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EXHIBIT 10.4    
    

EXECUTION COPY  

 
 

FORM OF GUARANTEE    

        GUARANTEE
dated as of July 23, 2003, made among ROCKWOOD SPECIALTIES INTERNATIONAL, INC., a Delaware corporation
("Holdings"), each of the subsidiaries of ROCKWOOD SPECIALTIES GROUP, INC., a Delaware corporation (the "US
Borrower"), listed on Annex A hereto (each such subsidiary individually, a "Subsidiary Guarantor" and, collectively, the
"Subsidiary Guarantors"; the Subsidiary Guarantors and Holdings are referred to collectively as the
"Guarantors") and JPMORGAN CHASE BANK, as administrative agent (in such capacity, the "Administrative
Agent") for the lenders (the "Lenders") from time to time parties to the Credit Agreement dated as of July 23, 2003 (as
the same may be amended, supplemented or otherwise modified from time to time, the "Credit Agreement"), among the US Borrower, Rockwood Specialties
Limited, a company incorporated under the laws of England and Wales (the "UK Borrower" and, together with the US Borrower, the
"Borrowers"), Holdings, Rockwood Specialties Consolidated, Inc., a Delaware corporation ("PIK
Holdco"), Rockwood Holdings, Inc., a Delaware corporation ("Parent" and, together with PIK Holdco, the
"Parent Companies"), the Lenders, the Administrative Agent, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as syndication agent (in such
capacity, the "Syndication Agent") for the Lenders, and Goldman Sachs Credit Partners L.P. and General Electric Capital Corporation, as
co-documentation agents (in such capacities, the "Documentation Agents") for the Lenders. 

 
 

W I T N E S S E T H:    

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

        WHEREAS,
each Subsidiary Guarantor is a Domestic Subsidiary of the US Borrower; 

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

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

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

        NOW,
THEREFORE, in consideration of the premises and to induce the Administrative Agent, the Syndication Agent, the Documentation Agents, the Lenders and the Letter of Credit Issuer to
enter into the Credit Agreement and to induce the Lenders and the Letter of Credit Issuer to make their respective Extensions of Credit to the Borrowers under the Credit Agreement and to induce one or
more Lenders or affiliates of Lenders to enter into Hedge Agreements with the Borrowers, the 

 

Guarantors
hereby agree with the Administrative Agent, for the ratable benefit of the Secured Parties, as follows: 

        1.    Defined Terms.    

        (a)   Unless
otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement. 

        (b)   As
used herein, the term "Obligations" means the collective reference to (i) the due and punctual payment of
(x) the principal of and premium, if any, and interest at the applicable rate provided in the Credit Agreement (including interest accruing during the pendency of any bankruptcy, insolvency,
receivership or other similar proceeding, regardless of whether allowed or allowable in such proceeding) on the Loans, when and as due, whether at maturity, by acceleration, upon one or more dates set
for prepayment or otherwise, (y) each payment required to be made by the Borrowers under the Credit Agreement in respect of any Letter of Credit, when and as due, including payments in respect
of reimbursement of disbursements, interest thereon and obligations to provide cash collateral, and (z) all other monetary obligations, including fees, costs, expenses and indemnities, whether
primary, secondary, direct, contingent, fixed or otherwise (including monetary obligations incurred during the pendency of any bankruptcy, insolvency, receivership or other similar proceeding,
regardless of whether allowed or allowable in such proceeding), of the Borrowers or any other Credit Party to any of the Secured Parties under the Credit Agreement and the other Credit Documents,
(ii) the due and punctual performance of all covenants, agreements, obligations and liabilities of the Borrowers under or pursuant to the Credit Agreement and the other Credit Documents,
(iii) the due and punctual payment and performance of all the covenants, agreements, obligations and liabilities of each other Credit Party under or pursuant to this Guarantee or the other
Credit Documents, (iv) the due and punctual payment and performance of all obligations of each Credit Party under each Hedge Agreement that (x) is in effect on the Closing Date with a
counterparty that is a Lender or an affiliate of a Lender as of the Closing Date or (y) is entered into after the Closing Date with any counterparty that is a Lender or an affiliate of a Lender
at the time such Hedge Agreement is entered into and (v) the due and punctual payment and performance of all obligations in respect of overdrafts and related liabilities owed to the
Administrative Agent or its affiliates arising from or in connection with treasury, depositary or cash management services or in connection with any automated clearinghouse transfer of funds. 

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

        (d)   References
to "Lenders" in this Guarantee shall be deemed to include affiliates of Lenders that may from time to time enter into Hedge Agreements with the Borrowers. 

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

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

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        2.    Guarantee.    

        (a)   Subject
to the provisions of Section 2(b), each of the Guarantors hereby, jointly and severally, unconditionally and irrevocably, guarantees, as primary obligor
and not merely as surety, to the Administrative Agent, for the ratable benefit of the Secured Parties, the prompt and complete payment and performance when due (whether at the stated maturity, by
acceleration or otherwise) of the Obligations. 

        (b)   Anything
herein or in any other Credit Document to the contrary notwithstanding, the maximum liability of each Guarantor hereunder and under the other Credit Documents
shall in no event exceed the amount that can be guaranteed by such Guarantor under applicable laws relating to the insolvency of debtors. 

        (c)   Each
Guarantor further agrees to pay any and all expenses (including all fees and disbursements of counsel) that may be paid or incurred by the Administrative Agent or
any other Secured Party in enforcing, or obtaining advice of counsel in respect of, any rights with respect to, or collecting, any or all of the Obligations and/or enforcing any rights with respect
to, or collecting against, such Guarantor under this Guarantee. 

        (d)   Each
Guarantor agrees that the Obligations may at any time and from time to time exceed the amount of the liability of such Guarantor hereunder without impairing this
Guarantee or affecting the rights and remedies of the Administrative Agent or any other Secured Party hereunder. 

        (e)   No
payment or payments made by the Borrowers, any of the Guarantors, any other guarantor or any other Person or received or collected by the Administrative Agent or any
other Secured Party from the Borrowers, any of the Guarantors, any other guarantor or any other Person by virtue of any action or proceeding or any set-off or appropriation or application
at any time or from time to time in reduction of or in payment of the Obligations shall be deemed to modify, reduce, release or otherwise affect the liability of any Guarantor hereunder, which shall,
notwithstanding any such payment or payments other than payments made by such Guarantor in respect of the Obligations or payments received or collected from such Guarantor in respect of the
Obligations, remain liable for the Obligations up to the maximum liability of such Guarantor hereunder until the Obligations under the Credit Documents are paid in full, the Commitments are terminated
and no Letters of Credit shall be outstanding. 

        (f)    Each
Guarantor agrees that whenever, at any time, or from time to time, it shall make any payment to the Administrative Agent or any other Secured Party on account of
its liability hereunder, it will notify the Administrative Agent in writing that such payment is made under this Guarantee for such purpose. 

        3.    Right of Contribution.    Each Guarantor hereby agrees that to the extent that a Guarantor shall have paid more
than its proportionate share of any payment made hereunder, such Guarantor shall be entitled to seek and receive contribution from and against any other Guarantor hereunder who has not paid its
proportionate share of such payment. Each Guarantor's right of contribution shall be subject to the terms and conditions of Section 5 hereof. The provisions of this Section 3 shall in no
respect limit the obligations and liabilities of any Guarantor to the Administrative Agent and the other Secured Parties, and each Guarantor shall remain liable to the Administrative Agent and the
other Secured Parties for the full amount guaranteed by such Guarantor hereunder. 

        4.    Right of Set-off.    In addition to any rights and remedies of the Secured Parties provided by law,
each Guarantor hereby irrevocably authorizes each Secured Party at any time and from time to time following the occurrence and during the continuance of an Event of Default without notice to such
Guarantor or any other Guarantor, any such notice being expressly waived by each Guarantor, upon any amount becoming due and payable by such Guarantor hereunder (whether at stated maturity, by
acceleration or otherwise) to set-off and appropriate and apply against such amount any and all 

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deposits
(general or special, time or demand, provisional or final), in any currency, and any other credits, indebtedness or claims, in any currency, in each case whether direct or indirect, absolute
or contingent, matured or unmatured, at any time held or owing by such Secured Party to or for the credit or the account of such Guarantor. Each Secured Party shall notify such Guarantor promptly of
any such set-off and the appropriation and application made by such Secured Party, provided that the failure to give such notice shall not
affect the validity of such set-off and application. 

        5.    No Subrogation.    Notwithstanding any payment or payments made by any of the Guarantors hereunder or any
set-off or appropriation and application of funds of any of the Guarantors by the Administrative Agent or any other Secured Party, no Guarantor shall be entitled to be subrogated to any of
the rights of the Administrative Agent or any other Secured Party against the Borrowers or any other Guarantor or any collateral security or guarantee or right of offset held by the Administrative
Agent or any other Secured Party for the payment of the Obligations, nor shall any Guarantor seek or be entitled to seek any contribution or reimbursement from the Borrowers or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to the Administrative Agent and the other Secured Parties by the Credit Parties on account of the Obligations under the
Credit Documents are paid in full, the Commitments are terminated and no Letters of Credit shall be outstanding. If any amount shall be paid to any Guarantor on account of such subrogation rights at
any time when all the Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the Administrative Agent and the other Secured Parties, segregated from other funds of such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned over to the
Administrative Agent in the exact form received by such Guarantor (duly endorsed by such Guarantor to the Administrative Agent, if required), to be applied against the Obligations, whether due or to
become due, in such order as the Administrative Agent may determine. 

        6.    Amendments, etc. with Respect to the Obligations; Waiver of Rights.    Each Guarantor shall remain obligated
hereunder notwithstanding that, without any reservation of rights against any Guarantor and without notice to or further assent by any Guarantor, (a) any demand for payment of any of the
Obligations made by the Administrative Agent or any other Secured Party may be rescinded by such party and any of the Obligations continued, (b) the Obligations, or the liability of any other
party upon or for any part thereof, or any collateral security or guarantee therefor or right of offset with respect thereto, may, from time to time, in whole or in part, be renewed, extended,
amended, modified, accelerated, compromised, waived, surrendered or released by the Administrative Agent or any other Secured Party, (c) the Credit Agreement, the other Credit Documents, the
Letters of Credit and any other documents executed and delivered in connection therewith and the Hedge Agreements and any other documents executed and delivered in connection therewith and any
documents entered into with the Administrative Agent or any of its affiliates in connection with treasury, depositary or cash management services or in connection with any automated clearinghouse
transfer of funds may be amended, modified, supplemented or terminated, in whole or in part, as the Administrative Agent (or the Required Lenders, as the case may be, or, in the case of any Hedge
Agreement or documents entered into with the Administrative Agent or any of its affiliates in connection with treasury, depositary or cash management services or in connection with any automated
clearinghouse transfer of funds, the party thereto) may deem advisable from time to time, and (d) any collateral security, guarantee or right of offset at any time held by the Administrative
Agent or any other Secured Party for the payment of the Obligations may be sold, exchanged, waived, surrendered or released. Neither the Administrative Agent nor any other Secured Party shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it as security for the Obligations or for this Guarantee or any property subject thereto. When making any demand hereunder
against any Guarantor, the Administrative Agent or any other Secured Party may, but shall be under no obligation to, make a similar demand on the Borrowers or any Guarantor or guarantor, and any
failure by the Administrative Agent or any other Secured Party to make any such demand or to collect any payments from the Borrowers or any Guarantor or guarantor or any release of the Borrowers or
any Guarantor or 

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guarantor
shall not relieve any Guarantor in respect of which a demand or collection is not made or any Guarantor not so released of its several obligations or liabilities hereunder, and shall not
impair or affect the rights and remedies, express or implied, or as a matter of law, of the Administrative Agent or any other Secured Party against any Guarantor. For the purposes hereof, "demand"
shall include the commencement and continuance of any legal proceedings. 

        7.    Guarantee Absolute and Unconditional.    Each Guarantor waives any and all notice of the creation, contraction,
incurrence, renewal, extension, amendment, waiver or accrual of any of the Obligations, and notice of or proof of reliance by the Administrative Agent or any other Secured Party upon this Guarantee or
acceptance of this Guarantee, the Obligations or any of them, shall conclusively be deemed to have been created, contracted or incurred, or renewed, extended, amended, waived or accrued, in reliance
upon this Guarantee; and all dealings between the Borrowers and any of the Guarantors, on the one hand, and the Administrative Agent and the other Secured Parties, on the other hand, likewise shall be
conclusively presumed to have been had or consummated in reliance upon this Guarantee. Each Guarantor waives diligence, presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Borrowers or any of the Guarantors with respect to the Obligations. Each Guarantor understands and agrees that this Guarantee shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity, regularity or enforceability of the Credit Agreement, any other Credit Document, any Letter of Credit or any Hedge Agreement, any of the
Obligations or any other collateral security therefor or guarantee or right of offset with respect thereto at any time or from time to time held by the Administrative Agent or any other Secured Party,
(b) any defense, set-off or counterclaim (other than a defense of payment or performance) that may at any time be available to or be asserted by the Borrowers against the
Administrative Agent or any other Secured Party or (c) any other circumstance whatsoever (with or without notice to or knowledge of the Borrowers or such Guarantor) that constitutes, or might
be construed to constitute, an equitable or legal discharge of the Borrowers for the Obligations, or of such Guarantor under this Guarantee, in bankruptcy or in any other instance. When pursuing its
rights and remedies hereunder against any Guarantor, the Administrative Agent and any other Secured Party may, but shall be under no obligation to, pursue such rights and remedies as it may have
against the Borrowers or any other Person or against any collateral security or guarantee for the Obligations or any right of offset with respect thereto, and any failure by the Administrative Agent
or any other Secured Party to pursue such other rights or remedies or to collect any payments from the Borrowers or any such other Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of the Borrowers or any such other Person or any such collateral security, guarantee or right of offset, shall not relieve such Guarantor of any
liability hereunder, and shall not impair or affect the rights and remedies, whether express, implied or available as a matter of law, of the Administrative Agent and the other Secured Parties against
such Guarantor. This Guarantee shall remain in full force and effect and be binding in accordance with and to the extent of its terms upon each Guarantor and the successors and assigns thereof, and
shall inure to the benefit of the Administrative Agent and the other Secured Parties, and their respective successors, indorsees, transferees and assigns, until all the Obligations under the Credit
Documents shall have been satisfied by payment in full, the Commitments shall be terminated and no Letters of Credit shall be outstanding, notwithstanding that from time to time during the term of the
Credit Agreement and any Hedge Agreement the Credit Parties may be free from any Obligations. A Guarantor shall automatically be released from its obligations hereunder and the Guarantee of such
Guarantor shall be automatically released upon the consummation of any transaction permitted by the Credit Agreement as a result of which such Guarantor ceases to be a Domestic Subsidiary of the
Borrower. In connection with any such release, the Administrative Agent shall execute and deliver to any Guarantor, at such Guarantor's expense, all documents that such Guarantor shall reasonably
request to evidence such termination or release. Any execution and delivery of documents pursuant to the preceding sentence of this Section 7 shall be without recourse to or warranty by the
Administrative Agent. 

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        8.    Reinstatement.    This Guarantee shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Obligations is rescinded or must otherwise be restored or returned by the Administrative Agent or any other Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrowers or any Guarantor, or upon or as a result of the appointment of a receiver, intervenor or conservator of, or trustee or similar
officer for, the Borrowers or any Guarantor or any substantial part of its property, or otherwise, all as though such payments had not been made. 

        9.    Payments.    Each Guarantor hereby guarantees that payments hereunder will be paid to the Administrative Agent
without set-off or counterclaim in Dollars at the Administrative Agent's Office. 

        10.    Representations and Warranties; Covenants.    

        (a)   Each
Guarantor hereby represents and warrants that the representations and warranties set forth in Section 8 of the Credit Agreement as they relate to such
Guarantor or in the other Credit Documents to which such Guarantor is a party, each of which is hereby incorporated herein by reference, are true and correct, and the Administrative Agent and each
other Secured Party shall be entitled to rely on each of them as if they were fully set forth herein. 

        (b)   Each
Guarantor hereby covenants and agrees with the Administrative Agent and each other Secured Party that, from and after the date of this Guarantee until the
Obligations under the Credit Documents are paid in full, the Commitments are terminated and no Letter of Credit remains outstanding, such Guarantor shall take, or shall refrain from taking, as the
case may be, all actions that are necessary to be taken or not taken so that no violation of any provision, covenant or agreement contained in Section 9 or 10 of the Credit Agreement, and so
that no Default or Event of Default, is caused by any act or failure to act of such Guarantor or any of its Subsidiaries. 

        11.    Authority of Agent.    Each Guarantor acknowledges that the rights and responsibilities of the Administrative
Agent under this Guarantee with respect to any action taken by the Administrative Agent or the exercise or non-exercise by the Administrative Agent of any option, right, request, judgment
or other right or remedy provided for herein or resulting or arising out of this Guarantee shall, as between the Administrative Agent and the other Secured Parties, be governed by the Credit Agreement
and by such other agreements with respect thereto as may exist from time to time among them, but, as between the Administrative Agent and such Guarantor, the Administrative Agent shall be conclusively
presumed to be acting as agent for the Secured Parties with full and valid authority so to act or refrain from acting, and no Guarantor shall be under any obligation, or entitlement, to make any
inquiry respecting such authority. 

        12.    Notices.    All notices, requests and demands pursuant hereto shall be made in accordance with
Section 14.2 of the Credit Agreement. All communications and notices hereunder to each Guarantor
shall be given to it in care of the US Borrower at the US Borrower's address set forth in Section 14.2 of the Credit Agreement. 

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

        14.    Severability.    Any provision of this Guarantee that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. The parties hereto shall endeavor in good-faith negotiations to replace the invalid, 

6

 

illegal
or unenforceable provisions with valid provisions the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions. 

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

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

        (a)   None
of the terms or provisions of this Guarantee may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the affected
Guarantor(s) and the Administrative Agent in accordance with Section 14.1 of the Credit Agreement. 

        (b)   Neither
the Administrative Agent nor any other Secured Party shall by any act (except by a written instrument pursuant to Section 16(a) hereof), delay,
indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of Default or in any breach of any of the terms and conditions
hereof. No failure to exercise, nor any delay in exercising, on the part of the Administrative Agent or any other Secured Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver
by the Administrative Agent or any other Secured Party of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy that the Administrative Agent or any
Secured Party would otherwise have on any future occasion. 

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

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

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

        19.    Additional Guarantors.    Each Subsidiary of the US Borrower that is required to become a party to this
Guarantee pursuant to Section 9.11 of the Credit Agreement shall become a Guarantor, with the same force and effect as if originally named as a Guarantor herein, for all purposes of this
Guarantee upon execution and delivery by such Subsidiary of a Supplement in the form of Annex B hereto. The execution and delivery of any instrument adding an additional Guarantor as a party to this
Guarantee shall not require the consent of any other Guarantor hereunder. The rights and obligations of each Guarantor hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor as a party to this Guarantee. 

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

7

 

        21.    Submission to Jurisdiction; Waivers.    Each Guarantor hereby irrevocably and unconditionally: 

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

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

        (c)   agrees
that service of process in any such action or proceeding may be effected by mailing a copy thereof by registered or certified mail (or any substantially similar
form of mail), postage prepaid, to such Guarantor at its address referred to in Section 12 or at such other address of which the Administrative Agent shall have been notified pursuant thereto; 

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

        (e)   waives,
to the maximum extent not prohibited by law, any right it may have to claim or recover in any legal action or proceeding referred to in this Section 21
any special, exemplary, punitive or consequential damages. 

        22.    GOVERNING LAW.    THIS GUARANTEE AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

8

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

	 	 	ROCKWOOD SPECIALTIES INTERNATIONAL, INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

ALPHAGARY CORPORATION,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

ADVANTIS TECHNOLOGIES, INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

CHEMICAL SPECIALTIES, INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

COMPUGRAPHICS U.S.A. INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:

9

 

        SIGNATURE
PAGE TO THE GUARANTEE DATED AS OF JULY 23, 2003, AMONG ROCKWOOD SPECIALTIES INTERNATIONAL, INC., THE SUBSIDIARIES OF ROCKWOOD SPECIALTIES GROUP, INC. LISTED ON
SCHEDULE 1 THERETO AND JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT AGREEMENT REFERRED TO THEREIN. 

	 	 	CYANTEK CORPORATION,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

ELECTROCHEMICALS INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

EXSIL, INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

LUREX, INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

ROCKWOOD AMERICA INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:

10

 

        SIGNATURE
PAGE TO THE GUARANTEE DATED AS OF JULY 23, 2003, AMONG ROCKWOOD SPECIALTIES INTERNATIONAL, INC., THE SUBSIDIARIES OF ROCKWOOD SPECIALTIES GROUP, INC. LISTED ON
SCHEDULE 1 THERETO AND JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT AGREEMENT REFERRED TO THEREIN. 

	 	 	ROCKWOOD SPECIALTIES INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

ROCKWOOD PIGMENTS NA, INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

RS FUNDING CORPORATION,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

SOUTHERN CLAY PRODUCTS, INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:
	

 	
 	

SOUTHERN COLOR N.A., INC.,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  MICHAEL W. VALENTE      
 Name:

Title:

11

        SIGNATURE
PAGE TO THE GUARANTEE DATED AS OF JULY 23, 2003, AMONG ROCKWOOD SPECIALTIES INTERNATIONAL, INC., THE SUBSIDIARIES OF ROCKWOOD SPECIALTIES GROUP, INC. LISTED ON
SCHEDULE 1 THERETO AND JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT FOR THE LENDERS FROM TIME TO TIME PARTIES TO THE CREDIT AGREEMENT REFERRED TO THEREIN. 

	 	 	JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
	

 	
 	

by	
 	

 
	 	 	 	 	/s/  PETER A. DEDOUSIS      
 Name: Peter A. Dedousis

Title: Managing Director

ANNEX A

TO THE GUARANTEE  

SUBSIDIARY GUARANTORS

AlphaGary
Corporation

Advantis Technologies, Inc.

Chemical Specialties, Inc.

Compugraphics U.S.A. Inc.

Cyantek Corporation

Electrochemicals Inc.

Exsil, Inc.

Lurex, Inc.

Rockwood America Inc.

Rockwood Specialties Inc.

Rockwood Pigments NA, Inc.

RS Funding Corporation

Southern Clay Products, Inc.

Southern Color N.A., Inc. 

ANNEX B TO THE

GUARANTEE

        SUPPLEMENT
NO. [    ] dated as of [            ], to the Guarantee dated as of July 23, 2003, among ROCKWOOD
SPECIALTIES INTERNATIONAL, INC., a Delaware corporation ("Holdings"), each of the subsidiaries of ROCKWOOD SPECIALTIES GROUP, INC., a
Delaware corporation (the "US Borrower") listed on Annex A thereto (each such subsidiary individually, a "Subsidiary
Guarantor", and, collectively, the "Subsidiary Guarantors"; the Subsidiary Guarantors and Holdings are referred to collectively
as the "Guarantors") and JPMORGAN CHASE BANK, as administrative agent (in such capacity, the "Administrative
Agent") for the lenders to the Borrowers (the "Lenders") from time to time parties to the Credit Agreement referred to below. 

        A.    Reference
is made to (a) the Credit Agreement dated as of July 23, 2003 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among Holdings, the US Borrower, Rockwood Specialties Limited, a company incorporated under the laws of England and Wales, Rockwood
Specialties Consolidated, Inc., a Delaware corporation, Rockwood Holdings, Inc., a Delaware corporation, the Lenders from time to time party thereto, JPMorgan Chase Bank, as
Administrative Agent for the Lenders, Merrill Lynch, Pierce, Fenner & Smith Incorporated, as syndication agent (in such capacity, the "Syndication
Agent"), and Goldman Sachs Credit Partners L.P. and General Electric Capital Corporation, as co-documentation agents (in such capacities, the
"Documentation Agents"). 

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

        C.    The
Guarantors have entered into the Guarantee in order to induce the Administrative Agent, the Syndication Agent, the Documentation Agents and the Lenders and the Letter
of Credit Issuer to enter into the Credit Agreement and to induce the Lenders and the Letter of Credit Issuer to make their respective Extensions of Credit to the Borrowers under the Credit Agreement
and to induce one or more Lenders or affiliates of Lenders to enter into Hedge Agreements with the Borrowers. Section 9.11 of the Credit Agreement and Section 19 of the Guarantee provide
that additional Subsidiaries may become Guarantors under the Guarantee by execution and delivery of an instrument in the form of this Supplement. Each undersigned Subsidiary (each a
"New Guarantor") is executing this Supplement in accordance with the requirements of the Credit Agreement to become a Guarantor under the Guarantee in
order to induce the Lenders and the Letter of Credit Issuer to make additional Extensions of Credit and as consideration for Extensions of Credit previously made. 

        Accordingly,
the Administrative Agent and each New Guarantor agrees as follows: 

        SECTION
1.    In accordance with Section 19 of the Guarantee, each New Guarantor by its signature below becomes a Guarantor under the Guarantee with the same force and
effect as if originally named therein as a Guarantor and each New Guarantor hereby (a) agrees to all the terms and provisions of the Guarantee applicable to it as a Guarantor thereunder and
(b) represents and warrants that the representations and warranties made by it as a Guarantor thereunder are true and correct on and as of the date hereof. Each reference to a Guarantor in the
Guarantee shall be deemed to include each New Guarantor. The Guarantee is hereby incorporated herein by reference. 

        SECTION
2.    Each New Guarantor represents and warrants to the Administrative Agent and the other Secured Parties that this Supplement has been duly authorized, executed and
delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with its terms. 

        SECTION
3.    This Supplement may be executed by one or more of the parties to this Supplement on any number of separate counterparts (including by facsimile or other
electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. A set of the copies of this Supplement signed by all the parties shall
be lodged with the US Borrower and the Administrative Agent. This Supplement shall become effective as to each New Guarantor when the 

 

Administrative
Agent shall have received counterparts of this Supplement that, when taken together, bear the signatures of such New Guarantor and the Administrative Agent. 

        SECTION
4.    Except as expressly supplemented hereby, the Guarantee shall remain in full force and effect. 

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

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

        SECTION
7.    All notices, requests and demands pursuant hereto shall be made in accordance with Section 14.2 of the Credit Agreement. All communications and notices
hereunder to each New Guarantor shall be given to it in care of the US Borrower at the US Borrower's address set forth in Section 14.2 of the Credit Agreement. 

        SECTION
8.    Each New Guarantor agrees to reimburse the Administrative Agent for its out-of-pocket expenses in connection with this Supplement,
including the fees, disbursements and other charges of counsel for the Administrative Agent. 

2

 

        IN
WITNESS WHEREOF, each New Guarantor and the Administrative Agent have duly executed this Supplement to the Guarantee as of the day and year first above written. 

	 	 	[NAME OF NEW GUARANTOR]
	

 	
 	

by	
 	

 
	 	 	 	 	
 Name:

Title:
	

 	
 	

JPMORGAN CHASE BANK, AS ADMINISTRATIVE AGENT,
	

 	
 	

by	
 	

 
	 	 	 	 	
 Name:

Title:

3

QuickLinks

EXHIBIT 10.4

FORM OF GUARANTEE

W I T N E S S E T HQuickLinks
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EXHIBIT 10.5    
    

Dated 20th November, 2000  

 LAPORTE PLC  

 and  

 K-L HOLDINGS, INC.  

 DEED OF TAX COVENANT  

 Slaughter and May

35 Basinghall Street

London EC2V 5DB

(SME/PIH)  

  
 

    CONTENTS    
    

	 
	 
	 	Page

	1.	INTERPRETATION	 	1
	2.	COVENANT	 	7
	3.	LIMITS ON CLAUSE 2	 	9
	4.	EXCLUSIONS	 	10
	5.	MITIGATION	 	11
	6.	OVER-PROVISIONS, RELIEFS, ETC.	 	12
	7.	RECOVERY FROM OTHER PERSONS	 	13
	8.	CLAIMS PROCEDURE	 	13
	9.	TAX RETURNS	 	15
	10.	DUE DATE OF PAYMENT	 	16
	11.	DEDUCTIONS FROM PAYMENTS, ETC.	 	16
	12.	SURRENDER OF GROUP RELIEF	 	17
	13.	COUNTER COVENANT	 	18
	14.	COVENANTOR AS AGENT AND TRUSTEE	 	20
	15.	MISCELLANEOUS	 	21
	Schedule THE COMPANIES	 	23

        THIS
DEED OF TAX COVENANT is made                        2000 

        BETWEEN:

	1.
	LAPORTE
PLC whose registered office is at Nations House, 103 Wigmore Street, London, W1H 9AB (registered in England No. 963656) (the
"Covenantor"); 

        AND

	2.
	K-L
HOLDINGS, INC., a company incorporated under the laws of the State of Delaware whose registered office is at Corporation Trust Centre, 1209 Orange Street,
Wilmington, County of Newcastle, Delaware, U.S.A. (the "Purchaser") 

        NOW
THIS DEED WITNESSES as follows: 

	1.
	INTERPRETATION 

        In
this deed of covenant and in the schedule: 

	(i)
	the
following expressions shall have the following meanings: 

	"Accounts Date"	 	means 31st December 1999;
	

"Agreement"	
 	

means the agreement between the Covenantor and the Purchaser for the sale and purchase of the Shares;
	

"Business Day"	
 	

means a day (other than a Saturday or a Sunday) on which banks are open for business in London;
	

"Claim"	
 	

means the issue of any notice, letter or other document by or on behalf of any Tax Authority or the taking of any other action by or on behalf of any Tax Authority from which notice, letter, document or action it appears either that a Tax Liability
is to be imposed on any member of the Group or that any audit for US Tax purposes is pending or threatened against any member of the Group or, in the context of clause 13 (Counter Covenant), that a
liability or increased liability to Tax is to be imposed on the Covenantor or any other member of the Retained Group;
	

"Companies"	
 	

means the companies listed in Part A of the schedule (each a "Company");
	

"Completion"	
 	

means completion of the sale and purchase of the Shares under the Agreement;
	

 	
 	

 	
 	

 

 

	

"Completion Accounts"	
 	

has the meaning given in the Agreement;
	

"Covenantor Companies"	
 	

means each member of the Retained Group (including, without limitation, the Covenantor) which was at Completion the beneficial owner of any of the Shares;
	

"Deemed Tax Liability"	
 	

has the meaning given in paragraph (ii)(b);
	

"Distribution"	
 	

has the meaning given in paragraph (iii)(c);
	

"Event"	
 	

means any transaction, action or omission, including, without limitation, a receipt or accrual of income or gains, a distribution, failure to distribute, acquisition, disposal, transfer or payment, the making of any loan or advance, any change in the
residence of any person for the purposes of any Tax, the death of any person, and a failure to take any action which would avoid an apportionment or deemed distribution of income (regardless of whether the taking of any such action after Completion
could have avoided such apportionment or deemed distribution) and shall also include Completion;
	

"Final Taxation Amount"	
 	

has the meaning given in the Agreement;
	

"Group"	
 	

has the meaning given in the Agreement (and the expression "member of the Group" shall be construed accordingly);
	

"Group Relief"	
 	

means any loss, allowance or other amount eligible for surrender by way of group relief in accordance with the provisions contained in sections 402 to 413 ICTA;
	

"ICTA"	
 	

means the Income and Corporation Taxes Act 1988;
	

"Interest Rate"	
 	

has the meaning given in the Agreement;
	

"Income, Profits or Gains"	
 	

has the meaning given in paragraph (iii)(a);
	

"Purchaser's Group"	
 	

has the meaning given in the Agreement, except that in this deed that expression shall not include any member of the Group;
	

"Relevant Amount"	
 	

has the meaning set out in clause 6(C) (Over-Provisions, Reliefs, Etc.);
	

 	
 	

 	
 	

 

2

 

	

"Relevant Company"	
 	

in the context of clause 2 (Covenant), has the meaning set out in paragraph (ii) of that clause, and in the context of clause 13 (Counter Covenant), has the meaning set out in paragraph (ii) of sub-clause (A) of that clause;
	

"Relief"	
 	

means any loss, exemption, set-off, relief, allowance or credit in respect of any Tax or any right to repayment of any Tax or any deduction in computing Income, Profits or Gains for the purposes of any Tax;
	

"Retained Group"	
 	

has the meaning given in the Agreement (and the expression "member of the Retained Group" shall be construed accordingly);
	

"Shares"	
 	

means all the issued shares in the capital of each of the Companies listed in part A of the schedule;
	

"Subsidiaries"	
 	

means the companies listed in Part B of the schedule (each a "Subsidiary");
	

"Tax"	
 	

means:
	

 	
 	

(a)	
 	

within the United Kingdom, corporation tax, advance corporation tax, income tax (including income tax required to be deducted or withheld from or accounted for in respect of any payment), capital gains tax, inheritance tax, value added tax, national
insurance contributions, stamp duty reserve tax, duties of customs and excise, any liability arising under section 601 ICTA, and any other taxes, levies, duties, charges, imposts or withholdings corresponding to, similar to, replaced by or
replacing any of them, together with all penalties, charges and interest relating to any of them; and
	

 	
 	

(b)	
 	

outside the United Kingdom, all taxes, levies, duties, imposts, deductions, contributions, charges and withholdings of any nature whatsoever, including (without limitation) taxes on gross or net Income, Profits or Gains and taxes on receipts, sales,
use, occupation, franchise, value added and personal property, equalisation tax
	

 	
 	

 	
 	

 

3

 

	

 	
 	

 	
 	

("Précompte"), indirect taxes, local taxes, payroll taxes, standby or monopoly charges, stamp duties, registration duties, custom and excise duties, social contributions imposed or collected by any State or by any local, national or
supernational authority or by any organisation, together with all penalties, charges, fines, reassessments and interest relating to any of them,
	

 	
 	

regardless (in either case) of whether any such taxes, levies, duties, imposts, charges, withholdings, penalties and interest are chargeable directly or primarily against or attributable directly or primarily to any member of the Group or any other
person and of whether any amount in respect of any of them is recoverable from any other person as mentioned in clause 7 (Recovery from Other Persons);
	

"Tax Assessment"	
 	

means any assessment, demand, determination or other similar formal notice of a Tax Liability issued by or on behalf of any Tax Authority or any action of a like nature taken by or on behalf of any Tax Authority by virtue of which (in either such
case) any member of the Group or any other person (including, in the context of Clause 13 (Counter Covenant), the Covenantor or any other member of the Retained Group) is liable, to make a payment of Tax, or will, with the passing of time,
become so liable,
	

 	
 	

or is denied or is sought to be denied a Relief relevant for the purposes of this deed and shall also mean any self-assessment made by any member of the Group or any other person (including, in the context of Clause 13
(Counter Covenant), the Covenantor or any other member of the Retained Group) in respect of any amount of Tax which any of them either considers that it is liable to pay or considers that it will, with the passing of time,
become liable to pay;
	

"Tax Authority"	
 	

means any government, state or municipality or any local, state, federal or other taxing or other authority or body (whether within or outside the United
	

 	
 	

 	
 	

 

4

 

	

 	
 	

Kingdom) being (in any such case) competent to impose any Tax Liability;
	

"Tax Liability"	
 	

has the meaning given in paragraph (ii)(a);
	

"Warranties"	
 	

means the Warranties set out in Schedule 3 to the Agreement;
	

"Working Capital and Cash/Debt Amount"	
 	

has the meaning given in the Agreement; and
	

"Working Hours"	
 	

means 9.30 a.m. to 5.30 p.m. on a Business Day;

	(ii)
	(a)    references
to any "Tax Liability" of any member of the Group shall mean both liabilities of that member
of the Group to make actual payments of Tax (or amounts in respect of Tax) and also: 

        (1)   the
loss or non-availability of a right to a refund or repayment of Tax which has been treated as an asset of the relevant member of the Group in computing
the Final Taxation Amount or the Working Capital and Cash/Debt Amount or the setting off of any such right to a refund or repayment of Tax against any actual Tax Liability in respect of which the
Purchaser would, but for that setting off, have been able to make a claim against the Covenantor under this deed; and 

        (2)   the
setting off against Income, Profits or Gains which were earned, accrued or received on or before Completion or in respect of a period ended on or before Completion
or against any Tax otherwise chargeable in respect of an Event occurring (or deemed to occur) on or before Completion or in respect of a period ended on or before Completion of any Relief which arises
as a consequence of or by reference to an Event occurring (or deemed to occur) after Completion or in respect of a period commencing after Completion and not as a consequence of or by reference to any
Event occurring (or deemed to occur) on or before Completion or in respect of a period ended on or before Completion in circumstances where, but for such setting off, the relevant member of the Group
would have had an actual Tax Liability in respect of which the Purchaser would have been able to make a claim against the Covenantor under this deed; and 

(b)    in
any case falling within either of sub-paragraphs (a)(1) or (a)(2) this paragraph, the amount that is to be treated for
the purposes of this deed as a Tax Liability of the relevant member of the Group (the "Deemed Tax Liability") shall be determined as follows: 

        (1)   in
a case which falls within sub-paragraph (a)(1) of this paragraph, the Deemed Tax Liability shall be
the amount of the refund or repayment that would have been obtained but for the loss, non-availability or setting off mentioned in that sub-paragraph; 

5

 

        (2)   in a case which falls within sub-paragraph (a)(2) of this paragraph and where the Relief that was the subject of the setting
off mentioned in that sub-paragraph was a deduction from or offset against Tax, the Deemed Tax Liability shall be the amount of that Relief; and 

        (3)   in
a case which falls within sub-paragraph (a)(2) of this paragraph and where the Relief that was the
subject of the setting off mentioned in that sub-paragraph was a deduction from
or offset against Income, Profits or Gains, the Deemed Tax Liability shall be the amount of Tax which has been saved in consequence of the setting off; 

	(iii)
	references
to:

	(a)
	"Income, Profits or Gains" shall include development value and any other standard or measure for the purposes of any Tax and shall also
include any income, profits or gains which are deemed to be earned, accrued or received for the purposes of any Tax;

	(b)
	Income,
Profits or Gains (as defined in sub-paragraph (a) of this paragraph) as being earned, accrued or received on
or before a particular date or in respect of a particular period shall mean Income, Profits or Gains which are regarded as having been, or are deemed to have been, earned, accrued or received on or
before that date or in respect of that period for the purposes of any Tax;

	(c)
	any
"Distribution" shall include anything which is, or is deemed to be, a dividend or distribution for the purposes of any Tax and
shall also include any other Event which gives rise to an obligation to account for advance corporation tax or amounts corresponding to or similar to advance corporation tax;

	(d)
	any
Distribution as occurring on or before a particular date shall include any Distribution which has fallen due to be made on or before that date for the purposes of any Tax;

	(e)
	any
"subsidiary of the Covenantor" shall mean any company of which the Covenantor has control for the purposes of section 416
ICTA; and

	(f)
	an
Event occurring or deemed to occur on or before Completion includes a combination of Events all of which have occurred or been deemed to occur on or before Completion;

	(iv)
	unless
otherwise specified:

	(a)
	references
to clauses, sub-clauses, paragraphs, sub-paragraphs and the schedule are to clauses, sub-clauses, paragraphs, sub-paragraphs
of, and the schedule to, this deed; 

        (b)   a
reference to any statute or statutory provision shall be construed as a reference to the same as it may have been, or may from time to time be, amended, modified or
re-enacted; 

        (c)   references
to a "person" shall be construed so as to include any individual, firm, company, government, state or agency
of a state or any joint venture, association or partnership (whether or not having separate legal personality); 

        (d)   references
to a "company" shall be construed so as to include any company, corporation or other body corporate, wherever
and however incorporated or established; 

        (e)   the
expression "body corporate" shall have the meaning given in the Companies Act 1985; 

        (f)    references
to writing shall include any modes of reproducing words in a legible and non-transitory form; 

        (g)   references
to times of the day are to London time; 

        (h)   headings
to clauses and the schedule are for convenience only and do not affect the interpretation of this deed; 

        (i)    the
schedule forms part of this deed and shall have the same force and effect as if expressly set out in the body of this deed, and any reference to this deed shall
include the schedule; 

        (j)    references
to any English 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 England be deemed to include what most nearly approximates in that jurisdiction to the English legal term; and 

        (k)   (1)
the rule known as the ejusdem generis rule shall not apply and accordingly general words introduced by the word "other" shall not be given a restrictive meaning by
reason of the fact that they are preceded by words indicating a particular class of acts, matters or things; and 

        (2)   general
words shall not be given a restrictive meaning by reason of the fact that they are followed by particular examples intended to be embraced by the general words. 

	2.
	COVENANT

        Subject
to the provisions of clause 3 (Limits on Clause 2) and clause 4  (Exclusions), the Covenantor hereby covenants with the Purchaser to pay to
the Purchaser (so far as possible by 

6

   way of repayment of the consideration payable under the Agreement for the Shares) an amount equal to any of the following: 

          (i)  any
Tax Liability of any member of the Group arising: 

        (a)   as
a consequence of or by reference to any Event which occurred on or before Completion or was deemed to occur on or before Completion for the purposes of any Tax; or 

        (b)   in
respect of or by reference to any Income, Profits or Gains which were earned, accrued or received on or before Completion or in respect of a period ending on or
before Completion; 

provided
that in the case of any member of the Group for which an accounting period commences before Completion and ends after Completion ("Straddle Period"), the amount to be treated for the purposes
of this deed as the liability of such member of the Group to Tax on Income, Profits or Gains for the period between the commencement of the Straddle Period and Completion shall be the amount of Tax to
which that member of the Group would be liable if the Straddle Period ended for the purposes of Tax on Completion and accordingly that member of the Group were permitted to file or submit a return for
the purposes of Tax for the period so ending; 

         (ii)  any
Tax Liability of any member of the Group arising as a consequence of or by reference to any of the following occurring or being deemed to occur at any time after
Completion: 

        (a)   the
disposal by any Relevant Company of any asset or of any interest in or right over any asset; or 

        (b)   the
making by any Relevant Company of any such payment or deemed payment as constitutes a chargeable payment for the purposes of section 214 ICTA; or 

        (c)   any
Relevant Company ceasing to be resident in the United Kingdom for the purposes of any Tax; or 

        (d)   any
Relevant Company failing to pay the whole of the Tax charged by any Tax Assessment made in respect of that Relevant Company within six months of the date of that Tax
Assessment; or 

        (e)   in
the case of any such right to a refund or repayment of Tax as mentioned in clause 1(ii)(a)(1), a Tax Authority determining that the amount of such right to a
refund or repayment of Tax is less than the amount which was treated as an asset in computing the Final Taxation Amount or, as the case may be, that such right to a refund or repayment of Tax is not
available, 

7

 

and,
for the purposes of this paragraph, the term "Relevant Company" shall mean the Covenantor and any
company, other than any member of the Group, that may be treated for the purposes of any Tax as being a member of the same group of companies as the Covenantor at any time after Completion; or 

        (iii)  any
legal and accounting costs and expenses reasonably and properly incurred by the Purchaser or any member of the Group in connection either with any such Tax
Liability as is mentioned in paragraphs (i) to (ii) or with any Claim therefor or in taking or defending any action under this deed. 

	3.
	LIMITS
ON CLAUSE 2 

        The
covenant given in clause 2 (Covenant) shall not cover any Tax Liability of any member of the Group: 

          (i)  to
the extent that that Tax Liability was taken into account in computing either the Final Taxation Amount or the Working Capital and Cash/Debt Amount; or 

         (ii)  to
the extent that that Tax Liability would not have arisen but for a transaction, action or omission carried out or effected by (or on behalf of) any member of the
Group or of the Purchaser's Group at any time after Completion (including, without limitation, the making of an election under Section 338 of the US Internal Revenue Code of 1986 (as amended)
or the making of any comparable election under US state or local income tax laws), other than any such transaction, action or omission: 

        (a)   carried
out or effected under a legally binding commitment created on or before Completion, including the Agreement or the Environmental Deed or Properties Manual to be
entered into under the Agreement; or 

        (b)   carried
out or effected in the ordinary course of the trade carried on by the relevant member of the Group as at Completion; or 

        (c)   carried
out at the express request of the Covenantor; or 

        (iii)  to
the extent that that Tax Liability would not have arisen or would have been reduced but for a failure or omission on the part of any member of the Purchaser's Group
or any member of the Group after
Completion lawfully to make any election or claim any Relief, the lawful making or claiming of which was taken into account in computing either the Final Taxation Amount or (as the case may be) the
Working Capital and Cash/Debt Amount and was notified to the Purchaser in writing and is consistent with the past practice of the Group or the Retained Group (or any member thereof); or 

        (iv)  to
the extent that that Tax Liability arises by reason of a voluntary disclaimer by any member of the Group after Completion of the whole or part of any allowance to
which any of them is entitled under Part II of the Capital Allowances Act 1990 (or any similar legislation imposed by any jurisdiction outside the United 

8

 

Kingdom)
or by reason of the revocation by any member of the Group after Completion of any claim for Relief made (whether provisionally or otherwise) by any of them prior to Completion; or 

         (v)  to
the extent that that Tax Liability arises as a result of any changes after Completion in the bases, methods or policies of accounting of any member of the Purchaser's
Group or any member of the Group, other than a change imposed or directed by any Tax Authority; or 

        (vi)  to
the extent that that Tax Liability has been otherwise compensated for without cost to any member of the Purchaser's Group or any member of the Group; or 

       (vii)  to
the extent that that Tax Liability is attributable to an Event producing an actual increment to the assets of any member of the Group of not less than the amount of
that Tax Liability which is not taken into account in the Working Capital and Cash/Debt Amount but would have been so taken into account if the Working Capital and Cash/Debt Amount as at the date of
Completion had been prepared with knowledge of the relevant Event; or 

      (viii)  to
the extent that that Tax Liability arises or is increased as a consequence of any failure by any member of the Purchaser's Group or any member of the Group to
comply with any of their respective obligations under clauses 5 (Mitigation), 8 (Claims Procedure),  9 (Tax
Returns) or 12 (Surrender of Group Relief); or
 

        (ix)  to
the extent that the Purchaser has made recovery in respect of that Tax Liability by means of a claim for breach of any of the Warranties under the Agreement; or 

         (x)  to
the extent that that Tax Liability consists of a liability to German real estate transfer tax which arises by virtue of the change of control on Completion of Laporte
Pigmente Holding GmbH and Silo Pigmente GmbH. 

	4.
	EXCLUSIONS

        (A)  The
Covenantor shall not be liable under either this deed or the Warranties in respect of any Tax Liability unless the Tax Liability in question shall have arisen: 

          (i)  in
the case of a liability to Tax imposed by the United Kingdom, on or before the seventh anniversary of the Accounts Date; or 

         (ii)  in
the case of a liability to Tax imposed by any other jurisdiction, on or before the date falling 30 days after the statutory time limit (including any
extension granted to such time limit) in the jurisdiction in which the Tax in question is sought; 

and
(in any such case) the Purchaser within that period shall by notice in writing to the Covenantor have given sufficient details of the Claim to enable the Covenantor to identify the matter giving
rise to that Tax Liability and the amount claimed in respect thereof. 

        (B)  The
Purchaser shall not be entitled to claim under either this deed or the Warranties in respect of any Tax Liability (however many in number) where the Tax Liability in
question is less than US$10,000. 

        (C)  Without
prejudice to so much of the provisions of clause 10 as concerns the date from which any payment due to be
made by the Covenantor under this deed shall carry interest, the liability (if any) of the Covenantor under this deed in respect of any Tax Liability falling within the scope of  clause 2 and of a
nature such that it was capable of being taken into account in computing the Final Taxation Amount shall not be determined and
become enforceable against the Covenantor until such time as the Final Taxation Amount has been ascertained in accordance with the provisions of the Agreement. 

	5.
	MITIGATION

        The
Purchaser shall, at the direction in writing of the Covenantor, procure that each member of the Group takes all such steps permitted by law as the Covenantor may require to: 

          (i)  use
in the manner hereinafter mentioned all such Reliefs arising as a consequence of or by reference to any Event occurring (or deemed to occur) on or before Completion
or in respect of a period ended on or before Completion and not as a consequence of or by reference to an Event occurring (or deemed to occur) after Completion or in respect of a period commencing
after Completion as are available to the members of the Group to reduce or eliminate any Tax Liability in respect of which the Purchaser would have been able to make a claim against the Covenantor
under this deed (such Reliefs including, without limitation, Reliefs made available to a company by means of a surrender from another company), the said use being to effect the reduction or
elimination of any such Tax Liability to the extent specified by the Covenantor and permitted by law, and to provide to the Covenantor, at the Covenantor's expense, a certificate from the auditors
(for the time being) of any member of the Group confirming that all such Reliefs have been so used; 

         (ii)  save
in respect of any member of the Group incorporated in the United States of America, make all such claims and elections specified by the Covenantor in respect of
any accounting period of any member of the Group commencing before Completion as have the effect of reducing or eliminating any such Tax Liability as is mentioned in  paragraph (i), provided that no
such claim or election shall require any member of the Group to use any Relief which arises solely as a
consequence of or by reference to an Event occurring (or deemed to occur) after Completion or in respect of a period commencing after Completion; and 

        (iii)  allow
the Covenantor to reduce or eliminate any Tax Liability by surrendering, or procuring the surrender by any company other than any member of the Group, of Group
Relief or advance corporation tax or any other form of Relief to any member of the Group to the extent permitted by law but without any payment being made in consideration for such surrender. 

9

 
	6.
	OVER-PROVISIONS,
RELIEFS, ETC. 

        (A)  If
the auditors for the time being of any member of the Group shall certify (at the request and expense of the Covenantor) that the Final Taxation Amount has proved to
be an over-provision, then the amount of such over-provision shall be dealt with in accordance with  sub-clause (C). 

        (B)  If
the auditors for the time being of any member of the Group shall certify (at the request and expense of the Covenantor) that any Tax Liability which has resulted in a
payment having been made or becoming due from the Covenantor under this deed has given rise to a Relief for any member of the Group which would not otherwise have arisen, or if the said auditors shall
certify (at the request and expense of the Covenantor) that the payment by the Covenantor or by any other member of the Retained Group of any amount of Tax (or additional amount of Tax) has given rise
to a Relief for any member of the Group which would not otherwise have arisen, then (in any such case) the amount of that Relief shall be dealt with in accordance with  sub-clause (C); provided that
if the Relief in question is a deduction from or offset against Income, Profits or Gains, the amount to
be so dealt with shall be a sum equal to the amount of Tax that has been saved through the use of that Relief, provided that no amount shall be so dealt with until such member of the Group has
obtained the benefit of such Relief and provided that the value of such Relief to such member of the Group shall not be prejudiced by such dealing. 

        (C)  Where
it is provided under sub-clause (A) or (B) that any amount (the
"Relevant Amount") is to be dealt with in accordance with this sub-clause: 

          (i)  the
Relevant Amount shall first be set off against any payment then due from the Covenantor under this deed; and 

         (ii)  to
the extent there is an excess, a refund shall be made to the Covenantor of any previous payment or payments made by the Covenantor under this deed and not previously
refunded under this clause up to the amount of such excess; and 

        (iii)  to
the extent that the excess referred to in paragraph (ii) of this sub-clause is not exhausted
under that paragraph, the remainder of that excess shall be carried forward and set off against any future payment or payments which become due from the Covenantor under this deed. 

        (D)  Where
any such certification as is mentioned in sub-clause (A) or (B) has been made, the
Covenantor or the Purchaser or the relevant member of the Group may request the auditors for the time being of the relevant member of the Group to review such certification in the light of all
relevant circumstances, including any facts which have become known only since such certification, and to certify whether such certification remains correct or whether, in the light of those
circumstances, the amount that was the subject of such certification should be amended. 

        (E)  If
the auditors certify under sub-clause (D) that an amount previously certified should be amended,
that amended amount shall be substituted for the purposes of sub-clause (C) as the Relevant Amount in respect of the certification in
question in place of the amount 

10

 

originally
certified, and such adjusting payment (if any) as may be required by virtue of the above-mentioned substitution shall be made as soon as practicable by the Covenantor or (as the case may
be) to the Covenantor. 

        (F)  If
the auditors for the time being of any member of the Group shall certify (at the request and expense of the Covenantor) that that member of the Group has obtained or
has actually enjoyed any other saving of Tax in respect (in either such case) of a period falling before Completion or (as the case may be) of such part of a period straddling Completion as falls
before Completion by reason of a reduction in rates of Tax which is made after Completion but which has effect in respect of any such period, the Purchaser shall, within seven Business Days of that
certification, pay to the Seller an amount equal to the repayment of Tax or other actual saving of Tax that has been so certified; and the provisions of sub-clauses (D) and
(E) of this clause shall apply, mutatis mutandis, to this sub-clause (F). 

	7.
	RECOVERY
FROM OTHER PERSONS 

        If,
in the event of any payment becoming due from the Covenantor under clause 2 (Covenant), any member of the Group either is
immediately entitled at the due date for the making of that payment to recover from any person (not being any other member of the Group but including any Tax Authority) any sum in respect of the Tax
Liability that has resulted in that payment becoming due from the Covenantor, or at some subsequent date becomes entitled to make such a recovery, then the Purchaser shall procure that the member of
the Group entitled to make that recovery shall promptly notify the Covenantor of its entitlement and shall, if so required by the Covenantor and at the Covenantor's sole expense, take all lawful,
appropriate and reasonable steps (taking into account the relevant member of the Group's own Tax affairs) to enforce that recovery (keeping the Covenantor fully and promptly informed of the progress
of any action taken); and if the Covenantor has made a payment under clause 2 (Covenant) in respect of the Tax Liability in question, the
Purchaser shall account to the Covenantor for whichever is the lesser of: 

          (i)  any
sum so recovered by the relevant member of the Group in respect of that Tax Liability (including any interest or repayment supplement paid by the Tax Authority or
other person on or in respect thereof less any Tax chargeable on the relevant member of the Group in respect of that interest and less also any Tax chargeable on the relevant member of the Group in
respect of the sum so recovered); and 

         (ii)  the
amount paid by the Covenantor under clause 2 (Covenant) in respect of that Tax Liability. 

	8.
	CLAIMS
PROCEDURE 

        (A)  Upon
any member of the Purchaser's Group or any member of the Group becoming aware of a Claim relevant for the purposes of this deed, the Purchaser shall within six
Business Days give 

11

 

written
notice of that Claim to the Covenantor or, as the case may be, shall procure that the relevant member of the Group shall within six Business Days give written notice of that Claim to the
Covenantor, and the Purchaser shall further procure that the relevant member of the Group (if the Covenantor shall indemnify the Purchaser and the relevant member of the Group to their reasonable
satisfaction against all losses, costs, damages and expenses, including interest on overdue Tax, which may be incurred thereby) will take such action and give such information and assistance in
connection with the affairs of that member of the Group as the Covenantor may reasonably and promptly by written notice request to avoid, resist, appeal or compromise the Claim or to enable any audit
for US Tax purposes concerning any member of the Group to be conducted in such reasonable manner as the Covenantor wishes solely to the extent of the issues for which the Covenantor has potential
liability under this deed and to the provisions of sub-clause (C); and in making any such request the Covenantor shall take account,
so far as is appropriate and reasonable, of any reasonable comments which the relevant member of the Group or the Purchaser may give to the Covenantor in connection with the Claim (including any
audit) and the possible implications of any actions which the Covenantor may request under this clause for the Tax affairs of the relevant member of the Group or any other member of the Group or of
the Purchaser's Group for any accounting period ending after Completion; 

        PROVIDED
THAT the Purchaser shall not be obliged to procure that any member of the Group appeal against any Tax Assessment if, the Covenantor having been given written notice of the
receipt of that Tax Assessment in accordance with the preceding provisions of this sub-clause, the relevant member of the Group has not
within 21 days thereafter received instructions in writing from the Covenantor, in accordance with the preceding provisions of this
sub-clause, to make that appeal. 

        (B)  The
actions which the Covenantor may reasonably request under sub-clause (A), having taken account of
any comments of the relevant member of the Group or of the Purchaser as there mentioned, shall include (without limitation) the relevant member of the Group applying to postpone (so far as legally
possible) the payment of any Tax and/or allowing the Covenantor to decide, in the context of any audit for US Tax purposes, whether any consents or waivers to extend applicable statutes of limitations
should be granted and/or allowing the Covenantor to take on or take over at its own expense the conduct of all or any proceedings of whatsoever nature arising in connection with the Claim in question,
and, if the Covenantor takes on or takes over the conduct of proceedings, the Purchaser shall provide and shall procure that the relevant member of the Group provide such information and assistance as
the Covenantor may reasonably require in connection with the preparation for and conduct of those proceedings. 

        (C)  The
Covenantor shall: 

          (i)  at
all times keep the Purchaser fully informed of all matters relating to the Claim; 

         (ii)  deliver
to the Purchaser copies of all correspondence relating to the Claim; and 

        (iii)  not
enter into any agreement with any Tax Authority that would affect the Tax Liability of the Purchaser or any member of the Group for a period beginning after
Completion (or, in the case of a period straddling Completion, for the 

12

  

portion of that period falling after Completion) without the prior consent of the Purchaser, which consent shall not be unreasonably withheld. 

        (D)  The
Purchaser shall not enter into any agreement with any Tax Authority that would affect a Tax Liability falling within the scope of the covenant given by the
Covenantor in clause 2 without the prior consent of the Covenantor, which consent shall not be unreasonably withheld. 

	9.
	TAX
RETURNS 

        (A)  The
Covenantor or its duly authorised agents shall prepare the Tax returns of the members of the Group for all Tax return periods ended on or prior to Completion, to the
extent that the same shall not have been prepared before Completion. 

        (B)  The
Purchaser shall procure that the members of the Group shall cause the returns mentioned in sub-clause (A)  to be authorised, signed and submitted to the appropriate authority without amendment or
with such amendments as the Covenantor shall agree and shall give the Covenantor or its
agent all such assistance as may be required to agree those returns with the appropriate authorities; 

        PROVIDED
THAT the Purchaser shall not be obliged to procure that any member of the Group take any such action as is mentioned in this sub-clause  in relation to any Tax return that is not true and accurate in all
material respects. 

        (C)  In
relation to any such action as is referred to in sub-clause (A) or (B), the Covenantor shall: 

          (i)  keep
the Purchaser fully informed of all matters relating thereto and deliver to the Purchaser copies of all correspondence with Tax Authorities relating thereto; 

         (ii)  submit
to the Purchaser for comments all correspondence and documents of a material nature which the Covenantor intends to submit to a Tax Authority and take into
account, so far as is appropriate and reasonable, all such reasonable comments as the Purchaser may make, including, in particular, as may affect periods following Completion; and 

        (iii)  not
submit to a Tax Authority any such correspondence or documents without first having given the Purchaser a reasonable period of time to comment on the same as
mentioned in the preceding paragraph of this sub-clause. 

        (D)  The
Covenantor or its duly authorised agents shall prepare all documentation and deal with all matters (including correspondence) relating to the Tax returns of the
members of the Group for all accounting periods ended on or prior to Completion and the Purchaser shall procure that the members of the Group shall afford such access to their books, accounts and
records as is necessary and reasonable to enable the Covenantor or its duly authorised agents to prepare those returns and conduct matters relating thereto in accordance with the Covenantor's rights
under this clause.

        (E)  Nothing
done by any member of the Group pursuant to this clause shall in any respect restrict or reduce any rights the
Purchaser may have to make a claim against the Covenantor under this deed in respect of any such Tax Liability as is mentioned in clause 2  (Covenant). 

	10.
	DUE
DATE OF PAYMENT 

        (A)  Where
the Covenantor becomes liable to make any payment under clause 2 (Covenant), the due date for the making of
that payment shall be: 

          (i)  in
a case that involves an actual payment of Tax by any member of the Group, the date that is three Business Days before the last date on which the relevant member of
the Group would have had to have paid to the appropriate Tax Authority the Tax that has given rise to the Covenantor's liability under this deed in order to avoid incurring a liability to interest or
a charge or penalty in respect of that Tax Liability; or 

         (ii)  in
a case falling within either of sub-paragraphs (a)(1) and (a)(2) of paragraph (ii) of clause 1  (Interpretation), the date falling seven days after the date when the Covenantor has been
notified by the relevant member of the Group or the Purchaser that the auditors for the
time being of the relevant member of the Group have certified, at the request of the Purchaser or the member of the Group, that the Covenantor has a liability for a determinable amount under  clause 2 (Covenant). 

        (B)  If
any payment required to be made by the Covenantor under this deed is not made by the due date for the making thereof, then, except to the extent that the Covenantor's
liability under clause 2 (Covenant) compensates the Purchaser for the late payment by virtue of its extending to interest and penalties, that
payment shall carry interest from that due date until the date when the payment is actually made at whichever is the higher of the Interest Rate and the rate of interest imposed by the relevant Tax
Authority. 

	11.
	DEDUCTIONS
FROM PAYMENTS, ETC. 

        (A)  All
sums payable by the Covenantor to the Purchaser under this deed shall be paid free and clear of all deductions or withholdings whatsoever, save only as may be
required by law. 

        (B)  If
any deductions or withholdings are required by law to be made from any of the sums payable as mentioned in  sub-clause (A), the Covenantor shall be obliged to pay to the Purchaser such sum as will,
after the deduction or withholding has been
made, leave the Purchaser with the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding. 

        (C)  If
any sum payable by the Covenantor to the Purchaser under this deed (other than interest under clause 10(B)) shall
be subject to a Tax Liability in the hands of the Purchaser, the Covenantor shall be under the same obligation to make an increased payment in relation to that Tax Liability as if the liability were a
deduction or withholding required by law. 

13

 
	12.
	 SURRENDER OF GROUP RELIEF  

         (A)  The Purchaser shall procure that each member of the Group shall, so far as is permissible under law, surrender to the Covenantor or to such other member of the
Retained
Group as the Covenantor may specify all such Group Relief as the Covenantor may at its sole discretion direct in writing in respect of any accounting period of any member of the Group ended on or
before Completion.  

        (B)  The Purchaser hereby undertakes that it shall, and shall procure that each member of the Group will, use all reasonable endeavours to procure that full effect is given
to the surrenders to be made under sub-clause (A) and that such surrenders are allowed in full by the Inland Revenue and (without prejudice to the generality
of the foregoing) the Purchaser shall procure that each member of the Group shall sign and submit to the Inland Revenue all such notices of consent to surrender (including provisional or protective
notices of consent in cases where any relevant Tax computation has not yet been agreed) and all such other documents and returns as may be necessary to secure that full effect is given to  this clause.

        (C)  In
consideration of each of the surrenders to be made under sub-clause (A), the Covenantor shall pay
to such member of the Group as is the surrendering company in respect of the surrender in question or, as the case may be, shall procure that the relevant other member of the Retained Group shall pay
to that surrendering company a sum equal to the amount of corporation tax from which the company that is the claimant company in respect of such surrender has been relieved by virtue of that surrender
being validly and effectively made; PROVIDED THAT the provisions of this sub-clause shall not have effect if and to the extent that payment
in respect of any such surrender has been made on the basis specified in the foregoing provisions of this sub-clause on or before the date
of this deed. 

        (D)  Any
sum payable under sub-clause (C) shall be paid on the date on which any corporation tax chargeable
on the taxable profits of the company that is the claimant company in respect of the surrender in question for the accounting period of its to which that surrender relates becomes due and payable (or
would have become due and payable had the claimant company incurred any liability to corporation tax in respect of that accounting period). 

        (E)  In
the event that any payment is made in accordance with the foregoing provisions of this clause in respect of any
surrender of Group Relief made under sub-clause (A) and corporation tax falls nevertheless to be charged in respect of the taxable
profits that the relevant surrender was intended to relieve from such tax (as a result of the Inland Revenue either refusing to allow Group Relief or subsequently withdrawing Group Relief in respect
of the relevant surrender), the Purchaser shall procure that the relevant member of the Group shall repay to the Covenantor or to the relevant other member of the Retained Group either the sum
previously paid in respect of the relevant surrender in accordance with the foregoing provisions of this clause or, as the case may be, such part of
that sum as is attributable to the element of the surrender that did not have the effect of

14

 

relieving
from corporation tax the taxable profits intended to be relieved by virtue of that surrender. 

	13.
	COUNTER
COVENANT 

        (A)  The
Purchaser and each of the Companies hereby jointly and severally covenant with the Covenantor to pay to the Covenantor an amount equal to any of the following: 

          (i)  any
liability or increased liability to Tax of the Covenantor or any other member of the Retained Group which arises as a result of or by reference to any reduction or
disallowance of Group Relief that would otherwise have been available to the Covenantor or any other member of the Retained Group where and to the extent that such reduction or disallowance occurs as
a result of or by reference to: 

         (a)  any
total or partial withdrawal effected by any member of the Group after Completion of any surrender of Group Relief that was submitted by any member of the Group to
the Inland Revenue on or before Completion in respect of any accounting period ended on or before Completion; or 

         (b)  any
total or partial disclaimer made by any member of the Group after Completion of any capital allowances available to any member of the Group in respect of any
accounting period ended on or before Completion 

save
where any such withdrawal or disclaimer is made at the express written request of the Covenantor and provided further that paragraph (a) shall not apply to the extent that an asset was
shown in the Completion Accounts in respect of payment for any such Group Relief as mentioned in that paragraph; 

         (ii)  any
liability or increased liability to Tax of the Covenantor or any other member of the Retained Group which arises as a consequence of or by reference to any of the
following occurring or being deemed to occur at any time after Completion: 

         (a)  the
disposal by any Relevant Company of any asset or of any interest in or right over any asset; 

         (b)  the
making by any Relevant Company of any such payment or deemed payment as constitutes a chargeable payment for the purposes of section 214 ICTA; 

         (c)  any
Relevant Company ceasing to be resident in the United Kingdom for the purposes of any Tax; 

         (d)  the
effecting by any Relevant Company of any such payment or transfer of assets as constitutes the receipt by another person of an abnormal amount by way of dividend (as
defined in section 709 ICTA); or 

         (e)  any
Relevant Company failing to pay the whole of the Tax charged by any Tax Assessment made in respect of that Relevant Company within six

15

 

months
of the date of that Tax Assessment where (and to the extent that) the liability for that Tax arises in circumstances such that the Purchaser would not have been entitled to make a claim against
the Covenantor under clause 2 (Covenant) of this deed in respect of that Tax had it been paid by the Relevant Company, 

and,
for the purposes of this sub-clause, the term "Relevant Company" shall mean any member
of the Group, any member of the Purchaser's Group and any other company which is, or has at any time been, treated for the purposes of any Tax as being a member of the same group of companies as the
Purchaser or as being associated with the Purchaser; and 

        (iii)  any
reasonable out-of-pocket legal and accounting costs and expenses reasonably and properly incurred by the Covenantor or any other member of
the Retained Group in connection with any such liability or increased liability to Tax (or Claim therefor) or in taking any action under this clause. 

    (B)  (i)  Upon
the Covenantor becoming aware of a Claim relevant for the purposes of  sub-clause (A), the Covenantor shall forthwith give written notice of that Claim to the Purchaser, and the Covenantor shall or,
as
the case may be, shall procure that the relevant other member of the Retained Group will (if the Purchaser shall indemnify the Covenantor and/or the relevant member of the Retained Group to the
Covenantor's reasonable satisfaction against all losses, costs, damages and expenses, including interest on overdue Tax, which may be incurred thereby) take such action and give such information and
assistance in connection with the affairs of the Covenantor and/or the relevant other member of the Retained Group as the Purchaser may reasonably and promptly by written notice request to avoid,
resist, appeal or compromise the Claim; PROVIDED THAT the Covenantor shall not be obliged to appeal against any Tax Assessment or to procure that any other member of the Retained Group appeals against
any Tax Assessment if, the Purchaser having been given written notice of the receipt of that Tax Assessment in accordance with the preceding provisions of this
sub-clause, the Covenantor or the relevant member of the Retained Group has not within 21 days thereafter received instructions in writing from the
Purchaser, in accordance with the preceding provisions of this sub-clause, to make that appeal. 

         (ii)  The
actions which the Purchaser may reasonably request under paragraph (i) of this sub-clause shall
include (without limitation) the Covenantor and/or the relevant other member of the Retained Group applying to postpone (so far as legally possible) the payment of any Tax and/or allowing the
Purchaser to take on or take over at its own expense the conduct of all or any proceedings of whatsoever nature arising in connection with the Claim in question, and, if the Purchaser takes on or
takes over the conduct of proceedings, the Covenantor shall provide and/or shall procure that the relevant other member of the Retained Group shall provide such information and assistance as the
Purchaser may reasonably require in connection with the preparation for and conduct of those proceedings. 

16

 

    (C)  (i)  Where
the Purchaser becomes liable to make any payment under sub-clause (A), the due
date for the making of that payment shall be the date that is the last date on which the Covenantor or, as the case may be, the relevant other member of the Retained Group would have had
to have paid to the appropriate Tax Authority the Tax that has given rise to the Purchaser's liability under sub-clause (A) in order
to avoid incurring a liability to interest or a charge or penalty in respect of that amount of Tax. 

         (ii)  If
any payment required to be made by the Purchaser under sub-clause (A) is not made by the due date
for the making thereof, then, except to the extent that the Purchaser's liability under sub-clause (A) compensates the Covenantor for
the late payment by virtue of its extending to interest and penalties, that payment shall carry interest from that due date until the date when the payment is actually made at the Interest Rate. 

    (D)  (i)  All
sums payable by the Purchaser to the Covenantor under this clause or under clause 6(F) shall be paid free and clear of all deductions or
withholdings whatsoever, save only as may be required by law. 

         (ii)  If
any deductions or withholdings are required by law to be made from any of the sums payable as mentioned in paragraph (i) of this
sub-clause, the Purchaser shall be obliged to pay to the Covenantor such sum as will, after the deduction or withholding has been made, leave the Covenantor with
the same amount as it would have been entitled to receive in the absence of any such requirement to make a deduction or withholding. 

        (iii)  If
any sum payable by the Purchaser to the Covenantor under this clause (other than interest under the preceding sub-clause) or under clause 6(F)
shall be subject to a Tax Liability in the hands of the Covenantor, the Purchaser shall be under the same obligation to make an increased payment in relation to that Tax Liability as if the liability
were a deduction or withholding required by law. 

	14.
	COVENANTOR
AS AGENT AND TRUSTEE 

        (A)  The
Covenantor has entered into this deed as duly authorised agent for each of the other Covenantor Companies and each covenant or undertaking of the Covenantor under
this deed has been given by the Covenantor for and on behalf of each such Covenantor Company in respect of: 

          (i)  such
member or members of the Group, the share capital of which was in the beneficial ownership of the Covenantor Company concerned as at Completion; and 

         (ii)  any
member or members of the Group that are direct or indirect subsidiaries of the member or members of the Group mentioned in (i) above. 

Notwithstanding
that the Covenantor is so acting as agent for the other Covenantor Companies, the Purchaser shall be entitled to enforce all such

17

 

covenants
and undertakings of the Covenantor under this deed solely against the Covenantor itself and accordingly shall not be entitled to claim against the Covenantor and the Covenantor Companies
separately in respect of the same liability allegedly arising under this deed. 

        (B)  All
rights, claims and entitlements of the Covenantor under this deed are held by it for itself and as trustee for the other Covenantor Companies. 

	15.
	MISCELLANEOUS

The
provisions of clauses 19 (Remedies and Waivers), 20 (Assignment), 21 (Further Assurance), 23 (Notices), 27 (Counterparts), 28 (Invalidity), 31 (Governing Law) and 32 (Jurisdiction) of the
Agreement shall apply to this deed mutatis mutandis. 

IN
WITNESS WHEREOF this document has been executed and delivered as a deed the day and year first before written. 

	

Signed as a deed by

Geneva Angela Stapleton

as attorney for LAPORTE PLC

in the presence of:	
 	

)

)

)

)	
 	

/s/  GENEVA ANGELA STAPLETON      

	

Witness's signature	
 	

 	
 	

/s/  NIA DAVIES      

	

Name (print):	
 	

 	
 	

Nia Davies

	

Occupation:	
 	

 	
 	

Trainee Solicitor

	

Address:	
 	

 	
 	

Avenue of Cortenberg 118

	

 	
 	

 	
 	

1000 Brussels

	

Signed as a deed by

as attorney for

K-L HOLDINGS, INC.

in the presence of:	
 	

)

)

)

)

)	
 	

 
	 	 	 	 	

	

Witness's signature	
 	

 	
 	

 
	 	 	 	 	

	

Name (print):	
 	

 	
 	

 
	 	 	 	 	

	

Occupation:	
 	

 	
 	

	

Address:	
 	

 	
 	

	

 	
 	

 	
 	

18

 
 
 

SCHEDULE
  THE MEMBERS OF THE GROUP    
    

Part A  

 
 

The Companies    
    

        All those companies listed in Schedule 5 to the Agreement. 

Part B  

 
 

The Subsidiaries    
    

        All those companies listed in Schedule 6 to the Agreement. 

19

QuickLinks

EXHIBIT 10.5

CONTENTS

SCHEDULE THE MEMBERS OF THE GROUP

The Companies

The Subsidiaries

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