Exhibit 10.1


 


ROCKWOOD
SPECIALTIES GROUP, INC.


 


AND


 


KEMIRA OYJ


 






 


MASTER
AGREEMENT REGARDING THE


TITANIUM DIOXIDE JOINT VENTURE


 






 

















 


 


TABLE OF
CONTENTS


 


	
  1.

  	
  Preamble

  	
  9

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Transaction Framework

  	
  11

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Carve-Out of the Rockwood Water Business

  	
  15

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Termination of the Upstream Enterprise Agreement

  	
  16

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Third Party Financing

  	
  18

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Conditions Precedent and Closing

  	
  18

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Due Diligence

  	
  20

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Adjustment of the Shareholding Split

  	
  21

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Regulatory Approval

  	
  22

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Covenants

  	
  24

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Rescission Right

  	
  27

  
	
   

  	
   

  	
   

  
	
  12.

  	
  Joint and Several Liability

  	
  29

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Confidentiality

  	
  29

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Costs

  	
  29

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Miscellaneous

  	
  30

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Authorised Agent

  	
  33

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Severability

  	
  34

  



 


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2

















 


DEFINITIONS


 


In this Agreement


 


	
  “Affiliate”

  	
   

  	
  shall have the meaning given
  to it in section 1.7;

  
	
   

  	
   

  	
   

  
	
  “Agreement”

  	
   

  	
  shall mean this master
  agreement;

  
	
   

  	
   

  	
   

  
	
  “Business Days”

  	
   

  	
  shall have the meaning given
  to it in section 6.3;;

  
	
   

  	
   

  	
   

  
	
  “Closing”

  	
   

  	
  shall have the meaning given
  to it in section6.3;

  
	
   

  	
   

  	
   

  
	
  “Closing Date”

  	
   

  	
  shall have the meaning given
  to it in section 6.3;

  
	
   

  	
   

  	
   

  
	
  “Covenanted Agreement”

  	
   

  	
  shall have the meaning given
  to it in section 10.1.1(k);

  
	
   

  	
   

  	
   

  
	
  “Downstream Enterprise Agreement”

  	
   

  	
  shall have the meaning given
  to it in section 3.2(d);

  
	
   

  	
   

  	
   

  
	
  “Due Diligence”

  	
   

  	
  shall have the meaning given
  to it in section 7.1;

  
	
   

  	
   

  	
   

  
	
  “E&Y”

  	
   

  	
  shall have the meaning given
  to it in section 8.6;

  
	
   

  	
   

  	
   

  
	
  “ECMR”

  	
   

  	
  shall have the meaning given
  to it in section 6.2(a);

  
	
   

  	
   

  	
   

  
	
  “Equity Value Split”

  	
   

  	
  shall have the meaning given
  to it in section 8.1;

  
	
   

  	
   

  	
   

  
	
  “Existing Intercompany Receivable” and “Existing Intercompany Receivables”

  	
   

  	
  shall have the meaning given
  to it in section 2.2.1;

  
	
   

  	
   

  	
   

  
	
  “Financial Information and Valuation”

  	
   

  	
  shall have the meaning given
  to it in section 1.5;

  
	
   

  	
   

  	
   

  
	
  “Finnish HoldCo”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “Functional Additive Business”

  	
   

  	
  shall have the meaning given
  to it in section 1.1:

  
	
   

  	
   

  	
   

  
	
  “IDW”

  	
   

  	
  shall have the meaning given
  to it in section 8.6;

  
	
   

  	
   

  	
   

  
	
  “Implementation Agreement”

  	
   

  	
  shall have the meaning given
  to it in section 2.1.1;

  



 


3

















 


	
  “Intercompany Receivables”

  	
   

  	
  shall mean any receivable by Kemira
  and its Affiliates or Rockwood and its Affiliates against JV Group Companies
  other than receivables from the delivery of goods or provision of services at
  arms’ length or created through a Breach of the No Leakage Provisions
  pursuant to the Implementation Agreement;

  
	
   

  	
   

  	
   

  
	
  “Joint Venture”

  	
   

  	
  shall have the meaning given
  to it in section 2.1.1;

  
	
   

  	
   

  	
   

  
	
  “JV Agreement”

  	
   

  	
  shall have the meaning given
  to it in section 2.1.2;

  
	
   

  	
   

  	
   

  
	
  “JV Group Company” and “JV Group Companies”

  	
   

  	
  shall have the meaning given
  to it in section 1.7(a);

  
	
   

  	
   

  	
   

  
	
  “JV US”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “JV Europe”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “JV Europe Interim Financial Statements”

  	
   

  	
  shall have the meaning given
  to it in section 4.3;

  
	
   

  	
   

  	
   

  
	
  “Kemira”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “Kemira Divident”

  	
   

  	
  shall have the meaning given
  to it in section 2.2.1(d);

  
	
   

  	
   

  	
   

  
	
  “Kemira Germany”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “Kemira Inc.”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “Kemira TiO2”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “Kemira TiO2 Pigments Business”

  	
   

  	
  shall have the meaning given
  to it in section 1.1;

  
	
   

  	
   

  	
   

  
	
  “Letter of Intent”

  	
   

  	
  shall have the meaning given
  to it in section 1.4;

  
	
   

  	
   

  	
   

  
	
  “Loss Amount”

  	
   

  	
  shall have the meaning given
  to it in section 4.3;

  
	
   

  	
   

  	
   

  
	
  “Material Adverse Effect”

  	
   

  	
  shall have the meaning given
  to it in section 11.1(a);

  
	
   

  	
   

  	
   

  
	
  “Maybrook”

  	
   

  	
  shall have the meaning given
  to it in section 1.3(b);

  



 


4

















 


	
  “Party” and “Parties”

  	
   

  	
  shall have the meaning given
  to them in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “Profit Amount”

  	
   

  	
  shall have the meaning given
  to it in section 4.3;

  
	
   

  	
   

  	
   

  
	
  “Refinancing”

  	
   

  	
  shall have the meaning given
  to it in section 5.1;

  
	
   

  	
   

  	
   

  
	
  “Regulatory Approval”

  	
   

  	
  shall have the meaning given
  to it in section 9.1;

  
	
   

  	
   

  	
   

  
	
  “Rescission Notice”

  	
   

  	
  shall have the meaning given
  to it in section 11.1;

  
	
   

  	
   

  	
   

  
	
  “Rockwood”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “Rockwood Germany”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “Rockwood Holdings”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “RockwoodTiO2 Pigments Business”

  	
   

  	
  shall have the meaning given
  to it in section 1.1;

  
	
   

  	
   

  	
   

  
	
  “Rockwood Water Business”

  	
   

  	
  shall have the meaning given
  to it in section 1.1;

  
	
   

  	
   

  	
   

  
	
  “Sachtleben”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “Sachtleben Corp”

  	
   

  	
  shall have the meaning given
  to it in the deed caption;

  
	
   

  	
   

  	
   

  
	
  “Shareholding Split”

  	
   

  	
  shall have the meaning given
  to it in section2.1.3;

  
	
   

  	
   

  	
   

  
	
  “Structure Paper”

  	
   

  	
  shall have the meaning given
  to it in section 2.4.1;

  
	
   

  	
   

  	
   

  
	
  “TiO2 Pigments Business” and 

  “TiO2 Pigments Businesses”

  	
   

  	
  shall have the meaning given
  to it in section 1.1;

  
	
   

  	
   

  	
   

  
	
  “Transaction”

  	
   

  	
  shall have the meaning given
  to it in section 1.6;.

  
	
   

  	
   

  	
   

  
	
  “Upstream Enterprise Agreement”

  	
   

  	
  shall have the meaning given
  to it in section 4.1

  
	
   

  	
   

  	
   

  
	
  “Water Business Carve-Out”

  	
   

  	
  shall have the meaning given
  to it in section 3.1 ;

  



 


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LIST
OF ANNEXES


 


	
  Annex 1.2(a)

  	
   

  	
  Shareholdings of JV Europe;

  
	
   

  	
   

  	
   

  
	
  Annex 1.5

  	
   

  	
  Financial Information and
  Valuation;

  
	
   

  	
   

  	
   

  
	
  Annex 2.4.1

  	
   

  	
  Structure Paper by
  Deloitte & Touche;

  
	
   

  	
   

  	
   

  
	
  Annex 3.2

  	
   

  	
  Term sheets for service
  agreement);

  
	
   

  	
   

  	
   

  
	
  Annex 6.3

  	
   

  	
  Closing Memorandum;

  
	
   

  	
   

  	
   

  
	
  Annex 8.2

  	
   

  	
  Sample Calculation of
  adjustment of Shareholding Split

  
	
   

  	
   

  	
   

  
	
  Annex 8.6

  	
   

  	
  Instructions for the
  Independent Expert;

  
	
   

  	
   

  	
   

  
	
  Annex 10.1.1

  	
   

  	
  Disclosure against Covenants;

  
	
   

  	
   

  	
   

  
	
  Annex 10.1.1(k)

  	
   

  	
  Definition of Covenanted
  Agreements;

  
	
   

  	
   

  	
   

  
	
  Annex 10.2.1

  	
   

  	
  Existing Affiliate Agreements;
  and

  
	
   

  	
   

  	
   

  
	
  Annex 14

  	
   

  	
  Estimated advisor costs.

  



 


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6

















 


MASTER
AGREEMENT


 


THIS AGREEMENT IS MADE ON 21 MAY 2008
BY AND AMONG


 


	
  (a)

  	
  Rockwood
  Holdings, Inc., 100 Overlook Center, Princeton, NJ 08540, USA

  
	
   

  	
   

  
	
   

  	
  hereinafter
  referred to as “Rockwood Holdings”;

  
	
   

  	
   

  
	
  (b)

  	
  Rockwood
  Specialties Group, Inc., 100 Overlook Center, Princeton, NJ 08540, USA

  
	
   

  	
   

  
	
   

  	
  hereinafter
  referred to as “Rockwood”;

  
	
   

  	
   

  
	
  (c)

  	
  Rockwood
  Specialties Group GmbH, Königsberger Straße 1, 60487 Frankfurt am Main,
  Germany, registered in the commercial register of the lower court of
  Frankfurt am Main under registration number HR B 5 79 24

  
	
   

  	
   

  
	
   

  	
  hereinafter
  referred to as “Rockwood Germany”;

  
	
   

  	
   

  
	
  (d)

  	
  Sachtleben
  Chemie GmbH, Dr.-Rudolf-Sachtleben-Straße 4, 47189 Duisburg, Germany,
  registered in the commercial register of the lower court of Duisburg under
  registration number HR B 1 96 69

  
	
   

  	
   

  
	
   

  	
  hereinafter
  referred to as “Sachtleben”;

  
	
   

  	
   

  
	
  (e)

  	
  Sachtleben
  Corporation, a Delaware corporation with business address 140 Grand Street,
  Suite 400, White Plains, NY 10601, USA

  
	
   

  	
   

  
	
   

  	
  hereinafter
  referred to as “Sachtleben Corp”;

  
	
   

  	
   

  
	
  (f)

  	
  Deukalion
  Einhundertvierundzwanzigste Vermögensverwaltungs-GmbH, Königsberger Straße 1,
  60487 Frankfurt am Main, Germany, registered in the commercial register of
  the lower court of Frankfurt am Main under registration number HR B 8 05 60,
  to be renamed into “White Pigments Holding GmbH” after signing

  
	
   

  	
   

  
	
   

  	
  hereinafter
  referred to as “JV Europe”

  
	
   

  	
   

  
	
  (g)

  	
  White
  Pigments Holding Oy, a limited liability company under establishment,
  Finland, with business identification number

  
	
   

  	
   

  
	
   

  	
  hereinafter
  referred to as “Finnish HoldCo”;

  



 


7

















 


	
  (h)

  	
  White Pigment LLC, a Delaware limited
  liability company with business address at 100 Overlook Center, Princeton, NJ
  08540, USA

  
	
   

  	
   

  
	
   

  	
  hereinafter
  referred to as “JV US”;

  
	
   

  	
   

  
	
  (i)

  	
  Kemira Oyj, Porkkalankatu 3, FI-00180
  Helsinki, Finland, with business identification number 0109823-0

  
	
   

  	
   

  
	
   

  	
  hereinafter
  referred to as “Kemira”;

  
	
   

  	
   

  
	
  (j)

  	
  Kemira Pigments Oy, Porkkalankatu 3,
  FI-00180 Helsinki, Finland, with business identification number 0948159-2

  
	
   

  	
   

  
	
   

  	
  hereinafter
  referred to as “Kemira TiO2”;

  
	
   

  	
   

  
	
  (k)

  	
  Kemira Germany GmbH, Marie-Curie-Straße 10,
  51377 Leverkusen, Germany, registered in the commercial register of the lower
  court of Cologne under registration number HR B 57319

  
	
   

  	
   

  
	
   

  	
  hereinafter referred to as “Kemira Germany”;

  
	
   

  	
   

  
	
   

  	
  and

  
	
   

  	
   

  
	
  (l)

  	
  Kemira Specialty Inc., USA, with its
  principal place of business at 151 Veterans Drive, Northvale, NJ 07647, USA

  
	
   

  	
   

  
	
   

  	
  hereinafter
  referred to as “Kemira Inc.”.

  



 


Rockwood Holdings, Rockwood,
Rockwood Germany, Sachtleben, Sachtleben Corp, JV Europe, Finnish HoldCo,
JV US, Kemira, Kemira TiO2, Kemira Germany, Kemira Inc. and each a “Party” and collectively the “Parties”.


 


NOW IT IS
HEREBY AGREED:


 


8

















 


1.                                       PREAMBLE


 


1.1           Rockwood and Kemira are both companies active in a variety of business
fields in the specialty chemicals sector. Both Parties are, amongst other
businesses, engaged in the titanium dioxide business (i.e. the sale and manufacturing
of titanium dioxide and related co-products and services), provided that (i) Rockwood’s
titanium dioxide business also includes the manufacturing of
barium-based and zinc-based inorganic fine white pigments and additives (the “Functional Additive Business”) but excludes the manufacturing of polyaluminium
chloride and polyaluminium nitrate-based flocculants (collectively
the “Rockwood  Water Business”) as currently conducted by
Sachtleben and Sachtleben Corp (Rockwood’s titanium dioxide business so defined,
the “Rockwood TiO2 Pigments Business”);
and (ii) Kemira’s titanium dioxide business also includes sales and
manufacturing of certain other than titanium dioxide based products and
services to the cosmetics industry (the “Kemira
TiO2 Pigments Business”). The Rockwood TiO2 Pigments Business and
the Kemira TiO2 Pigments Business are each also referred to as a “TiO2 Pigments Business” and collectively as
the “TiO2 Pigments Businesses”.


 


1.2                                 Rockwood currently operates its TiO2
Pigments Business (and the Rockwood Water Business) through


 


(a)                                  its indirect
German subsidiary Sachtleben, which currently directly and indirectly owns
shares in the entities as set out in Annex 1.2(a);
and


 


(b)                                 its indirect
US subsidiary Sachtleben Corp.


 


1.3                                 Kemira currently operates its TiO2
Pigments Business through


 


(a)                                  (i)            its direct Finnish subsidiary Kemira TiO2
(which has no further subsidiaries);


 


(ii)           certain assets owned by Kemira Germany (including certain intellectual
property and the Oberhausen technology centre); and


 


(iii)          certain sales offices operated and owned by certain of Kemira’s
Affiliates (as defined below); and


 


(b)                                 its direct US subsidiary Kemira
Inc., which, in turn, is the sole shareholder of Maybrook, Inc., having
its principal place of business at 570 Broadway, Lawrence, Massachusetts, USA (“Maybrook”).


 


1.4           In order to jointly pursue future business opportunities in the field of
the production and marketing of titanium dioxide pigments, Rockwood and Kemira
intend to combine their 


 


9

















 


TiO2 Pigments Businesses by forming a joint venture. On 17/23 January 2008,
Rockwood and Kemira have, therefore, entered into a Letter of Intent setting
out the principal terms and conditions relating to the joint venture (the “Letter of Intent”) which Letter of Intent
will be superseded by this Agreement and the agreements entered into on the
basis of this Agreement. To the extent required, the implementation of this
Transaction has been duly authorised by all relevant corporate bodies of the
Parties.


 


1.5           In the Letter of Intent, Rockwood and Kemira
have, on the basis of the financial and tax position of the TiO2 Pigments
Businesses of Rockwood and Kemira as such financial and tax positions is
reflected in (i) the actual financial information (EBITDA and net debt)
for the fiscal years 2004 to 2007; and (ii) the respective projections
(EBITDA and net debt) for the fiscal years 2008 to 2010 as set out in more
detail in Annex 1.5 (such
financial information and valuation, the “Financial
Information and Valuation”) agreed on a valuation of their
respective TiO2 Businesses and shareholding split between Rockwood and Kemira
in the joint venture of 61 per cent and 39 per cent, respectively.


 


1.6           By entering into this Agreement the Parties intend to agree on the
structure of the joint venture and the transactions to be implemented in order
to establish the joint venture (such transactions as they are described in more
detail in this Agreement collectively, the “Transaction”)
as well as the contractual terms and conditions governing the joint venture.


 


1.7           As used in this Agreement, with respect to a person or entity, “Affiliate” shall have the meaning given in
section 15 et seq. of the German
Stock Corporation Act (AktG), but


 


(a)                                  with respect to Rockwood Holdings, Rockwood, Rockwood Germany and
Kemira shall exclude JV Group Companies (“JV
Group Companies” defined as including only JV Europe, Sachtleben,
Finnish HoldCo, Kemira TiO2, JV US, Sachtleben Corp, Kemira Inc. and Maybrook,
Sachtleben Trading (Shanghai) Company Limited, each a “JV Group Company”) as well as JV Europe’s
direct and indirect subsidiaries and shareholdings; and


 


(b)                                 with respect to the JV Group Companies shall exclude Rockwood Holdings,
Rockwood, Rockwood Germany and Kemira and their Affiliates.


 


10
















 


2.                                       TRANSACTION FRAMEWORK


 


2.1                                 Structure of the Joint Venture


 


2.1.1        Subject to the terms
and conditions of this Agreement, in particular the conditions precedent set
forth in section 6, the Parties agree on JV Europe and JV US
being the jointly operated joint venture companies (collectively, the “Joint Venture”) and, in order to establish
the Joint Venture, the Parties have agreed that, pursuant to the terms and
conditions of a certain Share and Asset Purchase and Transfer Agreement (the “Implementation Agreement”) signed on the
date hereof:


 


(a)                                  Rockwood Germany shall transfer 39
per cent of the issued and outstanding shares of JV Europe to Kemira;


 


(b)                                 Rockwood Germany shall transfer 100 per cent of the issued and outstanding shares of Sachtleben to JV Europe;


 


(c)                                  Kemira
shall transfer the 100 per cent of the issued and outstanding shares of Kemira
TiO2 to Finnish HoldCo (the wholly owned subsidiary of JV Europe);


 


(d)                                 Kemira
shall transfer or cause the transfer of the Kemira Oberhausen Assets (as defined in the
Implementation Agreement) to JV Europe;


 


(e)                                  additionally,
with respect to the joint venture in the United States


 


(i)            Rockwood shall transfer the 100 per cent of the issued and outstanding
shares of Sachtleben Corp and Kemira shall transfer 100 per cent of the issued
and outstanding shares of Kemira Inc. to JV US,


 


(ii)                                  in
exchange for


 


(1)           Rockwood receiving limited liability company interest of JV US
representing 61 per cent of the total issued and outstanding limited liability
company interest; and


 


(2)           Kemira receiving a combination of limited liability company interest of
JV US representing 39 per cent of the total issued and outstanding limited
liability company interest and an Intercompany Receivable in a principal amount
of app. EUR 6,400,000.00 against JV US (as set out in section 3.4.5 of the
Implementation Agreement).


 


11

















 


2.1.2        The Joint Venture shall be governed by a
certain Shareholders’ and Joint Venture Agreement (the “JV Agreement”) signed on the date hereof and the
Statutes (as defined in the JV Agreement).


 


2.1.3                        Following the completion of the
Transaction, but subject to any adjustment agreed among the Parties,


 


(a)                                  Rockwood Germany shall hold 61 per
cent of the registered share capital of JV Europe and the issued and
outstanding shares of JV US; and


 


(b)                                 Kemira shall hold 39 per cent of the
registered share capital of JV Europe and the issued and outstanding
shares of JV US


 


(such allocation of
shares, the “Shareholding Split”).


 


2.2                                 Intercompany Receivables


 


2.2.1                        The Parties estimate that on the
date hereof:


 


(a)                                  Rockwood Germany has intercompany
receivables against JV Europe in the total amount of app.
EUR 325,000,000.00; and


 


(b)                                 Kemira has Intercompany Receivables
against Kemira TiO2 in the total amount of app. EUR 51,700,000.00;


 


(c)                                  Kemira has Intercompany Receivables
in the USD equivalent of app. EUR 600,000.00 against Kemira Inc.


 


(these Intercompany Receivables
as well as all Intercompany Receivables evolving until the Closing Date against
the JV Group Companies, each an “Existing
Intercompany Receivable” and collectively, the “Existing Intercompany Receivables”).


 


(d)                                 Kemira TiO2 shall further be
entitled to declare an amount of EUR 2,100,000.00 as dividend to Kemira (the “Kemira Dividend”), which shall not be paid
in cash, but shall increase the Existing Intercompany Receivables of Kemira.


 


12

















 


2.2.2                        Subject to (aufschiebend bedingt) to the Closing
occurring:


 


(a)           Rockwood Germany hereby waives (and procures
that its Affiliates waive) the amount of any Existing Intercompany Receivables
that exceed EUR 183,000,000.00;


 


(b)                                 Kemira hereby waives (and procure
that its Affiliates waive)


 


(i)            any amounts of Existing Intercompany Receivables
against JV Europe and its direct and indirect subsidiaries exceeding EUR
110,000,000.00; as well as


 


(ii)           any amounts of Existing Intercompany Receivable
within the meaning of section 2.2.1(c) that exceed EUR 7,000,000.00
(established by reference to the exchange rate used by Kemira for
converting  Intercompany Receivables for
its accounting);


 


but provided that, (x) if
the aggregate of (i) and (ii) before such waiver amounted to no more
than EUR 117,000,000.00 but a waiver would have to be effected under either (i) or
(ii) then no waiver shall be effected under this section 2.2.2(b), and (y) if
the waivers contemplated under (i) and (ii) would reduce the total
amount of Existing Intercompany Receivables to less than EUR 117,000,000.00,
then the waiver under this section 2.2.2(b) shall only relate to an amount
that reduces the total amount to EUR 117,000,000.00 (first waiving any Existing
Intercompany Receivables against Kemira Inc. and its subsidiaries that exceed
EUR 7,000,000.00 and then waiving all remaining amounts proportionally), but
provided in case of each (x) and (y) the Parties shall amend the
settlement of the purchase price and payments into the capital reserves
pursuant to the Implementation Agreement in a way that arrives at or preserves
the Existing Intercompany Receivables at the level of EUR 117,000,000.00 in the
aggregate.


 


2.2.3        At the Closing, pursuant to section 3 of the
Implementation Agreement, the purchase prices will be settled and certain
contributions into the capital reserves in a way that establish (or in the case
of Rockwood Germany’s Intercompany Receivables, preserve) the following
Intercompany Receivables (as set out in section 3.5 of the Implementation
Agreement):


 


(a)                                  Rockwood
Germany’s Intercompany Receivables will consist of


 


(i)            an Intercompany Receivable in the
amount of EUR 183,000,000.00 (being the result of a waiver of the exceeding
part of the Existing Intercompany Receivable under this Agreement); and


 


(ii)                                  the Subordinated Note in the amount
of EUR 2,900,000.00;


 


13

















 


(b)                                 Kemira’s Intercompany Receivables
will total EUR 117,000,000.00; of which


 


(i)                                     EUR 7,000,000.00 will be against JV
US and Kemira Inc.; and


 


(ii)           the remaining EUR 110,000,000.00 will
comprise of (x) the Existing Intercompany Receivables
of Kemira against Kemira TiO2 immediately after the Closing; and (y) the
remaining fraction of the Sachtleben Share Transfer Receivable against Finnish
HoldCo retained by Kemira as it is going to be determined pursuant to
section 3.4.3 of the Implementation Agreement;


 


(c)                                  JV
Europe’s intercompany receivables will amount to a total of EUR 0.00 (in
words: zero) as a result of the transaction pursuant to section 3.4.3 of the
Implementation Agreement and the JV Europe Share Transfer Receivable (as
defined in the Implementation Agreement) having been settled in cash.


 


Neither Kemira, Rockwood Germany
nor any of their respective Affiliates shall after consummation of the Closing
have any other Intercompany Receivables against any JV Group Company and shall
waive or procure that their Affiliates waive any such receivables.


 


2.3                                 Minimum Cash Level


 


2.3.1                        Immediately prior to the Closing,


 


(a)                                  Kemira TiO2 and Kemira Inc. as well
as their subsidiaries shall have a minimum amount of cash and cash equivalents
(“Cash”) in the amount of EUR
550,000.00; and


 


(b)                                 Sachtleben and its consolidated
direct and indirect subsidiaries shall have a minimum of Cash in the amount of
EUR 1,311,000.00.


 


2.3.2        To the extent the
amount of Cash at Closing at either Kemira TiO2 or Sachtleben falls short of
the levels set out in section 2.3.1, then as soon as practicable after the
Closing having occurred Kemira or Rockwood, as the case may be, shall pay to JV
Europe the shortfall on a Euro per Euro or as applicable Dollar per Dollar
basis.


 


14

















 


2.4                                 Covenant to Cooperate


 


2.4.1        The Parties shall
cooperate with each other in good faith and undertake to exercise their rights
as shareholders or in such other capacity, as the case may be, to the effect
that the transactions provided for herein and in the Implementation Agreement
as well as any additional measures provided for in the step paper of Deloitte &
Touche GmbH Wirtschaftsprüfungsgesellschaft dated 21 May 2008 attached to
this Agreement as Annex 2.4.1
(the “Structure Paper”, but
provided that no Party may rely on the advice contained therein to a greater
extent than permitted (if at all) under the terms of the retainer agreed with
Deloitte & Touche GmbH) are implemented as set forth therein and
otherwise without undue delay.


 


2.4.2        In addition, the
Parties shall cooperate in good faith to establish the level of Intercompany
Receivables set out in section 2.2, and in the event that such level after the
implementation of the Transaction has not been achieved take all commercially
reasonable steps to establish such level of Intercompany Receivables.


 


3.                                       CARVE-OUT OF THE ROCKWOOD WATER BUSINESS


 


3.1           The Rockwood Water Business currently operated
by JV Europe and JV Europe’s direct and indirect subsidiaries MIWAC
Mitteldeutsche Wasserchemie GmbH and Ekokemi GmbH will be carved out prior to
the Closing Date (the “Water Business
Carve-Out”), currently planned to
become effective on 1 July 2008.


 


3.2                                 Rockwood Germany and Sachtleben plan
to effect the Water Carve-Out and in particular implement the following:


 


(a)                                  an asset deal in which Ekokemi GmbH,
a direct subsidiary of Sachtleben, shall acquire assets including working
capital (but not Cash) owned by Sachtleben relating to the Rockwood Water
Business;


 


(b)                                 a share deal in which an indirect
subsidiary of Rockwood Germany, currently named iSiltec Innovative Silicon
Technologies GmbH and intended to be renamed into Sachtleben Wasserchemie GmbH,
shall acquire all shares in Ekokemi GmbH as well as (direct and indirect)
shareholdings in MIWAC Mitteldeutsche Wasserchemie GmbH and the purchase price
receivable of Sachtleben resulting from lit.(a);


 


(c)                                  implementation of service agreements
between Sachtleben and the carved-out Rockwood Water Business on the basis of
the term sheets contained in Annex 3.2;


 


15

















 


(d)                                 the termination of the profit and
loss equalisation agreement between JV Europe and MIWAC Mitteldeutsche
Wasserchemie GmbH (the “Downstream Enterprise
Agreement”).


 


Rockwood Germany shall implement
the Water Carve-Out in close consultation with Kemira to the extent necessary
to achieve the effects under this section 3.2.


 


3.3           The Parties are in agreement that the Water Business
Carve-Out shall occur in a way that is financially neutral for the JV Group
Companies, i.e. the JV Group Companies shall, after Closing, be in the same
position in which they would have been had the Rockwood Water Business not been
part of Sachtleben and its direct and indirect subsidiaries. Without limiting
the generality of the foregoing, any positive net effects of the Water
Carve-Out occurring after the Effective Date as defined in the Implementation
Agreement shall only be offset against Rockwood Germany’s Existing Intercompany
Receivables.


 


3.4           Rockwood Germany shall indemnify JV Europe
and its Subsidiaries, and Rockwood shall indemnify JV US and its Subsidiaries,
against any claims relating to or arising in connection with the Water Business
Carve-Out and/or Rockwood’s Water Business. This shall apply similarly with
respect to any and all liabilities or obligations related to Rockwood’s Water
Business that are, for whatever reason, not transferred from JV Europe to
Rockwood or one of its direct or indirect Affiliates (other than the JV Group
Companies) in the course of the Water Business Carve-Out.


 


3.5           Rockwood shall procure that the Water Business
Carve-Out is implemented as soon as reasonably practicable after the date
hereof.


 


4.                                       TERMINATION OF THE UPSTREAM ENTERPRISE AGREEMENT


 


4.1                                 Prior to the Closing
Date and subject to satisfaction of the conditions precedent set forth in
sections 6.2 the profit and loss equalisation agreement currently existing
between JV Europe and Rockwood Germany (the “Upstream  Enterprise
Agreement”) will be terminated with effect as of the Closing Date.
Following the implementation of the termination of the Upstream Enterprise
Agreement, Rockwood and Kemira shall change the fiscal year of JV Europe
again such that it shall end on December 31 of any given calendar year.
The period between the Closing Date and December 31, 2008 shall be another
stub-fiscal year.


 


16

















 


4.2           The Parties are in agreement that the
termination of the Upstream Enterprise Agreement shall be financially neutral
for JV Europe and that Rockwood and JV Europe will treat each other
and put each other into such position (from an economical point of view) as if
the Upstream Enterprise Agreement had already been terminated with effect as of
December 31, 2007, irrespective of if and when it is actually terminated.
Rockwood Germany shall in particular indemnify and hold Kemira and/or
JV Europe, as the case may be, harmless from and against all liabilities,
losses and obligations and reimburse Kemira and/or JV Europe, as the case
may be, for all reasonable expenses incurred by Kemira and/or JV Europe
which relate to or arise out of the Upstream Enterprise Agreement to the extent
it was in force after December 31, 2007. Notwithstanding the generality of
the foregoing, the Parties agree on the following:


 


4.3           As promptly as practicable but in any event
within two months after the Closing Date, JV Europe shall prepare and
deliver to the Parties financial statements of JV Europe as per the end of
the stub fiscal year (i.e. for the time period from the Effective Date until
the Closing Date) in accordance with German generally accepted accounting
principles (Grundsätze ordnungsgemäßer
Buchführung) as provided for in the German Commercial Code (Handelsgesetzbuch, HGB) consistently applied (the “JV Europe Interim Financial Statements”),
provided that the JV Europe Interim Financial Statements shall be prepared
only to the extent and contain only such information which is required in order
to determine the amount of the profit or loss, as the case may be, of
JV Europe as per the end of the stub fiscal year which is decisive for the
determination of Rockwood Germany’s profit transfer claim as per the end of the
stub fiscal year (Gewinnabführungsanspruch)
(the amount of any such claim, the “Profit
Amount”) or JV Europe’s obligation to cover losses as per the
end of the stub fiscal year (Verlustausgleichsanspruch)
(the amount of any such claim, the “Loss
Amount”), respectively, in each case in accordance with the terms
and conditions of the Upstream Enterprise Agreement and otherwise in accordance
with applicable law. Rockwood shall assist and co-operate with JV Europe
in the preparation of the interim financial statements.


 


4.4           Rockwood and Kemira shall procure that the
shareholders’ meeting of JV Europe approves (feststellen) the JV Europe Interim Financial Statements
within ten (10) Business Days following delivery of the
JV Europe Interim Financial Statements to Rockwood and Kemira, unless
either party disagrees with the JV Europe Interim Financial Statements in
which case section 8.6 shall apply mutatis
mutandis.


 


17

















 


4.5           Immediately after the Interim Financial
Statements have been approved and in any event in full compliance with the
Upstream Enterprise Agreement


 


(a)                                  if the JV Europe Interim
Financial Statements show a Profit Amount, then such Profit Amount shall be
discharged by an assignment to Rockwood Germanyof a corresponding fraction of
Sachtleben’s receivable resulting from the Water Business Carve-Out;


 


(b)                                 if the JV Europe Interim
Financial Statements show a Loss Amount, then such Loss Amount shall be
discharged by setting it off against a corresponding fraction of the Existing
Intercompany Receivables of Rockwood Germany against Sachtleben in the amount.


 


4.6           In case the amounts against which the Profit
and Loss Amounts are to be discharged against pursuant to section 4.5 are
insufficient, the Parties shall cooperate in good faith to implement the same
economic effect.


 


5.                                       THIRD PARTY FINANCING


 


5.1           The Rockwood Germany and Kemira have agreed a
term sheet and a mandate letter with SEB and Nordea for the external financing
of JV Europe, Finnish HoldCo and Sachtleben in the total amount of EUR
300,000,000.00 and a revolving facility of EUR 30,000,000.00 (the “Refinancing”).


 


5.2           The Parties shall cooperate in good faith and
make commercially reasonable efforts to finalise the Refinancing at
substantially the terms laid out in the mandate letter and the term sheet.


 


5.3           The Refinancing shall be used to the extent
possible to repay the Intercompany Receivables at or as soon as practicable
after Closing.


 


5.4           The Parties will discuss in good faith how to
fund any commitment or other fees related to the Refinancing if and to the
extent required. Kemira and Rockwood Germany will make available additional
funds through shareholder loans to JV Europe to fund such fees. Any such loan
shall be in addition to the Intercompany Receivables otherwise contemplated by
this Agreement.


 


6.                                       CONDITIONS PRECEDENT AND CLOSING


 


6.1           The assignments of shares and transfer of
assets pursuant to the Implementation Agreement and the effectiveness (Wirksamkeit) of the JV Agreement
shall be subject to the Closing (as defined below).


 


18

















 


6.2                                 Closing
shall be subject to the conditions precedent set out in this section 6.2 having
been duly fulfilled or waived:


 


(a)                                  the European Commission issuing a
decision under Article 6(1)(b) or Article 8(1) of Council
Regulation (EC) 139/2004 (the “ECMR”),
or being deemed to have done so under Article 10(6) of the ECMR,
declaring the Transaction compatible with the Common Market or, in the event
that the European Commission decides pursuant to Article 9(3) ECMR or
Article 4(4) ECMR to refer the entire case or parts of the case to
the competent authority of the relevant member state, or in the event the
European Commission is deemed to have made such a decision pursuant to Article 9(5) ECMR
or Article 4(4) subparagraph 4 ECMR, the Transaction being cleared by
the competent authority under the applicable national merger control provisions
or the Transaction being deemed to have been cleared under such national merger
provisions;


 


(b)                                 this Agreement not having been
rescinded by either Rockwood and/or Kemira in accordance with section 11;


 


(c)                                  in each case in accordance with the
requirements set forth in this Agreement


 


(i)            the stub fiscal year of JV Europe as
required pursuant to the Water Business Carve-Out having been duly registered
in the applicable commercial register and the Upstream Enterprise Agreement
having been duly terminated to the end of the aforementioned stub fiscal year;
and


 


(ii)           the Water Business Carve-Out (including the
termination of the Downstream Enterprise Agreement) having been implemented.


 


(d)                                 The condition precedent under
section 6.2(c) may be waived in writing jointly by Rockwood Germany and
Kemira.


 


6.3           On the last day of the month which ends after
no less than five days on which banks in Frankfurt am Main, Germany, and
Helsinki, Finland, are generally open for business (“Business Days”) after the last of the conditions precedents
set out in section 6.2 has been duly fulfilled or waived (or any other day
after fulfilment of the conditions precedent mutually agreed), the Parties
shall meet in Frankfurt at Clifford Chance’s offices to complete the
Transaction by signing a customary closing memorandum substantially in the form
of Annex 6.3 (the completion
of the “Closing”, it being
understood that the Transaction completes at 24.00 hours of such day, the “Closing Date”).


 


6.4           If the conditions precedent pursuant to section
6.2 have not occurred within 180 days following the date of this Agreement and
unless otherwise agreed between Rockwood and Kemira in writing, this Agreement
(including the Implementation Agreement and the 


 


19

















 


JV Agreement)
shall lapse and cease to exist with the exception of this section 6.4 and
sections 12 through 17, which shall continue to remain in force.


 


6.5           As soon as practicable after the last condition
precedent pursuant to section 6.2 has been fulfilled or duly waived, Kemira and
Rockwood Germany shall provide to each other their estimate of (i) the
level of Cash that will be present at the Closing, (ii) the amount of
Existing Intercompany Receivables present at Closing, (iii) information
about any Breaches of the No Leakage Provisions pursuant to the Implementation
Agreement that would require a Party to make a payment to a JV Group Company
and (iv) any material changes of the Oberhausen Assets pursuant to section
4.1, last paragraph of the Implementation Agreement.


 


7.                                       DUE DILIGENCE


 


7.1           Rockwood and Kemira will conduct a confirmatory
due diligence of the respective other’s TiO2 Pigments Business following the
execution of this Agreement (the “Due
Diligence”).


 


7.2           Rockwood and Kemira shall be entitled to
conduct or, as the case may be, finalise the Due Diligence for a period of no more
than four weeks following the execution of this Agreement, including, without
limitation, matters such as


 


(a)                                  the verification of the Financial
Information and Valuation;


 


(b)                                 the sales organisation;


 


(c)                                  human resources including pension
obligations and labour relations;


 


(d)                                 the environmental conditions
applying including environmental permits;


 


(e)                                  the documentation underlying the
acquisition of JV Europe by Rockwood Germany;


 


(f)                                    the provision of electricity and
related arrangements; and


 


(g)                                 intellectual property.


 


7.3           The Parties shall continuously cooperate in
good faith and provide each other with all information reasonably required to
conduct and complete the Due Diligence. If and to the extent information is
reasonably required to be reviewed to conduct and complete the Due Diligence by
either Rockwood and/or Kemira and such information must be kept confidential
due to applicable cartel laws or is deemed to be confidential by the Party
controlling such information, the review by the respective other Party shall be
permissible on a “lawyer to lawyer” basis, provided that lawyers may forward to
the auditors the information required under section 7.2(a), whereby any report
by a Party’s lawyer to its client shall be made without disclosure of any commercially
sensitive information specified by the disclosing Party


 


20
















 


(e.g.
no reporting on pricing arrangements of customer and supply agreements or with
regard to salaries et al).


 


8.                                      Adjustment
of the Shareholding Split


 


8.1                                The Parties have
negotiated the Shareholding Split on the basis of an equity value calculation
of the two TiO2 Pigments Businesses as further specified in the Financial
Information and Valuation in Annex 1.5.
The calculation is based on the average EBITDA of the years 2004 through 2010,
multiplied with a factor of 6, from which certain agreed net debt items as per
31 December 2007are deducted. The relation of the resulting equity values
was 38.4 per cent (Kemira) to 61.6 per cent (Rockwood) (the “Equity Value Split”). Using the Equity
Value Split and the Financial Information and Valuation as a basis, the Parties
have negotiated the Shareholding Split, i.e. 39 per cent (Kemira) and 61 per
cent (Rockwood).


 


8.2                                As part of the Due
Diligence, Rockwood and Kemira intend to verify the assumptions underlying the
Equity Value Split that led to the negotiated Shareholding Split. Based on any
and all facts that the Parties discover in the Due Diligence that affect the
EBITDA of one of the years 2004 to 2010 or the net debt (each calculated with
the methods used in the Financial Information and Valuation consistently
applied), the Equity Value Split shall be recalculated with the financial
impact of any and all such facts considered as further set out in the sample
calculation attached as Annex 8.2.
The Parties shall notify each other of any items they consider to affect the
Equity Value Split until six weeks after they have concluded Due Diligence.


 


8.3                                If and to the extent
the Equity Value Split calculated pursuant to section 8.2, differs by 1
per cent or more from the Equity Value Split pursuant to section 8.1, then
the Shareholding Split shall be adjusted upon request by either Party by the
same percentage points in 0.1 per cent increments (rounded up or down) provided
that a de minimis per individual
item or series of related items of EUR 1,000,000.00 shall apply for purposes of
the adjustment of the Shareholding Split.


 


8.4                                To the extent the
Shareholding Split is adjusted pursuant to this section 8, the Implementation
Agreement and the JV Agreement as well as all such other agreements
entered into in connection with these agreements that relate to the Joint
Venture shall be amended accordingly with regard to the adjusted Shareholding
Split; and the Parties shall make or receive all such declarations and take all
such actions which are required to implement such amendments.


 


21

















 


8.5                                Section 11 of this
Agreement remains unaffected. If and to the extent that any circumstances or
facts lead to an adjustment of the Shareholding Split pursuant to this
section 8, they shall be disregarded with respect to any further rights
under the Implementation Agreement (including under the Warranties (as defined
in the Implementation Agreement)), even if such circumstances or facts would
otherwise entitle any of the Parties to raise a claim under the Implementation
Agreement (i.e. no “double counting”).


 


8.6                                If and to the extent
Rockwood and Kemira are unable to agree on the adjustment of the Shareholding
Split in accordance with this section 8, and if such disagreement cannot be resolved
within a period of ten weeks following the execution of this Agreement, the
question whether and, if so, to what extent the Shareholding Split is to be
adjusted in accordance with this section 8, shall be finally determined, upon
Rockwood’s and/or Kemira’s request, with binding effects on the Parties, by
Ernst & Young AG Wirtschaftsprüfungsgesellschaft
Steuerberatungsgesellschaft, Frankfurt am Main, or its legal successor (“E&Y”), acting as an independent expert
(Schiedsgutachter) pursuant to
sections 317 to 319 German Civil Code (BGB).
If E&Y refuses to act as
independent expert, and if Rockwood and Kemira cannot agree upon another
independent expert within ten (10) Business Days after E&Y’s refusal
to the requesting party, the independent expert shall be appointed, upon
request of either Rockwood or Kemira, by the German Institute of Chartered
Accountants or its legal successor (Institut
der Wirtschaftsprüfer, “IDW”).
Rockwood and/or Kemira shall be entitled to mandate E&Y or such other
independent expert as determined by IDW on the basis of the instruction letter
attached as Annex 8.6. The expert
proceedings shall be deemed started on the day on which either Rockwood or
Kemira receives a request by the other Party to conduct the expert proceedings.
The final decision (Schiedsgutachten) of the expert must not be above or below the
figures asserted by the Parties for the Shareholding Split. If, for whatever
reason, no expert has been appointed (i.e. accepted the mandate) within four months after one Party’s request
to conduct expert proceedings, any dispute on the adjustment of the
Shareholding Split in accordance with section 8 may be referred to arbitration pursuant to section 15.9.


 


8.7                                Once the independent expert has accepted the
mandate, the expert proceedings shall be conducted in accordance with the terms
of this Agreement, in particular with the instructions set out in
Annex 8.6, and in line with any modification agreed by the Parties in
writing,  and the decision (Schiedsgutachten) on the adjustment of the
Shareholder Split shall be rendered and served on Rockwood and Kemira.


 


9.                                      Regulatory
Approval


 


9.1                                Rockwood and Kemira shall jointly
file for the approval of the Transaction by the European Commission as well as
any other filings with, or notifications to, any governmental authority


 


22

















 


required in
connection with the Transaction (“Regulatory
Approval”) as soon as reasonably practicable following the execution
of this Agreement. Rockwood and Kemira shall ensure that such filings for
Regulatory Approval will be made without undue delay. Any filings made by
either Rockwood or Kemira shall require the prior consent of the other Party
which shall not be unreasonably withheld, conditioned or delayed.


 


9.2                                In order to obtain Regulatory
Approval, the Parties shall:


 


(a)                                  at their own expense use all
reasonable endeavours to ensure that the Regulatory Approval is obtained as
soon as reasonably practicable following the execution of this Agreement and
without any condition or obligations being attached thereto;


 


(b)                                 supply to any competent authority as
promptly as practicable any additional information requested pursuant to any
applicable laws and take all other procedural actions required in order to
obtain any necessary clearance or to cause any applicable waiting periods to
commence and expire. For the avoidance of doubt, under no circumstances shall
this include the disposal of any shareholdings, participations or interests or
similar transactions;


 


(c)                                  consult with each other, to the
extent reasonably practicable in advance, in relation to all communications
(whether written or oral, and whether direct or via agents, consultants and
advisers) with all relevant authorities in respect of the filings or approvals,
especially the Regulatory Approvals, or any other third party who is required
to be consulted, in relation to the implementation of the Transaction;


 


(d)                                 promptly provide each other upon
dispatch or receipt (as the case may be) with copies of any written
communication received or sent (or written summaries of any non-written
communication) in connection with any proceeding, once any commercially
sensitive information has been redacted appropriately;


 


(e)                                  regularly update each
other on the progress of obtaining approvals, consents modifications or waivers
and promptly informing the other of the fulfilment of any obligation listed in
this section 9.2;


 


(f)                                    consult fully with each
other (and each other’s advisors) as to how best to present at any meeting the
case for unconditional clearance of the Transaction as soon as reasonably
practicable in advance of any meeting requested by any relevant authority in
respect of the filings or approvals;


 


(g)                                 cooperate with each
other in any consultation process undertaken by any relevant authority in
respect of the filings or approvals;


 


23

















 


(h)                               give each other and each Party’s
respective advisers the opportunity to participate in all meetings and
conferences with any authority competent in respect of the filings or
approvals;


 


(i)                                   discuss and consult with each other
with regard to responding to any adverse reaction to the Transaction from
competitors, customers or any other party and give the other Parties the
opportunity to comment on any proposed response before it is made; and


 


(j)                                   cooperate with one another in good
faith, to the extent permitted by law, in order to fulfil each of the
obligations listed in this section 9.2.


 


9.3                                Should any
of the Parties reasonably conclude that the Transaction as announced will not
be approved by the governmental agencies specified in section 9.1 without
opening Phase II proceedings or similar, the Parties shall meet to discuss a
strategy for presenting their case in such proceedings.


 


10.                                Covenants


 


10.1                          Pre-Closing Covenants


 


10.1.1                 In the
period between the date of this Agreement and the Closing Date and to the
extent permitted by law, each of Rockwood and Kemira, in their capacity as
(direct and indirect) shareholders of the JV Group Companies, undertake to use
all reasonable efforts to ensure that, unless otherwise set out in Annex 10.1.1 or explicitly set forth in the
Structure Paper or this Agreement, the JV Agreement or the Implementation
Agreement and their respective Annexes, the JV Group Companies, as well as
Kemira’s Subsidiaries to the extent that these own or operate assets that
relate to TiO2 Pigments Business (including the Oberhausen technology centre)


 


(a)                                  conduct their business in all
material respects in the ordinary course of business as conducted up until December 31,
2007 and immediately prior to the execution of this Agreement and in line with
past practice;


 


(b)                                 do not enter into or materially
amend any collective bargaining or shop agreement or grant any material increase
in the rates of pay or benefits or enter into any old age part-time agreements,
any new employment benefit plan or make any material change in the employment
or severance terms for any of the current or former directors, officers and
employees;


 


(c)                                  do not materially increase the
number of individuals employed by them;


 


24

















 


(d)                               do not hire or dismiss directors or
other members of the management or renew or change agreements regarding the
compensation and pension arrangement of any of these;


 


(e)                                maintain insurance protection
material for the business as maintained immediately prior to the execution of
this Agreement and in line with past practice (unless a prudent business man
would have procured additional insurance protection);


 


(f)                                  do not declare, make or pay any
dividends or distributions or repayment of any share capital;


 


(g)                               do not amend any of their
constitutional documents, issue, redeem or re-purchase any shares or agree upon
such issuance, redemption or re-purchase or grant any option or encumbrance in
respect of or over shares or any such securities or enter into any enterprise
agreement within the meaning of section 291 et seq. German Stock Corporation
Act (AktG) or any agreement with
a similar effect;


 


(h)                               do not consolidate with any other
person/entity or execute any of the measures pursuant to the German
Transformation Act (UmwG) or
acquire a material amount of assets from any third party;


 


(i)                                   do not acquire, sell, transfer,
pledge or otherwise encumber any material asset including shares or other
participations in any subsidiary other than due to the Water Business
Carve-Out;


 


(j)                                   do not sell, acquire or rent any
real estate or rights equivalent to real estate or encumber any real estate or rights
equivalent with charges;


 


(k)                                do not conclude any agreement of the
nature set out in Annex 10.1.1(k) (each
a “Covenanted Agreement”), or
terminate or materially amend a Covenanted Agreement;


 


(l)                                   do not grant volume rebates,
discounts to customers, factoring or sales of any receivables, in each case
outside the ordinary course of business or inconsistent with past practice;


 


(m)                             do not make or commit to make any
capital expenditures in excess of EUR 3,000,000.00 in each case or of
EUR 10,000,000.00 in the aggregate except pursuant to existing agreements,
the current budget or otherwise in the ordinary course of business and in line
with past practice;


 


(n)                               do not create, grant, issue, permit
or extend the creation of an encumbrance, lien or


 


25

















 


any other third-party right concerning any assets with
a value in excess of EUR 250,000.00 but only in compliance with the
mandate letter;


 


(o)                               do not settle, waive or compromise
any material right or claim against third parties;


 


(p)                               do not incur or repay any debt
outside the ordinary course of business as conducted immediately prior to the
execution of this Agreement and in line with past practice and the mandate
letter;


 


(q)                               do not grant donations to political
parties, charities and similar institutions in excess of EUR 5,000 per
instance and EUR 20,000 in the aggregate;


 


(r)                                  pay any management fees, monitoring
fees, advisory fees, directors’ fees or other fees or compensation to Rockwood
and Kemira (or any of their respective other Affiliates), respectively, except
in accordance with the ordinary course of business and in line with past
practice;


 


(s)                                (i) pay any fees, bonuses or
expenses to Rockwood and Kemira (or any of their respective other direct or
indirect Affiliates), respectively, that are related to the Transaction, or (ii) enter
into any obligation to pay any fees, bonuses or expenses to Rockwood and Kemira
(or any of their respective other direct or indirect Affiliates), respectively,
by virtue of, or in connection with, the execution or consummation of this
Agreement;


 


(t)                                  not change the total remuneration
for any group of employees (five or more) by more than 10 per cent or for
individual employees by more than EUR 10,000 p.a., or change the duration or
notice periods of employees of the Business.


 


(u)                               not enter into, amend and/or prolong
any agreements with parties in or for the ultimate delivery into (where this is
known) any of Syria, Cuba, Iran and North Korea that would require any JV Group
Company to honour any obligations after the Closing;


 


(v)                               do not enter into any agreement
pursuant to which they become obliged to execute any of the above impermissible
acts; and


 


(w)                             do not execute any measure that
would constitute a breach of any of the Warranties as set out in the
Implementation Agreement.


 


10.1.2                 To the
extent that in order to comply with the covenant set out in section 10.1.1(a),
one of the other covenants in this section 10 or any other obligation
under this Agreement could not be complied with, the affected Party shall
notify such situation to Kemira or Rockwood, as


 


26

















 


applicable,
which shall then without undue delay decide whether the Party (or its
Affiliate) shall comply with section 10.1.1(a) or the relevant other
obligation(s) or covenant(s). If such notification or decision by the
other Party is either (i) not possible because of danger of material
damage to such Party or the Joint Venture of because of an immediate need to
decide or (ii) not permitted (e.g. because of anti-trust laws), then such
Party shall in good faith resolve such conflict by giving commercially
reasonable priority to the interests of the Joint Venture.


 


10.2                          Existing Affiliate Agreements


 


10.2.1                 The Parties agree that the agreements between
JV Europe or JV US on the one hand and either Rockwood Germany or
Kemira (in each case including their respective Affiliates other than the JV
Group Companies) on the other hand set out in Annex 10.2.1
shall, in the case of existing agreements, continue to be honoured by
JV Europe and/or JV US or, if no agreement currently exists, shall be
entered into.


 


10.2.2                 With effect as of the Closing Date,
Kemira and Kemira TiO2 shall amend the existing supply agreement for ferrous
sulphate and


 


(a)                                change its fixed term to expire on
31 December 2015 without any unilateral option to prolong its term; for
any time thereafter, the agreement may be terminated with 18 months notice;


 


(b)                               to the extent required after a
review has been made in good faith to reflect the requirements of both parties
and the realities of the production process (e.g. technical specifications);


 


(c)                                clarify that drying shall be
provided at cost (no limit for maximum increase of prices per year).


 


11.                                Rescission
Right


 


11.1                          Rockwood and Kemira shall each have
the right to rescind this Agreement and thereby the Implementation Agreement
and the JV Agreement by giving written notice (the “Rescission Notice”) to the other Party if
between the date hereof and the Closing Date


 


(a)                                any change or effect or series of
changes or effects that are materially adverse to the assets, business,
operations, liabilities, results of operation or financial condition of the
other Party’s TiO2 Pigments Business, taken as a whole, arises or is discovered,
provided that in cases where any such adverse changes or effects already have
or are expected to have an assessable financial impact, they shall only be
considered to be material if such financial impact exceeds or is expected to
exceed


 


27

















 


EUR 25,000,000.00
in the aggregate, including, but not limited to, the partial or complete
destruction of assets material to the other Party’s TiO2 Pigments Business
(irrespective of any compensation claims pursuant to applicable insurances)
(each such change or effect, a “Material
Adverse Effect”), provided, however, that


 


(i)                                   any
changes that are generally applicable to the markets and market segments in
which the TiO2 Pigments Businesses operate;


 


(ii)                                any changes
that are generally applicable as a result of general economic conditions in the
markets in which the TiO2 Pigments Businesses operate (e.g. change of currency
exchange or interest rates), or


 


(iii)                             any
consequence, disruptions or other adverse effects on the TiO2 Pigments
Businesses resulting from the entering into and the announcement of this
Agreement


 


shall be excluded from the determination of a
Material Adverse Effect.


 


(b)                                 issues arise pursuant to which


 


(i)                                   the valuation of the respective TiO2
Pigments Business calculated using the methodology and principles set out in
the Financial Information and Valuation changes and, as a result, the
Shareholding Split with regard to a shareholder would need to be adjusted by
more than 4.00 per cent;


 


(ii)                                the Party wanting to adjust the
Shareholding Split has notified Kemira or Rockwood, as applicable, of such
request together with the desired change and the underlying reasons by no later
than 10 Business Days after the period for Due Diligence pursuant to section
7.2 has expired; and


 


(iii)                             in such case, Rockwood and Kemira
cannot agree on an adjusted Shareholding Split within a period of 10 Business
Days following receipt of the notice in 11.1(b)(ii) by Rockwood or Kemira,
as applicable.


 


11.2                          The right to
rescind this Agreement by Rockwood and/or Kemira can only be executed until the
earlier of (i) the last Business Day before the Closing Date and (ii) 10
Business Days following the lapse of the 10 Business Day-period pursuant to
section 11.1(b)(iii), it being understood that the Rescission Notice must be
received by the receiving Party within the 10 Business Day period.


 


28

















 


11.3                          If this
Agreement is duly rescinded by a Party, this Agreement shall lapse and cease to
exist with the exception of this section 11.3 and sections 12 through 17 which
shall continue to remain in force.


 


12.                               Joint and
Several Liability


 


The Parties agree that (i) 
Rockwood Holdings, Rockwood and Rockwood Germany on the one hand and (ii) Kemira
and Kemira Germany on the other hand shall be jointly and severally liable for
each and every obligation that either of these entities has under or in
connection with this Agreement.


 


13.                                Confidentiality


 


13.1                          The Parties shall keep secret the contents of
this Agreement to the extent that (i) no statutory disclosure obligations
exist or (ii) Rockwood or Kemira, as applicable, has not consented to the
disclosure. The Parties shall also keep secret any information they have
received about each other and about each other’s respective Affiliates since
they started talks about the Joint Venture, to the extent that such information
is not available to the public or (except for information relating to each
Party’s own TiO2 Pigments Business) to the extent Rockwood and Kemira have not
consented to the disclosure of the information.


 


13.2                          If and to
the extent disclosure or announcement of confidential matters referred to in
section 13.1 is required by law or by any regulation, rule or any
governmental or quasi governmental authority, such disclosure may be made by
the Party that is required to make such disclosure upon consultation of the
other Parties.


 


13.3                          Notwithstanding
section 13.1, each Party may disclose the contents of this Agreement to
any Affiliate.


 


13.4                          Any press
release or similar disclosure of any Party concerning the Transaction shall
require the prior consent of Rockwood and Kemira, except for releases in the
meaning of section 13.2.


 


14.                                Costs


 


All notary, court, registration or similar fees, real estate and other
transfer taxes, stamp duties and other public levies, as well as of the costs
of any merger control proceedings or other governmental approvals or filings
connected with the execution and implementation of this Agreement, including the
advisor costs set forth in Annex 14,
shall be borne by Rockwood Germany and Kemira on a pro rata basis based
on the (adjusted) Shareholding Split. Beyond this, each Party shall bear its
own costs and taxes and the costs of its advisors.


 


29

















 


15.                                Miscellaneous


 


15.1                          With regard
to financial statements, JV Europe and JV US, including their respective
direct and indirect Subsidiaries, from time to time and as applicable, shall be
consolidated by Rockwood Holdings in accordance with US GAAP and by Rockwood
Germany in accordance with IFRS or as otherwise deemed fit by Rockwood.


 


15.2                          Rockwood
Germany shall at all times be entitled to make for tax purposes and with regard
to the Joint Venture any election under the laws of the United States of
America required or deemed necessary by it or any of its Affiliates upon
consultation and approval of Kemira, such approval not to be unreasonably
withheld, and JV Europe and JV US shall implement any such election.


 


15.3                          This Agreement,
the JV Agreement, the Implementation Agreement and their Annexes, contain the
entire agreement of the Parties with respect to the subject matter hereof. Any
supplements or amendments to or a termination of this Agreement, the JV
Agreement and/or the Implementation Agreement, as well as any declarations to
be made hereunder or thereunder, shall be valid only if made in writing, or if
required by law, in due notarial form. This shall also apply to any change to,
or cancellation of, this provision.


 


15.4                          In case of any
discrepancies between this Agreement, the Implementation Agreement, the
JV Agreement and the Structure Paper, this Agreement shall prevail. In
case of any discrepancies between the Implementation Agreement and the
JV Agreement on the one hand and the Structure Paper on the other hand,
the Implementation Agreement and the JV Agreement shall prevail. In case
of any discrepancies between the Implementation Agreement and the
JV Agreement, the Parties shall cooperate in good faith in order to
resolve such discrepancies with view to what has been set forth in this
Agreement. If and to the extent the Parties cannot resolve such discrepancies,
section 17 shall apply accordingly.


 


15.5                          No Party may assign or
otherwise transfer any rights or claims under or in connection with this
Agreement to a third party without the prior written consent of the other
Parties.


 


15.6                          Unless otherwise explicitly provided
for in this Agreement, neither this Agreement nor any provisions contained in this Agreement is intended
to confer any rights or remedies upon any person or entity other than the
Parties.


 


15.7                          This
Agreement shall be exclusively governed by the laws of the Federal Republic of
Germany. The English language version shall be determinative (even if a translation
is made), provided that where German expressions are used in brackets, the
German expression shall be determinative.


 


15.8                          In this
Agreement:


 


30
















 


(a)                               any
German legal term for any action, remedy, method of judicial proceeding, legal
document, legal status, court, official or any legal concept or thing shall, in
respect of any jurisdiction other than Germany, be deemed to include what most
closely approximates in that jurisdiction to the German legal term and any
reference to any German statute shall be construed so as to include equivalent
or analogous laws of any other jurisdiction; and


 


(b)                               the
headings shall not affect the interpretation of this Agreement.


 


15.9                     All disputes arising in connection with this Agreement or its validity
shall be finally settled in accordance with Arbitration Rules of the International
Chamber of Commerce
without recourse to the ordinary courts of law. The place of arbitration is
Frankfurt am Main, Germany. The arbitral tribunal shall consist of three
arbitrators. The language of the arbitral proceedings shall be English.


 


15.10              Unless provided otherwise in this Agreement, all declarations (Willenserklärungen)  to be made or notices to be given by the
Parties pursuant to this Agreement shall be in writing in English and delivered
by hand, by courier or by fax to the person at the address set forth below, or
such other address as may be designated by the respective Party to the other
Party in the same manner. A notification made by email in pdf-format shall be
regarded as sufficient, provided that an identical notification in writing is
delivered by hand or by courier within two weeks after such email:


 


(a)                                 Notifications to Rockwood Holdings and
Rockwood:


 


Rockwood Specialties Group, Inc.


Thomas
J. Riordan, Senior Vice President, Law and Administration


100 Overlook Center


Princeton NJ 08540


USA


Facsimile: +1 (609) 514-8722


E-mail: TRiordan@rocksp.com


 


31

















 


(b)                                 Notifications to Rockwood Germany:


 


Rockwood Specialties Group GmbH


Udo Pinger


Königsberger Straße 1


60487 Frankfurt am Main


Germany


Facsimile: +49 (69) 7165-5693


E-mail: udo.pinger@rocksp.de


 


(c)                                  Notifications to Sachtleben:


 


Sachtleben Chemie GmbH


Prof. Dr. Wolf-Dieter Griebler


Dr.-Rudolf-Sachtleben-Str. 4


47198
Duisburg


Germany


Facsimile:
+49 (2066) 22-3201


E-mail: w.d.griebler@sachtleben.de


 


(d)                                 Notifications to JV Europe and Finnish
HoldCo:


 


Sachtleben Chemie GmbH


Prof. Dr. Wolf-Dieter Griebler


Dr.-Rudolf-Sachtleben-Str. 4


47198 Duisburg


Germany


Facsimile:
+49 (2066) 22-3201


E-mail: w.d.griebler@sachtleben.de


 


each with a copy to Rockwood
Germany and Kemira


 


32

















 


(e)                                  Notifications to JV US


 


White
Pigments LLC


c/o
Rockwood Specialties Group, Inc.


Thomas
J. Riordan, Senior Vice President, Law and Administration


100 Overlook Center


Princeton NJ 08540


USA


Facsimile: +1 (609) 514-8722


E-mail: TRiordan@rocksp.com


 


(f)                                   Notifications to Kemira, Kemira TiO2 and
Kemira Inc.


 


Hannu Virolainen, President Kemira Speciality
Business Area


Kemira
OYJ


Porkkalankatu
3


00180
Helsinki


Finland


Facsimile: +358 - (0) 10 862 1068


Email: hannu.virolainen@kemira.com


 


(g)                                  Notifications
to Kemira Germany


 


Hermann-Josef Frings, Managing
Director


Kemira
Germany GmbH


Marie-Curie-Straße
10


51377
Leverkusen


Germany


Facsimile:
+49 - (0) 214 20690-250 

Email: hermann-josef.frings@kemira.com


 


16.                            Authorised Agent


 


16.1                     Kemira and Kemira TiO2 hereby appoint the law firm of Gleiss
Lutz Hootz Hirsch Partnerschaftsgesellschaft von Rechtsanwälten,
Steuerberatern, Frankfurt am Main/Germany as their agent for service of process
(Zustellungsbevollmächtigter) for
all legal proceedings arising out of or in connection with this Agreement. This
appointment shall only terminate


 


33

















 


upon the
appointment of another agent for service of process domiciled in Germany,
provided that the agent for service of process is an attorney admitted to the
German bar (in Deutschland zugelassener
Rechtsanwalt) and his appointment has been notified to and approved
in writing by Rockwood (which approval shall not be unreasonably withheld).
Kemira and Kemira TiO2 shall upon the appointment of any new agent for service
of process (as the case may be) issue to the agent a written power of attorney
(Vollmachtsurkunde) and shall
irrevocably instruct the agent to submit such deed in connection with any
service of process under this Agreement. A certified copy of the power of
attorney shall be submitted to Rockwood.


 


16.2                     Rockwood
Holdings, Rockwood Germany, Rockwood, Sachtleben Corp and Finnish HoldCo hereby appoint the law firm of
Clifford Chance LLP, Frankfurt am Main/Germany as their agent
for service of process (Zustellungsbevollmächtigter)
for all legal proceedings arising out of or in connection with this Agreement.
This appointment shall only terminate upon the appointment of another agent for
service of process domiciled in Germany, provided that the agent for service of
process is an attorney admitted to the German bar (in Deutschland zugelassener Rechtsanwalt) and his
appointment has been notified to and approved in writing by Kemira (which
approval shall not be unreasonably withheld). Rockwood Holdings, Rockwood and
Rockwood Germany shall upon the appointment of any new agent for service of
process (as the case may be) issue to the agent a written power of attorney (Vollmachtsurkunde) and shall irrevocably
instruct the agent to submit such deed in connection with any service of
process under this Agreement. A certified copy of the power of attorney shall
be submitted to Kemira.


 


17.                            SEVERABILITY


 


Should any provision of this Agreement, or any
provision incorporated into this Agreement in the future, be or become invalid
or unenforceable, the validity or enforceability of the other provisions of
this Agreement shall not be affected thereby. The invalid or unenforceable
provision shall be deemed to be substituted with retroactive effect by a
suitable and equitable provision which, to the extent legally permissible,
comes as close as possible to the intent and purpose of the invalid or
unenforceable provision. The same shall apply: (i) if the Parties have,
unintentionally, failed to address a certain matter in this Agreement (Regelungslücke); in which case a suitable
and equitable provision shall be deemed to have been agreed upon with
retroactive effect and which comes as close as possible to what the Parties, in
the light of the intent and purpose of this Agreement, would have agreed upon
if they had considered the matter; or (ii) if any provision of this
Agreement is invalid because of the scope of any time period of performance
stipulated herein; in which case a legally permissible 


 


34

















 


time period or performance shall be deemed to
have been agreed which comes as close as possible to the stipulated time period
or performance.


 


* * *


 


35

















 


	
   

  	
  Rockwood
  Holdings, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  /s/
  CLEMENS ALFRED ROLLMAN

  	
   

  
	
   

  	
   

  	
  Clemens
  Alfred Rollman

  
	
   

  	
  Rockwood
  Specialties Group, Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  /s/
  CLEMENS ALFRED ROLLMAN

  	
   

  
	
   

  	
   

  	
  Clemens
  Alfred Rollman

  
	
   

  	
  Sachtleben
  Corporation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  /s/
  CLEMENS ALFRED ROLLMAN

  	
   

  
	
   

  	
   

  	
  Clemens
  Alfred Rollman

  
	
   

  	
  Deukalion
  Einhundertvierundzwanzigste Vermögensverwaltungs GmbH

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  /s/
  CLEMENS ALFRED ROLLMAN

  	
   

  
	
   

  	
   

  	
  Clemens
  Alfred Rollman

  
	
   

  	
  White
  Pigments Holdings Oy

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  /s/
  CLEMENS ALFRED ROLLMAN

  	
   

  
	
   

  	
   

  	
  Clemens
  Alfred Rollman

  
	
   

  	
  White
  Pigments LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  /s/
  CLEMENS ALFRED ROLLMAN

  	
   

  
	
   

  	
   

  	
  Clemens
  Alfred Rollman

  
	
   

  	
  Kemira
  Oyj

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  /s/
  VERENA HÜGEL

  	
   

  
	
   

  	
   

  	
  Verena
  Hügel

  
	
   

  	
  Kemira
  Pigments Oy

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  /s/
  VERENA HÜGEL

  	
   

  
	
   

  	
   

  	
  Verena
  Hügel

  
					



 


 


36

















 


	
   

  	
  Kemira
  Germany GmbH

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  /s/
  VERENA HÜGEL

  	
   

  
	
   

  	
   

  	
  Verena
  Hügel

  	
   

  
	
   

  	
  Kemira Specialty Inc.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  /s/
  VERENA HÜGEL

  	
   

  
	
   

  	
   

  	
  Verena
  Hügel

  	
   

  
	
   

  	
  Rockwood
  Specialties Group GmbH

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY: 

  	
  /s/
  LEIF U. SCHRADER

  	
   

  
	
   

  	
   

  	
  Leif
  U. Schrader

  	
   

  
	
   

  	
  Sachtleben
  Chemie GmbH

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  BY:
  

  	
  /s/ LORENZO MATTHAEI

  	
   

  
	
   

  	
   

  	
  Lorenzo
  Matthaei

  	
   

  



 


 


37