCompany.

 

12.1.2                  if the Administrative Agent so requires, promptly to execute a legalmortgage, registered charge or equitable charge (as the Administrative Agentmay require), on terms comparable (so far as reasonably possible) to the Liensintended to be created by this Deed, over any freehold or, subject to anyrequired third party consents, leasehold property which is hereafter acquiredby such Charging Company or which, at the date of this Deed, is owned by suchCharging Company, but which is not specified in schedule 2 to this Deedprovided that (in the case of a requirement to execute a legal mortgage), atthe 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 bythe Royal Institution of Chartered Surveyors) of such property exceedsUS$1,000,000 (or the equivalent thereof in any other currency);

 

12.1.3                  if the Administrative Agent so requires, promptly to execute a fixedmortgage or charge (as the Administrative Agent may require), on termscomparable (so far as reasonably possible) to the Liens intended to be createdby this Deed of all or any part of the Charged Property which is for the timebeing subject to the floating charge contained in this Deed;

 

12.1.4                  if the Administrative Agent so requires, promptly to execute anassignment to the Administrative Agent (on behalf of the Secured Parties) onterms comparable (so far as reasonably possible) to the Liens intended to becreated by this Deed of all or any debts or moneys payable to such ChargingCompany and any Liens or documents relating to them or otherwise to negotiatethe same to the Administrative Agent;

 

12.1.5                  if the Administrative Agent so requires, promptly to execute a transferof Investments or any rights to Investments now owned or hereafter acquired bysuch 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 sharesin a subsidiary of such Charging Company, that the transfer to theAdministrative Agent or its nominee is duly registered within one week; and

 

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12.1.6                  if the Administrative Agent so requires, promptly to execute a mortgageor first fixed charge if it acquires or agrees to acquire any intellectualproperty rights in terms specified by the Administrative Agent.

 

12.2                           Further security: Each Charging Company further covenants with theAdministrative Agent from time to time (and, for the purposes mentioned inclause 12.2.2, notwithstanding that the Administrative Agent may not haveserved a demand for payment of the Secured Amounts) upon demand to execute, atsuch 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 perfectingor protecting any charge or security created or intended to be created by thisDeed; or

 

12.2.2                  the Administrative Agent or any Receiver may reasonably specify with aview to facilitating the exercise or the proposed exercise of any of theirpowers.

 

12.3                           Registration: Each Charging Company covenants to procure that the legalmortgages contained in this Deed in respect of the Properties vested in it areregistered 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 ina crystallisation of the floating charge created by this Deed or any otherright the Administrative Agent may have but subject to clause 13.4, theAdministrative Agent may, at any time (subject to clause 13.2) after anEnforcement Event has occurred, by notice in writing to the relevant ChargingCompany declare that the floating charge hereby created shall be converted intoa first specific fixed charge as to all of the undertaking, property and assetsor such of them as may be specified in the notice, and by way of furtherassurance, such Charging Company, at its own expense, shall execute alldocuments in such form as the Administrative Agent shall require and shalldeliver to the Administrative Agent all conveyances, deeds, certificates anddocuments 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 beserved by the Administrative Agent under clause 13.1 if the AdministrativeAgent has reason to believe that such Charging Company’s property, assets andrights described or referred to in the demand or notice are in danger of beingseized or sold *under*any form ofdistress or *execution*levied orthreatened or are otherwise in immediate jeopardy.

 

13.3                           Automatic crystallisation: In addition and without prejudice to any otherevent resulting in a crystallisation of the floating charge but subject toclause 13.4, the floating charge contained herein shall automatically beconverted into a fixed charge over all property, assets or undertaking of aCharging Company subject to the floating charge if and when the holder of anyother Lien whether ranking in priority to or pad passu with or after the

 

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charges contained in this Deed shall appoint anadministrator, administrative receiver, receiver, manager or receiver andmanager.

 

13.4                           Insolvency Act 2000, void provisions: No floating charge granted by anyCharging Company pursuant to clause 3.1.2 shall, either by notice given by theAdministrative Agent under clause 13.1 or automatically under clause 13.3, beconverted into fixed charges over any Charged Property or otherwise crystallisesolely 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 amoratorium, in each case under section 1A of and schedule Al to the InsolvencyAct 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 AdministrativeAgent in the Charged Property and the performance of each Charging Company’sobligations to the Administrative Agent whether under this Deed or the otherCredit Documents or otherwise, each Charging Company irrevocably and by way ofsecurity appoints the Administrative Agent and any Receiver jointly and alsoseverally to be its attorney and attorneys (with full power to appointsubstitutes and to sub-delegate, including power to authorise the Person soappointed to make further appointments, in both cases, with regard to all orany part of such Charging Company’s Charged Property) on behalf of suchCharging Company and in its name or otherwise, to execute any document or doany act or thing which the Administrative Agent or such Receiver (or theirsubstitutes or delegates) may, in its or his absolute discretion, considerappropriate in connection with the exercise of any of the powers of theAdministrative Agent or such Receiver or which such Charging Company is obligedto the Administrative Agent to execute or do, whether under this Deed orotherwise; and without prejudice to the generality of its power to appointsubstitutes and to sub-delegate, the Administrative Agent may appoint anyReceiver as its substitute or delegate, and any Person appointed the substituteof the Administrative Agent shall, in connection with the exercise of the saidpower of attorney, be the agent of such Charging Company and clause 7.4 shallapply 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 containedin this Deed shall become enforceable, it will hold all of the Charged Propertyvested in it (subject to the right of redemption) upon trust to convey, assignor otherwise deal with the Charged Property vested in it in such manner and tosuch Person as the Administrative Agent shall direct and declares that it shallbe lawful for the Administrative Agent to appoint a new trustee or trustees ofthe Charged Property in place of such Charging Company.

 

14.3                           Powers as trustee: Each Charging Company hereby agrees and declares thatthe Administrative Agent or any nominee of the Administrative Agent may at anytime after the Administrative Agent or any nominee or nominees of theAdministrative Agent has/have been registered as owner(s) of anyInvestments, without any further consent or

 

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authority on the part of such Charging Company,exercise (in the name of such Charging Company or otherwise) with respect tosuch Investments and to the exclusion of such Charging Company, all rights andpowers conferred by statute or otherwise *upon*an absolute *owner*ofthose Investments and all the powers given to trustees by the Trustee Act 2000in respect of Investments or property subject to a trust, and all rights orpowers incidental to or conducive to the exercise of rights and powers inrelation to the Investments; provided that until the security constituted bythis Deed shall become enforceable the Administrative Agent shall:

 

14.3.1                  exercise or procure that its nominees shall exercise all such rights andpowers at the specific request of and in accordance with the instructions ofsuch Charging Company but so that neither the Administrative Agent nor anynominees of the Administrative Agent shall be obliged to give effect to anyrequest or instruction which the Administrative Agent may consider would beprejudicial to the charges contained in this Deed or if in doing so it wouldincur any cost or expense or render itself subject to any liability, unlesspreviously indemnified to its satisfaction; and

 

14.3.2                  pay or procure that its nominee shall pay to such Charging Company alldividends, interest and other distributions of an income nature that it or itsnominee receives.

 

14.4                           Ratification: Each Charging Company in respect of its Charged Propertyratifies and confirms and agrees to ratify and confirm all acts and thingswhich any attorney as mentioned in clause 14.1 shall do or *purport*to do in the lawful and properexercise of his powers under such clause.

 

15.                Inspection

 

Each Charging Company shall permit theAdministrative Agent and any Persons appointed by it full access to the ChargedProperty vested in it upon reasonable notice and, following an EnforcementEvent, to carry out any survey, inspection, assessment or review of the ChargedProperty and shall permit an inspection to be made and copies and extracts tobe taken of books, accounts, records and documents relating to the ChargedProperty vested in it or the covenants and obligations of such Charging Companyunder this Deed and any reasonable costs, fees and expenses incurred by theAdministrative Agent in connection with any such inspection, assessment orreview shall be payable by such Charging Company and shall form part of theSecured Amounts. The Administrative Agent shall have the absolute right toshare any information it gains from such inspection and review with any SecuredParty.

 

16.                Othersecurity, etc.

 

16.1                           No merger: The charges contained in or created pursuant to this Deed arein addition to, and shall neither be merged in, nor in any way exclude orprejudice any other Lien, right of recourse, set off or other right whatsoeverwhich the Secured Parties may now or at any time hereafter hold or have (orwould apart from this Deed or any charge contained or created pursuant to thisDeed hold or have) as regards each Charging Company or any other Person inrespect of the Secured Amounts and the Administrative Agent shall be

 

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under no obligation to take any steps to call in orto enforce any security for the Secured Amounts and shall not be liable to anyCharging Company for any loss arising from any omission on the part of theAdministrative Agent to take any such steps or for the manner in which theAdministrative Agent shall enforce or refrain from enforcing any such security.

 

16.2                           Consolidation: Section 93 of the 1925 Act shall not apply inrelation to any of the charges contained in this Deed.

 

16.3                           Ruling off: Without prejudice to clause 5.1.1, if the AdministrativeAgent receives notice of any Lien or any other interest (other than an interestarising out of a sale in the usual course of business which is permitted by theCredit Documents) affecting the Charged Property:

 

16.3.1                  the Administrative Agent may open a new account with the relevantCharging Company and, if it does not, it shall nevertheless be deemed to havedone so at the time it received such notice; and

 

16.3.2                  all payments made by such Charging Company to the Administrative Agentafter the Administrative Agent receives such notice shall be credited or deemedto have been credited to the new account, and in no circumstances whatsoevershall operate to reduce the Secured Amounts as at the time the AdministrativeAgent received such notice.

 

16.4                           Change of name, etc.: This Deed shall remain valid and enforceablenotwithstanding any:

 

16.4.1                  Incapacity, change in the name, composition or constitution of theAdministrative Agent or any Charging Company or any amalgamation orconsolidation by the Administrative Agent or any Charging Company with anyother corporation; or

 

16.4.2                  any amendment, waiver or variation (however material or fundamental) ofany Credit Document.

 

Without prejudice to the foregoing, each ChargingCompany shall be deemed to be a principal debtor and the sole, original andindependent obligor for the Secured Amounts and its Charged Property shall bedeemed to be a principal security for the Secured Amounts. The liability ofeach Charging Company under this Deed shall not be discharged, impaired orotherwise affected by any circumstance, act, omission, matter or thing whichbut for this provision might operate to reduce, release, prejudice or otherwiseexonerate any Charging Company from its obligations under the Credit Documentsin whole or in part, including without limitation and whether or not known toany 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 otherPerson or any change in its status, function, control or ownership; or

 

(b)                                 any time, indulgence, concession, waiver or consent granted to, or compositionwith, any Charging Company or any other Person; or

 

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(c)                                  the release of any Charging Company or any other Person under the termsof any composition or arrangement with any creditor of the such ChargingCompany or any of its Affiliates; or

 

(d)                                 the taking, variation, compromise, exchange, renewal or release of, orrefusal or neglect to perfect, take-up or enforce, any rights against, orsecurity over, the assets of any Charging Company or any other Person or anynon-presentation or non-observance of any formality or other requirement inrespect of any instrument or any failure to release or to realise the fullvalue 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 orstatus of, or other circumstance relating to, any Charging Company or any otherPerson; or

 

(f)                                    any variation (however fundamental and whether or not involving anyincrease in the liability of any Charging Company or any other Credit Party thereunder) or replacement of any CreditDocument or any other document or security; or

 

(g)                                 any unenforceability, illegality, invalidity or frustration of anyobligation of any Charging Company or any other Person under any Credit Documentor any other document or security, or any failure of any Charging Company orany other Credit Party to become bound by the terms of any other CreditDocument, in each case whether through any want of power or authority orotherwise; or

 

(h)                                 any postponement, discharge, reduction, non-provability or similarcircumstances affecting any obligation of any Charging Company or any otherCredit Party under a Credit Document resulting from any insolvency, liquidationor dissolution proceedings or from any law, regulation or order,

 

so that each Charging Company’s obligations underthis Deed remain in full force and effect and that this Deed shall be construedaccordingly as if there were no such circumstance, act, omission, matter orthing.

 

16.5                           Non-competition: Subject as provided below, until the date on which allthe Secured Amounts and the obligations of the Charging Companies under thisDeed shall have been satisfied by payment in full, the Commitments shall beterminated and no Letters of Credit shall be outstanding (notwithstanding thatfrom time to time during the term of the Credit Agreement and any HedgeAgreement the Credit Parties may be free from any Secured Amounts), no ChargingCompany shall, by virtue of any payment made, security realised or moneysreceived or recovered under any of the Credit Documents for or on account ofthe liability of any Credit Party:

 

16.5.1                  be subrogated to any rights, security or moneys held, received orreceivable by the Administrative Agent or any other Secured Party or beentitled to any right of contribution or indemnity; or

 

16.5.2                  claim, rank, prove or vote as a creditor of any Credit Party or itsestate in competition with the Administrative Agent or any other Secured Party;or

 

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16.5.3                  receive, claim or have the benefit of any payment, distribution orsecurity from or on account of any Credit Party, or exercise any right ofset-off against any Credit Party.

 

Each Charging Company shall hold in trust for andforthwith pay or transfer to the Administrative Agent for the benefit of theSecured Parties any payment or distribution or benefit of security received byit contrary to the above. If any Charging Company exercises any right ofset-off contrary to the above it will forthwith pay an amount equal to theamount set off to the Administrative Agent for the benefit of the SecuredParties. Notwithstanding the foregoing, following any enforcement of thesecurity created hereunder by the Administrative Agent under this Deed, eachCharging Company will (at its own cost) promptly take such steps or actions asare referred to above as the Administrative Agent may from time to timestipulate.

 

17.                                 Set-off

 

Each Secured Party may upon the occurrence of anEnforcement Event and notwithstanding any settlement of account or other matterwhatsoever combine or consolidate all or any of its existing accounts includingaccounts in the name of such Secured Party or of any Charging Company jointlywith others and may set off or transfer all or any part of any credit balanceor any sum standing to the credit of any account (whether or not the same isdue to such Charging Company from such Secured Party and whether or not thecredit balance and the account in debit or the Secured Amounts are expressed inthe same currency in which case such Secured Party is hereby authorised toeffect any necessary conversions at its then prevailing rates of exchange) inor towards satisfaction of any of the Secured Amounts and may in its absolutediscretion (acting reasonably) estimate the amount of any liability of suchCharging Company which is contingent or unascertained and thereafter set offsuch estimated amount and no amount shall be payable by such Secured Party tosuch Charging Company unless and until all Secured Amounts have beenascertained and fully repaid or discharged.

 

18.         Avoidanceof payments

 

18.1                           No release: No assurance, security or payment which may be avoided oradjusted under the law, including under any enactment relating to bankruptcy orinsolvency, and no release, settlement or discharge given or made by theAdministrative Agent on the faith of any such assurance, security or payment,shall prejudice or affect the right of the Administrative Agent to recover theSecured Amounts from any Charging Company (including any moneys which it may becompelled to pay or refund under the provisions of the Insolvency Act and anycosts 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 theSecured Amounts.

 

18.2                           Retention of charges: If the Administrative Agent shall have reasonablegrounds in its absolute discretion for believing that any Charging Company maybe insolvent or deemed to be insolvent pursuant to the provisions of theInsolvency Act as at the date of any payment made by such Charging Company tothe Administrative Agent, the Administrative Agent shall be at liberty toretain the charges contained in or created

 

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pursuant to this Deed until the expiry of a periodof one month plus such statutory period within which any assurance, security,guarantee or payment can be avoided or invalidated after the payment anddischarge in full of all Secured Amounts notwithstanding any release,settlement, discharge or arrangement which may be given or made by theAdministrative Agent on, or as a consequence of, such payment or discharge ofliability provided that, if at any time within such period, a petitionshall be presented to a competent court for an order for the winding up or themaking of an administration order in respect of such Charging Company, or suchCharging Company shall commence to be wound up or to go into administration orany analogous proceedings shall be commenced by or against such ChargingCompany, the Administrative Agent shall be at liberty to continue to retainsuch security for such further period as the Administrative Agent may determineand such security shall be deemed to continue to have been held as security forthe payment and discharge to the Administrative Agent of all Secured Amounts.

 

19.         Currencyconversion

 

19.1                           Indemnity: If under any applicable law, whether as a result of a judgmentagainst any Charging Company or the liquidation of any Charging Company or forany other reason, any payment under or in connection with this Deed is made orany amount is received or recovered by the Administrative Agent in respect ofthe Secured Amounts in a currency (the “other currency”) other than thecurrency 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 Companyshall as a separate and independent obligation fully indemnify theAdministrative Agent against the amount of the shortfall; and for the purposesof this clause, “rate of exchange” means the rate at which the AdministrativeAgent is able on the relevant date to purchase the original currency in Londonwith the other currency.

 

19.2                           Purchases: If any Charging Company fails to pay or discharge any part ofthe Secured Amounts when due (except where such payment or discharge is madewithin three Business Days of the due date), the Administrative Agent from timeto time may purchase an amount of the currency in which such sum is due withany other currency or currencies and such Charging Company’s obligationthereafter shall be to pay to the Administrative Agent the amount of the othercurrency or currencies so used to purchase.

 

20.         Declarationof Trust

 

20.1                           Declaration of Trust: The Administrative Agent hereby declares itself astrustee to hold the benefit of the covenants, agreements and undertakings ofeach of the Charging Companies contained in this Deed and the Liens and otherrights, 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 itpursuant to or in connection with this Deed with effect from the date of thisDeed on trust for the Secured Parties for application in accordance with clause8.1.

 

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20.2                           Perpetuity period: The trusts constituted or evidenced in or by clause20.1 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 accordancewith its terms, and the parties to this Deed declare that the perpetuity periodapplicable to this Deed shall for the purposes of the Perpetuities andAccumulations Act 1964 be the period of 80 years from the date of this Deed.

 

21.         Executionof documents

 

Any document required to be executed as a deed bythe Administrative Agent under or in connection with this Deed shall be validlyexecuted if executed as a deed by a duly authorised attorney of the AdministrativeAgent.

 

22.         Noticesand demands

 

All notices, requests and demands pursuant heretoshall be made in accordance with Section 14.2 of the Credit Agreement. Allcommunications and notices hereunder to any Charging Company shall be given toit in care of the US Borrower at the US Borrower’s address set forth in Section 14.2of the Credit Agreement.

 

23.                                 Further provisions

 

23.1                           Evidence of indebtedness: In any action, proceedings or claim relating tothis Deed or the charges contained in this Deed, a statement as to any amountdue to the Administrative Agent or of the Secured Amounts or any part thereofwhich is certified as being correct by an officer of the Administrative Agentshall, save in the case of manifest error, be conclusive evidence that suchamount is in fact due and payable.

 

23.2                           Rights cumulative, waiver: The rights of the Administrative Agent and anyReceiver are cumulative, may be exercised as often as they consider appropriateand are in addition to their respective rights *undergeneral law (including*the right to appoint an administrator underthe Insolvency Act). The respective rights of the Administrative Agent and anyReceiver (whether arising under this Deed or under the general law) shall notbe capable of being waived or varied otherwise than by express waiver orvariation in writing; and, in particular, any failure to exercise or any delayin exercising any such rights shall not operate as a variation or waiver ofthat or any other such right; any defective or partial exercise of such rightsshall not preclude any other or further exercise of that or any other suchright; and no act or course of conduct or negotiation on their part or on theirbehalf shall in any way preclude them from exercising any such right orconstitute a suspension or variation of any such right.

 

23.3                           Invalidity of any provision: If any provisions of this Deed becomeinvalid, illegal or unenforceable in any respect under any law, the validity,legality and enforceability of the remaining provisions shall not in any way beaffected or impaired.

 

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23.4                           No set-off or counterclaim; payments free and clear: All payments to bemade by a Charging Company under this Deed shall be made in full, without anyset-off or counterclaim whatsoever and free and clear of any deductions orwithholdings in the currency in which they are due on the due date to suchaccount as the Administrative Agent may from time to time specify.

 

23.5                           Liabilities survive deficiencies and releases: Each Charging Companyagrees to be bound by this Deed notwithstanding that any other Person intendedto execute or to be bound by this Deed or any other Credit Document may not doso or may not be effectually bound and notwithstanding that any guarantees orLiens contained in any other Credit Document may be terminated or released ormay be or become invalid or unenforceable, whether or not the deficiency isknown to any of the Secured Parties.

 

23.6                           Law of Property (Miscellaneous Provisions) Act 1989: For the purposes ofthe Law of Property (Miscellaneous Provisions) Act 1989 any provisions of theCredit Documents relating to any disposition of an interest in land shall bedeemed to be incorporated in this Deed.

 

23.7                           Contracts (Rights of *Third Parties)*Act1999: *Without prejudice*to clause8.1, and save for clauses 10.1, 11.2 and 17, no provision of this Deed isenforceable by a Person who is not a party to this Deed.

 

23.8                           Change to constitutional documents: *TheUK*Borrower undertakes with the Administrative Agent to procure inrespect of each of the other Charging Companies that, to the extent suchCharging Company has not already done so, it will remove from its respectivearticles of association:

 

23.8.1                  any and all restrictions on the transfer of its shares; or 23.8.2 any andall liens on shares, whether fully or partly paid.

 

23.9                           Charge over Shares: The UK Borrower hereby irrevocably accepts itsappointment under clause 21.8 of each UK Pledge Agreement as process agent inEngland for the US Borrower and hereby agrees that it will not revoke suchappointment without the prior written consent of the Administrative Agent whichconsent shall not be unreasonably withheld or delayed.

 

23.10                     Assignments and Transfers: No Charging Company shall be entitled toassign or transfer all or any of its rights or obligations under this Deedwithout the prior written consent of the Administrative Agent. TheAdministrative Agent may at any time assign or otherwise transfer all or anypart of its rights under this Deed in accordance with the Credit Documents andeach Charging Company authorises the Administrative Agent to execute on itsbehalf any document required to effect the necessary transfer of rights andobligations.

 

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 sameinstrument

 

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23.12                     Joint and several liability: The liability of each Charging Company underthis Deed shall be joint and several. Each agreement and undertaking of anyCharging Company shall be construed accordingly.

 

24. Choice of law

 

This Deed is governed by, and shall be construed inaccordance with, the laws of England.

 

DULY DELIVERED AS A DEED by each Charging Company oron its behalf on the date inserted above.

 

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Schedule 1List of Charging Companies other than UK Borrower

 
|   |   |   |   |   |   |
|--------|--------|--------|--------|--------|--------|
|   |   |   |   |   |   |
|   |   |   |   |   |   |

 

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EXHIBIT L-2

 

FORM OFUK 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 SPECIALTIESLIMITED, a company incorporated under the laws of England and Wales (the “UKBorrower”), listed on Annex A hereto or that becomes a party heretopursuant to Section 19 hereof (each such subsidiary individually, a “SubsidiaryGuarantor” and, collectively, the “Subsidiary Guarantors”; theSubsidiary Guarantors and the US Borrower are referred to collectively as the “Guarantors”)and CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, asadministrative agent (in such capacity, the “Administrative Agent”) forthe lenders to the UK Borrower (the “Lenders”) from time to time partiesto the Credit Agreement dated as of July 30, 2004 (as the same may beamended, supplemented or otherwise modified from time to time, the “CreditAgreement”), among the US Borrower, the UK Borrower, Rockwood SpecialtiesInternational, Inc., a Delaware corporation (“Holdings”), theLenders, the Administrative Agent and UBS Securities LLC and Goldman SachsCredit Partners L.P., as co-syndication agents (in such capacities, the “Co-SyndicationAgents”) 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 theLetter of Credit Issuer has agreed to issue Letters of Credit for the accountof the UK Borrower (collectively, the “Extensions of Credit”) upon theterms and subject to the conditions set forth therein and (b) one or moreLenders or Affiliates of Lenders may from time to time enter into HedgeAgreements with the UK Borrower or any of the Restricted Subsidiaries of the UKBorrower;

 

WHEREAS, each Subsidiary Guarantor is a Subsidiaryof the UK Borrower;

 

WHEREAS, the proceeds of the Extensions of Creditwill be used in part to enable the UK Borrower to make valuable transfers tothe Guarantors in connection with the operation of their respective businesses;

 

WHEREAS, each Guarantor acknowledges that it willderive substantial direct and indirect benefit from the making of theExtensions of Credit; and

 

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WHEREAS, it is a condition precedent to theobligation of the Lenders and the Letter of Credit Issuer to make theirrespective Extensions of Credit to the UK Borrower under the Credit Agreementthat the Guarantors shall have executed and delivered this Guarantee to theAdministrative Agent for the ratable benefit of the Secured Parties;

 

NOW, THEREFORE, in consideration of the premises andto induce the Administrative Agent, the Co-Syndication Agents, the Lenders andthe Letter of Credit Issuer to enter into the Credit Agreement and to inducethe Lenders and the Letter of Credit Issuer to make their respective Extensionsof Credit to the UK Borrower under the Credit Agreement and to induce one ormore Lenders or Affiliates of Lenders to enter into Hedge Agreements with theUK Borrower and/or the Restricted Subsidiaries of the UK Borrower, theGuarantors hereby agree with the Administrative Agent, for the ratable benefitof the Secured Parties, as follows:

 

1.             DefinedTerms.

 

(a)           Unlessotherwise defined herein, terms defined in the Credit Agreement and used hereinshall have the meanings given to them in the Credit Agreement.

 

(b)           Asused herein, the term “Closing Time” means 24:00 (German time) on theClosing Date.

 

(c)           Asused 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 orallowable in such proceeding) on the Loans extended to the UK Borrower, whenand as due, whether at maturity, by acceleration, upon one or more dates setfor prepayment or otherwise, (y) each payment required to be made by theUK Borrower under the Credit Agreement in respect of any Letter of Credit, whenand as due, including payments in respect of reimbursement of disbursements,interest thereon and obligations to provide cash collateral, and (z) allother monetary obligations, including fees, costs, expenses and indemnities,whether primary, secondary, direct, contingent, fixed or otherwise (includingmonetary obligations incurred during the pendency of any bankruptcy,insolvency, receivership or other similar proceeding, regardless of whetherallowed or allowable in such proceeding), of the UK Borrower or any otherCredit Party that is a Foreign Subsidiary to any of the Secured Parties underthe Credit Agreement and the other Credit Documents, (ii) the due andpunctual performance of all covenants, agreements, obligations and liabilitiesof the UK Borrower under or pursuant to the Credit Agreement and the otherCredit Documents, (iii) the due and punctual payment and performance ofall the covenants, agreements, obligations and liabilities of each other CreditParty that is a Foreign Subsidiary under or pursuant to this Guarantee or theother Credit Documents, (iv) the due and punctual payment and performanceof all obligations of the UK Borrower and each Borrower or RestrictedSubsidiary that is a Foreign Subsidiary under each Hedge Agreement that (x) isin effect on the Closing Date with a counterparty that is a Lender or anAffiliate of a Lender as of the Closing Date or (y) is entered into afterthe Closing Date with any counterparty that is a Lender or an Affiliate of aLender at the time such Hedge Agreement is entered into and (v) the dueand punctual payment and performance of all obligations in respect ofoverdrafts and related liabilities owed to the Administrative Agent or its

 

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Affiliates by the UK Borrower or any other CreditParty that is a Foreign Subsidiary arising from or in connection with treasury,depositary or cash management services or in connection with any automatedclearinghouse transfer of funds.

 

(d)           Asused herein, the term “Secured Parties” means (i) the Lenders, (ii) theLetter of Credit Issuer, (iii) the Swingline Lender, (iv) theAdministrative Agent, (v) the Co-Syndication Agents, (vi) eachcounterparty to a Hedge Agreement the obligations under which constituteObligations, (vii) the beneficiaries of each indemnification obligationundertaken by the UK Borrower or any other Credit Party that is a ForeignSubsidiary under any Credit Document and (viii) any successors, indorsees,transferees and assigns of each of the foregoing.

 

(e)           Referencesto “Lenders” in this Guarantee shall be deemed to include Affiliates of Lendersthat may from time to time enter into Hedge Agreements with the UK Borrower orany Restricted Subsidiary of the UK Borrower.

 

(f)            Thewords “hereof,” “herein” and “hereunder” and words of similar import when usedin this Guarantee shall refer to this Guarantee as a whole and not to anyparticular provision of this Guarantee, and Section references are toSections of this Guarantee unless otherwise specified.  The words “include”, “includes” and “including”shall be deemed to be followed by the phrase “without limitation”.

 

(g)           Themeanings given to terms defined herein shall be equally applicable to both thesingular and plural forms of such terms.

 

2.             Guarantee.

 

(a)           Subjectto the provisions of Section 2(b) and effective immediately upon theClosing Time, each of the Guarantors hereby, jointly and severally,unconditionally and irrevocably, guarantees, as primary obligor and not merelyas surety, to the Administrative Agent, for the ratable benefit of the SecuredParties, the prompt and complete payment and performance when due (whether atthe stated maturity, by acceleration or otherwise) of the Obligations.

 

(b)           [Reserved].

 

(c)           EachGuarantor further agrees to pay any and all expenses (including all fees anddisbursements of counsel) that may be paid or incurred by the AdministrativeAgent or any other Secured Party in enforcing, or obtaining advice of counselin respect of, any rights with respect to, or collecting, any or all of theObligations and/or enforcing any rights with respect to, or collecting against,such Guarantor under this Guarantee.

 

(d)           EachGuarantor agrees that the Obligations may at any time and from time to timeexceed the amount of the liability of such Guarantor hereunder withoutimpairing this Guarantee or affecting the rights and remedies of theAdministrative Agent or any other Secured Party hereunder.

 

(e)           Nopayment or payments made by the UK Borrower, any of the Guarantors, any otherguarantor or any other Person or received or collected by the

 

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Administrative Agent or any other Secured Party fromthe UK Borrower, any of the Guarantors, any other guarantor or any other Personby virtue of any action or proceeding or any set-off or appropriation orapplication at any time or from time to time in reduction of or in payment ofthe Obligations shall be deemed to modify, reduce, release or otherwise affectthe liability of any Guarantor hereunder, which shall, notwithstanding any suchpayment or payments other than payments made by such Guarantor in respect ofthe Obligations or payments received or collected from such Guarantor inrespect of the Obligations, remain liable for the Obligations up to the maximumliability of such Guarantor hereunder until the Obligations under the CreditDocuments are paid in full, the Commitments are terminated and no Letters ofCredit drawn by the UK Borrower shall be outstanding.

 

(f)            EachGuarantor agrees that whenever, at any time, or from time to time, it shallmake any payment to the Administrative Agent or any other Secured Party onaccount of its liability hereunder, it will notify the Administrative Agent inwriting that such payment is made under this Guarantee for such purpose.

 

3.             Rightof Contribution.  Each Guarantor hereby agrees that to theextent that a Guarantor shall have paid more than its proportionate share ofany payment made hereunder, such Guarantor shall be entitled to seek andreceive contribution from and against any other Guarantor hereunder who has notpaid its proportionate share of such payment. Each Guarantor’s right of contribution shall be subject to the terms andconditions of Section 5 hereof.  Theprovisions of this Section 3 shall in no respect limit the obligations andliabilities of any Guarantor to the Administrative Agent and the other SecuredParties, and each Guarantor shall remain liable to the Administrative Agent andthe other Secured Parties for the full amount guaranteed by such Guarantorhereunder.

 

4.             Rightof Set-off.  In addition to any rights and remedies of theSecured Parties provided by law, each Guarantor hereby irrevocably authorizeseach Secured Party at any time and from time to time following the occurrenceand during the continuance of an Event of Default without notice to suchGuarantor or any other Guarantor, any such notice being expressly waived byeach Guarantor, upon any amount becoming due and payable by such Guarantorhereunder (whether at stated maturity, by acceleration or otherwise) to set-offand appropriate and apply against such amount any and all deposits (general orspecial, time or demand, provisional or final), in any currency, and any othercredits, indebtedness or claims, in any currency, in each case whether director indirect, absolute or contingent, matured or unmatured, at any time held orowing by such Secured Party to or for the credit or the account of suchGuarantor.  Each Secured Party shallnotify such Guarantor promptly of any such set-off and the appropriation andapplication made by such Secured Party, provided that the failure togive such notice shall not affect the validity of such set-off and application.

 

5.             NoSubrogation.  Notwithstanding any payment or payments madeby any of the Guarantors hereunder or any set-off or appropriation andapplication of funds of any of the Guarantors by the Administrative Agent orany other Secured Party, no Guarantor shall be entitled to be subrogated to anyof the rights of the Administrative Agent or any other Secured Party againstthe UK Borrower or any other Guarantor or any collateral security or guaranteeor right of offset held by the Administrative Agent or any other Secured Partyfor the payment of the Obligations, nor shall any Guarantor seek or be entitledto seek any contribution or

 

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reimbursement from the UK Borrower or any otherGuarantor in respect of payments made by such Guarantor hereunder, until allamounts owing to the Administrative Agent and the other Secured Parties by theCredit Parties on account of the Obligations under the Credit Documents arepaid in full, the Commitments are terminated and no Letters of Credit drawn bythe UK Borrower shall be outstanding.  Ifany amount shall be paid to any Guarantor on account of such subrogation rightsat any time when all the Obligations shall not have been paid in full, suchamount shall be held by such Guarantor in trust for the Administrative Agentand the other Secured Parties, segregated from other funds of such Guarantor,and shall, forthwith upon receipt by such Guarantor, be turned over to theAdministrative Agent in the exact form received by such Guarantor (dulyindorsed by such Guarantor to the Administrative Agent, if required), to beapplied against the Obligations, whether due or to become due, in such order asthe Administrative Agent may determine.

 

6.             Amendments, etc.with Respect to the Obligations; Waiver of Rights.  Each Guarantor shall remainobligated hereunder notwithstanding that, without any reservation of rightsagainst any Guarantor and without notice to or further assent by any Guarantor,(a) any demand for payment of any of the Obligations made by theAdministrative Agent or any other Secured Party may be rescinded by such partyand any of the Obligations continued, (b) the Obligations, or theliability of any other party upon or for any part thereof, or any collateralsecurity 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 theAdministrative Agent or any other Secured Party, (c) the Credit Agreement,the other Credit Documents, the Letters of Credit and any other documentsexecuted and delivered in connection therewith and the Hedge Agreements and anyother documents executed and delivered in connection therewith and anydocuments entered into with the Administrative Agent or any of its Affiliatesin connection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds may be amended,modified, supplemented or terminated, in whole or in part, as theAdministrative Agent (or the Required Lenders, as the case may be, or, in thecase of any Hedge Agreement or documents entered into with the AdministrativeAgent or any of its Affiliates in connection with treasury, depositary or cashmanagement services or in connection with any automated clearinghouse transferof funds, the party thereto) may deem advisable from time to time, and (d) anycollateral security, guarantee or right of offset at any time held by theAdministrative Agent or any other Secured Party for the payment of theObligations may be sold, exchanged, waived, surrendered or released.  Neither the Administrative Agent nor anyother Secured Party shall have any obligation to protect, secure, perfect orinsure any Lien at any time held by it as security for the Obligations or forthis Guarantee or any property subject thereto. When making any demand hereunder against any Guarantor, the AdministrativeAgent or any other Secured Party may, but shall be under no obligation to, makea similar demand on the UK Borrower or any Guarantor or guarantor, and anyfailure by the Administrative Agent or any other Secured Party to make any suchdemand or to collect any payments from the UK Borrower or any Guarantor orguarantor or any release of the UK Borrower or such Guarantor or guarantorshall not relieve any Guarantor in respect of which a demand or collection isnot made or any Guarantor not so released of its several obligations orliabilities 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 anyother Secured Party against any Guarantor. For the purposes hereof, “demand” shall include the commencement andcontinuance of any legal proceedings.

 

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7.             GuaranteeAbsolute and Unconditional.  Each Guarantor waives any and all notice ofthe creation, contraction, incurrence, renewal, extension, amendment, waiver oraccrual of any of the Obligations, and notice of or proof of reliance by theAdministrative Agent or any other Secured Party upon this Guarantee oracceptance of this Guarantee, the Obligations or any of them, shallconclusively be deemed to have been created, contracted or incurred, orrenewed, extended, amended, waived or accrued, in reliance upon this Guarantee;and all dealings between the UK Borrower and any of the Guarantors, on the onehand, and the Administrative Agent and the other Secured Parties, on the otherhand, likewise shall be conclusively presumed to have been had or consummatedin reliance upon this Guarantee.  EachGuarantor waives diligence, presentment, protest, demand for payment and noticeof default or nonpayment to or upon the UK Borrower or any of the Guarantorswith respect to the Obligations.  EachGuarantor understands and agrees that this Guarantee shall be construed as acontinuing, 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 ofthe Obligations or any other collateral security therefor or guarantee or rightof offset with respect thereto at any time or from time to time held by theAdministrative Agent or any other Secured Party, (b) any defense, set-offor counterclaim (other than a defense of payment or performance) that may atany time be available to or be asserted by the UK Borrower against the AdministrativeAgent 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 legaldischarge of the UK Borrower for the Obligations, or of such Guarantor underthis Guarantee, in bankruptcy, liquidation, administration, or in any otherinstance.  When pursuing its rights andremedies hereunder against any Guarantor, the Administrative Agent and anyother Secured Party may, but shall be under no obligation to, pursue suchrights and remedies as it may have against the UK Borrower or any other Personor against any collateral security or guarantee for the Obligations or anyright of offset with respect thereto, and any failure by the AdministrativeAgent or any other Secured Party to pursue such other rights or remedies or tocollect any payments from the UK Borrower or any such other Person or torealize upon any such collateral security or guarantee or to exercise any suchright of offset, or any release of the UK Borrower or any such other Person orany such collateral security, guarantee or right of offset, shall not relievesuch Guarantor of any liability hereunder, and shall not impair or affect therights and remedies, whether express, implied or available as a matter of law,of the Administrative Agent and the other Secured Parties against suchGuarantor.  This Guarantee shall remainin full force and effect and be binding in accordance with and to the extent ofits terms upon each Guarantor and the successors and assigns thereof, and shallinure to the benefit of the Administrative Agent and the other Secured Parties,and their respective successors, indorsees, transferees and assigns, until allthe Obligations under the Credit Documents shall have been satisfied by paymentin full, the Commitments shall be terminated and no Letters of Credit drawn bythe UK Borrower shall be outstanding, notwithstanding that from time to timeduring the term of the Credit Agreement and any Hedge Agreement the CreditParties may be free from any Obligations. A Guarantor shall automatically be released from its obligationshereunder and the Guarantee of such Guarantor shall be automatically releasedupon the consummation of any transaction permitted by the Credit Agreement as aresult of which such Guarantor ceases to be a Subsidiary of the UKBorrower.  In connection with any suchrelease, the Administrative Agent shall execute and deliver to any Guarantor,at such Guarantor’s expense, all documents that such Guarantor shall

 

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reasonably request to evidence such termination orrelease.  Any execution and delivery ofdocuments pursuant to the preceding sentence of this Section 7 shall bewithout recourse to or warranty by the Administrative Agent.

 

8.             Reinstatement.  This Guarantee shall continue tobe effective, or be reinstated, as the case may be, if at any time payment, orany part thereof, of any of the Obligations is rescinded or must otherwise berestored or returned by the Administrative Agent or any other Secured Partyupon the insolvency, bankruptcy, dissolution, liquidation or reorganization ofthe UK Borrower or any Guarantor, or upon or as a result of the appointment ofa receiver, intervenor or conservator of, or trustee or similar officer for,the UK Borrower or any Guarantor or any substantial part of its property, orotherwise, all as though such payments had not been made.

 

9.             Payments.  Each Guarantor hereby guaranteesthat payments hereunder will be paid to the Administrative Agent withoutset-off or counterclaim in Dollars at the Administrative Agent’s Office.

 

10.           Representationsand Warranties; Covenants.

 

(a)           EachGuarantor hereby represents and warrants that the representations andwarranties set forth in Section 8 of the Credit Agreement as they relateto such Guarantor or in the other Credit Documents to which such Guarantor is aparty, each of which is hereby incorporated herein by reference, are true andcorrect, and the Administrative Agent and each other Secured Party shall beentitled to rely on each of them as if they were fully set forth herein.

 

(b)           EachGuarantor hereby covenants and agrees with the Administrative Agent and eachother Secured Party that, from and after the date of this Guarantee until theObligations under the Credit Documents are paid in full, the Commitments areterminated and no Letter of Credit drawn by the UK Borrower remainsoutstanding, such Guarantor shall take, or shall refrain from taking, as thecase may be, all actions that are necessary to be taken or not taken so that noviolation of any provision, covenant or agreement contained in Section 9or 10 of the Credit Agreement, and so that no Default or Event of Default, iscaused by any act or failure to act of such Guarantor or any of itsSubsidiaries.

 

11.           Authorityof Agent.  Each Guarantor acknowledges that the rightsand responsibilities of the Administrative Agent under this Guarantee withrespect to any action taken by the Administrative Agent or the exercise ornon-exercise by the Administrative Agent of any option, right, request,judgment or other right or remedy provided for herein or resulting or arisingout of this Guarantee shall, as between the Administrative Agent and the otherSecured Parties, be governed by the Credit Agreement and by such otheragreements with respect thereto as may exist from time to time among them, but,as between the Administrative Agent and such Guarantor, the AdministrativeAgent shall be conclusively presumed to be acting as agent for the SecuredParties with full and valid authority so to act or refrain from acting, and noGuarantor shall be under any obligation, or entitlement, to make any inquiryrespecting such authority.

 

12.           Notices.  All notices, requests anddemands pursuant hereto shall be made in accordance with Section 14.2 ofthe Credit Agreement. All communications and notices

 

7

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hereunder to each Guarantor shall be given to it incare of the UK Borrower at the UK Borrower’s address set forth in Section 14.2of the Credit Agreement.

 

13.           Counterparts.  This Guarantee may be executedby one or more of the parties to this Guarantee on any number of separatecounterparts (including by facsimile or other electronic transmission), and allof said counterparts taken together shall be deemed to constitute one and thesame instrument.  A set of the copies ofthis Guarantee signed by all the parties shall be lodged with theAdministrative Agent and the UK Borrower.

 

14.           Severability.  Any provision of this Guaranteethat is prohibited or unenforceable in any jurisdiction shall, as to suchjurisdiction, be ineffective to the extent of such prohibition orunenforceability without invalidating the remaining provisions hereof, and anysuch prohibition or unenforceability in any jurisdiction shall not invalidateor render unenforceable such provision in any other jurisdiction.  The parties hereto shall endeavor ingood-faith negotiations to replace the invalid, illegal or unenforceableprovisions with valid provisions the economic effect of which comes as close aspossible to that of the invalid, illegal or unenforceable provisions.

 

15.           Integration.  This Guarantee represents theagreement of each Guarantor and the Administrative Agent with respect to thesubject matter hereof, and there are no promises, undertakings, representationsor warranties by the Administrative Agent or any other Secured Party relativeto the subject matter hereof not expressly set forth or referred to herein orin the other Credit Documents.

 

16.           Amendmentsin Writing; No Waiver; Cumulative Remedies.

 

(a)           Noneof the terms or provisions of this Guarantee may be waived, amended,supplemented or otherwise modified except by a written instrument executed bythe affected Guarantor(s) and the Administrative Agent in accordance with Section 14.1of the Credit Agreement.

 

(b)           Neitherthe Administrative Agent nor any other Secured Party shall by any act (exceptby a written instrument pursuant to Section 16(a) hereof), delay,indulgence, omission or otherwise be deemed to have waived any right or remedyhereunder or to have acquiesced in any Default or Event of Default or in anybreach of any of the terms and conditions hereof.  No failure to exercise, nor any delay inexercising, 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 exercisethereof or the exercise of any other right, power or privilege.  A waiver by the Administrative Agent or anyother Secured Party of any right or remedy hereunder on any one occasion shallnot be construed as a bar to any right or remedy that the Administrative Agentor any Secured Party would otherwise have on any future occasion.

 

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

 

8

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17.           Section Headings.  The Section headings usedin this Guarantee are for convenience of reference only and are not to affectthe construction hereof or be taken into consideration in the interpretationhereof.

 

18.           Successorsand Assigns.  This Guarantee shall be binding upon thesuccessors and assigns of each Guarantor and shall inure to the benefit of theAdministrative Agent and the other Secured Parties and their respectivesuccessors and assigns except that no Guarantor may assign, transfer ordelegate any of its rights or obligations under this Guarantee without theprior written consent of the Administrative Agent.

 

19.           AdditionalGuarantors.  Each Subsidiary of the US Borrower that isrequired to become a party to this Guarantee pursuant to Section 9.11 ofthe Credit Agreement shall become a Guarantor, with the same force and effectas if originally named as a Guarantor herein, for all purposes of thisGuarantee upon execution and delivery by such Subsidiary of a Supplement in theform of Annex B hereto.  The executionand delivery of any instrument adding an additional Guarantor as a party tothis Guarantee shall not require the consent of any other Guarantorhereunder.  The rights and obligations ofeach Guarantor hereunder shall remain in full force and effect notwithstandingthe addition of any new Guarantor as a party to this Guarantee.

 

**20.****         ****WAIVER OFJURY TRIAL****. EACH GUARANTOR HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES TRIAL BYJURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS GUARANTEE, ANY OTHERCREDIT DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.**

 

21.           Submissionto Jurisdiction; Waivers.  Each Guarantor hereby irrevocably andunconditionally:

 

(a)           submitsfor itself and its property in any legal action or proceeding relating to thisGuarantee and the other Credit Documents to which it is a party, or forrecognition and enforcement of any judgment in respect thereof, to thenon-exclusive general jurisdiction of the courts of the State of New York, thecourts of the United States of America for the Southern District ofNew York and appellate courts from any thereof;

 

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

 

(c)           agreesthat service of process in any such action or proceeding may be effected bymailing a copy thereof by registered or certified mail (or any substantiallysimilar form of mail), postage prepaid, to such Guarantor at its addressreferred to in Section 12 or at such other address of which theAdministrative Agent shall have been notified pursuant thereto;

 

(d)           agreesthat nothing herein shall affect the right of the Administrative Agent or anyother Secured Party to effect service of process in any other manner permittedby law or shall limit the right of the Administrative Agent or any otherSecured Party to sue in any other jurisdiction; and

 

9

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(e)           waives,to the maximum extent not prohibited by law, any right it may have to claim orrecover in any legal action or proceeding referred to in this Section 21any special, exemplary, punitive or consequential damages.

 

**22.****         ****GOVERNINGLAW****. THIS GUARANTEE AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDERSHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWOF THE STATE OF NEW YORK.**

 

10

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IN WITNESS WHEREOF, each of the undersigned hascaused this Guarantee to be duly executed and delivered by its duly authorizedofficer as of the day and year first above written.

 

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|   | CREDIT  SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, as  Administrative Agent |
|--------|-------------------------------------------------------------------------------------------------|
|   |                                                                                            |   |
|   |                                                                                            | by |   |
|   |                                                                                            |   |   |
|   |                                                                                            |   | Name: |
|   |                                                                                            |   | Title: |

 
|   |   | by     |   |
|--------|--------|--------|--------|
|   |   |   |   |
|   |   |   | Name:  |
|   |   |   | Title: |

 

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ANNEX A

TO THE GUARANTEE

 

 

SUBSIDIARYGUARANTORS

 

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ANNEX B TO THE

UK GUARANTEE AGREEMENT

 

SUPPLEMENTNO. [  ] dated as of[            ], tothe Guarantee dated as of July 30, 2004, among ROCKWOOD SPECIALTIES GROUP, INC.(the “US Borrower”) and each of the subsidiaries of ROCKWOOD SPECIALTIESLIMITED, a company incorporated under the laws of England and Wales (the “UKBorrower”) listed on Annex A thereto (each such subsidiaryindividually a “Subsidiary Guarantor”, and, collectively, the “SubsidiaryGuarantors”; the Subsidiary Guarantors and the US Borrower are referred tocollectively as the “Guarantors”) and CREDIT SUISSE FIRST BOSTON, actingthrough 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.  Referenceis made to (a) the Credit Agreement dated as of July 30, 2004 (asamended, supplemented or otherwise modified from time to time, the “CreditAgreement”), among the US Borrower, the UK Borrower, Rockwood SpecialtiesInternational, Inc., a Delaware corporation, the Lenders from time to timeparty thereto, Credit Suisse First Boston, acting through its Cayman IslandsBranch, as Administrative Agent for the Lenders and UBS Securities LLC andGoldman Sachs Credit Partners L.P., as co-syndication agents (in suchcapacities, the “Co-Syndication Agents”).

 

B. Capitalized terms used herein and not otherwise defined herein shallhave the meanings assigned to such terms in the Guarantee (or, if not definedtherein, in the Credit Agreement).

 

C.  TheGuarantors have entered into the Guarantee in order to induce theAdministrative Agent, the Co-Syndication Agents and the Lenders and the Letterof Credit Issuer to enter into the Credit Agreement and to induce the Lendersand the Letter of Credit Issuer to make their respective Extensions of Credit tothe Borrowers under the Credit Agreement and to induce one or more Lenders orAffiliates of Lenders to enter into Hedge Agreements with the Borrowers.  Section 9.11 of the Credit Agreement andSection 19 of the Guarantee provide that additional Subsidiaries maybecome Guarantors under the Guarantee by execution and delivery of aninstrument in the form of this Supplement. Each undersigned Subsidiary (each a “New Guarantor”) is executingthis Supplement in accordance with the requirements of the Credit Agreement tobecome a Guarantor under the Guarantee in order to induce the Lenders and theLetter of Credit Issuer to make additional Extensions of Credit to the UKBorrower and as consideration for the Extensions of Credit previously made tothe UK Borrower.

 

Accordingly, the Administrative Agent and each NewGuarantor agrees as follows:

 

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SECTION 1. In accordance with Section 19 of the Guarantee, each New Guarantorby its signature below becomes a Guarantor under the Guarantee with the sameforce and effect as if originally named therein as a Guarantor and each NewGuarantor hereby (a) agrees to all the terms and provisions of theGuarantee applicable to it as a Guarantor thereunder and (b) representsand warrants that the representations and warranties made by it as a Guarantorthereunder are true and correct on and as of the date hereof. Each reference toa Guarantor in the Guarantee shall be deemed to include each NewGuarantor.  The Guarantee is herebyincorporated herein by reference.

 

SECTION 2. Each New Guarantor represents and warrants to the Administrative Agentand the other Secured Parties that this Supplement has been duly authorized,executed and delivered by it and constitutes its legal, valid and bindingobligation, enforceable against it in accordance with its terms.

 

SECTION 3. This Supplement may be executed by one or more of the parties to thisSupplement on any number of separate counterparts (including by facsimile orother electronic transmission), and all of said counterparts taken togethershall be deemed to constitute one and the same instrument.  A set of the copies of this Supplement signedby all the parties shall be lodged with the US Borrower and the AdministrativeAgent.  This Supplement shall becomeeffective as to each New Guarantor when the Administrative Agent shall havereceived counterparts of this Supplement that, when taken together, bear thesignatures of such New Guarantor and the Administrative Agent.

 

SECTION 4. Except as expressly supplemented hereby, the Guarantee shall remain infull force and effect.

 

**SECTION 5. THIS SUPPLEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDERSHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWOF THE STATE OF NEW YORK.**

 

SECTION 6. Any provision of this Supplement that is prohibited or unenforceable inany jurisdiction shall, as to such jurisdiction, be ineffective to the extentof such prohibition or unenforceability without invalidating the remainingprovisions hereof and in the Guarantee, and any such prohibition orunenforceability in any jurisdiction shall not invalidate or renderunenforceable such provision in any other jurisdiction.  The parties hereto shall endeavor ingood-faith negotiations to replace the invalid, illegal or unenforceableprovisions with valid provisions the economic effect of which comes as close aspossible to that of the invalid, illegal or unenforceable provisions.

 

SECTION 7. All notices, requests and demands pursuant hereto shall be made inaccordance with Section 14.2 of the Credit Agreement.  All communications and notices hereunder toeach New Guarantor shall be given to it in care of the UK Borrower at theUK Borrower’s address set forth in Section 14.2 of the CreditAgreement.

 

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SECTION 8. Each New Guarantor agrees to reimburse the Administrative Agent for itsout-of-pocket expenses in connection with this Supplement, including the fees,disbursements and other charges of counsel for the Administrative Agent.

 

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ANNEX B TO THE

UK GUARANTEE AGREEMENT

 

IN WITNESS WHEREOF, each New Guarantor and theAdministrative Agent have duly executed this Supplement to the Guarantee as ofthe 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: |

 

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EXHIBIT L-3

 

FORMSOF 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

 

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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                                               |

 

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THIS DEED OF CHARGE is made on 30 July 2004 BETWEEN

 

**(A)****                              **ROCKWOODSPECIALTIES GROUP, INC. (the “Chargor”), a Delaware corporation of 100 OverlookCenter, Princeton, NJ 08542, United States of America; and

 

**(B)****                              **CREDITSUISSE FIRST BOSTON, acting through its Cayman Islands Branch, at ElevenMadison Avenue, New York, NY 10010, United States of America, as administrativeagent and trustee for the Secured Parties.

 

WHEREAS:

 

**(1)****                                **TheLenders have severally agreed to make the Loans to the Chargor and to RockwoodSpecialties Limited (the “UK Borrower”) and the Letter of Credit Issuer hasagreed to issue Letters of Credit for the account of the Chargor and the UKBorrower upon the terms and subject to the conditions set forth in the creditagreement (the “Credit Agreement”) dated as of 30 July 2004, among the Chargor,the UK Borrower, Rockwood Specialties International, Inc., the lendinginstitutions from time to time party thereto as Lenders, Credit Suisse FirstBoston (acting through its Cayman Islands Branch) as administrative agent andcollateral agent and UBS Securities LLC and Goldman Sachs Credit Partners L.P.as co-syndication agents; and

 

**(2)****                                **UnderSection 6.1(g) of the Credit Agreement, the Chargor is required to execute thisDeed in favour of the Administrative Agent for the rateable benefit of theSecured Parties.

 

WITNESSES AS FOLLOWS:

 

1.                                      Interpretation

 

1.1                               Definitions: In this Deed, each of the following expressions has, exceptso far as the context otherwise requires, the meaning shown:

 

“Act” means the Companies Act 1985 (as amended);

 

“Administrative Agent” means Credit Suisse FirstBoston (acting through its Cayman Island Branch) as administrative agent andtrustee for the Secured Parties under this Deed or such other Person as mayfrom time to time be appointed as successor Administrative Agent to hold thewhole or any part of the security created hereby;

 

“After-acquired Shares” means any shares obtained bythe Chargor in the future in the UK Borrower, provided that such future sharesare not charged under the US Share Charge;

 

“Charged Property” means:

 

**(a)****                                **theshares listed in Schedule 1 hereto and any After-acquired Shares;

 

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**(b)****                                **allrights in respect of or incidental to the shares identified in paragraph (a)above, including *the*certificatesrepresenting such shares and any interest of the Chargor in the entries on thebooks of the issuer of such shares or any financial intermediary pertaining tosuch shares and all dividends, cash, warrants, rights, instruments and otherproperty or proceeds from time to time received, receivable or otherwisedistributed in respect of or in exchange for any or all of such shares; and

 

**(c)****                                 **tothe extent not covered by paragraphs (a) and (b) above, all proceeds of any orall 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 isvoluntary or involuntary, and includes proceeds of any indemnity or guaranteepayable to the Chargor or the Administrative Agent from time to time with respectto any of the Charged Property,

 

and references to the Charged Property includereferences to any part of it; “Closing Time” means 24:00 (German time) on theClosing Date;

 

“this Deed” means this present deed and any otherdocument by which, pursuant to any of its provisions or otherwise, the Chargormay grant a Lien to the Administrative Agent in respect of the ChargedProperty, as, in each case, from time to time varied in any manner or respectwhatsoever, and “charges contained in this Deed” and “Liens contained in thisDeed” and similar expressions shall be construed accordingly;

 

“Enforcement Event” means the occurrence of an Eventof Default, provided that the Administrative Agent has served notice upon theChargor to the effect that an Event of Default has occurred and the Liensconstituted under this Deed have become enforceable and provided further that,notwithstanding the provisions of any other Credit Document, the AdministrativeAgent shall not be obliged to enforce the Liens from time to time constitutedby or pursuant to this Deed unless it is satisfied that such action is inaccordance 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 Personof whatever nature, and any warrants, options or other rights entitling theholder thereof to purchase or acquire any of the foregoing;

 

“Incapacity”, in relation to a Person, means theinsolvency, liquidation, dissolution, winding-up, administration, receivership,amalgamation, reconstruction or any analogous proceeding occurring in relationto that Person whatsoever;

 

“Receiver” means any Person or Persons appointed(and any additional Person or Persons appointed or substituted) asadministrative receiver, receiver, manager, or receiver and manager by theAdministrative 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, andinterest at the applicable rate provided in the

 

2

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Credit Agreement (including interest accruing duringthe pendency of any bankruptcy, insolvency, receivership or other similarproceeding, regardless of whether allowed or allowable in such proceeding) onthe Loans extended to the UK Borrower, when and as due, whether at maturity, byacceleration, upon one or more dates set for prepayment or otherwise, (y) eachpayment required to be made by the UK Borrower under the Credit Agreement inrespect of any Letter of Credit, when and as due, including payments in respectof reimbursement of disbursements, interest thereon and obligations to providecash collateral, and (z) all other monetary obligations, including fees, costs,expenses and indemnities, whether primary, secondary, direct, contingent, fixedor otherwise (including monetary obligations incurred during the pendency ofany bankruptcy, insolvency, receivership or other similar proceeding,regardless of whether allowed or allowable in such proceeding), of the UKBorrower or any other Credit Party that is a Foreign Subsidiary to any of theSecured Parties under the Credit Agreement and the other Credit Documents; (ii)all covenants, agreements, obligations and liabilities of the UK Borrower underor pursuant to the Credit Agreement and the other Credit Documents; (iii) allcovenants, agreements, obligations and liabilities of each other Credit Partythat 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 ForeignSubsidiary under each Hedge Agreement that (x) is in effect on the Closing Datewith a counterparty that is a Lender or an Affiliate of a Lender as of theClosing Date or (y) is entered into after the Closing Date with anycounterparty that is a Lender or an Affiliate of a Lender at the time suchHedge Agreement is entered into; and (v) all obligations in respect ofoverdrafts and related liabilities owed to the Administrative Agent or itsAffiliate by the *UK Borrower*orany other Credit Party that is a Foreign Subsidiary arising from or inconnection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds; and referencesto Secured Amounts include references to any of them;

 

“Secured Parties” means (i) the Lenders, (ii) theLetter of Credit Issuer, (iii) the Swingline Lender, (iv) the AdministrativeAgent, (v) the Co-Syndication Agents, (vi) each counterparty to a HedgeAgreement the obligations under which constitute Secured Amounts, (vii) thebeneficiaries of each indemnification obligation undertaken by the UK Borroweror any other Credit Party that is a Foreign Subsidiary and (viii) anysuccessors, indorsees, transferees and assigns of each of the foregoing and “SecuredParty” means any one of them;

 

“Taxes” includes all present and future taxes,levies, imposts, duties, fees or charges of whatever nature together withinterest thereon and penalties in respect thereof and “Taxation” shall beconstrued accordingly; and

 

“US Share Charge” means a charge dated 30 July 2004,among the Chargor and the Administrative Agent creating a charge over 65percent of the issued and outstanding Equity Interests in the UK Borrower.

 

1.2                          Construction: In this Deed, except where the context otherwise requires:

 

3

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1.2.1                references to the Chargor include its permitted successors and assignsand Persons deriving title through or under the Chargor in whole or in part andwhether at law or in equity and to the Administrative Agent includes itssuccessors and assigns and Persons deriving title through or under theAdministrative 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 andreferences to any document (or a provision thereof) shall be construed as areference 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 otherlegislative provision shall include any statutory or legislative modificationor 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 Chargoras carried on by it at the date of this Deed or otherwise without a breach ofthe Credit Agreement occurring;

 

1.2.6                references to “Lenders” shall be deemed to include Affiliates of Lendersthat may from time to time enter into Hedge Agreements with the Borrowers (oreither of them);

 

1.2.7                the words “hereof’, “herein”, “hereto” and “hereunder” and words ofsimilar import when used in this Deed shall refer to this Deed as a whole andnot to any particular provision of this Deed, and Section, subsection, clauseand Schedule references are to this Deed unless otherwise specified. The words “include”,“includes” and “including” shall be deemed to be followed by the phrase “withoutlimitation”; and

 

1.2.8                the meanings given to terms defined herein shall be equally applicable toboth 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 inthis

 

Deed shall, except so far as the context otherwiserequires, have the meanings given to them in the Credit Agreement and theappendices thereto.

 

1.5                          Effect as a deed: This Deed is intended to take effect as a deednotwithstanding

 

that the Administrative Agent may have executed itunder hand only.

 

**2.****                                **Covenant to pay secured amounts

 

The Chargor as primary obligor covenants with theAdministrative Agent (on behalf of the Secured Parties) that it will pay whendue and payable all of the Secured Amounts

 

4

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which now are *or*atany time hereafter may (whether *on*orafter any demand) become due, owing or payable or due for discharge, in anycurrency, to the Secured Parties by the UK Borrower or any other Credit Partythat is a Foreign Subsidiary, actually or contingently, solely or jointlyand/or severally with another or others, as principal or surety.

 

**3.****                                **Fixed charge

 

3.1                          Charge: The Chargor with full title guarantee and effective immediatelyupon the

 

Closing Time, hereby charges to the AdministrativeAgent (on behalf of the Secured Parties) the Charged Property by way of firstfixed charge as a continuing security for the payment or discharge of the SecuredAmounts.

 

3.2                          Warranty: The Chargor warrants to the Administrative Agent that it isabsolutely

 

entitled to all of the Charged Property vested in itas at the date of this Deed free from all Liens (other than those arisingpursuant to this Deed) and that, as of the date of this Deed, the sharesforming part of the Charged Property vested in it have been duly authorised andvalidly issued and are fully paid and no calls have been or can be made intheir respect.

 

3.3                          Rights attaching to the Charged Property:

 

3.3.1                With respect to the Chargor’s rights and powers relating to the ChargedProperty:

 

(i)                                the Chargor shall be entitled to exercise any and all voting and otherconsensual rights pertaining to the Charged Property or any part thereof forany purpose not prohibited by the terms of this Deed or the other CreditDocuments and to the extent that such exercise is not inconsistent with thesecurity intended to be conferred on the Administrative Agent by or pursuant tothis Deed; and

 

(ii)                             in the event that the Administrative Agent registers itself as the legalowner of any shares constituting part of the Charged Property, theAdministrative Agent shall execute and deliver (or cause to be executed anddelivered) to the Chargor all such proxies and other instruments as the Chargormay reasonably request for the purpose of enabling the Chargor to exercise thevoting and other rights that it is entitled to exercise pursuant to clause3.3.1(a)(1) above;

 

(b)                                 the Chargor shall not, except to the extent permitted by the CreditAgreement, permit or agree to any variation of the rights attaching to orconferred 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 theform of cash or participate in any vote concerning a members voluntarywinding-up or a compromise or arrangement pursuant to Section 425 of the Act;

 

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(c)                                  subject to clause 3.1.1(d) below, the Chargor shall be entitled toreceive and retain and *use, free*andclear of any Lien created by this Deed, any and all dividends and distributionsmade or paid in respect of the Charged Property to the extent permitted by theCredit Agreement provided, however, that any and all non-cash dividends,interest, principal or other distributions that would constitute ChargedProperty, whether resulting from a subdivision, combination or reclassificationof the outstanding Equity Interests of the UK Borrower or received in exchangefor shares forming part of the Charged Property or any part thereof, or inredemption thereof, or as a result of any merger, consolidation, acquisition orother 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 holdas, Charged Property and shall, if received by the Chargor, be received intrust for the benefit of the Administrative Agent (on behalf of the SecuredParties), be segregated from the other property or funds of the Chargor and beforthwith delivered to the Administrative Agent as Charged Property in the sameform as so received (with any necessary endorsement); and

 

(d)                                 after the occurrence of an Enforcement Event and whilst such event iscontinuing (and without any consent or authority on the part of the Chargor)the Administrative Agent may at the Administrative Agents discretion (in thename of the Chargor or otherwise):

 

(i)           *exercise*(or refrain from exercising) anyvoting rights in respect of the

 

Charged Property, provided that, unlessotherwise directed by the Required Lenders, the Administrative Agent shall havethe right from time to time following and during the continuance of an Event ofDefault to permit the Chargor to exercise such rights. After all of the Eventsof Default have been cured or waived and the Chargor has delivered to theAdministrative Agent a certificate to that effect, the Chargor will have theright to exercise the voting and consensual

 

rights that the Chargor would otherwise be entitledto exercise pursuant to the terms of this clause 3.3.1 (and the obligations ofthe Administrative Agent under the same shall be reinstated);

 

**(ii)****                          **receiveall dividends and distributions that the Chargor would otherwise be authorisedto receive and retain and apply all dividends, interest and other moniesarising from the Charged Property as though they were the proceeds of saleunder this Deed as set out in clause 8.1, provided that after all Events ofDefault have been cured or waived, and the Chargor has delivered to theAdministrative Agent a certificate to that effect, the Administrative Agentshall repay to the Chargor (without interest) all dividends and distributionsthat the Chargor would otherwise be permitted to receive, retain and usepursuant to the terms of clause 3.1.1(c);

 

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**(iii)****                      **transfer the Charged Property into the name of the Administrative Agentor 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 exercisableby the legal or beneficial owner of the Charged Property to exercise all powersgiven to trustees by the Trustee Act 2000 in respect of securities or propertysubject to a trust.

 

3.3.2                   All dividends and distributions that are received by the Chargor contraryto the provisions of clause 3.3.1 above shall be received in trust for thebenefit of the Administrative Agent (on behalf of the Secured Parties), shallbe segregated from other property or funds of the Chargor and shall forthwith(and, in any event, within two Business Days) be delivered to theAdministrative Agent as Charged Property in the same form as so received (withany necessary endorsements).

 

4.                                  Continuance of security and release

 

4.1                                 Continuing security: Without prejudice to the generality of clause 2, thecharges contained in this Deed are made for securing the Secured Amounts,including further advances and shall be without prejudice and in addition toany other security whatsoever which may be held by the Administrative Agentfrom the Chargor or any other Person for or in respect of the whole or part ofthe Secured Amounts; and the charges, covenants and provisions contained inthis Deed shall remain in force as continuing security to the AdministrativeAgent notwithstanding any settlement of account or the existence at any time ofa credit balance on any current or other account or any other act, event ormatter whatsoever, except only the execution by the Administrative Agent as adeed of an absolute and unconditional release or the execution by or on behalfof the Administrative Agent of a receipt for all (and not part only) of theSecured Amounts.

 

4.2                                 Retention of security: Subject to clause 4.3, the Administrative Agentshall be entitled to retain the security constituted by this Deed until thedate on which all the Secured Amounts and the obligations of the Chargor underthis Deed shall have been satisfied by payment in full, the Commitments shallbe terminated and no Letters of Credit shall be outstanding, notwithstandingthat from time to time during the term of the Credit Agreement and any HedgeAgreement the Credit Parties may be free from any Secured Amounts.

 

4.3                                 Release of security: Upon any sale or other transfer by the Chargor ofany Charged Property that is permitted under the Credit Agreement to anyPerson, or upon the effectiveness of any written consent to the release of thesecurity interest granted hereby in any such Charged Property pursuant to Section 14.1of the Credit Agreement, the obligations of the Chargor with respect to suchCharged Property shall be automatically released.

 

4.4                                 Documents of release: In connection with any termination or releasepursuant to clause 4.3 the Administrative Agent shall execute and deliver tothe Chargor, at the Chargor’s

 

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expense, all documents that the Chargor shallreasonably request to evidence such termination or release. Any execution anddelivery of documents pursuant to this clause 4.4 shall be without recourse toor warranty by the Administrative Agent.

 

5.                                       General covenants and representations

 

5.1                                 Covenants: During the subsistence of the security constituted by thisDeed, 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 orotherwise dispose of, or grant any option or warrant with respect to, any ofthe Charged Property or (ii) create or suffer to exist any consensual Lienupon or with respect to any of the Charged Property, except for the Liencreated under this Deed; provided that in the event the Chargor sells orotherwise disposes of assets permitted by the Credit Agreement and such assetsare or include any of the Charged Property, the Administrative Agent shallrelease 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 perfectedsecurity interest having at least the priority described in clause 5.2.2(i) andshall defend its and the Administrative Agent’s title or interest in and to allthe Charged Property against any and all Liens (other than the Lien created inaccordance with the terms of this Deed), however arising, and any and allPersons whomsoever;

 

5.1.3                        it will advise the Administrative Agent and the Lenders promptly, inreasonable detail, of any Lien of which it has knowledge (other than the securityconstituted hereby) on any of the Charged Property which would adverselyaffect, in any material respect, the ability of the Administrative Agent toexercise any of its remedies hereunder;

 

5.1.4                        it will deliver to the Administrative Agent (or procure delivery to theAdministrative Agent of), and the Administrative Agent shall be entitled tohold and retain, all (or such part thereof as may from time to time bespecified by the Administrative Agent) of the Charged Property (including, forthe avoidance of doubt, the After-acquired Shares) or the certificates andother documents of title to or representing the same held or acquired by theChargor or its nominee(s) together with, in each case in form andsubstance satisfactory to the Administrative Agent:

 

**(a)****                                 **aninstrument or instruments of or relating to the transfer of such ChargedProperty (with the name of the transferee or assignee, the consideration andthe date left blank, but otherwise duly completed} executed by the Chargor; and

 

**(b)****                                 **anyother document or thing which the Administrative Agent may reasonably specifywith a view to perfecting or protecting its security over the Charged Property,

 

and so that:

 

**(i)****                              **theAdministrative Agent may at any time after the occurrence of an EnforcementEvent which is continuing have the Charged Property

 

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registered in its name orin the name of, or otherwise have the same held by, one or more nominees on itsbehalf; and

 

**(ii)****                          **notwithstandingany other provisions of this Deed, the Administrative Agent shall not registeritself or any nominee as the owner (whether *by*legal mortgage or otherwise) of any of the shares in the UK Borrowerprior to the occurrence of an Enforcement Event; and

 

5.1.5                        it will during the subsistence of the security from time to timeconstituted by or pursuant to this Deed pay on the same becoming due all callsor other payments which may be or become due in respect of any of the ChargedProperty, and in any case of default by the Chargor in this respect, theAdministrative Agent may if it thinks fit make any such payment on behalf ofthe Chargor in which event any sums so paid by the Administrative Agent shallbe reimbursed by the Chargor to the Administrative Agent on demand and shallcarry interest from the date of payment by the Administrative Agent until soreimbursed at the rate and otherwise as mentioned in Section 2.8(c)(y) ofthe Credit Agreement.

 

The obligations of the Chargor under this clause 5shall be in addition to and not in substitution for the covenants for titledeemed to be included in this Deed by virtue of Part 1 of the Law ofProperty (Miscellaneous Provisions) Act 1994.

 

5.2                                 Representations: During the subsistence of the security constituted bythis Deed, the Chargor represents to the Administrative Agent as follows:

 

5.2.1                        Schedule 1 hereto (i) correctly represents as of the date hereof theissuer, the certificate number, the number and class and the percentage of theissued and outstanding Equity Interests of such class of all current sharescharged as Charged Property hereunder and (ii) includes all EquityInterests required to be charged hereunder. Except as set forth on Schedule 1,the Charged Property represents all of the issued and outstanding EquityInterests of each class of current shares in the UK Borrower on the date hereofthat are required to be charged hereunder; and

 

5.2.2 (i) the chargeof the Charged Property by the Chargor hereunder constitutes valid andperfected first-priority security in the Charged Property in favour of theAdministrative Agent, for the rateable benefit of the Secured Parties, assecurity for the Secured Amounts subject to the filing of the prescribedparticulars of such security pursuant to Section 395 of the Act, (ii) exceptfor the security constituted by this Deed, the Chargor is the legal andbeneficial owner of each item of the Charged Property free and clear of any andall Liens and (iii) the Chargor has full power, authority and legal rightto charge all the Charged Property pursuant to this Deed.

 

5.3                                 Powers and authorisations: The Chargor covenants with and represents tothe Administrative Agent that the documents which contain or establish theChargor’s constitution include provisions which give power, and all necessarycorporate authority has been obtained and action taken, for the Chargor togrant the charges contained in this Deed and execute and deliver, and performthe covenants and obligations contained in,

 

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this Deed and that this Deed constitutes valid andbinding obligations of the Chargor enforceable in accordance with its terms.

 

5.4                                 Non-violation: The Chargor further covenants and represents to theAdministrativeAgent that neither the execution and delivery of this Deed northe performance of any of the covenants contained in it does or will contraveneor constitute a default under (or result in the creation or imposition of, orthe obligation to create or impose, any Lien upon any of its property or assetspursuant to), or cause to be exceeded any limitation on it or the powers of itsdirectors 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 isbound.

 

5.5                                 Non-compliance by the Chargor: If the Chargor for any reason fails toperform any of its obligations to the Administrative Agent under this Deed, theAdministrative Agent shall have power but shall not be obliged, on behalf of orin the name of the Chargor or otherwise, to perform the obligation and to takeany steps which the Administrative Agent may, in its absolute discretion,reasonably consider appropriate with a view to remedying or mitigating theconsequences of such failure, but so that the exercise of this power, or thefailure to exercise it, shall in no circumstances prejudice the AdministrativeAgents rights under this Deed. Any moneys so expended by the AdministrativeAgent shall be repayable by the Chargor to the Administrative Agent on demandtogether with interest at the rate specified in Section 2.8(c)(y) ofthe Credit Agreement from the date of payment by the Administrative Agent untilsuch repayment, both before and after judgment. No exercise by theAdministrative Agent of its powers under this clause 5.5 shall make theAdministrative Agent or any other of the Secured Parties liable to account as amortgagee in possession.

 

6.                                       The Administrative Agent’s powers

 

6.1                                 Amounts due: The Secured Amounts shall be deemed to have become due forthe 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 areconferred on the Administrative Agent under that Act (as varied or extended bythis Deed) and all other powers shall be deemed to arise immediately afterexecution of this Deed but shall only be exercisable after the occurrence of anEnforcement Event which is continuing

 

6.2                                 Power of sale: Section 103 of the 1925 Act shall not apply inrelation to any of the charges contained in this Deed and the statutory powerof sale (as extended by this Deed) and all other powers shall be exercisable atany 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 thepower of sale and the other powers conferred by section 101(1) and (2) arehereby extended (as if such

 

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extensions were contained therein) to authorise theAdministrative Agent at its absolute discretion, but only after the occurrenceof an Enforcement Event which is continuing:

 

6.3.1                        to sell all of the Chargor’s title to or interest in the Charged Propertyor any part thereof, and to do so for any shares, debentures or othersecurities whatsoever, or in consideration of an agreement to pay all or partof the purchase price at a later date or dates, or an agreement to makeperiodical payments, whether or not the agreement is secured by a Lien or aguarantee, or for such other consideration whatsoever as the AdministrativeAgent may think fit, and also to grant any option to purchase, and to effectexchanges;

 

6.3.2                        with a view to or in connection with the sale of the Charged Property, tocarry out any transaction, scheme or arrangement which the Administrative Agentmay, in its absolute discretion, consider appropriate;

 

6.3.3                        to insure the Charged Property against such risks and for such amounts asthe 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 whichare mentioned or referred to in clause 7.6 as if each of them was expresslyconferred on the Administrative Agent by this Deed and which may not beincluded in clauses 6.3.1 to 6.3.3 above.

 

7.                                       Receiver

 

7.1                                 Appointment: The Administrative Agent may by writing or by deed appointsuch Person or Persons (including an officer or officers of the AdministrativeAgent) as it thinks fit to be receiver or manager of the Charged Property orany part thereof and, in the case of an appointment of more than one Person, toact together or independently of the other or others and the AdministrativeAgent may make such appointment at any time after it has demanded payment ofany of the Secured Amounts which are due and payable but unpaid or if it isrequested to do so by the Chargor or upon the presentation of a petition orapplication to the court for an administration order in respect of the Chargor.Where more than one Receiver is appointed, each joint Receiver shall have thepower to act severally and independently of any other joint Receivers, exceptto the extent the Administrative Agent may specify to the contrary. The powersof appointment of a Receiver shall be in addition to all statutory and otherpowers of appointment under the 1925 Act (as extended by this Deed) orotherwise and such powers shall remain exercisable from time to time by *the*Administrative Agent in respect of anypart of the Charged Property in accordance with the terms of this Deed.

 

7.2                                 Removal and replacement: Except as otherwise required by statute, theAdministrative Agent may by writing or by deed remove (so far as it is lawfullyable) a Receiver and appoint another in his place or to act as an additionalReceiver.

 

7.3                                 Extent of appointment: The exclusion of any part of the Charged Propertyfrom the appointment of any Receiver shall not preclude the AdministrativeAgent from subsequently extending his or their appointment (or that of anyReceiver replacing him or them) to that part or appointing another Receiverover any other part of the Charged Property.

 

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7.4                                 Agent of the Chargor: A Receiver shall be the agent of the Chargor andthe Chargor alone shall be responsible for his acts and defaults and liable onany contracts or engagements made or entered into or adopted by him; and in nocircumstances whatsoever shall the Administrative Agent be in any way responsiblefor or incur any liability in connection with his contracts, engagements, acts,omissions, misconduct, negligence or default and, if a liquidator of theChargor shall be appointed, the Receiver shall act as principal and not asagent for the Administrative Agent.

 

7.5                                 Remuneration: Subject to section 36 of the Insolvency Act 1986, theremuneration of any Receiver may be fixed by the Administrative Agent at a rateappropriate to the work and responsibilities involved (and may be or include acommission calculated by reference to the gross amount of all moneys receivedor otherwise and may include remuneration in connection with claims, actions orproceedings made or brought against such Receiver by the Chargor or any otherPerson or the performance or discharge of any obligation imposed upon him bystatute or otherwise) but such remuneration shall be payable by the Chargoralone; and the amount of such remuneration may be debited by the AdministrativeAgent to any account of the Chargor, but shall, in any event, form part of theSecured Amounts and accordingly be secured on the Charged Property under thecharges contained in this Deed.

 

7.6                                 Powers: A Receiver of the Chargor shall have any and all powers conferredon a receiver, manager, receiver and manager, mortgagor and mortgagee inpossession by statute or common law. In addition, a Receiver of the Chargorshall have the following powers in relation to the Charged Property in respectof which he is appointed:

 

7.6.1                        to enter upon, take possession of, get in and collect the ChargedProperty (or such part thereof in respect of which he may be appointed)including rents and income whether accrued before or after the date of hisappointment;

 

7.6.2                        to sell, exchange, license, surrender, release, disclaim, abandon, returnor otherwise dispose of or in any way whatsoever deal with the Charged Propertyor any interest in the Charged Property for such consideration (if any),including any Charged Property whatsoever, and upon such terms (including bydeferred payment or payment by instalments) as he may think fit and to concurin any such transaction;

 

7.6.3                        to sell on condition and to grant rights, options, licences or easementsover the whole or any part of the Charged Property and (with or withoutconsideration) to rescind, surrender or disclaim or accept or agree to acceptsurrenders or disclaimers of agreements relating to or affecting the ChargedProperty in such circumstances, to such Persons (including, without limitation,to the Administrative Agent), for such purposes and upon such terms whatsoeveras he may think fit and also to vary the terms of any contract affecting theCharged Property and to provide payments under such contract in such manner ashe may think fit;

 

7.6.4                        in connection with the exercise or the proposed exercise of any of hispowers or in order to obtain payment of his remuneration (whether or not it isalready payable), to borrow or raise money from any Person, including theAdministrative Agent, without security or on

 

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the security of theCharged Property and generally in such manner and on such terms as he may thinkfit;

 

7.6.5                        to bring, defend, submit to arbitration, negotiate, compromise, abandonand settle any claims, disputes and proceedings concerning the Charged Propertyor any part thereof;

 

7.6.6                        to transfer all or any of the Charged Property and/or any of theliabilities of the Chargor to any other company or body corporate, whether ornot formed or acquired for the purpose and to form a subsidiary or subsidiariesof the Chargor;

 

7.6.7                        to redeem, discharge or compromise any Lien over or with respect to theCharged Property;

 

7.6.8                        to effect or maintain indemnity insurance and other insurance and obtainbonds 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 ofthe 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 rightsor entitlements in relation to any of the Charged Property of an absoluteowner, together with all powers which are incidental to the ownership of orrights in or to any Charged Property and to complete or effect any transactionentered into by the Chargor and complete, disclaim, abandon or modify all orany of the outstanding contracts or arrangements of the Chargor relating to oraffecting the Charged Property;

 

7.6.11                  to exercise all powers as are described in Schedule 1 to the InsolvencyAct 1986, whether or not the Receiver is an “administrative receiver” asdefined in that Act; and

 

7.6.12                  generally to carry out, or cause or authorise to be carried out, anytransaction, scheme or arrangement whatsoever, whether similar or not to any ofthe foregoing, in relation to the Charged Property which he may considerexpedient or conducive to any of the functions, powers, authorities or discretionsconferred on or vested in him and as effectually as if he were solely andabsolutely entitled to the Charged Property.

 

8.                                       Application of proceeds

 

8.1                                 Application: All moneys arising from the exercise of the powers of theReceiver or the Administrative Agent shall be held on trust by theAdministrative Agent for the benefit of itself and the other Secured Parties(for so long as they remain Secured Parties) and (subject to any claims rankingin priority to any of the Secured Amounts and except as otherwise directed bythe Administrative Agent) shall be applied in or towards discharging, in thefollowing 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 bythe Receiver (including any amounts for which he is entitled to be indemnified)in connection with or as a result of

 

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the exercise of his powers and the remuneration ofthe Receiver, in such order as the Receiver or the Administrative Agent mayfrom time to time determine;

 

8.1.2                        second, to the payment of all reasonable and documented costs andexpenses incurred by the Administrative Agent in connection with suchcollection or sale or otherwise in connection with this Deed, the other CreditDocuments or any of the Secured Amounts, including all court costs and thereasonable fees and expenses of its agents and legal counsel, the repayment ofall advances made by the Administrative Agent hereunder or under any otherCredit Document on behalf of the Chargor and any other reasonable anddocumented costs or expenses incurred in connection with the exercise of anyright or remedy hereunder or under any other Credit Document;

 

8.1.3                        third, to the Secured Parties, an amount equal to all of the SecuredAmounts owing to them on the date of any such distribution, and, if such moneysshall be insufficient to pay such amounts in full, then rateably (withoutpriority of any one over any other) to such Secured Parties in proportion tothe unpaid amounts thereof; and

 

8.1.4                        fourth, any surplus then remaining shall be paid to the Chargor or towhomsoever may *be*lawfullyentitled to receive the same or as a court of competent jurisdiction maydirect.

 

The Chargor agrees and acknowledges that theAdministrative Agent is entering into this Deed, and holds its rights andbenefits hereunder, as trustee for and on behalf of the Secured Parties inaccordance with the terms of clause 17.

 

8.2                                 Accounts: Notwithstanding the provisions of clause 8.1, all moneys fromtime to time received by the Administrative Agent from the Chargor or anyPerson or Persons liable to pay the same or from any Receiver or otherwise onthe realisation or enforcement of the charges contained in this Deed may beapplied by the Administrative Agent either as a whole or in such proportion asthe Administrative Agent shall think fit to any account or item of account orany transaction and, without limitation, the Administrative Agent may in itsabsolute discretion at all times pending the payment to the AdministrativeAgent of all of the Secured Amounts place and keep to the credit of a separateor suspense interest bearing account (subject to the accrual of interest atmarket rates for the account of the Chargor) any money received by theAdministrative Agent from the Chargor or such other Persons for so long and insuch manner as the Administrative Agent may determine without any obligation toapply the same or any part thereof in or towards the discharge of any of theSecured Amounts.

 

8.3                                 Receiver’s Receipts: Sections 109(6) and (8) of the 1925 Actshall not apply in relation to a Receiver appointed under this Deed.

 

**9.****                                     **Protectionof third parties

 

9.1                                 Enquiry: No purchaser from, or other Person dealing with, theAdministrative Agent or any Receiver shall be concerned to enquire whether anyof the powers exercised or purported to be exercised has arisen or becomeexercisable, whether the Secured Amounts remain outstanding, whether the AdministrativeAgent or any Receiver is authorised to act or as to the propriety or validityof the exercise or purported exercise of

 

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any power; and the title of such a purchaser and theposition of such a Person shall not be impeachable by reference to any of thosematters 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 otherapplicable legislation shall apply to any Person purchasing from or dealingwith 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 dischargeto a purchaser and shall relieve him of any obligation to see to theapplication of any moneys paid to or by the direction of the AdministrativeAgent or the Receiver.

 

9.3                                 Construction: in clauses 9.1 and 9.2, “purchaser’’ includes any *Person*acquiring any Lien over, or anyother interest or right whatsoever in relation to, the Charged Property.

 

**10.****                              **Protectionof Administrative Agent and Receiver

 

10.1                           Liability: Neither the Administrative Agent nor any Receiver shall beliable to the Chargor in respect of any loss or damage which arises out of theexercise, the attempted or purported exercise or the failure to exercise any oftheir respective powers. Notwithstanding the foregoing, neither theAdministrative Agent, any Receiver or any Secured Party shall be entitled to beindemnified in respect of any part of the foregoing if it arises as a result ofsuch party’s gross negligence or wilful misconduct.

 

10.2                           Possession: Without prejudice to the generality of clause 10.1, entryinto possession of the Charged Property shall not render the AdministrativeAgent or any Receiver liable to account as mortgagee in possession; and if andwhenever the Administrative Agent or any Receiver enters into possession of theCharged Property, it shall be entitled at any time to go out of suchpossession.

 

11.                                 Expenses and indemnity

 

11.1                           Expenses: The Chargor further covenants with the Administrative Agent toreimburse or pay to the Administrative Agent or any Receiver (on the basis of afull indemnity) the amount of all costs (including legal costs), charges andexpenses reasonably incurred or sustained by the Administrative Agent or suchReceiver (including, for the avoidance of doubt, any such costs, charges andexpenses arising from any act or omission of, or proceedings involving, anythird party) in connection with:

 

11.1.1                  the investigation of title to or any inspection or valuation of theCharged Property vested in the Chargor under or in connection with this Deed,and the preparation, registration or perfecting of this Deed (or any of thecharges contained in it), or any other document entered into between theChargor and the Administrative Agent;

 

11.1.2                  the lawful exercise by or on behalf of the Administrative Agent or anyReceiver of any of the powers of the Administrative Agent or such Receiver, andthe enforcement, preservation or attempted preservation of this Deed or theCharged Property or any other action taken by or on behalf of theAdministrative Agent or any Receiver with a view to

 

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or in connection with the recovery by theAdministrative Agent of the Secured Amounts from the Chargor or any otherPerson; and

 

11.1.3                  the carrying out of any other act or matter which the AdministrativeAgent 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 theAdministrative Agent, the Secured Parties, any Receiver and any attorney, agentor other Person appointed by the Administrative Agent or any Receiver underthis Deed and the Administrative Agent’s officers and employees (each an “IndemnifiedParty”) 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 theexecution, delivery, enforcement, performance and administration of this Deedto the extent either of the Borrowers would be required to do so pursuant tothe terms of the Credit Agreement.

 

11.3                           Taxes: All sums of whatsoever nature which are payable by the Chargorunder this Deed and which are now or at any time hereafter become subject tovalue added tax or any similar tax shall be deemed to be exclusive of valueadded tax or any similar tax and the Chargor in addition to such sums willindemnify the Administrative Agent from and against all claims and liabilitieswhatsoever in respect thereof. The Chargor agrees to pay, and to indemnify theAdministrative Agent, any Receiver and the Secured Parties against any and allliabilities with respect to, or resulting from any delay in paying, any and allstamp, excise, sales or other taxes which may be payable or determined to bepayable with respect to any of the Charged Property or in connection with anyof the transactions contemplated by this Deed.

 

**12.****                              **Protectionof charges

 

12.1                           Fixed mortgage: The Chargor further covenants with the AdministrativeAgent at the Chargor’s own cost, as a continuing security for the payment ordischarge of the Secured Amounts that it shall, if the Administrative Agent sorequires, promptly execute a transfer of Charged Property or any rights toCharged Property now owned or hereafter acquired by the Chargor to theAdministrative Agent or its nominee (in each case, on behalf of the SecuredParties), and also to procure that the transfer to the Administrative Agent orits nominee is duly registered within one week.

 

12.2                           Further security: The Chargor further covenants with the AdministrativeAgent 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 forpayment of the Secured Amounts) upon demand to execute, at the Chargor’s owncost, any document or do any act or thing which:

 

12.2.1                  the Administrative Agent may reasonably specify with a view to perfectingor protecting any charge or security created or intended to be created by thisDeed; or

 

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12.2.2                  the Administrative Agent or any Receiver may reasonably specify with aview to facilitating the exercise or the proposed exercise of any of theirpowers.

 

**13.****                              **Powerof attorney, etc.

 

13.1                           Attorneys: For the purpose of securing the interest of the AdministrativeAgent in the Charged Property and the performance of the Chargor’s obligationsto the Administrative Agent whether under this Deed or the other CreditDocuments or otherwise, the Chargor irrevocably and by way of security appointsthe Administrative Agent and any Receiver jointly and also severally to be itsattorney and attorneys (with full power to appoint substitutes and tosub-delegate, including power to authorise the Person so appointed to makefurther appointments, in both cases, with regard to all or any part of theCharged Property) on behalf of the Chargor and in its name or otherwise, toexecute any document or do any act or thing which the Administrative Agent orsuch Receiver (or their substitutes or delegates) may, in its or his absolutediscretion, consider appropriate in connection with the exercise of any of thepowers of the Administrative Agent or such *Receiveror which*the Chargor is obliged to the Administrative Agent toexecute or do, whether under this Deed or otherwise; and without prejudice tothe generality of its power to appoint substitutes and to sub-delegate, theAdministrative Agent may appoint any Receiver as its substitute or delegate,and any Person appointed the substitute of the Administrative Agent shall, in connectionwith the *exercise*of the saidpower of attorney, be the agent of the Chargor and clause 7.4 shall applymutatis 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 thisDeed shall become enforceable, it will hold all of the Charged Property vestedin it (subject to the right of redemption) upon trust to convey, assign orotherwise deal with the Charged Property vested in it in such manner and tosuch Person as the Administrative Agent shall direct and declares that it shallbe lawful for the Administrative Agent to appoint a new trustee or trustees ofthe Charged Property in place of the Chargor.

 

13.3                           Powers as trustee: The Chargor hereby agrees and declares that theAdministrative Agent or any nominee of the Administrative Agent may at any timeafter the Administrative Agent or any nominee or nominees of the AdministrativeAgent has/have been registered as owner(s) of any Charged Property, withoutany further consent or authority on the part of the Chargor, exercise (in thename of the Chargor or otherwise) with respect to such Charged Property and tothe exclusion of the Chargor, all rights and powers conferred by statute orotherwise upon an absolute owner of such Charged Property and all the powersgiven to trustees by the Trustee Act 2000 in respect of charged property orproperty subject to a trust, and all rights or powers incidental to orconducive to the exercise of rights and powers in relation to the ChargedProperty; provided that until the security constituted by this Deed shallbecome enforceable the Administrative Agent shall:

 

13.3.1                  exercise or procure that its nominees shall exercise all such rights andpowers at the specific request of and in accordance with the instructions ofthe Chargor but so that neither the Administrative Agent nor any nominees ofthe Administrative Agent shall be obliged to give effect to any request orinstruction which the Administrative Agent may

 

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consider would be prejudicial to the chargescontained in this Deed or if in doing so it would incur any cost or expense orrender itself subject to any liability, unless previously indemnified to itssatisfaction; 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 nomineereceives.

 

13.4                           Ratification: The Chargor ratifies and confirms and agrees to ratify and confirmall acts and things which any attorney as mentioned in clause 13.1 shall do orpurport to do in the lawful and proper exercise of his powers under suchclause.

 

14.                                 Other security, etc.

 

14.1                           No merger: The charges contained in or created pursuant to this Deed arein addition to, and shall neither be merged in, nor in any way exclude orprejudice any other Lien, right of recourse, set off or other right whatsoeverwhich the Secured Parties may now or at any time hereafter hold or have (orwould apart from this Deed or any charge contained or created pursuant to thisDeed hold or have) as regards the Chargor or any other Person in respect of theSecured Amounts and the Administrative Agent shall be under no obligation totake any steps to call in or to enforce any security for the Secured Amountsand shall not be liable to the Chargor for any loss arising from any omissionon the part of the Administrative Agent to take any such steps or for themanner in which the Administrative Agent shall enforce or refrain fromenforcing any such security.

 

14.2                           Consolidation: Section 93 of the 1925 Act shall not apply inrelation to any of the charges contained in this Deed.

 

14.3                           Ruling off: Without prejudice to clause 5.1.1, if the AdministrativeAgent receives notice of any Lien or any other interest (other than an interestarising out of a sale in the usual course of business which is permitted by Section 10.4of the Credit Agreement) affecting the Charged Property:

 

14.3.1                  the Administrative Agent may open a new account with the relevant Chargorand, if it does not, it shall nevertheless be deemed to have done so at thetime it received such notice; and

 

14.3.2                  all payments made by the Chargor to the Administrative Agent after theAdministrative Agent receives such notice shall be credited or deemed to havebeen credited to the new account, and in no circumstances whatsoever shalloperate to reduce the Secured Amounts as at the time the Administrative Agentreceived such notice.

 

14.4                           Change of name, etc.:  This Deedshall remain valid and enforceable notwithstanding any:

 

14.4.1                  Incapacity, change in the name, composition or constitution of theAdministrative Agent or the Chargor or any amalgamation or consolidation by theAdministrative Agent or the Chargor with any other corporation; or

 

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14.4.2                  any amendment, waiver or variation (however material or fundamental) ofany Credit Document.

 

Without prejudice to the foregoing, the Chargorshall be deemed to be a principal debtor and the sole, original and independentobligor for the Secured Amounts and the Charged Property shall be deemed to bea principal security for the Secured Amounts. The liability of the Chargorunder this Deed shall not be discharged, impaired or otherwise affected by anycircumstance, act, omission, matter or thing which but for this provision mightoperate to reduce, release, prejudice or otherwise exonerate the Chargor fromits obligations under the Credit Documents in whole or in part, includingwithout limitation and whether or not known to any Credit Party, theAdministrative Agent or any other Person:

 

(a)                                  the winding-up, dissolution, administration, re-organisation,amalgamation, merger or reconstruction of the Chargor or any other Person orany change in its status, function, control or ownership; or

 

(b)                                 any time, indulgence, concession, waiver or consent granted to, or compositionwith, the Chargor or any other Person; or

 

(c)                                  the release of the Chargor or any other Person under the terms of any compositionor arrangement with any creditor of the Chargor or any of its Affiliates; or

 

(d)                                 the taking, variation, compromise, exchange, renewal or release of, orrefusal or neglect to perfect, take-up or enforce, any rights against, orsecurity over, the assets of the Chargor or any other Person or anynon-presentation or non-observance of any formality or other requirement inrespect of any instrument or any failure to release or to realise the fullvalue 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 orstatus of, or other circumstance relating to, the Chargor or any other Person;or

 

(f)                                    any variation (however fundamental and whether or not involving any increasein the liability of the Chargor or any other Credit Party thereunder) orreplacement of any Credit Document or any other document or security; or

 

(g)                                 any unenforceability, illegality, invalidity or frustration of any obligationof the Chargor or any other Person under any Credit Document or any otherdocument or security, or any failure of the Chargor or any other Credit Partyto become bound by the terms of any other Credit Document, in each case whetherthrough any want of power or authority or otherwise; or

 

(h)                                 any postponement, discharge, reduction, non-provability or similarcircumstances affecting any obligation of the Chargor or any other Credit Partyunder a Credit

 

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Documentresulting from any insolvency, liquidation or dissolution proceedings or fromany law, regulation or order,

 

so that the Chargor’s obligations under this Deedremain in full force and effect and that this Deed shall be construedaccordingly as if there were no such circumstance, act, omission, matter orthing.

 

14.5                      Non-competition: Subject as provided below, until the date on which allthe Secured Amounts and the obligations of the Chargor under this Deed shallhave been satisfied by payment in full, the Commitments shall be terminated andno Letters of Credit shall be outstanding (notwithstanding that from time totime during the term of the Credit Agreement and any Hedge Agreement the CreditParties may be free from any Secured Amounts), the Chargor shall not, by virtueof any payment made, security realised or moneys received or recovered underany of the Credit Documents for or on account of the liability of any CreditParty:

 

14.5.1             be subrogated to any rights, security or moneys held, received orreceivable by the Administrative Agent or any other Secured Party or beentitled to any right of contribution or indemnity; or

 

14.5.2             claim, rank, prove or vote as a creditor of any Credit Party or itsestate 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 orsecurity from or on account of any Credit Party, or exercise any right ofset-off against any Credit Party.

 

The Chargor shall hold in trust for and forthwithpay or transfer to the Administrative Agent for the benefit of the SecuredParties any payment or distribution or benefit of security received by itcontrary to the above. If the Chargor exercises any right of set-off contraryto the above it will forthwith pay an amount equal to the amount set off to theAdministrative Agent for the benefit of the Secured Parties. Notwithstandingthe foregoing, following any enforcement of the security created hereunder bythe Administrative Agent under this Deed, the Chargor will (at its own cost)promptly take such steps or actions as are referred to above as theAdministrative Agent may from time to time stipulate.

 

15.                            Avoidance of payments

 

15.1                      No release: No assurance, security or payment which may be avoided oradjusted under the law, including under any enactment relating to bankruptcy orinsolvency, and no release, settlement or discharge given or made by theAdministrative Agent on the faith of any such assurance, security or payment,shall prejudice or affect the right of the Administrative Agent to recover theSecured Amounts from the Chargor (including any moneys which it may becompelled to pay or refund under the provisions of the Insolvency Act 1986 andany costs payable by it pursuant to or otherwise incurred in connectiontherewith) or to enforce the charges contained in this Deed to the full extentof the Secured Amounts.

 

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15.2                      Retention of charges: If the Administrative Agent shall have reasonablegrounds in its absolute discretion for believing that the Chargor may beinsolvent or deemed to be insolvent pursuant to the provisions of theInsolvency Act 1986 as at the date of any payment made by the Chargor to theAdministrative Agent, the Administrative Agent shall be at liberty to retainthe charges contained in or created pursuant to this Deed until the expiry of aperiod of one month plus such statutory period within which any assurance,security, guarantee or payment can be avoided or invalidated after the paymentand discharge in full of all Secured Amounts notwithstanding any release,settlement, discharge or arrangement which may be given or made by theAdministrative Agent on, or as a consequence of, such payment or discharge ofliability provided that, if at any time within such period, a petitionshall be presented to a competent court for an order for the winding up or themaking of an administration order in respect of the Chargor, or the Chargorshall commence to be wound up or to go into administration or any analogousproceedings shall be commenced by or against the Chargor, the AdministrativeAgent shall be at liberty to continue to retain such security for such furtherperiod as the Administrative Agent may determine and such security shall bedeemed to continue to have been held as security for the payment and dischargeto the Administrative Agent of all Secured Amounts.

 

**16.****                         **Currency conversion

 

16.1                      Indemnity: If under any applicable law, whether as a result of a judgmentagainst 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 isreceived or recovered by the Administrative Agent in respect of the SecuredAmounts in a currency (the “other currency”) other than the currency in whichthe Secured Amounts are payable (the “original currency”), then to the extentthat the payment to or receipt by the Administrative Agent (when converted atthe rate of exchange on the date of payment or receipt) falls short of thewhole of the Secured Amounts the Chargor shall as a separate and independentobligation fully indemnify the Administrative Agent against the amount of theshortfall; and for the purposes of this clause, “rate of exchange” means therate at which the Administrative Agent is able on the relevant date to purchasethe original currency in London with the other currency.

 

16.2                      Purchases: If the Chargor fails to pay or discharge any part of theSecured Amounts when due (except where such payment or discharge is made withinthree Business Days of the due date), the Administrative Agent from time totime may purchase an amount of the currency in which such sum is due with anyother currency or currencies and the Chargor’s obligation thereafter shall beto pay to the Administrative Agent the amount of the other currency orcurrencies so used to purchase.

 

**17.****                         **Declaration of Trust

 

17.1                      Declaration of Trust: The Administrative Agent hereby declares itself astrustee to hold the benefit of the covenants, agreements and undertakings ofthe Chargor contained in this Deed and the Liens and other rights, titles andinterests constituted by this Deed and all other moneys, property and assetspaid to it or held by it or received or

 

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recovered by it pursuant to or in connection withthis Deed with effect from the date of this Deed on trust for the SecuredParties for application in accordance with clause 8.1.

 

17.2                      Perpetuity period: The trusts constituted or evidenced in or by clause17.1 shall remain in full force and effect until whichever is the earlier of:

 

17.2.1   theexpiration 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 accordancewith its terms,

 

and the parties to this Deed declare that theperpetuity period applicable to this Deed shall for the purposes of thePerpetuities and Accumulations Act 1964 be the period of 80 years from the dateof this Deed.

 

**18.****                         **Execution of documents

 

Any document required to be executed as a deed bythe Administrative Agent under or in connection with this Deed shall be validlyexecuted if executed as a deed by a duly authorised attorney of theAdministrative Agent.

 

**19.****                         **Notices and demands

 

All notices, requests and demands pursuant heretoshall 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 tothis Deed or the charges contained in this Deed, a statement as to any amountdue to the Administrative Agent or of the Secured Amounts or any part thereofwhich is certified as being correct by an officer of the Administrative Agentshall, save in the case of manifest error, be conclusive evidence that suchamount is in fact due and payable.

 

20.2                      Rights cumulative, waiver: The rights of the Administrative Agent and anyReceiver are cumulative, may be exercised as often as they consider appropriateand are in addition to their respective rights under general law. Therespective rights of the Administrative Agent and any Receiver (whether arisingunder this Deed or under the general law) shall not be capable of being waivedor varied otherwise than by express waiver or variation in writing; and, inparticular, any failure to exercise or any delay in exercising any such rightsshall not operate as a variation or waiver of that or any other such right; anydefective or partial exercise of such rights shall not preclude any other or *further*exercise of that or any other suchright; *and no act*or course ofconduct or negotiation on their part or on their behalf shall in any waypreclude them from exercising any such right or constitute a suspension orvariation of any such right.

 

20.3                      Invalidity of any provision: If any provisions of this Deed becomeinvalid, illegal or unenforceable in any respect under any law, the validity,legality and enforceability of the remaining provisions shall not in any way beaffected or impaired.

 

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20.4                      No set-off or counterclaim; payments free and clear: All payments to bemade by the Chargor under this Deed shall be made in full, without any set-offor counterclaim whatsoever and free and clear of any deductions or withholdingsin the currency in which they are due on the due date to such account as theAdministrative Agent may from time to time specify.

 

20.5                      Liabilities survive deficiencies and releases: The Chargor agrees to bebound by this Deed notwithstanding that any other Person intended to be boundby any other Credit Document may not do so or may not be effectually bound andnotwithstanding that any guarantees or Liens contained in any other CreditDocument may be terminated or released or may be or become invalid orunenforceable, whether or not the deficiency is known to any of the SecuredParties.

 

20.6                      Contracts (Rights of Third Parties) Act 1999: Without prejudice to clause8.1, and save for clauses 10.1, 11.2 and 17, no provision of this Deed isenforceable by a Person that is not a party to this Deed.

 

20.7                      Change to constitutional documents: The Chargor undertakes with theAdministrative Agent to procure in respect of the UK Borrower that, if it hasnot already done so, the UK Borrower will remove from its articles ofassociation:

 

20.7.1   anyand all restrictions on the transfer of its shares; or 20.7.2 any and all lienson shares, whether fully or partly paid.

 

20.8                      Process Agent: Without prejudice to any other mode of service allowedunder any relevant law, the Chargor:

 

20.8.1             irrevocably appoints the UK Borrower at its registered address from timeto time as its agent for service of process in relation to any proceedingsbefore 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 theprocess will not invalidate the proceedings concerned.

 

If the appointment of the UK Borrower ceases to beeffective in respect of the Chargor, the Chargor shall immediately appoint afurther person in England to accept service of process on its behalf in Englandand, failing such appointment within 15 days, the Administrative Agent shall beentitled to appoint such a person by notice to the Chargor. Nothing containedin this Deed shall affect the right to serve process in any other mannerpermitted by law.

 

20.9                      Assignments and Transfers: The Chargor shall not be entitled to assign ortransfer all or any of its rights or obligations under this Deed without theprior written consent of the Administrative Agent. The Administrative Agent mayat any time assign or otherwise transfer all or any part of its rights underthis Deed in accordance with the Credit Documents and the Chargor authorisesthe Administrative Agent to execute on its behalf any document required toeffect the necessary transfer of rights and obligations.

 

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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 sameinstrument.

 

**21.****                         **Choice of law

 

This Deed is governed by, and shall be construed inaccordance with, the laws of England.

 

**22.****                         **Jurisdiction

 

22.1                      Submission: The Chargor agrees for the benefit of the AdministrativeAgent that the courts of England shall have jurisdiction to hear and determineany suit, action or proceeding, and to settle any dispute, which may arise outof or in connection with this Deed and, for such purposes, irrevocably submitsto the jurisdiction of such courts.

 

22.2                      Forum: The Chargor irrevocably waives any objection which it might now orhereafter have to the courts referred to in clause 22.1 being nominated as theforum

 

to hear and determine any suit, action orproceeding, and to settle any dispute, which may arise out of or in connectionwith this Deed and agrees not to claim that any such court is not a convenientor appropriate forum.

 

22.3                      Other competent jurisdictions: The submission to the jurisdiction of thecourts referred to in clause 22.1 shall not (and shall not be construed so asto) limit the right of the Administrative Agent to take proceedings against theChargor in any other court of competent jurisdiction nor shall the taking ofproceedings in any one or more jurisdictions preclude the taking of proceedingsin any other jurisdiction, whether concurrently or not.

 

22.4                      Consent to enforcement: The Chargor hereby consents generally in respectof any legal action or proceeding arising out of or in connection with this Deedto the giving of any relief or the issue of any process in connection with suchaction or proceeding including, without limitation, the making, enforcement orexecution against any property whatsoever of the Chargor (irrespective of itsuse or intended use) of any order or judgment which may be made or given insuch action or proceeding.

 

DULY DELIVERED AS A DEED by the Chargor or on itsbehalf on the date inserted above.

 

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**Schedule 1The Shares**

 
| **Issuer** | ** ** | **Class of Share** | ** ** | **Share********Certificate No(s)** | ** ** | **Number  of Shares** | ** ** | **Percentage  of Issued and  Outstanding  Shares** |
|------------|------------|------------------------------|------------|-----------------------------------------|------------|----------------------------|------------|--------------------------------------------------------------|
|       |       |                         |       |                                    |       |                       |       |                                                         |
|       |       |                         |       |                                    |       |                       |       |                                                         |
|       |       |                         |       |                                    |       |                       |       |                                                         |

 

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EXHIBIT M

 

FORM OFLUXEMBOURG PLEDGE AGREEMENTS

 

LUXEMBOURG PLEDGE AGREEMENT dated as of 31 July,2004, among ROCKWOOD SPECIALTIES GROUP, INC., a Delaware corporationhaving its registered office at 1029 Orange Street, Corporation Trust Center,Wilmington, DE 19801, U.S.A., (the “Pledgor”), and CREDIT SUISSE FIRSTBOSTON, acting through its Cayman Islands Branch, as Administrative Agent andas Collateral Agent (in such capacities, the “Administrative Agent”) forthe lenders (each, a “Lender” and, collectively, the “Lenders”)and for the Secured Parties (as defined below) from time to time parties to theCredit 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 incorporatedunder the laws of England and Wales (the “UK Borrower” and, togetherwith the US Borrower, the “Borrowers”), ROCKWOOD SPECIALTIESINTERNATIONAL, INC., a Delaware corporation, the Syndication Agent (as definedin the Credit Agreement), the Lenders and the other Secured Parties.

 

WITNESSETH:

 

WHEREAS, (a) pursuant to *the*Credit Agreement, the Lenders haveseverally agreed to make Loans to the Borrowers and the Letter of Credit Issuerhas agreed to issue Letters of Credit for the account of the Borrowers(collectively, the “Extensions of Credit”) upon the terms and subject tothe conditions set forth therein and (b) one or more Lenders, oraffiliates of Lenders may from time to time enter into Hedge Agreements withthe Borrowers;

 

WHEREAS, the Pledgor acknowledges that it willderive substantial direct and indirect benefit from the making of theExtensions of Credit;

 

WHEREAS, it is a condition precedent to the obligationof the Lenders and the Letter of Credit Issuer to make their respectiveExtensions of Credit to the Borrowers under the Credit Agreement that thePledgor shall have executed and delivered this Pledge Agreement; and

 

WHEREAS, the Pledgor is the owner of the sharesdescribed under Schedule 1 hereto and issued by Knight Lux 1 S.a r.1., aLuxembourg *societe a responsabilite limitee,*with a share capital of one hundred thirty seven thousand fivehundred euros (£ 137,500), whose registered office is at 61, rue deRollingergrund, L-2440 Luxembourg, registered with the Luxembourg trade andcompanies’ registry under the number B 100.495 (the “Company”) (thepledged shares .described above are, together with any shares of the Companyobtained in the future by the Pledgor, including any shares issued by theCompany as a result of the conversion of any or all Convertible PreferredEquity Certificates (the “CPECs”) and registered in the Pledgor’s name in theCompany’s CPEC register (the “After-acquired Shares”), referred tocollectively herein as the “Pledged Shares”).

 

NOW, THEREFORE, in consideration of the premises andto induce the Administrative Agent, the Syndication Agent, the DocumentationAgent and the Lenders and the Letter of Credit

 

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Issuer to enter into the Credit Agreement and toinduce the Lenders and the Letter of Credit Issuer to make their respectiveExtensions of Credit to the Borrowers under the Credit Agreement and to induceone or more Lenders or affiliates of Lenders to enter into Hedge Agreeementswith the Borrowers, the Pledgor hereby agrees with the Adminiitrative Agent, asagent for the Lenders and for the ratable benefit of the Secured Parties, asfollows:

 

1.                                      Defined Terms.

 

**a)           **Unlessotherwise defined herein (including in the above recitals), terms defined inthe Credit Agreement and used herein shall have the meanings given to them inthe Credit Agreement

 

**b)           **Asused herein, the term “Equity Interests” means quotas or shares ofcapital stock of the Company as well as any quotas or shares which may besubstituted 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 anyof the foregoing and any of the foregoing class of securities being a “Class ofEquity Interest”.

 

**c)            **Asused herein, the term “Obligations” means the collective reference to (i) thedue and punctual payment of (x) the principal of and premium, if any, andinterest at the applicable rate provided in the Credit Agreement (includinginterest accruing during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding, regardless of whether allowed orallowable in such proceeding) on the Loans, when and as due, whether atmaturity, by acceleration, upon one or more dates set for prepayment orotherwise, (y) each payment required to be made by the Borrowers under theCredit Agreement in respect of any Letter of Credit, when and as due, includingpayments in respect of reimbursement of disbursements, interest thereon andobligations to provide cash collateral, and (z) all other monetaryobligations, including fees, costs, expenses and indemnities, whether primary,secondary, direct, contingent, fixed or otherwise (including monetaryobligations incurred during the pendency of any bankruptcy, insolvency,receivership or other similar proceeding, regardless of whether allowed orallowable in such proceeding), of the Borrowers or any other Credit Party to anyof the Secured Parties under the Credit Agreement and the other CreditDocuments, (ii) the due and punctual performance of all covenants,agreements, obligations and liabilities of the Borrowers under or pursuant tothe Credit Agreement and the other Credit Documents, (iii) the due andpunctual payment and performance of all the covenants, agreements, obligationsand liabilities of each other Credit Party under or pursuant to this PledgeAgreement or the other Credit Documents, (iv) the due and punctual paymentand performance of all obligations of each Credit Party under each HedgeAgreement that (x) is in effect on the Closing Date with a counterpartythat is a Lender or an affiliate of a Lender as of the Closing Date or (y) isentered into after the Closing Date with any counterparty that is a Lender or aaffiliate of a Lender at the time such Hedge Agreement is entered into and (v) thedue and punctual payment and performance of all obligations in respect ofoverdrafts and related liabilities owed to the Administrative Agent or itsaffiliates arising from or in a connection with treasury, .depositary or cashmanagment services or in connection with any automated clearinghouse transferof funds.

 

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**d)           **Asused herein, the term “Secured Parties” means (i) the Lenders, (ii) theLetter of Credit Issuer, (iii) the Swingline Lender, (iv) theAdministrative Agent, (v) the Syndication Agent, (vi) theDocumentation Agent and (vii) each counterparty to a Hedge Agreement theobligations under which constitute Obligations, (viii) the beneficiariesof each indemnification obligation undertaken by any Credit Party under anyCredit Document and (ix) any successors, indorsees, transferees andassigns of each of the foregoing.

 

**e)            **Referencesto “Lenders” in this Pledge Agreement shall be deemed to include affiliates ofLenders that may from time to time enter into Hedge Agreements with theBorrowers as hedging counterparties.

 

**f)            **Thewords “hereof’, “herein” and “hereunder” and words of similar import when usedin this Pledge Agreement shall refer to this Pledge Agreement as a whole andnot to any particular provision of this Pledge Agreement, and Section referencesare to Sections of this Pledge Agreement unless otherwise specified. The words “include”,“includes” and “including” shall be deemed to be followed by the phrase “withoutlimitation”.

 

**g)           **Themeanings given to terms defined herein shall be equally applicable to both thesingular and plural forms of such terms.

 

2.                                      Grant of Security. The Pledgorhereby undertakes to pledge to the Administrative Agent as agent for theSecured Parties for their ratable benefit, all of the Pledgor’s right, titleand interest in the following, now owned or existing, and hereby undertakes topledge to the Administrative Agent as agent for the Secured Parties all of thePledgor’s right, title and interest in any of the following hereafter acquiredor existing (collectively, the “Collateral”):

 

**a)****                                    **thePledged Shares registered in the Pledgor’s name and, subject to Section 7hereof, all dividends, cash, warrants, rights, instruments and other propertyor proceeds from time to time received, receivable or otherwise distributed inrespect of or in exchange’for any or all of the Pledged Shares, subject in allcases to the limit that the Pledged Shares shall never exceed 65% of the totalissued share capital of the Company; and

 

**b)****                                    **tothe extent not covered by clause (a) above, and subject to Section 7hereof; the Equity Interests, subject in all cases, to the limit that thePledged Shares shall never exceed 65% of the total issued share capital of theCompany and all proceeds of any or all of the foregoing Collateral. Forpurposes of this Pledge Agreement, the term “proceeds” includes whatever isreceivable or received when Collateral or proceeds are sold, exchanged,collected or otherwise disposed of, whether such disposition is voluntary orinvoluntary, and includes proceeds of any indemnity or guarantee payable to thePledgor or the Administrative Agent from time to time with respect to any of theCollateral;

 

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**c)****                                     **alland any rights which the Pledgor may have or obtain against the Company in casethe Pledged Shares were held to be invalidly issued, regardless of thequalification given to such rights.

 

3.                                      Security for Obligations.This Pledge Agreement secures the payment of all Obligations owed by theBorrowers and/or each other Credit Party to the Administrative Agent or theSecured Parties for their ratable benefit. Without limiting the generality ofthe foregoing, this Pledge Agreement secures the payment of all amounts thatconstitute part of the Obligations and would be owed by the Borrowers to theAdministrative Agent or the Secured Parties under the Credit Documents but forthe fact that they are unenforceable or not allowable due to the existence of abankruptcy, reorganization or similar proceeding involving the Borrowers and/oreach other Credit Party.

 

**4.****            **Delivery of the Collateral.The pledge of the Pledged Shares shall be perfected by (i) anacknowledgement by the Company in compliance with article 114 of the Luxembourgcommercial code and (ii) the immediate registration in the share registerof the Company *(registre des associes)*ofthe name of the Administrative Agent, as agent for the Secured Parties. Boththe Pledgor and the Administrative Agent as agent for the Secured Parties aswell as the Company authorise and empower and hereby instruct any manager ofthe Company and/or any employee of Demag Holding S.a r.l. and/or any lawyer ofClifford Chance Luxembourg to proceed immediately with the registration of thePledge in the share register of the Company. The Pledgor hereby undertakes tobring satisfactory evidence to the Administrative Agent as agent for theSecured Parties of such notification or acceptance and recording in the sharesregister of the Company including, without limitation, a certified true copy ofthe page or the pages bearing the recording of the pledge, and theregistration of the name of the Administrative Agent as agent for the SecuredParties in the share register of the Company.

 

The Pledgor undertakes to reiterate the aboveformalities each time that the pledge is extended to further quotas or sharesof the Company.

 

**5.****                  **Representations and Warranties.The Pledgor represents and warrants as follows:

 

**a)           **Schedule1 hereto (i) correctly represents as of the date hereof the issuer, thePledgor, the number, the Class of Equity Interest and the percentage ofthe issued and outstanding Class of Equity Interests of such Class ofEquity Interests of all Pledged Shares and (ii) includes all EquityInterests required to be pledged hereunder. Except as set forth on Schedule 1,the Pledged Shares represent 65 percent of such issued and outstanding Class ofEquity Interests and no other Class of Equity Interests in the Company hasbeen issued on the date hereof.

 

**b)           **ThePledgor is the owner of the Collateral pledged or assigned by the Pledgorhereunder free and clear of any Lien, except for the Lien created by thisPledge Agreement

 

**c)            **Asof the date of this Pledge Agreement, the Pledged Shares pledged by the Pledgorhereunder have been duly authorized by a meeting of the shareholders of theCompany and are validly issued and are fully paid up.

 

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**d)           **Theexecution and delivery by the Pledgor of this Pledge Agreement and the pledgeof the Collateral by the Pledgor hereunder pursuant hereto create a valid andperfected first-priority security interest in the Collateral, securing thepayment of the Obligations, in favor of the Administrative Agent as agent forthe Secured Parties. ·

 

**e)            **ThePledgor has full power, authority and legal right to pledge all the Collateralpursuant to this Pledge. Agreement and this Pledge Agreement constitutes alegal, valid and binding obligation of the Pledgor, enforceable in accordancewith its terms, except as enforceability thereof may be limited by bankruptcy,insolvency or other similar laws affecting creditor’s rights generally.

 

**f)            **Inthe event the Administrative Agent enforces this Luxembourg Pledge Agreement,shareholders of the Company representing at least three-quarters of the sharecapital of the Company shall have agreed in advance to accept the SecuredParties as new shareholders of the Company.

 

**6.****                                     **Further Assurances. The Pledgoragrees 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 andtake 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 securityinterest granted or purported to be granted hereby (including the prioritythereof) or (y) to enable the Administrative Agent to exercise and enforcethe rights and remedies hereunder with respect to any Collateral.

 

The Pledgor further agrees, that if new shares areissued through a resolution of the managez(s) of the Company under theauthorised capital mechanism, such issuance will be formally approved andratified by a proper shareholder’s meeting of the Company held in front of aLuxembourg notary within a period of two weeks following the issuance.

 

**7.****                       **Voting Rights: Dividends and Distributions: Etc.

 

**a)           **Subject toparagraph (b) below, the Pledgor shall be entitled to receive and retainand use, free and clear of the Lien of this Pledge Agreement, any and alldividends and distributions made or paid in respect of the Collateral to theextent permitted by the Credit Agreement; provided, however, thatany and all noncash dividends or other distributions that would constitutePledged Shares, whether resulting from a subdivision, combination orreclassification of the outstanding Equity Interests of the issuer of anyPledged 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 orotherwise, shall become Collateral, shall be held as Collateral and shall, ifreceived 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 forthwithremitted as Collateral to the Administrative Agent in the same form as soreceived and provided, that the valid issuance of the Pledged Shares isnot being challenged in court proceedings.

 

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**b)           **Upon written noticeto the Pledgor by the Administrative Agent following the occurrence and duringthe continuance of an Event of Default,

 

**(i)           **all rights of thePledgor to receive the dividends and distributions that the Pledgor wouldotherwise be authorized to receive and retain pursuant to Section 7 (a) shall,cease, and all such rights shall thereupon become vested in the AdministrativeAgent as agent for the Secured Parties, which shall thereupon have the soleright to receive and hold as Collateral such dividends and distributions duringthe continuance of such Event of Default. The Administrative Agent shall retainthose amounts as a *“gage “.*Afterall Events of Default have been cured or waived and the relevant Pledgor hasdelivered to the Administrative Agent a certificate to that effect, theAdministrative Agent shall repay to the Pledgor (without interest) all suchdividends and distributions that the Pledgor would otherwise be permitted toreceive, retain and use pursuant to the terms of Section 7 (a);

 

***(ii)          ***alldividends and distributions that are received by the Pledgor contrary to theprovisions of Section 7 (a) and 7 (b)(i) shall be held for thebenefit of the Administrative Agent, shall be segregated from other property orfunds of the Pledgor and shall forthwith be remitted to the AdministrativeAgent, which shall retain the same as a *“gage”;*

 

c) The Pledgor agrees as of the date hereof and aslong as the Pledge Agreement remains in force:

 

**(i)           **to refrain fromusing any voting rights in respect of the Collateral in a way which would becontrary to the provisions of this Pledge Agreement or of any other CreditDocument to which the Pledgor is a party;

 

**(ii)          **(x) if the Companyproceeds with a reduction of share capital which is not motived by losses, notto offer the Pledged Shares to the Company for repurchase and (y) if theCompany proceeds with a share capital reduction which is motivated by losses,to inform the Administrative Agent of the proposed reduction before itsadoption by the shareholders’ meeting and to cause any new shares issued andattributed to the Pledgor as a result of the reduction in capital to beincluded in the Collateral; and

 

**(iii)        **not to permit the Company’sby-laws or any other instrument to contain any provision (including preemptionrights, rights of replacement or similar rights) which would limit in any waythe execution or the performance of this Pledge Agreement or the enforcement bythe Administrative Agent of the security interest herein created.

 

8. Transfers and Other Liens. The Pledgor shall:

 

**a)           **not (i) exceptas permitted by the Credit Agreement, sell or otherwise dispose of, or grantany option or warrant with respect to, any of the Collateral or (ii) createor suffer to exist any contractual Lien upon or with respect to any of theCollateral, except for the

 

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Lien under this PledgeAgreement, provided that in the event the Pledgor sells or otherwisedisposes of assets permitted by the Credit Agreement and such assets are orinclude any of the Collateral, the Administrative Agent shall release suchCollateral to the Pledgor free and clear of the Lien under this PledgeAgreement concurrently with the consummation of such sale;

 

**b)           **defend its and theAdministrative Agent’s title or interest in and to all the Collateral (and inthe proceeds thereof) against any and all Liens (other than the Lien of thisPledge Agreement), however arising, and any and all Persons whomsoever.

 

9. Remedies. If any Event of Default shall have occurred and becontinuing:

 

a) The Administrative Agent and any nominee of theAdministrative Agent may on behalf of the Secured Parties exercise in respectof all or any of the Collateral, in addition to other rights and remediesprovided for herein or otherwise available to it, all the rights and remediesconferred on a secured creditor *(creamiergagiste)*pursuant to Luxembourg law and regulations, and may,provided that the Obligations remain unpaid ten (10) business days afterthe notification of a demand to pay *(mise endemeure)*addressed to the Borrowers, (x) proceed to a publicsale of the Collateral in accordance with the provisions of Article 116 ofthe Luxembourg Commercial Code, or (y) petition a Luxembourg court, asprovided for in Article 117 of the Luxembourg Commercial Code, that titleto the Collateral be assigned to it for payment of all or any part of theoutstanding amount of the Collateral. In this case, the Pledged Shares may notbe transferred to non-shareholders, unless shareholders of the Companyrepresenting at least three-quarters of its share capital agree to suchtransfer in a general meeting.

 

In the event ownership of the Collateral isattributed to the Secured Parties pursuant to clause (y) above, subject tomandatory provisions of Luxembourg law and except as specified below, theAdministrative Agent acting in such capacity:

 

**(i)           **shall be entitledto sell the Collateral or any part thereof in one or more parcels for cash, oncredit or for future delivery, at such price or prices and upon such otherterms as are commercially reasonable irrespective of the impact of any suchsales on the market price of the Collateral;

 

**(ii)     **shallbe authorized at any such sale (if it deems it advisable to do so) to restrictthe prospective bidders or purchasers of Collateral to Persons who willrepresent and agree that they are purchasing the Collateral for their ownaccount for investment and not with a view to the distribution or . salethereof, and, upon consummation of any such sale, the Administrative Agentshall have, subject to the aforementioned restrictions, the right to assign,transfer and deliver to the purchaser or purchasers thereof the Collateral sosold. Each purchaser at any such sale shall hold the property sold absolutelyfree from any claim or right on the part of the Pledgor, and *the*Pledgor hereby waives (to the extentpermitted by law) all rights of redemption, stay and/or appraisal that it nowhas or may at any time in the future have under any rule of law or statutenow existing or hereafter enacted; and

 

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**(iii)        **The Administrative Agentor any Secured Party shall have the right, to the extent permitted by law, uponany such sale, to purchase the whole or any part of the Collateral so sold.

 

Subject to applicable law, the Administrative Agentshall not be obligated to make any sale of Collateral regardless of notice ofsale having been given. The Administrative Agent may adjourn any sale from timeto time by announcement at the time and place fixed therefor, and such salemay, without further notice, be made at the time and place to which it was soadjourned. To the extent permitted by law, the Pledgor hereby waives any claimagainst the Administrative Agent arising by reason of the fact that the priceat which any Collateral may have been sold at such a private sale was less thanthe price that might have been obtained at a public sale, even if theAdministrative Agent accepts the first offer received and does not offer suchCollateral to more than one offeree.

 

b) The Administrative Agent shall apply the proceedsof any collection or sale of the Collateral at any time after receipt asfollows:

 

(i) first, to the payment of all reasonable anddocumented costs and expenses incurred by the Administrative Agent inconnection with such collection or sale or otherwise in connection with thisPledge Agreeement, the other Credit Documents or any of the Obligations,including all court costs and the reasonable fees and expenses of its agentsand legal counsel, the repayment of all advances made by the AdministrativeAgent hereunder or under any other Credit Document on behalf of the Pledgor andany other reasonable and documented costs or expenses incurred in connectionwith the exercise of any right or remedy hereunder or under any other CreditDocument;

 

**(ii)          **second,to the Secured Parties, an amount equal to all Obligations owing to them on thedate of any such distribution, and, if such moneys shall be insufficient to paysuch 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 orassigns or to whomsoever may be lawfully entitled to receive the same or as acourt of competent jurisdiction may direct.

 

c) All payments received by the Pledgor after theoccurrence and during the continuance of an Event of Default in respect of theCollateral shall be held for the benefit of the Administrative Agent, shall besegregated from other property or funds of the Pledgor and shall be forthwithdelivered to the Administrative Agent as Collateral *(“gage”)*in the same form as so received.

 

d) The Pledgor hereby waives its rights under Articles2032 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 thecharges created hereby shall not be adversely

 

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affected nor shall this Agreement be novated unlessexpressly agreed in writing by the parties hereto, notwithstanding that,without any reservation of rights against the Pledgor and without notice to orfurther assent by the Pledgor, (a) any demand for payment of any of theObligations made by the Administrative Agent or any other Secured Party may berescinded by such party and any of the Obligations continued, (b) theObligations, or the liability of any other party upon or for any part thereof,or any collateral security or guarantee therefor or right of offset withrespect thereto, may, from time to time, in whole or in part, be renewed,accelerated, compromised, waived, surrendered or released by the AdministrativeAgent or any other Secured Party, (c) the Credit Agreement, the otherCredit Documents, the Letters of Credit and any other documents executed anddelivered in connection therewith and the Hedge Agreements and any otherdocuments executed and delivered in connection therewith and any documentsentered into with the Administrative Agent or any of its affiliates inconnection with treasury, depositary or cash management services or inconnection with any automated clearinghouse transfer of funds may be amended,modified, supplemented or terminated, in whole or in part, as theAdministrative Agent (or the Required Lenders, as the case may be, or, in thecase of any Hedge Agreement, or document entered into with the AdministrativeAgent or any of its affiliates in connection with treasury, depositary or cashmanagement services or in connection with any automated clearinghouse transferof funds, the party thereto) may deem advisable from time to time, and (d) anycollateral security, guarantee or right of offset at any time held by theAdministrative Agent or any other Secured Party for the payment of theObligations may be sold, exchanged, waived, surrendered or released. Neitherthe Administrative Agent nor any other Secured Party shall have any obligationto protect, secure perfect or insure any Lien at any time held by it assecurity for the Obligations or for this Pledge Agreement or any propertysubject thereto. When making any demand hereunder against the Pledgor, theAdministrative Agent or any other Secured Party may, but shall be under noobligation to, make a similar demand on the Borrowers or any pledgor and anyfailure by the Administrative Agent or any other such Secured Party to make anysuch demand or to collect any payments from the Borrowers or any pledgor or anyrelease of the Borrowers or any pledgor shall not relieve the Pledgor inrespect of which a demand or collection is not made or the Pledgor not soreleased of its several obligations or liabilities hereunder, and shall notimpair or affect the rights and remedies, express or implied, or as a matter oflaw, of the Administrative Agent or any other Secured Party against thePledgor. For the purposes hereof “demand” shall include the commencement andcontinuance of any legal proceedings.

 

11. Continuing Security Interest: Assignments Under the Credit Agreement:Release.

 

**a)           **This PledgeAgreement shall remain in full force and effect and be binding in accordancewith and to the extent of its terms upon the Pledgor and the successors andassigns thereof, and shall inure to the benefit of the Administrative Agent andthe other Secured Parties and their respective successors, indorsees,transferees and assigns until all the Obligations under the Credit Documentsshall have *been*satisfied bypayment in full, the Commitments shall be terminated and no Letters of Creditshall be outstanding, notwithstanding that from time to time during the term ofthe Credit Agreement and any Hedge Agreement the Credit Parties may be freefrom any Obligations.

 

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**b)           **Upon any sale orother transfer by the Pledgor of any Collateral that is permitted under theCredit Agreement to any Person, or upon the effectiveness of any writtenconsent to the release of the security interest granted hereby in anyCollateral pursuant to Section 14.1 of the Credit Agreement, theobligations of such Pledgor with respect to such Collateral shall beautomatically released and such Collateral sold free and clear of the Liencreated hereby.

 

**c)            **In connection withany termination or release pursuant to paragraph (a) or (13), theAdministrative Agent shall execute and deliver to the Pledgor, at the Pledgor’sexpense, all documents that the Pledgor shall reasonably request to evidencesuch termination or release. Any execution and delivery of documents pursuantto this Section 11 shall be without recourse to or warranty by theAdministrative Agent.

 

12. Reinstatement. This Pledge Agreement shall continue to beeffective, or be reinstated, as the case may be, if at any time payment, or anypart thereof, of any of the Obligations is rescinded or must otherwise be restoredor returned by the Administrative Agent or any other Secured Party upon theinsolvency, bankruptcy, dissolution, administration, liquidation orreorganization of the Pledgor, or upon or as a result of the appointment of areceiver, intervenor or conservator of, or trustee or similar officer for, thePledgor or any substantial part of its property, or otherwise, all as thoughsuch payments had not been made.

 

13. Notices. All notices, requests and demands pursuant hereto shallbe made in accordance with Section 14.2 of the Credit Agreement.

 

14. Severability. Any provision of this Pledge Agreement that isprohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,be ineffective to the extent of such prohibition or unenforceability withoutinvalidating the remaining provisions hereof, and any such prohibition orunenforceability in any jurisdiction shall invalidate or render unenforceablesuch provision in any other jurisdiction. The parties hereto shall endeavor ingood-faith negotiations to replace the invalid, illegal or unenforceableprovisions with valid provisions the economic effect of which comes as close aspossible to that of the invalid, illegal or unenforceable provisions.

 

15. Integration. This Pledge Agreement and the Schedules heretorepresent the agreement of the Pledgor with respect to the subject matterhereof and there are no promises, undertakings, representations or warrantiesby the Administrative Agent or any other Secured Party relative to the subjectmatter hereof not expressly set forth or referred to herein or in the otherCredit Documents.

 

16. Amendments in Writing No Waiver: Cumulative Remedies.

 

**a)           **None of the termsor provisions of this Pledge Agreement may be waived, amended, supplemented orotherwise modified except by a written instrument executed by the affectedPledgor and the Administrative Agent in accordance with Section 14.1 ofthe Credit Agreement

 

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**b)           **Neither theAdministrative Agent nor any Secured Party shall by any act (except by a writteninstrument pursuant to Section 16(a) hereof), delay, indulgence,omission or otherwise be deemed to have waived any right or remedy hereunder orto have acquiesced in any Default or Event of Default or in any breach of anyof the terms and conditions hereof. No failure or exercise, nor any delay inexercising, on the part of the Administrative Agent or any other secured Party,any right, power or privilege hereunder shall operate as a waiver hereof. Nosingle or partial exercise of any right, power or privilege hereunder shallpreclude any other or further exercise thereof or the exercise of any otherright, power or privilege. A waiver by the Administrative Agent or any otherSecured Party of any right or remedy hereunder on any one occasion shall not beconstrued as a bar to any right or remedy that the Administrative Agent or suchother Secured Party otherwise have on any future occasion.

 

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

 

17. Section Headings. The Section Headings used in thisPledge Agreement are for convenience or reference only and are not to affectthe construction hereof or be taken into consideration in the interpretationhereof.

 

18. Successors and Assigns. This Pledge Agreement shall be bindingupon the successors and assigns of the Pledgor and shall inure to the benefitof the Administrative Agent and the other Secured Parties and their respectivesuccessors and assigns, except that the Pledgor may not assign, transfer ordelegate any of its rights or obligations under this Pledge Agreement withoutthe prior written consent of the Administrative Agent.

 

19. Governing law — Jurisdiction. This Agreement shall be governedby, and interpreted in accordance with, the laws of Luxembourg. The Pledgorsubmits in favor of the Secured Parties with respect to any dispute arisingfrom or in connection with this Pledge Agreement to the non-exclusivejurisdiction of the Luxembourg *tribunal d’arrondissement*without prejudice to the rights for the Secured Parties to commenceproceedings before any other court of competent jurisdiction.

 

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EXHIBIT N

 

FORM OF LETTER OF CREDIT REQUEST

 

No.                                         (11)                                    Dated                                        (12)

 

To:                              CREDIT SUISSE FIRST BOSTON, acting through its Cayman Islands Branch, asAdministrative Agent and as the Letter of Credit Issuer, under the CreditAgreement 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, andRockwood Specialties International, Inc., the several lenders from time totime parties thereto, the Administrative Agent referred to above and UBSSecurities LLC and Goldman Sachs Credit Partners L.P., as Co-SyndicationAgents.

 

Ladies and Gentlemen:

 

The undersigned hereby requests that the Letter ofCredit Issuer issue a Letter of Credit on                                          (13) (the “Date of Issuance”) in the aggregate stated amount of theDollar Equivalent of                                            (14) in                                (15).

 

For purposes of this Letter of Credit Request,unless otherwise defined, all capitalized terms used herein that are defined inthe Credit Agreement shall have the respective meanings provided therein.

 

The beneficiary of the requested Letter of Creditwill be                              (16), and such Letter of Credit will be in support of                                            (17) and will have a stated termination date of                                  (18).

 

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(11) Letter of Credit Request Number.

 

(12) Date of standby Letter of Credit Request (atleast five Business Days prior to the Date of Issuance or such lesser number ofBusiness Days as may be agreed by the Administrative Agent and such Letter ofCredit Issuer).

 

(13) Date of Issuance.

 

(14) Aggregate initial stated amount of Letter ofCredit.

 

(15) Dollars, Euro or Sterling.

 

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The undersigned hereby certifies that:

 

(a)  All representations and warranties made byany Credit Party contained in the Credit Agreement or in the other CreditDocuments shall be true and correct in all material respects with the sameeffect as though such representations and warranties had been made on and as ofthe Date of Issuance (except where such representations and warrantiesexpressly relate to an earlier date, in which case such representations andwarranties were true and correct in all material respects as of such earlierdate).

 

(b) No Default or Event of Default has occurredand is continuing as of the date hereof nor, after giving effect to theissuance of the Letter of Credit requested hereby, would such a Default orEvent of Default occur.

 

Copies of all documentation with respect to thesupported transaction are attached hereto.

 

 
|   | [ROCKWOOD SPECIALTIES GROUP, INC.,] |
|--------|------------------------------------------|
|   |                                     |
|   |                                     |
|   | [ROCKWOOD SPECIALTIES LIMITED]           |
|   |                                     |
|   |                                     |
|   | By:                                      |   |
|   | Name:                                    |   |
|   | Title:                                   |   |

 

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(16) Insert name and address of beneficiary.

 

(17) Insert description of supported obligations andname of agreement to which it relates, if any.

 

(18) Insert lastdate upon which drafts may be presented.

 

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EXHIBIT O-1

 

FORM OFOPINION OF SIMPSON THACHER & BARTLETT LLP

 

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EXHIBIT O-2

 

FORM OFOPINION OF TOM RIORDAN

 

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EXHIBIT O-3

 

FORM OFOPINION OF LATHAM & WATKINS LLP

 

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EXHIBIT O-4

 

FORM OFOPINION OF LATHAM & WATKINS LLP

 

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EXHIBIT O-5

 

FORM OFOPINION OF BORDEN LADNER GERVAIS

 

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EXHIBIT O-6

 

FORM OFOPINION OF LATHAM & WATKINS LLP

 

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EXHIBIT O-7

 

FORM OFOPINION OF LEE AND LI

 

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EXHIBIT O-8

 

FORM OFOPINION OF NORTON ROSE MILAN

 

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EXHIBIT O-9

 

FORM OFOPINION OF BURNESS

 

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EXHIBIT O-10

 

FORM OFOPINION OF ARENDT & MEDERNACH

 

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EXHIBIT O-11

 

FORM OFOPINION OF LOCAL COUNSEL

 

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EXHIBIT P

 

FORM OF CLOSING CERTIFICATE

 

Reference is made to the Credit Agreement dated asof July 30, 2004 (as amended, supplemented or otherwise modified from timeto time, the “Credit Agreement”), among Rockwood Specialties Group, Inc.,a Delaware corporation, Rockwood Specialties Limited, a company incorporatedunder 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, asAdministrative Agent and UBS Loan Finance LLC and Goldman Sachs Credit PartnersL.P., as Co-Syndication Agents.  Termsused but not defined herein shall have the meanings given to such terms in theCredit Agreement.

 

1.             Theundersigned [President or Vice President] of [                        ](the “Certifying Credit Party”) hereby certifies as follows:

 

(a) The representations and warrantiesmade by the Certifying Credit Party(19) in Sections 8.1(a), 8.2 and 8.3 ofthe Credit Agreement, in each case as they relate to the Credit Parties on thedate hereof, are true and correct in all material respects on and as of thedate hereof; and

 

(b) [                             ] is the dulyelected and qualified [Assistant] Secretary of the Certifying Credit Party andthe signature set forth on the signature line for such officer below is suchofficer’s true and genuine signature, and such officer is duly authorized toexecute and deliver on behalf of the Certifying Credit Party each CreditDocument to which it is a party and any certificate or other document to bedelivered by the Certifying Credit Party pursuant to such Credit Documents; and

 

2.             Theundersigned [Assistant] Secretary of the Certifying Credit Party herebycertifies as follows:

 

(a) There are no liquidation or dissolutionproceedings pending or to my knowledge threatened against the Certifying CreditParty, nor to my knowledge has any other event occurred affecting orthreatening the corporate existence of the Certifying Credit Party;

 

(b) The Certifying Credit Party is a[corporation][limited liability company] duly organized, validly existing andin good standing under the laws of [jurisdiction];

 

(c) Attached hereto as Exhibit A is acomplete and correct copy of resolutions duly adopted by the Board of Directors(or a duly authorized committee thereof) of the Certifying

 

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(19) Only applicable for Rockwood SpecialtiesGroup, Inc., Rockwood Specialties Limited and Rockwood SpecialtiesInternational, Inc.

 

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Credit Party on                  ,2004 authorizing [(a)] the execution, delivery and performance of the CreditDocuments (and any agreements relating thereto) to which it is a party [and (b) theextensions of credit contemplated by the Credit Agreement](20); suchresolutions have not in any way been amended, modified, revoked or rescindedand have been in full force and effect since their adoption to and includingthe date hereof and are now in full force and effect; and such resolutions arethe only corporate proceedings of the Certifying Credit Party now in forcerelating to or affecting the matters referred to therein;

 

(d) Attached hereto as Exhibit B is a trueand complete copy of the certificate of [incorporation][formation] of theCertifying Credit Party as in effect at all times since [              ], to and including the datehereof, certified by the [Secretary of State of the State of Delaware orappropriate Governmental Authority in the jurisdiction] as of a recent date;

 

(e) Attached hereto as Exhibit C is a trueand complete copy of the [by-laws][limited liability company agreement] of theCertifying Credit Party as in effect at all times since [         ], to and including the date hereof;and

 

(f) The following persons are now duly electedand qualified officers of the Certifying Credit Party holding the officesindicated next to their respective names below, and such officers have heldsuch offices with the Certifying Credit Party at all times since the dateappearing opposite their respective names below, to and including the datehereof, and the signatures appearing opposite their respective names below arethe true and genuine signatures of such officers, and each of such officers isduly authorized to execute and deliver on behalf of the Certifying Credit Partyeach Credit Document to which it is a party and any certificate or otherdocument to be delivered by the Certifying Credit Party pursuant to such CreditDocuments:

 
| **Name** | ** ** | **Office**                                                                                         | ** ** | **Date** | ** ** | **Signature** |
|----------|------------|----------------------------------------------------------------------------------------------------|------------|----------|------------|---------------|
|     |       |                                                                                               |       |     |       |          |
|     |       | [                ] |       |     |       |          |
|     |       | [Assistant] Secretary                                                                              |       |     |       |          |

 

 

IN WITNESS WHEREOF, the undersigned have hereto setour names as of [     ], 2004.

 
|                                                                                                                                           |   |                         |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|
| Name:                                                                                                                                          |   | Name:                        |
| Title:  [                      ] |   | Title: [Assistant] Secretary |

 

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(20) To be included for Rockwood SpecialtiesGroup, Inc. and Rockwood Specialties Limited only.

 

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EXHIBIT Q

 

FORM OFASSIGNMENT AND ACCEPTANCE

 

This Assignment and Acceptance (the “Assignmentand Acceptance”) is dated as of the Effective Date (as defined below) andis entered into by and between the Assignor (as defined below) and the Assignee(as defined below).  Capitalized termsused in this Assignment and Acceptance and not otherwise defined herein shallhave the meanings specified in the Credit Agreement dated as of July 30,2004 (as amended, supplemented or otherwise modified from time to time, the “CreditAgreement”), among Rockwood Specialties Group, Inc., a Delawarecorporation (the “US Borrower”), Rockwood Specialties Limited, a companyincorporated under the laws of England and Wales (the “UK Borrower” and,together with the US Borrower, the “Borrowers”), Rockwood SpecialtiesInternational, Inc., a Delaware corporation, the several lenders from timeto time parties thereto (each a “Lender” and, collectively, the “Lenders”),Credit Suisse First Boston, acting through its Cayman Islands Branch, asAdministrative Agent and UBS Securities LLC and Goldman Sachs Credit PartnersL.P., as Co-Syndication Agents.  TheStandard Terms and Conditions set forth in Annex 1 attached hereto are herebyagreed to and incorporated herein by reference and made a part of thisAssignment and Acceptance as if set forth herein in full.

 

For an agreed consideration, the Assignor herebyirrevocably sells and assigns to the Assignee, and the Assignee herebyirrevocably purchases and assumes from the Assignor, subject to and inaccordance with the Standard Terms and Conditions and the Credit Agreement, asof the Effective Date inserted by the Administrative Agent as contemplatedbelow (i) all the Assignor’s rights and obligations in its capacity as aLender under the Credit Agreement and any other documents or instrumentsdelivered pursuant thereto to the extent related to the amount and percentageinterest identified below of the Credit Facility identified below and (ii) tothe 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 aLender) against any Person, whether known or unknown, arising under or inconnection with the Credit Agreement, any other documents or instrumentsdelivered pursuant thereto or the loan transactions governed thereby or in anyway based on or related to any of the foregoing, including contract claims,tort claims, malpractice claims, statutory claims and all other claims at lawor in equity related to the rights and obligations sold and assigned pursuantto clause (i) above (the rights and obligations sold and assigned pursuantto clauses (i) and (ii) above being referred to herein collectivelyas the “Assigned Interest”).  Suchsale and assignment is without recourse to the Assignor and, except asexpressly provided in this Assignment and Acceptance, without representation orwarranty by the Assignor.

 

1.             Assignor (the “Assignor”):

 

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2.             Assignee (the “Assignee”):

 

3.             AssignedInterest:

 
| **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.             EffectiveDate of Assignment (the “Effective Date”):                    ,20  (21).

 

 

The terms set forth in this Assignment andAcceptance are hereby agreed to:

 
|   | [NAME OF ASSIGNOR], as Assignor, |
|--------|----------------------------------|
|   |                             |   |
|   | by                               |   |
|   |                             | Name: |
|   |                             | Title:  |
|   |                             |   |
|   |                             |   |
|   | [NAME OF ASSIGNEE], as Assignee, |
|   |                             |   |
|   | by                               |   |
|   |                             | Name: |
|   |                             | Title:  |

 

----

(21) To be inserted byAdministrative Agent and which shall be the effective date of recordation oftransfer 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 14.6of Credit Agreement.

 

----

 
| [Consented to:

ROCKWOOD SPECIALTIES GROUP, INC., |                                                                                                                                                                                                                                                                            |
|--------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                   |                                                                                                                                                                                                                                                                            |   |
|                                                   |                                                                                                                                                                                                                                                                            |   |
| by                                                     |                                                                                                                                                                                                                                                                            |   |
|                                                   | Name:                                                                                                                                                                                                                                                                           |   |
|                                                   | Title:                                             ](23) |   |

 

----

(23) See Section 14.6of Credit Agreement.

 

----

 

ANNEX 1

 

STANDARDTERMS AND CONDITIONS FOR

ASSIGNMENTAND ACCEPTANCE

 

1.  Representationsand Warranties and Agreements.

 

1.1  Assignor.  The Assignor (a) represents and warrantsthat (i) it is the legal and beneficial owner of the Assigned Interest, (ii) theAssigned Interest is free and clear of any lien, encumbrance or other adverseclaim and (iii) it has full power and authority, and has taken all actionnecessary, to execute and deliver this Assignment and Acceptance and toconsummate the transactions contemplated hereby and (b) assumes noresponsibility with respect to (i) any statements, warranties orrepresentations made in or in connection with the Credit Agreement or any otherCredit Document, (ii) the execution, legality, validity, enforceability,genuineness, sufficiency or value of the Credit Documents or any collateralthereunder, (iii) the financial condition of the Borrowers, Holdings, anyof their respective Subsidiaries or Affiliates or any other Person obligated inrespect of any Credit Document or (iv) the performance or observance byany of the Borrowers, Holdings, any of their respective Subsidiaries orAffiliates or any other Person obligated in respect of any Credit Document ofany of their respective obligations under any Credit Document.

 

1.2.  Assignee.  The Assignee (a) represents and warrantsthat (i) it has full power and authority, and has taken all action necessary,to execute and deliver this Assignment and Acceptance and to consummate thetransactions contemplated hereby and to become a Lender under the CreditAgreement, (ii) it satisfies the requirements, if any, specified in theCredit Agreement that are required to be satisfied by it in order to acquirethe Assigned Interest and become a Lender thereunder, (iii) from and afterthe Effective Date, it shall be a party to the Credit Agreement and, to theextent provided in this Assignment and Acceptance, have the rights andobligations of a Lender under the Credit Agreement, and (iv) it hasreceived a copy of the Credit Agreement, together with copies of the mostrecent financial statements delivered pursuant to Section 9.1 of theCredit Agreement, and such other documents and information as it has deemedappropriate to make its own credit analysis and decision to enter into thisAssignment and Acceptance and to purchase the Assigned Interest on the basis ofwhich it has made such analysis and decision independently and without relianceon the Administrative Agent, any other Agent, or any other Lender and (b) agreesthat (i) it will, independently and without reliance on the AdministrativeAgent, any other Agent, the Assignor or any other Lender, and based on suchdocuments and information as it shall deem appropriate at the time, continue tomake its own credit decisions in taking or not taking action under the CreditDocuments, and (ii) it will perform in accordance with their terms all ofthe obligations which by the terms of the Credit Documents are required to beperformed by it as a Lender, including, if it is a Non-U.S. Lender, itsobligations pursuant to Section 5.4 of the Credit Agreement.

 

----

 

2.  Payments.  From and after the Effective Date, the AdministrativeAgent shall make all payments in respect of the Assigned Interest (includingpayments of principal, interest, fees and other amounts) to the Assignor foramounts which have accrued to but excluding the Effective Date and to theAssignee for amounts which have accrued from and after the Effective Date.

 

3.  GeneralProvisions.

 

3.1  Inaccordance with Section 14.6 of the Credit Agreement, upon execution,delivery, acceptance and recording of this Assignment and Acceptance, from andafter the Effective Date, (a) the Assignee shall be a party to the CreditAgreement and, to the extent provided in this Assignment and Acceptance, havethe rights and obligations of a Lender under the Credit Agreement with aCommitment as set forth herein and (b) the Assignor shall, to the extentof the Assigned Interest assigned pursuant to this Assignment and Acceptance,be released from its obligations under the Credit Agreement (and, in the caseof this Assignment and Acceptance covers all of the Assignor’s rights and obligationsunder the Credit Agreement, the Assignor shall cease to be a party to theCredit Agreement but shall continue to be entitled to the benefits of Sections2.10, 2.11, 3.5, 5.4 and 14.5 thereof).

 

3.2  ThisAssignment and Acceptance shall be binding upon and inure to the benefit of theparties hereto and their respective successors and assigns.  This Assignment and Acceptance may beexecuted by one or more of the parties to this Assignment and Acceptance on anynumber of separate counterparts (including by facsimile or other electronictransmission), and all of said counterparts taken together shall be deemed toconstitute one and the same instrument. This Assignment and Acceptance and the rights and obligations of theparties hereunder shall be construed in accordance with and governed by andinterpreted under the law of the state of New York.

 

----

 

EXHIBIT R-1

 

FORM OF PROMISSORY NOTE (TRANCHE A-1 TERMLOANS)

 
|   |   | New York                                                                           |
|--------|--------|------------------------------------------------------------------------------------|
| € |   | [           ],  20[  ] |

 

FOR VALUE RECEIVED, the undersigned, ROCKWOODSPECIALTIES GROUP, INC., a Delaware corporation (the “US Borrower”),hereby unconditionally promises to pay to the order of [Lender] or itsregistered assigns (the “Lender”), at the Administrative Agent’s Officeor such other place as Credit Suisse First Boston, acting through its CaymanIslands Branch (the “Administrative Agent”), shall havespecified, in Euro and in immediately available funds, in accordance withSection 2.5 of the Credit Agreement (as defined below) on the Tranche A-1 TermLoan Maturity Date (capitalized terms used and not otherwise defined hereinshall have the meanings assigned to such terms in the Credit Agreement), theprincipal 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 unconditionallypromises to pay interest in like money at such office on the unpaid principalamount hereof from time to time outstanding at the rates per annum and on thedates specified in Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notesreferred 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 “CreditAgreement”), among the US Borrower, Rockwood Specialties Limited (the “UKBorrower”), Rockwood Specialties International, Inc., the several lendersfrom time to time parties thereto, the Administrative Agent and UBS SecuritiesLLC and Goldman Sachs Credit Partners L.P., as Co-Syndication Agents.  This Promissory Note is subject to, and theLender 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 asprovided therein and in the other Credit Documents.  The Tranche A-1 Term Loans evidenced herebyare subject to prepayment prior to the Tranche A-1 Term Loan Maturity Date, inwhole or in part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect tothis Promissory Note, whether maker, principal, surety, guarantor, endorser orotherwise, hereby waive diligence, presentment, demand, protest and notice ofany kind whatsoever in connection with this Promissory Note.  No failure to exercise and no delay inexercising, on the part of the Administrative Agent or the Lender, any right,remedy, power or privilege hereunder or under the Credit Documents shalloperate as a waiver thereof, nor shall any single or partial exercise of anyright, remedy, power or privilege hereunder or thereunder preclude any other orfurther exercise thereof or the exercise of any other right, remedy, power orprivilege.  A waiver by theAdministrative Agent or the Lender of any right, remedy, power or privilegehereunder or under any Credit Document on any one occasion shall not beconstrued as a bar to any right or remedy that the Administrative Agent or theLender would otherwise have on any future occasion.  The rights, remedies, powers and

 

----

 

privileges herein provided are cumulative, may beexercised 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 andinterest on this Promissory Note shall be made to the Person recorded in theRegister as the holder of this Promissory Note, as described more fully inSection 14.6(b) of the Credit Agreement, and such Person shall be treatedas the Lender hereunder for all purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, ANDCONSTRUED 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 TERMLOANS)

 
|   |   | New York                                                                           |
|--------|--------|------------------------------------------------------------------------------------|
| € |   | [           ],  20[  ] |

 

FOR VALUE RECEIVED, the undersigned, ROCKWOODSPECIALTIES LIMITED, a company incorporated under the laws of England and Wales(the “UK Borrower”), hereby unconditionally promises to pay to the orderof [Lender] or its registered assigns (the “Lender”), at theAdministrative Agent’s Office or such other place as Credit Suisse FirstBoston, acting through its Cayman Islands Branch (the “Administrative Agent”),shall have specified, in Euro and in immediately available funds, in accordancewith Section 2.5 of the Credit Agreement (as defined below) on the Tranche A-2Term Loan Maturity Date (capitalized terms used and not otherwise definedherein 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 promisesto pay interest in like money at such office on the unpaid principal amounthereof from time to time outstanding at the rates per annum and on the datesspecified in Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notesreferred 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 “CreditAgreement”), among Rockwood Specialties Group, Inc., (the “US Borrower”),the UK Borrower, Rockwood Specialties International, Inc., the several lendersfrom time to time parties thereto, the Administrative Agent and UBS SecuritiesLLC and Goldman Sachs Credit Partners L.P., as Co-Syndication Agents.  This Promissory Note is subject to, and the Lenderis entitled to the benefits of, the provisions of the Credit Agreement, and theTranche A-2 Term Loans evidenced hereby are guaranteed and secured as providedtherein and in the other Credit Documents. The Tranche A-2 Term Loans evidenced hereby are subject to prepaymentprior to the Tranche A-2 Term Loan Maturity Date, in whole or in part, asprovided in the Credit Agreement.

 

All parties now and hereafter liable with respect tothis Promissory Note, whether maker, principal, surety, guarantor, endorser orotherwise, hereby waive diligence, presentment, demand, protest and notice ofany kind whatsoever in connection with this Promissory Note.  No failure to exercise and no delay inexercising, on the part of the Administrative Agent or the Lender, any right,remedy, power or privilege hereunder or under the Credit Documents shalloperate as a waiver thereof, nor shall any single or partial exercise of anyright, remedy, power or privilege hereunder or thereunder preclude any other orfurther exercise thereof or the exercise of any other right, remedy, power orprivilege.  A waiver by theAdministrative Agent or the Lender of any right, remedy, power or privilegehereunder or under any Credit Document on any one occasion shall not beconstrued as a bar to any right or remedy that the Administrative Agent 

 

----

 

or the Lender would otherwise have on any futureoccasion.  The rights, remedies, powersand privileges herein provided are cumulative, may be exercised singly orconcurrently and are not exclusive of any rights, remedies, powers andprivileges provided by law.

 

All payments in respect of the principal of andinterest on this Promissory Note shall be made to the Person recorded in theRegister as the holder of this Promissory Note, as described more fully inSection 14.6(b) of the Credit Agreement, and such Person shall be treatedas the Lender hereunder for all purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, ANDCONSTRUED 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 TERMLOANS)

 
|   |   | New York                                                                           |
|--------|--------|------------------------------------------------------------------------------------|
| $      |   | [           ],  20[  ] |

 

FOR VALUE RECEIVED, the undersigned, ROCKWOODSPECIALTIES GROUP, INC., a Delaware corporation (the “US Borrower”),hereby unconditionally promises to pay to the order of [Lender] or itsregistered assigns (the “Lender”), at the Administrative Agent’s Officeor such other place as Credit Suisse First Boston, acting through its CaymanIslands Branch (the “Administrative Agent”), shall havespecified, in Dollars and in immediately available funds, in accordancewith Section 2.5 of the Credit Agreement (as defined below) on the Tranche BTerm Loan Maturity Date (capitalized terms used and not otherwise definedherein shall have the meanings assigned to such terms in the Credit Agreement),the principal amount of [           ]Dollars ($[        ]) or, if less, theaggregate unpaid principal amount of all Tranche B Term Loans, if any, made bythe Lender to the US Borrower pursuant to the Credit Agreement.  The US Borrower further unconditionallypromises to pay interest in like money at such office on the unpaid principalamount hereof from time to time outstanding at the rates per annum and on thedates specified in Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notesreferred 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 “CreditAgreement”), among the US Borrower, Rockwood Specialties Limited (the “UKBorrower”), Rockwood Specialties International, Inc., the several lendersfrom time to time parties thereto, the Administrative Agent and UBS SecuritiesLLC and Goldman Sachs Credit Partners L.P., as Co-Syndication Agents.  This Promissory Note is subject to, and theLender is entitled to the benefits of, the provisions of the Credit Agreement,and the Tranche B Term Loans evidenced hereby are guaranteed and secured asprovided therein and in the other Credit Documents.  The Tranche B Term Loans evidenced hereby aresubject to prepayment prior to the Tranche B Term Loan Maturity Date, in wholeor in part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect tothis Promissory Note, whether maker, principal, surety, guarantor, endorser orotherwise, hereby waive diligence, presentment, demand, protest and notice ofany kind whatsoever in connection with this Promissory Note.  No failure to exercise and no delay inexercising, on the part of the Administrative Agent or the Lender, any right,remedy, power or privilege hereunder or under the Credit Documents shalloperate as a waiver thereof, nor shall any single or partial exercise of anyright, remedy, power or privilege hereunder or thereunder preclude any other orfurther exercise thereof or the exercise of any other right, remedy, power orprivilege.  A waiver by the AdministrativeAgent or the Lender of any right, remedy, power or privilege hereunder or underany Credit Document on any one occasion shall not be construed as a bar to anyright or remedy that the Administrative Agent or the Lender would otherwisehave on any future occasion.  The rights,remedies, powers and

 

----

 

privileges herein provided are cumulative, may beexercised 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 andinterest on this Promissory Note shall be made to the Person recorded in theRegister as the holder of this Promissory Note, as described more fully inSection 14.6(b) of the Credit Agreement, and such Person shall be treatedas the Lender hereunder for all purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, ANDCONSTRUED 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 TERMLOANS)

 
|   |   | [London]                                                                           |
|--------|--------|------------------------------------------------------------------------------------|
| € |   | [           ],  20[  ] |

 

FOR VALUE RECEIVED, the undersigned, ROCKWOODSPECIALTIES GROUP, INC., a Delaware corporation (the “US Borrower”),hereby unconditionally promises to pay to the order of [Lender] or itsregistered assigns (the “Lender”), at the Administrative Agent’s Officeor such other place as Credit Suisse First Boston, acting through its CaymanIslands Branch (the “Administrative Agent”), shall havespecified, in Euro and in immediately available funds, in accordance withSection 2.5 of the Credit Agreement (as defined below) on the Tranche C TermLoan Maturity Date (capitalized terms used and not otherwise defined hereinshall have the meanings assigned to such terms in the Credit Agreement), theprincipal amount of [                ]Euro (€[        ]) or, if less, theaggregate unpaid principal amount of all Tranche C Term Loans, if any, made bythe Lender to the US Borrower pursuant to the Credit Agreement.  The US Borrower further unconditionallypromises to pay interest in like money at such office on the unpaid principalamount hereof from time to time outstanding at the rates per annum and on thedates specified in Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notesreferred 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 “CreditAgreement”), among the US Borrower, Rockwood Specialties Limited, (the “UKBorrower”), Rockwood Specialties International, Inc., the several lendersfrom time to time parties thereto, the Administrative Agent and UBS SecuritiesLLC and Goldman Sachs Credit Partners L.P., as Co-Syndication Agents.  This Promissory Note is subject to, and theLender is entitled to the benefits of, the provisions of the Credit Agreement,and the Tranche C Term Loans evidenced hereby are guaranteed and secured asprovided therein and in the other Credit Documents.  The Tranche C Term Loans evidenced hereby aresubject to prepayment prior to the Tranche C Term Loan Maturity Date, in wholeor in part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect tothis Promissory Note, whether maker, principal, surety, guarantor, endorser orotherwise, hereby waive diligence, presentment, demand, protest and notice ofany 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, poweror privilege hereunder or under the Credit Documents shall operate as a waiverthereof, nor shall any single or partial exercise of any right, remedy, poweror privilege hereunder or thereunder preclude any other or further exercisethereof or the exercise of any other right, remedy, power or privilege.  A waiver by the Administrative Agent or theLender of any right, remedy, power or privilege hereunder or under any CreditDocument on any one occasion shall not be construed as a bar to any right orremedy that the Administrative Agent or the Lender would otherwise have on anyfuture occasion.  The rights, remedies,powers and

 

----

 

privileges herein provided are cumulative, may beexercised 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 andinterest on this Promissory Note shall be made to the Person recorded in the Registeras the holder of this Promissory Note, as described more fully inSection 14.6(b) of the Credit Agreement, and such Person shall be treatedas the Lender hereunder for all purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, ANDCONSTRUED 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 ANDSWINGLINE LOANS)

 
|        |   | [London][New York]                                                                 |
|-------------|--------|------------------------------------------------------------------------------------|
| [$][€] |   | [           ],  20[  ] |

 

FOR VALUE RECEIVED, the undersigned, [ROCKWOODSPECIALTIES GROUP, INC., a Delaware corporation (the “US Borrower”)][ROCKWOOD SPECIALTIES LIMITED, a company incorporated under the laws of Englandand Wales (the “UK Borrower”)], hereby unconditionally promises to payto the order of [Lender] or its registered assigns (the “Lender”), atthe Administrative Agent’s Office or such other place as CREDIT SUISSE FIRSTBOSTON, acting through its Cayman Islands Branch (the “Administrative Agent”),shall have specified, in [Dollars][Euro] and in immediately availablefunds, in accordance with Section 2.5 of the Credit Agreement (as definedbelow) on the [Revolving Credit Maturity Date][Swingline Maturity Date](capitalized terms used and not otherwise defined herein shall have themeanings assigned to such terms in the Credit Agreement), the principal amountof [      ] [Dollars][Euro] ([$][€][             ]) or, if less, the aggregateunpaid principal amount of all [Revolving Credit Loans][Swingline Loans], ifany, made by the Lender to the [US Borrower][UK Borrower] pursuant to theCredit Agreement.  The [US Borrower][UKBorrower] further unconditionally promises to pay interest in like money atsuch office on the unpaid principal amount hereof from time to time outstandingat the rates per annum and on the dates specified in Section 2.8 of the CreditAgreement.

 

This Promissory Note is one of the promissory notesreferred 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 “CreditAgreement”), among [Rockwood Specialties Group, Inc.], [RockwoodSpecialties Limited], Rockwood Specialties International, Inc., the severallenders from time to time parties thereto, the Administrative Agent and UBSSecurities LLC and Goldman Sachs Credit Partners L.P., as Co-SyndicationAgents.  This Promissory Note is subjectto, and the Lender is entitled to the benefits of, the provisions of the CreditAgreement, and the [Revolving Credit Loans][Swingline Loans] evidenced herebyare guaranteed and secured as provided therein and in the other CreditDocuments.  The [Revolving CreditLoans][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 tothis Promissory Note, whether maker, principal, surety, guarantor, endorser orotherwise, hereby waive diligence, presentment, demand, protest and notice ofany kind whatsoever in connection with this Promissory Note.  No failure to exercise and no delay inexercising, on the part of the Administrative Agent or the Lender, any right,remedy, power or privilege hereunder or under the Credit Documents shalloperate as a waiver thereof, nor shall any single or partial exercise of anyright, remedy, power or privilege hereunder or thereunder preclude any other orfurther exercise thereof or the exercise of any other right, remedy, power orprivilege.  A waiver by theAdministrative Agent or the

 

----

 

Lender of any right, remedy, power or privilegehereunder or under any Credit Document on any one occasion shall not beconstrued as a bar to any right or remedy that the Administrative Agent or theLender would otherwise have on any future occasion.  The rights, remedies, powers and privilegesherein provided are cumulative, may be exercised singly or concurrently and arenot exclusive of any rights, remedies, powers and privileges provided by law.

 

All payments in respect of the principal of andinterest on this Promissory Note shall be made to the Person recorded in theRegister as the holder of this Promissory Note, as described more fully inSection 14.6(b) of the Credit Agreement, and such Person shall be treatedas the Lender hereunder for all purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, ANDCONSTRUED 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 TERMLOANS)

 
|   |   | New York                                                                           |
|--------|--------|------------------------------------------------------------------------------------|
| $      |   | [           ],  20[  ] |

 

FOR VALUE RECEIVED, the undersigned, ROCKWOODSPECIALTIES GROUP, INC., a Delaware corporation (the “US Borrower”),hereby unconditionally promises to pay to the order of [Lender] or itsregistered assigns (the “Lender”), at the Administrative Agent’s Officeor such other place as Credit Suisse (the “Administrative Agent”), shallhave specified, in Dollars and in immediately available funds, inaccordance with Section 2.5 of the Credit Agreement (as defined below) onthe Tranche H Term Loan Maturity Date (capitalized terms used and not otherwisedefined herein shall have the meanings assigned to such terms in the CreditAgreement), the principal amount of [           ] Dollars ($[        ]) or, if less, the aggregate unpaidprincipal amount of all Tranche H Term Loans, if any, made by the Lender to theUS Borrower pursuant to the Credit Agreement. The US Borrower further unconditionally promises to pay interest in likemoney at such office on the unpaid principal amount hereof from time to timeoutstanding at the rates per annum and on the dates specified in Section 2.8of the Credit Agreement.

 

This Promissory Note is one of the promissory notesreferred 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, datedas of July 30, 2004 (the “Existing Credit Agreement” and togetherwith 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 totime parties thereto, the Administrative Agent and UBS Securities LLC andGoldman Sachs Credit Partners L.P., as Co-Syndication Agents.  This Promissory Note is subject to, and theLender is entitled to the benefits of, the provisions of the Credit Agreement,and the Tranche H Term Loans evidenced hereby are guaranteed and secured asprovided therein and in the other Credit Documents.  The Tranche H Term Loans evidenced hereby aresubject to prepayment prior to the Tranche H Term Loan Maturity Date, in wholeor in part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect tothis Promissory Note, whether maker, principal, surety, guarantor, endorser orotherwise, hereby waive diligence, presentment, demand, protest and notice ofany kind whatsoever in connection with this Promissory Note.  No failure to exercise and no delay inexercising, on the part of the Administrative Agent or the Lender, any right,remedy, power or privilege hereunder or under the Credit Documents shalloperate as a waiver thereof, nor shall any single or partial exercise of anyright, remedy, power or privilege hereunder or thereunder preclude any other orfurther exercise thereof or the exercise of any other right, remedy, power orprivilege.  A waiver by theAdministrative Agent or the

 

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Lender of any right, remedy, power or privilegehereunder or under any Credit Document on any one occasion shall not beconstrued as a bar to any right or remedy that the Administrative Agent or theLender would otherwise have on any future occasion.  The rights, remedies, powers and privilegesherein provided are cumulative, may be exercised singly or concurrently and arenot exclusive of any rights, remedies, powers and privileges provided by law.

 

All payments in respect of the principal of andinterest on this Promissory Note shall be made to the Person recorded in theRegister as the holder of this Promissory Note, as described more fully inSection 14.6(b) of the Credit Agreement, and such Person shall betreated as the Lender hereunder for all purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, ANDCONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 
|   | ROCKWOOD SPECIALTIES GROUP, INC. |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | by                               |   |
|   |                             |   |
|   |                             | Name: |
|   |                             | Title: |

 

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EXHIBIT R-7

 

FORM OF PROMISSORY NOTE (TRANCHE I TERMLOANS)

 
|   |   | New York                                                                           |
|--------|--------|------------------------------------------------------------------------------------|
| $      |   | [           ],  20[  ] |

 

FOR VALUE RECEIVED, the undersigned, ROCKWOODSPECIALTIES GROUP, INC., a Delaware corporation (the “US Borrower”),hereby unconditionally promises to pay to the order of [Lender] or itsregistered assigns (the “Lender”), at the Administrative Agent’s Officeor such other place as Credit Suisse acting through its Cayman Islands Branch(the “Administrative Agent”), shall have specified, in Euro and inimmediately available funds, in accordance with Section 2.5 of the CreditAgreement (as defined below) on the Tranche I Term Loan Maturity Date(capitalized terms used and not otherwise defined herein shall have themeanings assigned to such terms in the Credit Agreement), the principal amountof [           ] Euro (€ [        ]) or, if less, the aggregate unpaidprincipal amount of all Tranche I Term Loans, if any, made by the Lender to theUS Borrower pursuant to the Credit Agreement. The US Borrower further unconditionally promises to pay interest in likemoney at such office on the unpaid principal amount hereof from time to timeoutstanding at the rates per annum and on the dates specified in Section 2.8of the Credit Agreement.

 

This Promissory Note is one of the promissory notesreferred 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, datedas of July 30, 2004 (the “Existing Credit Agreement” and togetherwith 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 totime parties thereto, the Administrative Agent and UBS Securities LLC and GoldmanSachs Credit Partners L.P., as Co-Syndication Agents.  This Promissory Note is subject to, and theLender is entitled to the benefits of, the provisions of the Credit Agreement,and the Tranche I Term Loans evidenced hereby are guaranteed and secured asprovided therein and in the other Credit Documents.  The Tranche I Term Loans evidenced hereby aresubject to prepayment prior to the Tranche I Term Loan Maturity Date, in wholeor in part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect tothis Promissory Note, whether maker, principal, surety, guarantor, endorser orotherwise, hereby waive diligence, presentment, demand, protest and notice ofany kind whatsoever in connection with this Promissory Note.  No failure to exercise and no delay inexercising, on the part of the Administrative Agent or the Lender, any right,remedy, power or privilege hereunder or under the Credit Documents shalloperate as a waiver thereof, nor shall any single or partial exercise of anyright, remedy, power or privilege hereunder or thereunder preclude any other orfurther exercise thereof or the exercise of any other right, remedy, power orprivilege.  A waiver by theAdministrative Agent or the

 

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Lender of any right, remedy, power or privilegehereunder or under any Credit Document on any one occasion shall not beconstrued as a bar to any right or remedy that the Administrative Agent or theLender would otherwise have on any future occasion.  The rights, remedies, powers and privilegesherein provided are cumulative, may be exercised singly or concurrently and arenot exclusive of any rights, remedies, powers and privileges provided by law.

 

All payments in respect of the principal of andinterest on this Promissory Note shall be made to the Person recorded in theRegister as the holder of this Promissory Note, as described more fully inSection 14.6(b) of the Credit Agreement, and such Person shall betreated as the Lender hereunder for all purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, ANDCONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

 
|   | ROCKWOOD SPECIALTIES GROUP, INC. |
|--------|----------------------------------|
|   |                             |
|   |                             |
|   | by                               |   |
|   |                             | Name: |
|   |                             | Title: |

 

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EXHIBIT R-8

 

FORM OF PROMISSORY NOTE (EXTENDEDREVOLVING CREDIT AND SWINGLINE LOANS)

 
|        |   | [London][New York]                                                                 |
|-------------|--------|------------------------------------------------------------------------------------|
| [$][€] |   | [           ],  20[  ] |

 

FOR VALUE RECEIVED, the undersigned, [ROCKWOODSPECIALTIES GROUP, INC., a Delaware corporation (the “US Borrower”)][ROCKWOOD SPECIALTIES LIMITED, a company incorporated under the laws of Englandand Wales (the “UK Borrower”)], hereby unconditionally promises to payto the order of [Lender] or its registered assigns (the “Lender”), atthe Administrative Agent’s Office or such other place as CREDIT SUISSE (the “AdministrativeAgent”), shall have specified, in [Dollars][Euro] and in immediatelyavailable funds, in accordance with Section 2.5 of the Credit Agreement(as defined below) on the [Extended Revolving Credit Maturity Date][SwinglineMaturity Date] (capitalized terms used and not otherwise defined herein shallhave the meanings assigned to such terms in the Credit Agreement), theprincipal amount of [      ][Dollars][Euro] ([$][€][             ])or, if less, the aggregate unpaid principal amount of all [Extended RevolvingCredit Loans][Swingline Loans], if any, made by the Lender to the [USBorrower][UK Borrower] pursuant to the Credit Agreement.  The [US Borrower][UK Borrower] furtherunconditionally promises to pay interest in like money at such office on theunpaid principal amount hereof from time to time outstanding at the rates perannum and on the dates specified in Section 2.8 of the Credit Agreement.

 

This Promissory Note is one of the promissory notesreferred 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, datedas of July 30, 2004 (the “Existing Credit Agreement” and togetherwith the Amended and Restated Credit Agreement and as otherwise amended, supplementedor 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 totime parties thereto, the Administrative Agent and UBS Securities LLC andGoldman Sachs Credit Partners L.P., as Co-Syndication Agents.  This Promissory Note is subject to, and theLender is entitled to the benefits of, the provisions of the Credit Agreement,and the [Extended Revolving Credit Loans][Swingline Loans] evidenced hereby areguaranteed and secured as provided therein and in the other CreditDocuments.  The [Extended RevolvingCredit Loans][Swingline Loans] evidenced hereby are subject to prepayment priorto the [Extended Revolving Credit Maturity Date][Swingline Maturity Date], inwhole or in part, as provided in the Credit Agreement.

 

All parties now and hereafter liable with respect tothis Promissory Note, whether maker, principal, surety, guarantor, endorser orotherwise, hereby waive diligence, presentment, demand, protest and notice ofany kind whatsoever in connection with this Promissory Note.  No failure to exercise and no delay inexercising, on the part of the Administrative Agent or the Lender, any right,remedy, power or privilege hereunder or under the Credit Documents shalloperate as a waiver thereof, nor shall any single or partial exercise of anyright, remedy, power or privilege hereunder or thereunder preclude any other orfurther exercise thereof or the exercise of any other right, remedy, power orprivilege.  A waiver by theAdministrative Agent or the

 

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Lender of any right, remedy, power or privilegehereunder or under any Credit Document on any one occasion shall not beconstrued as a bar to any right or remedy that the Administrative Agent or theLender would otherwise have on any future occasion.  The rights, remedies, powers and privilegesherein provided are cumulative, may be exercised singly or concurrently and arenot exclusive of any rights, remedies, powers and privileges provided by law.

 

All payments in respect of the principal of andinterest on this Promissory Note shall be made to the Person recorded in theRegister as the holder of this Promissory Note, as described more fully inSection 14.6(b) of the Credit Agreement, and such Person shall betreated as the Lender hereunder for all purposes of the Credit Agreement.

 

THIS PROMISSORY NOTE SHALL BE GOVERNED BY, ANDCONSTRUED 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 withLoans (a “Counterparty”)] under the Credit Agreement dated as of July 30,2004 (as the same may be amended, supplemented or otherwise modified from timeto time, the “Credit Agreement”; capitalized terms used herein and nototherwise defined herein shall have the meanings assigned to such terms in theCredit Agreement), among Rockwood Specialties Group, Inc., a Delawarecorporation (the “US Borrower”), Rockwood Specialties Limited, a companyincorporated under the laws of England and Wales (the “UK Borrower” and,together with the US Borrower, the “Borrowers”), Rockwood SpecialtiesInternational, Inc., a Delaware corporation, the several lenders from timeto time parties thereto (the “Lenders”), Credit Suisse First Boston,acting through its Cayman Islands Branch, as administrative agent (in suchcapacity, the “Administrative Agent”) and UBS Securities LLC and GoldmanSachs Credit Partners, L.P. as co-syndication agents, you will be receivingcertain information that is non-public, confidential or proprietary.  Such information concerning RockwoodSpecialties Group, Inc. and each of its Subsidiaries, Rockwood SpecialtiesLimited, Rockwood Specialties International, Inc., (each together with itsrespective affiliates, the “Companies”), and partnerships controlled byKohlberg Kravis Roberts & Co. (“KKR”), including the structureof 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 CaymanIslands Branch, UBS Securities LLC and Goldman Sachs Credit Partners L.P. orany of their respective affiliates (collectively, the “Agents”) orotherwise by or on behalf of the Companies (at any time on, before or after thedate 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) oremployees that contain or otherwise reflect such information or your review of,or interest in, the Companies, and any information otherwise concerning theCredit Agreement, is hereinafter referred to as the “Information”.  In consideration of your receipt of theInformation, you agree that:

 

1.             TheInformation shall be kept confidential and shall not, without the prior writtenconsent of the Administrative Agent and the US Borrower, be reproduced ordisclosed by you or by your affiliates, agents, representatives or employees inany manner whatsoever, in whole or in part, and shall not be used by you oryour affiliates, agents, representatives or employees, other than in connectionwith evaluating whether you wish to become a [Lender under the CreditAgreement] [Counterparty].  Moreover, youagree to reveal Information only to your affiliates, agents, representativesand employees who need to

 

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know the Information for the purpose ofevaluating whether you wish to become a [Lender under the CreditAgreement][Counterparty], who are informed by you of the confidential nature ofthe Information and who agree to be bound by the terms and conditions of thisConfidentiality Agreement.  You agree totake all reasonable measures to restrain your affiliates, agents,representatives and employees from unauthorized disclosure or use of theInformation.

 

2.             Withoutthe prior written consent of the Administrative Agent and the US Borrowerexcept as required by law, you and your affiliates, agents, representatives andemployees shall not disclose to any person or entity (including, specifically,any representative of the press or media) the fact that the Information hasbeen made available, that discussions or negotiations are taking placeconcerning a possible transaction involving the Credit Agreement, any of theterms, conditions or other facts with respect to any such possible transaction(including the status thereof), or that the transaction has been, or is aboutto be, consummated.

 

3.             ThisConfidentiality Agreement shall be inoperative as to such portions of theInformation (or such of the facts referred to in the preceding paragraph) that(a) are or become generally available to the public on a non-confidentialbasis through no fault of or action by you or your affiliates, agents,representatives or employees so long as you have determined in good faith thatsuch portions became generally available from a source (an “UnrestrictedSource”) 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 sourceother than any of the Companies or Agents or any of their respectiveaffiliates, agents, representatives or employees, which source is anUnrestricted Source, or (c) was hereafter independently developed or compiledby you, as evidenced by your records, without the use of the Information.

 

4.             Ifand to the extent that you or anyone to whom you transmit the Informationpursuant to this Confidentiality Agreement (a) becomes legally compelledto discuss any of the Information or the existence of the transaction pursuantto a subpoena or other court process or (b) is requested or required toprovide any of the Information or acknowledge the existence of the Informationby an applicable regulatory agency in connection with an examination of yourfinancial institution by examiners or by your independent auditors,(i) you shall use your best efforts to provide the Administrative Agentand the US Borrower with notice of such event promptly upon your obtainingknowledge thereof so that any one or more of the Administrative Agent and theUS Borrower may seek confidential treatment of such Information, (ii) youmay disclose the portion of the Information that is the subject of such legalcompulsion or request or requirement of such applicable regulatory agency and(iii) you shall disclose such Information in a manner reasonably designedto preserve its confidential nature.

 

Notwithstanding anything express or implied to thecontrary herein or by the documents referred to or incorporated by referenceherein, or any other prior or future oral or written statements by any partieshereto with respect to the transactions contemplated herein or by the otherCredit Documents, and whether or not any of them are legally binding, the

 

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obligations of confidentiality contained herein andtherein, as they relate to the transactions contemplated by the CreditAgreement, shall not apply to the tax structure or tax treatment of suchtransactions, and each recipient (and its employees, representatives, or otheragents) may immediately disclose to any and all persons, without limitation ofany 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 taxanalyses 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 anyinformation relating to such tax structure or tax treatment to the extent thatnon-disclosure is reasonably necessary to comply with applicable securitieslaws.  This paragraph is intended tocause the transactions contemplated by this Agreement not to be treated ashaving been offered under conditions of confidentiality for purposes of Section 1.6011-4(b)(3) (orany successor provision) of the Treasury Regulations promulgated under Section 6011of the Internal Revenue Code of 1986, as amended, and shall be construed in amanner consistent with such purpose.

 

ThisConfidentiality Agreement shall be governed by, and construed and interpretedin accordance with, the law of the State of New York.

 

If you are prepared to accept the Information onthis basis, please sign and return to the Administrative Agent the enclosedcopy of this Confidentiality Agreement. In the event that you decide not to provide financing under the CreditAgreement referenced above or to become a Counterparty, you shall, within twobusiness 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 theCompanies in connection with the Credit Agreement, and represent to theAdministrative Agent and the US Borrower that you have returned all copies ofsuch material (except that you may destroy, rather than re-deliver, anyanalyses, compilations, studies or other documents prepared by you or by youraffiliates, agents, representatives (including attorneys, accountants andfinancial advisors) or employees that contain or otherwise reflect anyInformation, and represent to the Administrative Agent and the US Borrower thatyou have destroyed all copies of such material).  All of your obligations hereafter and all ofour rights and remedies hereunder shall survive any return or destruction ofthe Information.

 

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|   | 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:                                                                                           |   |

 

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EXHIBIT T

 

FORM OF POST-CLOSING SCHEDULE

 

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EXHIBIT U

 

FORM OF JOINDER

 

JOINDER AGREEMENT, dated as of[                        ,20[  ] (this “Agreement”), by andamong [NEW LOAN LENDERS] (each, a “New Loan Lender” and, collectively,the “New Loan Lenders”), ROCKWOOD SPECIALTIES GROUP, INC., a Delawarecorporation (the “US Borrower”), ROCKWOOD SPECIALTIES LIMITED, a companyincorporated 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 ishereby made to the Amended and Restated Credit Agreement, dated as of June 12,2009 (the “Amended and Restated Credit Agreement”), which amends andrestates in its entirety that certain Credit Agreement, dated as of July 30,2004 (the “Existing Credit Agreement” and together with the Amended andRestated Credit Agreement and as otherwise amended, supplemented or otherwisemodified from time to time, the “Credit Agreement”), among the USBorrower, the UK Borrower, Holdings, the lending institutions from time to timeparties thereto (each a “Lender” and, collectively, the “Lenders”),CREDIT SUISSE, as Administrative Agent and as Collateral Agent and UBSSECURITIES LLC and GOLDMAN SACHS CREDIT PARTNERS L.P., as Co-Syndication Agents(capitalized terms used but not defined herein having the meaning provided inthe Credit Agreement); and

 

**WHEREAS**, subject to theterms and conditions of the Credit Agreement, the US Borrower may establish NewRevolving Loan Commitments, New Extended Revolving Loan Commitments, NewTranche H Term Loan Commitments, New Tranche I Term Loan Commitments,Incremental Refinancing Term Loan Commitments and/or Incremental RefinancingRevolving Credit Commitments by, among other things, entering into one or moreJoinder Agreements with New Tranche H Term Loan Lenders, New Tranche I TermLoan Lenders, New Revolving Loan Lenders, New Extended Revolving Loan Lenders,Incremental Refinancing Term Loan Lenders, and/or Incremental RefinancingRevolving Credit Lenders, as applicable;

 

**NOW, THEREFORE**,in consideration of the premises and agreements, provisions and covenantsherein contained, the parties hereto agree as follows:

 

Each New Revolving Loan Lender party hereto herebyagrees to commit to provide its respective New Revolving Loan Commitment, eachNew Extended Revolving Loan Lender party hereto hereby agrees to commit toprovide its respective New Extended Revolving Loan Commitment, each New TrancheH Term Loan Lender party hereto agrees to commit to provide its respective NewTranche H Term Loan Commitment, each New Tranche I Term Loan Lender partyhereto agrees to commit to provide its respective New Tranche I Term LoanCommitment, each Incremental Refinancing Term Loan Lender party hereto herebyagrees to provide its respective Incremental Refinancing Term Loan Commitmentand/or each Incremental Refinancing

 

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Revolving Credit Lender party hereto hereby agreesto commit to provide its respective Incremental Refinancing Revolving CreditCommitment, as set forth on Schedule A annexed hereto, on the terms and subjectto the conditions set forth below:

 

Each New Revolving Loan Lender, each New ExtendedRevolving Loan Lender, each New Tranche H Term Loan Lender, each New Tranche ITerm Loan Lender, each Incremental Refinancing Term Loan Lender and/or eachIncremental Refinancing Revolving Credit Lender (i) confirms that it hasreceived a copy of the Credit Agreement and the other Credit Documents,together with copies of the financial statements referred to therein and suchother documents and information as it has deemed appropriate to make its owncredit analysis and decision to enter into this Agreement; (ii) agreesthat it will, independently and without reliance upon the Administrative Agentor any other New Revolving Loan Lender, New Extended Revolving Loan Lender, NewTranche H Term Loan Lender, New Tranche I Term Loan Lender, IncrementalRefinancing Term Loan Lender, Incremental Refinancing Revolving Credit Lender orany other Lender or Agent and based on such documents and information as itshall deem appropriate at the time, continue to make its own credit decisionsin taking or not taking action under the Credit Agreement; (iii) appointsand authorizes the Administrative to take such action as agent on its behalfand to exercise such powers under the Credit Agreement and the other CreditDocuments 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 theobligations which by the terms of the Credit Agreement are required to beperformed by it as a New Tranche H Term Loan Lender, New Tranche I Term LoanLender, New Revolving Loan Lender, New Extended Revolving Loan Lender,Incremental Refinancing Term Loan Lender and/or Incremental RefinancingRevolving Credit Lender as the case may be.

 

Each New Revolving Loan Lender, New ExtendedRevolving Loan Lender, New Tranche H Term Loan Lender, New Tranche I Term LoanLender, Incremental Refinancing Term Loan Lender and/or Incremental RefinancingRevolving Credit Lender hereby agrees to make its respective Commitment on thefollowing terms and conditions:(24)

 

SECTION 24.         **Applicable ABR Margin**.  TheApplicable ABR Margin for each Series [    ] [New Tranche HTerm Loan / Incremental Refinancing Term Loan] shall mean, as of any date ofdetermination, [    ]% per annum [plus the pricingpremium, if any, less the pricing reduction, if any].

 

SECTION 25.         **Applicable Eurodollar Margin**.  TheApplicable Eurodollar Margin for each Series [ ] [New Tranche H Term Loans / New Tranche I Term Loans / IncrementalRefinancing 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**.  TheUS Borrower shall make principal payments on the Series[    ] New Tranche H Term Loans in installments on thedates and in the amounts set forth below:

 

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(24) Insert completed items 1-7 as applicablewith respect to New Tranche H Term Loans, New Tranche I Term Loans andIncremental Refinancing Term Loans with such modifications as may be agreed toby the parties hereto to the extent consistent with the Credit Agreement.

 

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| **(A)********Payment********Date** | ** ** | **(B)********Scheduled********Repayment of Series********[    ] New Tranche H********Term Loans** | ** ** |
|------------------------------------|------------|-----------------------------------------------------------------------------------------------------------------------------------------------------|------------|
|                               |       | $                                                                                                                                                   |       |   |
|                               |       | $                                                                                                                                                   |       |   |
|                               |       | $                                                                                                                                                   |       |   |
|                               |       | $                                                                                                                                                   |       |   |
|                               |       | $                                                                                                                                                   |       |   |
|                               |       | $                                                                                                                                                   |       |   |
|                               |       | $                                                                                                                                                   |       |   |
|                               |       | $                                                                                                                                                   |       |   |

 

The US Borrower shall make principal payments on theSeries [    ] New Tranche I Term Loans in installments onthe 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 theSeries [    ]Incremental Refinancing Term Loans ininstallments on the dates and in the amounts set forth below:

 

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| **(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 aboveshall be reduced in connection with any voluntary or mandatory prepayments ofthe 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**.  TheUS Borrower agrees to pay to each [New Tranche H Term Loan Lender / New TrancheI Term Loan Lender / Incremental Refinancing Term Loan Lender] the followingprepayment fees, if any: [                                  ].

 

**[Insertother additional prepayment provisions with respect to New Tranche H TermLoans, New Tranche I Term Loans or Incremental Refinancing Term Loans]**

 

SECTION 29.         **Other Fees**.  The US Borrower agrees to payeach [New Tranche H Term Loan Lender] [New Tranche I Term Loan Lender] [NewRevolving Loan Lender] [New Extended Revolving Loan Lender] [IncrementalRefinancing Term Loan Lender] [Incremental Refinancing Revolving Credit Lender]its pro rata share of an aggregate fee equal to[                          ]on [                        ,        ].

 

SECTION 30.         **Proposed Borrowing**.  ThisAgreement represents the US Borrower’s request to borrow Series[    ] [New Tranche [H] [I] Term Loans / IncrementalRefinancing Term Loans] from the [New Tranche [H] [I] Term Loan Lenders /Incremental Refinancing Term Loan Lenders] as follows (the “Proposed Borrowing”):

 

21.1.        BusinessDay of Proposed Borrowing:                           ,

 

21.2.        Amountof Proposed Borrowing:  $

 

21.3.        Interestrate option:

a.                                       ABR Loan(s) 

b.                                      Eurodollar Loans 

with an initial Interest 

Period of         month(s)

 

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SECTION 31.         **[New Loan Lenders**.  EachNew Revolving Loan Lender, New Extended Revolving Loan Lender, New Tranche HTerm Loan Lender, New Tranche I Term Loan Lender, Incremental Refinancing TermLoan Lender and/or Incremental Refinancing Revolving Credit Lender acknowledgesand agrees that upon its execution of this Agreement and the making of NewRevolving Loans, New Extended Revolving Loans, Series[      ] New Tranche H Term Loans, Series[      ] New Tranche I Term Loans, Series[    ] Incremental Refinancing Term Loans, and/orIncremental Refinancing Revolving Credit Commitments,  as the case may be, that such New RevolvingLoan Lender, New Extended Revolving Loan Lender, New Tranche H Term LoanLender, New Tranche I Term Loan Lender, Incremental Refinancing Term LoanLender and/or Incremental Refinancing Revolving Credit Lender shall become a “Lender”under, and for all purposes of, the Credit Agreement and the other CreditDocuments, and shall be subject to and bound by the terms thereof, and shallperform all the obligations of and shall have all rights of a Lenderthereunder.](25)

 

SECTION 32.         **Credit Agreement Governs**  Except as set forth in this Agreement, the NewRevolving Loans, New Extended Revolving Loans, Series[      ] New Tranche H Term Loans, Series[      ] New Tranche I Term Loans, Series[    ] Incremental Refinancing Term Loans and/orIncremental Refinancing Revolving Credit Commitments shall otherwise be subjectto the provisions of the Credit Agreement and the other Credit Documents.

 

SECTION 33.         **Borrower’s Certifications**.  Byits execution of this Agreement, the undersigned officer, to the best of his orher knowledge, and the US Borrower hereby certify that:

 

The representations and warranties contained in theCredit Agreement and the other Credit Documents are true and correct in allmaterial respects on and as of the date hereof to the same extent as thoughmade on and as of the date hereof, except where such representations andwarranties expressly relate to an earlier date, in which case suchrepresentations and warranties were true and correct in all material respectson and as of such earlier date;

 

No event has occurred and is continuing or wouldresult from the consummation of the proposed Borrowing contemplated hereby thatwould constitute a Default or an Event of Default; and

 

The US Borrower has performed in all materialrespects all agreements and satisfied all conditions which the Credit Agreementprovides shall be performed or satisfied by it on or before the date hereof.

 

SECTION 34.         **Borrower Covenants**.  Byits execution of this Agreement, the US Borrower hereby covenants that:

 

[The US Borrower shall make any payments requiredpursuant to Section 2.11 of the Credit Agreement in connection with the New RevolvingLoan Commitments, New 

 

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(25) Insert bracketed language if the lendinginstitution is not already a Lender.

 

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ExtendedRevolving Loan Commitments and/or the Incremental Refinancing Revolving CreditCommitment as applicable;](26)

 

The US Borrower shall deliver or cause to bedelivered the following legal opinions and documents: [                      ],together with all other legal opinions and other documents reasonably requestedby Administrative Agent in connection with this Agreement; and

 

Set forth on the attached Officers’ Certificate arethe calculations (in reasonable detail) demonstrating compliance with thefinancial tests described in Sections 10.9 and 10.10 of the Credit Agreement.

 

SECTION 35.         **Notice**.  For purposes of the CreditAgreement, the initial notice address of each New Revolving Loan Lender, NewExtended Revolving Loan Lender, New Tranche H Term Loan Lender, New Tranche ITerm Loan Lender, Incremental Refinancing Term Loan Lender and/or IncrementalRefinancing Revolving Credit Lender shall be as set forth below its signaturebelow.

 

SECTION 36.         **Non-US Lenders**.  Foreach New Revolving Loan Lender, New Extended Revolving Loan Lender, New TrancheH Term Loan Lender, New Tranche I Term Loan Lender, Incremental RefinancingTerm Loan Lender and/or Incremental Refinancing Revolving Credit Lender that isa Non-US Lender, delivered herewith to the Administrative Agent are such forms,certificates or other evidence with respect to United States federal income taxwithholding matters as such New Revolving Loan Lender, New Extended RevolvingLoan Lender, New Tranche H Term Loan Lender, New Tranche I Term Loan Lender,Incremental Refinancing Term Loan Lender and/or Incremental RefinancingRevolving Credit Lender may be required to deliver to the Administrative Agentpursuant to subsection 5.4(d) of the Credit Agreement.

 

SECTION 37.         **Recordation of the New Loans**.  Uponexecution and delivery hereof, the Administrative Agent will record the Series[      ] New Tranche H Term Loans, Series[      ] New Tranche I Term Loans, New RevolvingLoans, New Extended Revolving Loans, Series [    ]Incremental Refinancing Term Loans and/or Incremental Refinancing RevolvingCredit 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 TrancheI Term Loan Lender, Incremental Refinancing Term Loan Lender and/or IncrementalRefinancing Revolving Credit Lender in the Register.

 

SECTION 38.         **Amendment, Modification and Waiver**  ThisAgreement may not be amended, modified or waived except by an instrument orinstruments in writing signed and delivered on behalf of each of the partieshereto.

 

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(26)Select this provision in the circumstance wherethe Lender is a New Revolving Loan Lender.

 

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SECTION 39.         **Entire Agreement**.  ThisAgreement, the Credit Agreement and the other Credit Documents constitute theentire agreement among the parties with respect to the subject matter hereofand thereof and supersede all other prior agreements and understandings, bothwritten and verbal, among the parties or any of them with respect to thesubject matter hereof.

 

SECTION 40.         **GOVERNING LAW**.  THISAGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BEGOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OFTHE STATE OF NEW YORK.

 

SECTION 41.         **Severability**.  Any term or provision of thisAgreement which is invalid or unenforceable in any jurisdiction shall, as tothat jurisdiction, be ineffective to the extent of such invalidity orunenforceability without rendering invalid or unenforceable the remaining termsand provisions of this Agreement or affecting the validity or enforceability ofany of the terms or provisions of this Agreement in any otherjurisdiction.  If any provision of thisAgreement is so broad as to be unenforceable, the provision shall beinterpreted to be only so broad as would be enforceable.

 

SECTION 42.         **Counterparts**.  This Agreement may be executedin counterparts, each of which shall be deemed to be an original, but all ofwhich shall constitute one and the same agreement.

 

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**IN WITNESS WHEREOF**,each of the undersigned has caused its duly authorized officer to execute anddeliver this Joinder Agreement as of[                              ,          ].

 
|   | **[NAME OF NEW LOAN LENDER]** |
|--------|-------------------------------|
|   |                          |
|   | By:                           |   |
|   | Name:                         |   |
|   | Title:                        |   |
|   |                          |
|   | Notice Address:               |
|   | Attention:                    |
|   | Telephone:                    |
|   | Facsimile:                    |

 

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**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] |       | $          |

 

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