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Exhibit 10.5    
    

 
 

TRANSMONTAIGNE SERVICES INC.    
    
    LONG-TERM INCENTIVE PLAN    
    

        1.    Plan.    The TransMontaigne Services Inc. Long-Term Incentive Plan (the "Plan") was adopted
by TransMontaigne Services Inc. (the "Company") to reward certain employees, consultants and directors of the Company and the Company's Affiliates who perform services for TransMontaigne
Partners L.P. (the "Partnership") or its Affiliates by enabling them to acquire Units of the Partnership and/or through the provision of cash payments. 

        2.    Objectives.    This Plan is designed to enhance the ability of the Company and its Affiliates to attract and
retain employees, directors and consultants whose services are key to the growth and profitability of the Partnership and its Affiliates, to encourage the sense of proprietorship among such persons
and to stimulate the active interest of such persons in the development and financial success of the Partnership and its Affiliates. These objectives are to be accomplished by making Awards under this
Plan and thereby providing Participants with a proprietary interest in the growth and performance of the Partnership. 

        3.    Definitions.    As used herein, the terms set forth below shall have the following respective meanings: 

        "Affiliate"
means, with respect to any Person, any other Person that directly or indirectly through one or more intermediaries controls, is controlled by or is under common control with,
the Person in question. As used herein, the term "control" means the possession, direct or indirect, of the power to direct or cause the direction of the management and policies of a Person, whether
through ownership of voting securities, by contract or otherwise. 

        "Award"
means the grant of any Option, Unit Appreciation Right, Restricted Unit or Phantom Unit, whether granted singly, in combination or in tandem, to a Participant pursuant to such
applicable terms, conditions and limitations as the Committee may establish in order to fulfill the objectives of the Plan. 

        "Award
Agreement" means any written agreement between the Company and a Participant setting forth the terms, conditions and limitations applicable to an Award. 

        "Board"
means the Board of Directors of the General Partner. 

        "Code"
means the Internal Revenue Code of 1986, as amended from time to time. 

        "Committee"
means the Board, the Compensation Committee of the Board or such other committee of the Board as is designated by the Board to administer the Plan. 

        "Company"
means TransMontaigne Services Inc. 

        "Consultant"
means an individual, other than an Employee or a Non-Employee Director, providing bona fide services to the Partnership, the Company or any of their Affiliates
as a consultant or advisor, as applicable, provided that such individual is a natural person and that such services are not in connection with the offer or sale of securities in a capital-raising
transaction and do not directly or indirectly promote or maintain a market for any securities of the Partnership. 

        "Distribution
Equivalents" means a contingent right, granted in tandem with a specific Phantom Unit, to receive an amount in cash equal to the cash distributions made by the Partnership
with respect to a Unit during the Restriction Period applicable to the Phantom Unit. 

        "Employee"
means an employee of the General Partner, the Company, the Partnership or any of their Affiliates who performs services for the Company or for the Partnership and its
Affiliates. 

        "Fair
Market Value" means, as of any date and in respect of any Units, the closing sales price of a Unit on the applicable date (or, if there is no trading in the Units on such date, the
closing sales price

on the last date the Units were traded) as reported in The Wall Street Journal (or other reporting service approved by the Committee). In the event Units are not publicly traded at the time a
determination of Fair Market Value is required to be made hereunder, the determination of Fair Market Value shall be made in good faith by the Committee. 

        "General
Partner" means TransMontaigne GP L.L.C. 

        "Non-Employee
Director" means an individual, other than an Employee or Consultant, serving as a member of the Board of Directors of the General Partner or the Company. 

        "Option"
means a right to purchase a specified number of Units at a specified price. 

        "Participant"
means an Employee, Consultant or Non-Employee Director to whom an Award has been made under this Plan. 

        "Partnership"
means TransMontaigne Partners L.P. 

        "Person"
means an individual or a corporation, limited liability company, partnership, joint venture, trust, unincorporated organization, association, governmental agency or political
subdivision thereof or other entity. 

        "Phantom
Unit" means a phantom (notional) unit granted under the Plan which upon vesting entitles the Participant to receive a Unit or, subject to compliance with Section 17, an
amount of cash equal to the Fair Market Value of a Unit, whichever is determined by the Committee. 

        "Restricted
Unit" means any Unit that is subject to such restrictions or forfeiture provisions as are established by the Committee. 

        "Restriction
Period" means a period of time established by the Committee during which an Award remains subject to forfeiture or is not exercisable by the Participant. 

        "Unit"
means a common unit of the Partnership. 

        "Unit
Appreciation Right" means a right to receive a payment, in Units, cash or a combination thereof as determined by the Committee, equal to the excess of the Fair Market Value or
other specified valuation of a specified number of Units on the date the right is exercised over a specified strike price, in each case, as determined by the Committee. 

        4.    Participation.    Individuals eligible to participate and receive Awards under the Plan are those Employees,
Consultants and Non-Employee Directors selected by the Committee in its discretion. 

        5.    Units Available for Awards.    Subject to the provisions of paragraph 14 hereof, initially there shall be
available for Awards under this Plan, granted wholly or partly in Units (including rights or options that may be exercised for or settled in Units), 200,000 Units, which amount shall automatically
increase on January 1 of each calendar year by two percent of the total number of common and subordinated units of the Partnership outstanding at the end of the Partnership's preceding fiscal
year. Any Units delivered pursuant to an Award shall consist, in whole or in part, of Units acquired in the open market, from any Affiliate, the Company, the Partnership or any other Person, or any
combination of the foregoing, as determined by the Committee in its discretion. The number of Units that are the subject of Awards under this Plan, that are cancelled, forfeited, terminated or expire
unexercised, shall again immediately become available for Awards hereunder. The number of Units reserved for issuance under the Plan shall be reduced only to the extent that Units are actually issued
in connection with the exercise or settlement of an Award. The Committee may from time to time adopt and observe such procedures concerning the counting of Units against the Plan maximum as it may
deem appropriate. The Board and the appropriate officers of the General Partner shall from time to time take whatever actions are necessary to file any required documents with governmental
authorities, stock exchanges and transaction reporting systems to ensure that Units are available for issuance pursuant to Awards.

        6.    Administration    

        (a)    Authority of the Committee.    Subject to the provisions hereof, the Committee shall have full and exclusive
power and authority to administer this Plan and to take all actions that are specifically contemplated hereby or are necessary or appropriate in connection with the administration hereof. The
Committee shall also have full and exclusive power to interpret this Plan and to adopt such rules,
regulations and guidelines for carrying out this Plan as it may deem necessary or proper, all of which powers shall be exercised in the best interests of the General Partner, the Company and the
Partnership and in keeping with the objectives of this Plan. The Committee may, in its discretion, provide for the extension of the exercisability of an Award, accelerate the vesting or exercisability
of an Award, eliminate or make less restrictive any restrictions contained in an Award, waive any restriction or other provision of this Plan or an Award or otherwise amend or modify an Award in any
manner that is (i) not adverse to the Participant to whom such Award was granted, (ii) consented to by such Participant or (iii) authorized by paragraph 14(c) hereof;
provided, however, that no such action shall permit the term of any Option to be greater than ten years from the applicable grant date. The Committee may correct any defect or supply any omission or
reconcile any inconsistency in this Plan or in any Award in the manner and to the extent the Committee deems necessary or desirable to further the Plan purposes. Any decision of the Committee in the
interpretation and administration of this Plan shall lie within its sole and absolute discretion and shall be final, conclusive and binding on all parties concerned. 

        (b)    Indemnity.    No member of the Committee or officer of the General Partner to whom the Committee has delegated
authority in accordance with the provisions of paragraph 7 of this Plan shall be liable for anything done or omitted to be done by him or her, by any member of the Committee or by any officer
of the General Partner in connection with the performance of any duties under this Plan, except for his or her own willful misconduct or as expressly provided by statute. 

        7.    Delegation of Authority.    The Committee may delegate to the Chief Executive Officer and to other senior
officers of the General Partner its duties under this Plan pursuant to such conditions or limitations as the Committee may establish; provided, however, that the Chief Executive Officer may not grant
Awards to, or take any action with respect to any Award previously granted to, himself, a person who is an officer subject to Rule 16b-3 of the Exchange Act, or a member of the
Board. 

        8.    Awards.    The Committee shall determine the type or types of Awards to be made under this Plan and shall
designate from time to time the Participants who are to be the recipients of such Awards. Each Award shall be embodied in an Award Agreement, which shall contain such terms, conditions and limitations
as shall be determined by the Committee in its sole discretion. Awards may consist of those listed in this paragraph 8 and may be granted singly, in combination or in tandem. Awards may also be
made in combination or in tandem with, in replacement of, or as alternatives to, grants or rights under this Plan or any other plan of the Partnership, the Company or any of their Affiliates,
including the plan of any acquired entity; provided that, except as contemplated in paragraph 14 hereof, no Option may be issued in exchange for the cancellation of an Option with a higher
exercise price nor may the exercise price of any Option be reduced. All or part of an Award may be subject to conditions established by the Committee, which may include, but are not limited to,
continuous service with the Partnership, the Company and/or their Affiliates, achievement of specific business objectives, increases in specified indices, attainment of specified growth rates and
other comparable measurements of performance. Upon the termination of employment by a Participant who is an Employee or upon the termination of service by a Participant who is a Consultant or a
Non-Employee Director, any unexercised, deferred, unvested or unpaid Awards shall be treated as set forth in the applicable Award Agreement. 

        (a)    Options.    An Award may be in the form of an Option. The price at which Units may be purchased upon the
exercise of an Option shall be not less than the Fair Market Value of the Units on the date of grant. The term of an Option shall not exceed ten years from the date of

grant. Subject to the foregoing provisions, the terms, conditions and limitations applicable to any Options awarded pursuant to this Plan, including the term of any Options and the date or dates upon
which they become exercisable, shall be determined by the Committee. 

        (b)    Unit Appreciation Rights.    An Award may be in the form of a Unit Appreciation Right. The strike price for a
Unit Appreciation Right shall not be less than the Fair Market Value of the Units on the date on which the Unit Appreciation Right is granted. The term of a Unit Appreciation Right shall not exceed
ten years from the date of grant. Subject to the foregoing limitations, the terms, conditions and limitations applicable to any Unit Appreciation Rights awarded pursuant to this Plan, including the
term of any Unit Appreciation Rights and the date or dates upon which they become exercisable, shall be determined by the Committee. 

        (c)    Restricted Units.    An Award may be in the form of a Restricted Unit. The Committee shall have the authority
to determine the number of Restricted Units to be granted to a Participant, the Restriction Period, the conditions under which the Restricted Units may become vested or forfeited, which may include,
without limitation, accelerated vesting upon the achievement of specified performance objectives, and such other terms and conditions as the Committee may establish with respect to such Awards,
including whether distributions with respect to such Restricted Units are subject to forfeiture restrictions. 

        (d)    Phantom Units.    An Award may be in the form of Phantom Units. The Committee shall have the authority to
determine the number of Phantom Units to be granted to a Participant, the Restriction Period, the conditions under which the Phantom Units may become vested or forfeited, which may include, without
limitation, accelerated vesting upon the achievement of specified performance objectives, and such other terms and conditions as the Committee may establish with respect to such Awards, including
whether Distribution Equivalents are granted with respect to such Phantom Units. 

        9.    Award Payment and Distributions.    

        (a)    General.    Payment of Awards may be made in the form of cash or Units, or a combination thereof, and may
include such restrictions as the Committee shall determine, including, in the case of Units, restrictions on transfer and forfeiture provisions. Notwithstanding anything in the Plan or any Award
Agreement to the contrary, delivery of Units pursuant to the exercise or vesting of an Award may be deferred for any period during which, in the good faith determination of the Committee, the Company
or the General Partner, as applicable, is not reasonably able to obtain Units to deliver pursuant to such Award without violating the rules or regulations of any applicable law or securities exchange.
If
payment of an Award is made in the form of Restricted Units, the applicable Award Agreement relating to such Units shall specify whether certificates evidencing such Units are to be issued at the
beginning or end of the Restriction Period. In the event that certificates are to be issued at the beginning of the Restriction Period, the certificates evidencing such Units (to the extent that such
Units are so evidenced) shall contain appropriate legends and restrictions that describe the terms and conditions of the restrictions applicable thereto. In the event that Units are to be issued at
the end of the Restriction Period, the right to receive such Units shall be evidenced by book entry registration or in such other manner as the Committee may determine. 

        (b)    Deferral.    With the approval of the Committee, amounts payable in respect of Awards may be deferred and paid
either in the form of installments or as a lump-sum payment; provided, however, that if deferral is permitted, each provision of the Award shall be interpreted to permit the deferral only
as allowed in compliance with the requirements of Section 409A of the Code and any provision that would conflict with such requirements shall not be valid or enforceable. The Committee intends
that any Awards under the Plan satisfy the requirements of Section 409A of the Code to avoid imposition of applicable taxes thereunder. The Committee may permit selected Participants to elect
to defer payments of some or all types of Awards in accordance with procedures established by the Committee. Any deferred payment of an Award, whether elected by

the Participant or specified by the Award Agreement or by the Committee, may be forfeited if and to the extent that the Award Agreement so provides. 

        (c)    Distributions and Interest.    Rights to Distribution Equivalents or other distributions may be extended to and
made part of any Award consisting of or denominated in Units, subject to such terms, conditions and restrictions as the Committee may establish. The Committee may also establish rules and procedures
for the crediting of interest on deferred cash payments and Distribution Equivalents for Awards consisting of or denominated in Units. 

        (d)    Consideration.    Awards may be granted for such consideration as the Committee determines, including, without
limitation, service or such minimal cash consideration as may by required by applicable law. 

        10.    Option Exercise.    The price at which Units may be purchased under an Option shall be paid in full at the time
of exercise in cash or, if elected by the Participant and approved by the Committee, the Participant may purchase such Units by means of tendering Units already owned or surrendering another Award,
including Restricted Units, valued at Fair Market Value on the date of exercise, or any combination thereof. The Committee shall determine acceptable conditions and methods for Participants to tender
Units or other Awards. The Committee may provide for procedures to permit the exercise or purchase of such Awards by use of the proceeds to be received from the sale of Units issuable pursuant to an
Award. Unless otherwise provided in the applicable Award Agreement, in the event Restricted Units are tendered as consideration for the exercise of an Option, a number of the Units issued upon the
exercise of the Option equal to the number of Restricted Units used as
consideration therefor shall be subject to the same restrictions as the Restricted Units so submitted as well as any additional restrictions that may be imposed by the Committee. 

        11.    Taxes.    The Company shall have the right to deduct applicable taxes from any Award payment and withhold, at
the time of delivery or vesting of cash or Units under this Plan, an appropriate amount of cash or number of Units or a combination thereof for payment of taxes required by law or to take such other
action as may be necessary in the opinion of the Company to satisfy all obligations for withholding of such taxes. The Committee may also permit withholding to be satisfied by the transfer to the
Company, the General Partner or any Affiliate of Units theretofore owned by the holder of the Award with respect to which withholding is required. If Units are used to satisfy tax withholding, such
Units shall be valued based on the Fair Market Value when the tax withholding is required to be made. 

        12.    Amendment, Modification, Suspension or Termination.    Except as required by applicable law or the rules of the
principal securities exchange on which the Units are traded, the Board of Directors of the Company may, subject to ratification by the Board, amend, modify, suspend or terminate this Plan for the
purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law including increasing the number of Units available for Awards under the Plan without the
consent of any partner, Participant, other holder or beneficiary of an Award or other Person; provided, however, that no amendment or alteration that would adversely affect the rights of any
Participant under any Award previously granted to such Participant shall be made without the consent of such Participant. 

        The
Committee may waive any conditions or rights under, amend any terms of, or alter any Award theretofore granted, provided no change in any Award shall materially reduce the benefit to
a Participant without the consent of such Participant. 

        13.    Assignability.    Unless otherwise determined by the Committee in the Award Agreement, no Award or any other
benefit under this Plan shall be assignable or otherwise transferable. Any attempted assignment of an Award or any other benefit under this Plan in violation of this paragraph 13 shall be null
and void.

        14.    Adjustments.    

        (a)   The
existence of outstanding Awards shall not affect in any manner the right or power of the General Partner to make or authorize any or all distributions, adjustments,
recapitalizations, reorganizations or other changes in the Units or other interests in the Partnership or its business or any merger or consolidation of the Partnership, or any issue of bonds or
debentures or the dissolution or
liquidation of the Partnership, or any sale or transfer of all or any part of its assets or business, or any other act or proceeding of any kind, whether or not of a character similar to that of the
acts or proceedings enumerated above. 

        (b)   If
the Committee determines that any distribution (whether in the form of cash, Units, other securities, or other property), re-capitalization, split,
reverse split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, or exchange of Units or other securities of the Partnership, issuance of
warrants or other rights to purchase Units or other securities of the Partnership, or other similar transaction or event affects the Units such that an adjustment is determined by the Committee to be
appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan, then the Committee shall, in such manner as it may deem
equitable, adjust any or all of: 

        (i)    the
number and type of Units (or other securities or property) with respect to which Awards may be granted; 

        (ii)   the
number and type of Units (or other securities or property) subject to outstanding Awards; and 

        (iii)  if
deemed appropriate, make provision for a cash payment to the holder of an outstanding Award; provided, that the number of Units subject to any Award will always be
a whole number. 

        (c)   The
Committee is hereby authorized to make adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring
events (including, without limitation, the events described in Section 14(b) of the Plan) affecting the Partnership or the financial statements of the Partnership, or of changes in applicable
laws, regulations, or accounting principles, whenever the Committee determines that such adjustments are appropriate in order to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Plan. 

        15.    Restrictions.    No Units or other form of payment shall be issued with respect to any Award unless the Company
shall be satisfied based on the advice of its counsel that such issuance will be in compliance with applicable federal and state securities laws. Certificates evidencing Units delivered under this
Plan (to the extent that Units are so evidenced) may be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the rules, regulations and other
requirements of the Securities and Exchange Commission, any securities exchange or transaction reporting system upon which the Units are then listed or to which it is admitted for quotation and any
applicable federal or state securities law. The Committee may cause a legend or legends to be placed upon such certificates (if any) to make appropriate reference to such restrictions. 

        16.    Unfunded Plan.    Insofar as it provides for Awards of cash, Units or rights thereto, this Plan shall be
unfunded. Although bookkeeping accounts may be established with respect to Participants who are entitled to cash, Units or rights thereto under this Plan, any such accounts shall be used merely as a
bookkeeping convenience. The Company shall not be required to segregate any assets that may at any time be represented by cash, Units or rights thereto, nor shall this Plan be construed as providing
for such segregation, nor shall the Company, the Board or the Committee be deemed to be a trustee of any cash, Units or rights thereto to be granted under this Plan. Any liability or obligation of the
Company to any Participant with respect to an Award of cash, Units or rights thereto under this Plan shall be based solely upon any contractual obligations that may be created by this Plan and any
Award Agreement, and no such liability or obligation of the Company shall be deemed to be secured by any pledge or other encumbrance on any property of the Company. Neither the Company nor the Board

nor the Committee shall be required to give any security or bond for the performance of any obligation that may be created by this Plan. 

        17.    Code Section 409A.    Notwithstanding anything in this Plan to the contrary, if any Plan provision or
Award under the Plan would result in the imposition of an applicable tax under Code Section 409A and related regulations and Treasury pronouncements ("Section 409A"), that Plan provision
or Award will be reformed to avoid imposition of the applicable tax and no action taken to comply with Section 409A shall be deemed to adversely affect the Participant's rights to an Award or
to require the Participant's consent. 

        18.    Severability.    If any provision of the Plan or any Award is or becomes or is deemed to be invalid, illegal,
or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or
deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the
Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect. 

        19.    No Fractional Units.    No fractional Units shall be issued or delivered pursuant to the Plan or any Award, and
the Committee shall determine whether cash, other securities, or other property shall be paid or transferred in lieu of any fractional Units or whether such fractional Units or any rights thereto
shall be canceled, terminated, or otherwise eliminated. 

        20.    Facility Payment.    Any amounts payable hereunder to any person under legal disability or who, in the judgment
of the Committee, is unable to properly manage his financial affairs, may be paid to the legal representative of such person, or may be applied for the benefit of such person in any manner which the
Committee may select, and the Company shall be relieved of any further liability for payment of such amounts. 

        21.    Governing Law.    This Plan and all determinations made and actions taken pursuant hereto, to the extent not
otherwise governed by mandatory provisions of the Code or the securities laws of the United States, shall be governed by and construed in accordance with the laws of the State of Colorado without
giving effect to any choice or conflict of law provision or rule (whether of such state or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than such
state. 

        22.    Effectiveness.    This Plan shall be effective on the date it is ratified by the Board following its adoption
by the Board of Directors of the Company, and shall continue until the first to occur of the date the Plan is terminated, the date Units are no longer available for grants of Awards under the Plan, or
the date that is ten years after the initial adoption of the Plan. 

        IN
WITNESS WHEREOF, TransMontaigne Services Inc. has caused this Plan to be executed by its duly authorized officer, effective as provided herein. 

	 	 	TRANSMONTAIGNE SERVICES INC.
	

 	
 	

By:	

    

	 	 	Title:	    

	 	 	Date:	    

   

   

	ATTEST:	    
	 	 	 
	

DATE:	

    
	
 	

 	

 

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Exhibit 10.5

TRANSMONTAIGNE SERVICES INC. LONG-TERM INCENTIVE PLANExhibit 10.46

 

EXECUTION
VERSION

 

Kohlberg Kravis Roberts &
Co. L.P.

DLJ Merchant Banking III, Inc.

 

July 29, 2004

 

Rockwood Holdings, Inc.

100 Overlook Center

Princeton, NJ 08540

 

Dear Sirs:

 

Reference is made to the letter agreement
(the “Original Agreement”) dated November 20, 2000 between K-L
Holdings, Inc. (now known as Rockwood Holdings, Inc. (the “Company”))  and Kohlberg Kravis Roberts & Co.
L.P. (“KKR”) relating to the Company’s engagement of KKR to provide
certain services to the Company and its subsidiaries (collectively, the “Rockwood
Group”).

 

KKR and DLJ Merchant Banking III, Inc. (“DLJ”
and, together with KKR, the “Sponsors” and each a “Sponsor”) have
expertise in providing management, business strategy, consulting and financial
services and have provided such services to the Rockwood Group in connection
with the acquisition of certain subsidiaries of mg technologies, AG (the “Acquisition”).

 

The Company and KKR desire to terminate the
Original Agreement and the Company desires to retain the Sponsors to provide
services to the Rockwood Group as follows:

 

1.             The
Company has retained the Sponsors and the Sponsors hereby agree to accept such
retention, to provide to the Rockwood Group, when and if called upon, certain
management, business strategy, consulting and financial services of the type
customarily performed by the Sponsors. 
The Company agrees to pay the Sponsors an aggregate annual fee of
$2,000,000, which amount shall be increased by 5% on January 1 of each
calendar year, in exchange for our services (the “Management Fee”), such
fee being payable in 

 

 

quarterly installments in arrears at the end of each calendar quarter,
commencing on July 31, 2004 (the fee for the period from July 31,
2004 until September 30, 2004 being pro rated based on the number of days
elapsed from July 31, 2004 through September 30, 2004).  From time to time after the date hereof, the
Sponsors may notify the Company in writing of a different amount of such
Management Fee for any particular year or for subsequent years, and, in such
event, from and after such notification, such fee shall be the Management
Fee.  The Management Fee shall be paid to
each Sponsor pro rata based such Sponsor’s Percentage Interest in the Rockwood
Group on the last day of the quarterly period with respect to which such
Management Fee is owed.  For purposes of
the preceding sentence, “Percentage Interest” means, with respect to a Sponsor,
the aggregate value of the shares of common stock (based on the aggregate
purchase price paid for such shares) and the shares of preferred stock (based
on the aggregate purchase price paid for such shares plus the accumulated
dividends thereon as of the date of this Agreement) owned by the Stockholder
Group (as defined in the Stockholders Agreement dated as of July 29, 2004
among the Company and the stockholders of the Company named therein) related to
such Sponsor (excluding shares acquired following the closing of the
Acquisition) relative to the aggregate value of the shares of common stock and
preferred stock (in each case, calculated as described above) held by both
Stockholder Groups.

 

The Company also agrees to pay (or cause one of its
subsidiaries to pay) the Sponsors a transaction fee in an aggregate amount
equal to $30,000,000  (the “Transaction
Fee”), payable as soon as practicable after the closing of the Acquisition, in
connection with the Acquisition.  The
Company shall pay (or cause one of its subsidiaries to pay) 70% of the
Transaction Fee to KKR and 30% of the Transaction Fee to DLJ.

 

In addition, on the date hereof or as soon as
practicable hereafter, the Company shall pay (or cause one of its subsidiaries
to pay) KKR any fees accrued or unpaid 

 

2

 

under the Original Agreement through July 31, 2004 (including a
pro rata portion of the management fee thereunder through the date hereof).

 

2.             Each
Sponsor may also invoice the Company for additional fees in connection with
acquisition, or certain other transactions or in the event that such Sponsor or
any of its affiliates, performs services for the Rockwood Group above and
beyond those called for by this agreement.

 

3.             In
addition to any fees that may be payable to the Sponsors under this agreement,
the Company also agrees to reimburse the Sponsors and their respective
affiliates, from time to time upon request, for all reasonable out-of-pocket
expenses incurred, including unreimbursed expenses incurred to the date hereof,
in connection with this retention, including travel expenses and expenses of
their respective counsel.

 

4.             The
Company agrees to indemnify and hold each Sponsor and its respective partners,
executives, officers, directors, employees, agents and controlling persons and
the affiliates of each of the foregoing (each such person, an “Indemnified
Party”) harmless from and against any and all losses, claims, damages and
liabilities (including, without limitation, losses, claims, damages and
liabilities arising from or in connection with legal actions brought by or on
behalf of the holders or future holders of the outstanding securities of any
member of the Rockwood Group or creditors or future creditors of any member of
the Rockwood Group), joint, several or otherwise, to which such Indemnified
Party may become subject under any applicable federal or state law, or
otherwise, related to or arising out of any activity contemplated by this
agreement or the retention of such Sponsor pursuant to, and such Sponsor’s or
its affiliate’s performance of the services contemplated by, this agreement and
will reimburse each Indemnified Party for all expenses (including counsel fees
and disbursements) upon request as they are incurred in connection with the
investigation of, preparation for or defense of any pending or threatened claim
or any action 

 

3

 

or proceeding arising therefrom, whether or not such Indemnified Party
is a party and whether or not such claim, action or proceeding is initiated or
brought by any member of the Rockwood Group; provided, however,
that the Company will not be liable to a Sponsor under the foregoing
indemnification provision (and amounts previously paid that are determined not
required to be paid by the Company pursuant to the terms of this paragraph
shall be repaid promptly) to the extent that any loss, claim, damage, liability
or expense is found in a final, non-appealable judgment by a court to have
resulted from the willful misconduct, bad faith or gross negligence of such
Sponsor.  The Company also agrees that no
Indemnified Party shall have any liability (whether direct or indirect, in
contract or tort or otherwise) to any member of the Rockwood Group related to
or arising out of the retention of the Sponsors pursuant to, or the performance
by affiliates of the Sponsors of the services contemplated by, this agreement,
except to the extent that any loss, claim, damage, liability or expense is
found in a final, non-appealable judgment by a court to have resulted from the
willful misconduct, bad faith or gross negligence of such Indemnified
Party.  The Company also agrees to
indemnify and hold harmless each Indemnified Party from and against any and all
losses, claims, damages and liabilities incurred by such Indemnified Party
arising out of, resulting from, or relating to any litigation to which any
Indemnified Party is made a party in its capacity as a stockholder or owner of
securities of the Company or in connection with such Indemnified Party’s
purchase of shares of common stock or its status as a stockholder of the
Company; provided that the Company will not be liable to any Indemnified
Party under the foregoing indemnification provision to the extent that any such
loss, claim, damage or liability is found in a final, non-appealable judgment
by a court to have resulted from the willful misconduct, bad faith or gross
negligence of such Indemnified Party.

 

The Company also agrees that no member of the Rockwood
Group will settle, compromise or consent to the entry of any judgment in any
pending or threatened claim, 

 

4

 

action or proceeding to which an Indemnified Party is an actual or
potential party and in respect of which indemnification could be sought under
the indemnification provision in the immediately preceding paragraph, without
the prior written consent of such Indemnified Party, unless such settlement,
compromise or consent includes an unconditional release of such Indemnified
Party from all liability arising out of such claim, action or proceeding.

 

Promptly after receipt by an Indemnified Party of
notice of any suit, action, proceeding or investigation with respect to which
an Indemnified Party may be entitled to indemnification hereunder, such
Indemnified Party will notify the Company in writing of the assertion of such
claim or the commencement of such suit, action, proceeding or investigation,
but the failure so to notify the Company shall not relieve the Company from any
liability which it may have hereunder, except to the extent that such failure
has materially prejudiced the Company. 
If the Company so elects within a reasonable time after receipt of such
notice, then the Company may participate at its own expense in the defense of
such suit, action, proceeding or investigation. 
Each Indemnified Party may employ separate counsel to represent it or
defend it in any such suit, action, proceeding or investigation in which it may
become involved or is named as a defendant and, in such event, the reasonable
fees and expense of such counsel shall be borne by the Company; provided,
however, that the Company will not be required in connection with any
such suit, action, proceeding or investigation, or separate but substantially
similar actions arising out of the same general allegations or circumstances,
to pay the fees and disbursements of more than one separate counsel (other than
local counsel) for all KKR-related Indemnified Parties and one separate counsel
(other than local counsel) for all DLJ-related Indemnified Parties.  Whether or not the Company participates in
the defense of any claim, both the Company and the Indemnified Party shall
cooperate in the defense thereof and shall furnish such records, information
and 

 

5

 

testimony, and attend such conferences, discovery proceedings,
hearings, trials and appeals, as may be reasonably requested in connection
therewith.

 

If the indemnification provided for hereunder is
finally judicially determined by a court of competent jurisdiction to be
unavailable to an Indemnified Party, or insufficient to hold any Indemnified
Party harmless, in respect of any losses, claims, damages or liabilities (other
than any losses, claims, damages or liabilities found in a final judgment by a
court to have resulted from the willful misconduct, bad faith or gross
negligence of such Indemnified Party), then the Company, on the one hand, in
lieu of indemnifying such Indemnified Party, and KKR (in the case of a
KKR-related Indemnified Party) or DLJ (in the case of a DLJ-related Indemnified
Party), on the other hand, will contribute to the amount paid or payable by
such Indemnified Party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the
relative benefits received, or sought to be received, by the Rockwood Group, on
the one hand, and KKR or DLJ, as the case may be, solely in its respective
capacity as advisor under this agreement, on the other hand, in connection with
the transactions to which such indemnification, contribution or reimbursement
is sought, or (ii) if (but only if) the allocation provided by clause (i) above
is not permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) but also
the relative fault of the Rockwood Group, on the one hand, and KKR or DLJ, as
the case may be, on the other hand, as well as any other relevant equitable
considerations; provided, however, that in no event shall a
Sponsor’s aggregate contribution hereunder exceed the amount of fees actually
received by such Sponsor in respect of the advice, opinion or transaction at
issue pursuant to this agreement.  The
amount paid or payable by a party as a result of the losses, claims, damages
and liabilities referred to above will be deemed to include any legal or other
fees or expenses reasonably incurred in defending any action or claim.  The Company and each Sponsor agree 

 

6

 

that it would not be just and equitable if contribution pursuant to
this paragraph were determined by pro rata allocation or by any other method
which does not take into account the equitable considerations referred to in
this paragraph.  The indemnity,
contribution and expenses reimbursement obligations the Company has under this
paragraph shall be in addition to any liability the Rockwood Group may have,
and notwithstanding any other provision of this letter, shall survive the
termination of this agreement.

 

5.             Any
advice or opinions provided by a Sponsor may not be disclosed or referred to
publicly or to any third party (other than the Rockwood Group’s legal, tax,
financial or other advisors), except in accordance with the prior written
consent of such Sponsor and any advice or opinions provided jointly by the
Sponsors may not be disclosed or referred to publicly or to any third party
(other than the Rockwood Group’s legal, tax, financial or other advisors),
except in accordance with the prior written consent of both Sponsors.

 

6.             Each
Sponsor shall act as an independent contractor, with duties solely to the
Rockwood Group.  The provisions hereof
shall inure to the benefit of and shall be binding upon the parties hereto and
their respective successors and assigns. 
Nothing in this agreement, expressed or implied, is intended to confer
on any person other than the parties hereto or their respective successors and
assigns, and, to the extent expressly set forth herein, the Indemnified
Parties, any rights or remedies under or by reason of this agreement.  Without limiting the generality of the
foregoing, the parties acknowledge that nothing in this agreement, expressed or
implied, is intended to confer on any present or future holders of any
securities of the Company or its subsidiaries or affiliates, or any present or
future creditor of the Company or its subsidiaries or affiliates, any rights or
remedies under or by reason of this agreement or any performance hereunder.

 

7

 

7.             This
agreement shall be governed by and construed in accordance with the law of the
State of New York.

 

8.             The
terms of this agreement are effective as of the closing of the
Acquisition.  This agreement shall
continue in effect from year to year unless amended or terminated by the mutual
consent of the parties hereto.

 

9.             Each
party hereto represents and warrants that the execution and delivery of this
agreement by such party has been duly authorized by all necessary action of
such party.

 

10.           If any
term or provision of this agreement or the application thereof shall, in any
jurisdiction and to any extent, be invalid and unenforceable, such term or
provision shall be ineffective, as to such jurisdiction, solely to the extent
of such invalidity or unenforceability without rendering invalid or unenforceable
any remaining terms or provisions hereof or affecting the validity or
enforceability of such term or provision in any other jurisdiction.  To the extent permitted by applicable law,
the parties hereto waive any provision of law that renders any term or
provision of this agreement invalid or unenforceable in any respect.

 

11.           Each of
the Company and each Sponsor waives all right to trial by jury in any action,
proceeding or counterclaim (whether based upon contract, tort or otherwise)
related to or arising out of this agreement.

 

12.           It is
expressly understood that the foregoing paragraphs 3 through 11, this paragraph
12 and paragraphs 13 and 14 in their entirety survive any termination of this
agreement.

 

13.           This
letter agreement may be executed by one or more parties hereto on any number of
separate counterparts (including by facsimile), and all of said counterparts
taken together will be deemed to constitute one and the same agreement.

 

8

 

14.           Effective
as of the closing of the Acquisition, the Company and KKR hereby terminate the
Original Agreement (other than paragraphs 3 through 12 thereof which, by the
terms of the Original Agreement, survive any termination).

 

 

[Agreement continued on
next page.]

 

9

 

If the foregoing sets forth the understanding
among us, please so indicate on the enclosed signed copy of this letter in the
space provided therefor and returning it to us, whereupon this letter shall constitute
a binding agreement among us.

 

 

	
   

  	
  Very truly yours,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  KOHLBERG KRAVIS ROBERTS & CO. L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    By:

  	
  /s/ Perry Golkin

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  DLJ MERCHANT BANKING III, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
    By:

  	
  /s/ Michael S. Isikow

  	
   

  
	
   

  	
   

  	
  Title: 
  Principal

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  AGREED TO AND ACCEPTED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ROCKWOOD HOLDINGS, INC.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Michael W. Valente

  	
   

  	
   

  
	
   

  	
  Title: Vice President and Assistant
  Secretary

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