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EXHIBIT 10.8  

 
 

FORM OF SALE PARTICIPATION AGREEMENT    
    

        Dated as of January 30, 2001 

Dear                        :

        You
have entered into a Management Stockholder's Agreement, dated as of    , 2001 between K-L Holdings, Inc., a Delaware corporation ("the Company"), and
you (the "Stockholder's Agreement") relating to the purchase from the Company of shares of the common stock, par value $0.01 per share, of the Company (the "Common Stock"). The undersigned, KKR
Partners II, L.P. and KKR 1996 Fund L.P., each a Delaware limited partnership (each a "KKR Partner" and together, "KKR Partners"), also have purchased shares of Common Stock and hereby agree with you
as follows, effective upon such purchase of Common Stock by you: 

        1.     In
the event that at any time KKR Partners proposes to sell for cash or any other consideration any shares of Common Stock owned by it, in any transaction other than a
Public Offering (as defined in the Stockholder's Agreement) or a sale to an affiliate of KKR Partners the KKR Partners will notify you or your Purchaser's Estate or Purchaser's Trust (as such terms
are defined in Section 2 of the Stockholder's Agreement), as the case may be, in writing (a "Notice") of such proposed sale (a "Proposed Sale") and the material terms of the Proposed Sale as of
the date of the Notice (the "Material Terms") promptly, and in any event not less than 15 days prior to the consummation of the Proposed Sale and not more than 5 days after the execution
of the definitive agreement relating to the Proposed Sale, if any (the "Sale Agreement"). If within 10 days of your or your Purchaser's Estate's or Purchaser's Trust's, as the case may be,
receipt of such Notice the KKR Partner receives from you or your Purchaser's Estate or Purchaser's Trust, as the case may be, a written request (a "Request") to include Common Stock held by you or
your Purchaser's Estate or Purchaser's Trust, as the case may be, in the Proposed Sale (which Request shall be irrevocable unless (a) there shall be a material adverse change in the Material
Terms or (b) if otherwise mutually agreed to in writing by you or your Purchaser's Estate or Purchaser's Trust, as the case may be, and the KKR Partner), the Common Stock held by you will be so
included as provided herein; provided that only one Request, which shall be executed by you or your Purchaser's Estate or Purchaser's Trust, as the case may be, may be delivered with respect to any
Proposed Sale for Common Stock held by you or your Purchaser's Estate or Purchaser's Trust. Promptly after the execution of the Sale Agreement, the KKR Partner will furnish you, your Purchaser's Trust
or your Purchaser's Estate with a copy of the Sale Agreement, if any. 

        2.     (a)
The maximum number of shares of Common Stock which you or your Purchaser's Estate or Purchaser's Trust, as the case may be (collectively, the "Purchaser Entities"),
will be permitted to include in a Proposed Sale pursuant to a Request will be the number of shares of Common Stock then held by the Purchaser Entities, including all shares of Common Stock which the
Purchaser Entities are then entitled to acquire under an unexercised Option, to the extent then exercisable or would become exercisable as a result of the consummation of the Proposed Sale, multiplied
by a fraction, the numerator of which is the number of shares of Common Stock being sold by KKR Partners and any investment partnerships and investment limited liability companies affiliated with KKR
Partners and the denominator of which is the aggregate number of shares of Common Stock owned by KKR Partners and any investment partnerships and investment limited liability companies affiliated with
KKR Partners. 

        (b)   If
one or more holders of shares of Common Stock who have been granted the same rights granted to the Purchaser Entities hereunder elect not to include the maximum
number of shares of Common Stock which such holders would have been permitted to include in a Proposed Sale (the "Eligible Shares"), KKR Partners, or such remaining holders of shares of Common Stock,
or any of them, may sell in the Proposed Sale a number of additional shares of Common Stock owned by any of them equal to their pro rata portion of the number of Eligible Shares not 

 

included
in the Proposed Sale, based on the relative number of shares of Common Stock then held by each such holder, and such additional shares of Common Stock which any such holder or holders propose
to sell shall not be included in any calculation made pursuant to the first sentence of this Paragraph 2 for the purpose of determining the number of shares of Common Stock which the Purchaser
Entities will be permitted to include in a Proposed Sale. KKR Partners or any of them, may sell in the Proposed Sale additional shares of Common Stock owned by any of them equal to any remaining
Eligible Shares which will not be included in the Proposed Sale pursuant to the foregoing. 

        3.     Except
as may otherwise be provided herein, shares of Common Stock subject to a Request will be included in a Proposed Sale pursuant hereto and in any agreements with
purchasers relating thereto on the same terms and subject to the same conditions applicable to the shares of Common Stock which the KKR Partner proposes to sell in the Proposed Sale. Such terms and
conditions shall include, without limitation: the pro rata reduction of the number of shares of Common Stock to be included in the Proposed Sale if required by the party proposing such Sale, the sale
price; the payment of fees, commissions and expenses; the provision of, and representation and warranty as to, information reasonably requested by the KKR Partner covering matters regarding your
ownership of shares; and the provision of requisite indemnification; provided that any indemnification provided by you, your Purchaser's Estate or your
Purchaser's Trust shall be pro rata in proportion with the number of shares of Common Stock to be sold. 

        4.     Upon
delivering a Request, you or your Purchaser's Estate or Purchaser's Trust, as the case may be, will, if requested by the KKR Partner, execute and deliver a custody
agreement and power of attorney in form and substance satisfactory to the KKR Partner with respect to the shares of Common Stock which are to be sold by you or your Purchaser's Estate or Purchaser's
Trust, as the case may be, pursuant hereto (a "Custody Agreement and Power of Attorney"). The Custody Agreement and Power of Attorney will provide, among other things, that you or your Purchaser's
Estate or Purchaser's Trust, as the case may be, will deliver to and deposit in custody with the custodian and attorney-in-fact named therein a certificate or certificates
representing such shares of Common Stock (duly endorsed in blank by the registered owner or owners thereof) and irrevocably appoint said custodian and attorney-in-fact as your
or your Purchaser's Estate's or Purchaser's Trust's, as the case may be, agent and attorney-in-fact with full power and authority to act under the Custody Agreement and Power
of Attorney on your or your Purchaser's Estate's or Purchaser's Trust's, as the case may be, behalf with respect to the matters specified therein. 

        5.     The
Purchaser Entities' right pursuant hereto to participate in a Proposed Sale shall be contingent on the Purchaser Entities' strict compliance with each of the
provisions hereof and the Purchaser Entities' respective willingness to execute such documents in connection therewith as may be reasonably requested by the KKR Partner. 

        6.     In
the event of a Proposed Sale pursuant to Section 1 hereof of a majority of the shares of Common Stock held by the KKR Partners, the KKR Partners may elect, by
so specifying in the Notice, to require you or your Purchaser's Estate or Purchaser's Trust, as the case may be, to, and you or your Purchaser's Estate or Purchaser's Trust, as the case may be, shall,
participate in such Proposed Sale to the same extent calculated pursuant to Section 2(a) above, in accordance with the terms and provisions of Sections 3 and 4 hereof. 

        7.     The
obligations of KKR Partners hereunder shall extend only to you or your Purchaser's Estate or Purchaser's Trust, as the case may be, and no other of your or your
Purchaser's Estate's or Purchaser's Trust's, as the case may be, successors or assigns shall have any rights pursuant hereto. 

        8.     This
Agreement shall terminate and be of no further force and effect on the fifth anniversary of the first occurrence of a Public Offering (as defined in the
Stockholder's Agreement). 

2

 

        9.     All
notices and other communications provided for herein shall be in writing and shall be deemed to have been duly given when delivered to the party to whom it is
directed: 

        If
to KKR Partners, to it at the following address: 

c/o
Kohlberg Kravis Roberts & Co. Ltd.

Stirling Square

7 Carlton Gardens

London SW17 5AD

England

Attn: Todd Fisher 

        with
a copy to: 

Simpson
Thacher & Bartlett

Citypoint

One Ropemaker Street

London, England

EC24 9HV

Attn: Michael Wolfson, Esq. 

        If
to you, to you at the address first set forth above herein; 

        If
to your Purchaser's Estate or Purchaser's Trust, at the address provided to such partnerships by such entity; 

        or
at such other address as any of the above shall have specified by notice in writing delivered to the others by certified mail. 

        10.   The
laws of the State of Delaware (or if the Company reincorporates in another state, of that state) shall govern the interpretation, validity and performance of the
terms of this Agreement. No suit, action or proceeding with respect to this Agreement may be brought in any court or before any similar authority other than in a court of competent jurisdiction in the
State of Delaware (or if the Company reincorporates in another state, of that state), as the KKR Partners may elect in their sole discretion, and you hereby submit to the non-exclusive
jurisdiction of such courts for the purpose of such suit, proceeding or judgment. You hereby irrevocably waive any right which you may have had to bring such an action in any other court, domestic or
foreign, or before any similar domestic or foreign authority. 

        11.   If
KKR Partners transfers its interest in the Company to an affiliate of KKR Partners, such affiliate shall assume the obligations hereunder of KKR Partners. 

        It
is the understanding of the undersigned that you are aware that no Proposed Sale presently is contemplated and that such a sale may never occur. 

3

 

        If
the foregoing accurately sets forth our agreement, please acknowledge your acceptance thereof in the space provided below for that purpose. 

	 	 	Very truly yours,
	

 	
 	

KKR PARTNERS II, L.P.
	

 	
 	

By:	
 	

KKR Associates L.P.,

General Partner
	

 	
 	

By:	
 	

 
	 	 	 	 	
 General Partner
	

 	
 	

KKR 1996 Fund L.P.
	

 	
 	

By:	
 	

KKR Associates 1996 L.P.

its General Partner
	

 	
 	

By:	
 	

KKR 1996 GP LLC,

its General Partner
	

 	
 	

By:	
 	

 
	 	 	 	 	
 General Partner
	Accepted and agreed to:	 	 	 	 

	By:	 	 	 	 
	 	 	
	 	 

4

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EXHIBIT 10.9    
    

 
 

PLEDGE AGREEMENT    
    

        PLEDGE AGREEMENT, dated this            day of            , 2001,
made by [NAME]
(the "Pledgor") in favor of Rockwood Specialties Inc., a company formed under the laws of the State of Delaware (the "Company"). 

W
I T N E S S E T H: 

        WHEREAS,
simultaneous with the execution hereof, the Company is making a loan (the "Loan") to the Pledgor, to be evidenced by a note, a copy of which is annexed as Exhibit A
hereto (the "Note"); and 

        WHEREAS,
the Pledgor is the legal and beneficial owner of the shares of Pledged Stock (as hereinafter defined) issued by the Company; and 

        WHEREAS,
it is condition precedent to the obligation of the Company to make the Loan to the Pledgor that the Pledgor shall have executed and delivered this Pledge Agreement to the
Company. 

        NOW,
THEREFORE, in consideration of the premises and to induce the Company to make the Loan, the Pledgor hereby agrees with the Company as follows: 

        1.    Defined Terms.    (a) Unless otherwise defined herein, terms defined in the Note and used herein shall
have the meanings assigned to them in the Note. 

        (b)   The
following terms shall have the following meanings: 

        "Agreement":
this Pledge Agreement, as the same may be amended, modified or otherwise supplemented from time to time. 

        "Code":
the Uniform Commercial Code from time to time in effect in the State of New York. 

        "Collateral":
The Pledged Stock and all Proceeds. 

        "Collateral
Account": any account to hold money Proceeds, maintained under the sole dominion and control of the Company. 

        "Default":
any event that is or with the passage of time or the giving of notice or both would be an Event of Default under the Note. 

        "Obligations":
the collective reference to the unpaid principal of and interest on the Note and all other obligations and liabilities of the Pledgor to the Company (including, without
limitation, interest accruing at the then applicable rate provided in the Note after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding,
relating to the Pledgor, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), whether direct or indirect, absolute or contingent,
due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with the Note and this Agreement or any other document made, delivered or given in
connection therewith, in each case whether on account of principal, interest, costs, expenses or otherwise. 

        "Person":
any individual, corporation, partnership, joint venture, association, joint stock company, trust, unincorporated organization, government or any agency or political subdivision
thereof or any other entity. 

        "Pledged
Stock": the shares of capital stock described in Section 2 hereof, together with all capital stock received upon exercise of any such options or rights of any nature
whatsoever that may be issued or granted by the Company or by Rockwood Holdings, Inc. (an affiliate of the 

1

 

Company),
to the Pledgor while this Agreement is in effect, in each case together with any other shares, stock certificates, options or rights of any nature whatsoever in respect of such capital
stock. 

        "Proceeds":
all "proceeds," as such term is defined in Section 9-306(1) of the Uniform Commercial Code in effect in the State of New York on the date hereof and, in
any event, shall include, without limitation, all dividends or other income from the Pledged Stock, collections thereon or distributions with respect thereto. 

        "Securities
Act": The Securities Act of 1933, as amended. 

        (c)   The
words "hereof," "herein" and "hereunder" and words of similar import when used in this Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and section and paragraph references are to this Agreement unless otherwise specified. 

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

        2.    Pledge; Grant of Security Interest.    (a) The Pledgor hereby delivers to the Company all the Pledged
Stock and hereby grants to the Company a first security interest in the Collateral, as collateral security for the prompt and complete payment and performance when due (whether at the stated maturity,
by acceleration or otherwise) of the Obligations. 

        (b)   The
Pledged Stock shall be the shares of common stock, par value $0.01 per share, of Rockwood Holdings, Inc. ("Common Stock"), as set forth on the Stock
Certificate(s) No.(s) described on Schedule 1 attached hereto. 

        3.    Stock Powers.    Concurrently with the delivery to the Company of each certificate representing one or more
shares of Pledged Stock to the Company, the Pledgor shall deliver an undated stock power covering such certificate, duly executed in blank by the Pledgor with, if the Company so requests, signature
guaranteed. 

        4.    Covenants.    The Pledgor covenants and agrees with the Company that, from and after the date of this Agreement
until this Agreement is terminated and the security interests created hereby are released: 

        (a)   If
the Pledgor shall (i) as a result of its ownership of the Pledged Stock, become entitled to receive or shall receive any stock certificate (including, without
limitation, any certificate representing a stock dividend or a distribution in connection with any reclassification, increase or reduction of capital or any certificate issued in connection with any
reorganization), option or rights, whether in addition to, in substitution of, as a conversion of, or in exchange for any shares of the Pledged Stock, or otherwise in respect thereof or
(ii) acquire ownership of shares of the Company, hold the same in trust for the Company, and deliver the same forthwith to the Company in the exact form received, duly endorsed by the Pledgor
to the Company, if required, together with an undated stock power covering such certificate duly executed in blank by the Pledgor to be held by the Company, subject to the terms hereof, as additional
collateral security for the Obligations. 

        (b)   Without
the prior written consent of the Company, the Pledgor will not, except with respect to transfers made in order to effectuate estate planning of the Pledgor, so
long as shares remain subject to this Pledge Agreement, (i) sell, assign, transfer, exchange, or otherwise dispose of, or grant any option with respect to, the Collateral, (ii) create,
incur or permit to exist any Lien or option in favor of, or any claim of any Person with respect to, any of the Collateral, or any interest therein, except for the security interests created by this
Agreement, or (iii) enter into any 

2

 

agreement
or undertaking restricting the right or ability of the Pledgor or the Company to sell, assign or transfer any of the Collateral. 

        (c)   The
Pledgor shall maintain the security interest created by this Agreement as a first, perfected security interest and shall defend such security interest against claims
and demands of all persons whomsoever. At any time and from time to time, upon the written request of the Company, and at the sole expense of the Pledgor, the Pledgor will promptly and duly execute
and deliver such further instruments and documents and take such further actions as the Company may reasonably request for the purposes of obtaining or preserving the full benefits of this Agreement
and of the rights and powers herein granted. If any amount payable under or in connection with any of the Collateral shall be or become evidenced by any promissory note, other instrument or chattel
paper, such note, instrument or chattel paper shall immediately be delivered to the Company, duly endorsed in a manner satisfactory to the Company, to be held as Collateral pursuant to this Agreement. 

        (d)   The
Pledgor shall pay, and save the Company harmless from, any and all liabilities with respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with respect to any of the Collateral or in connection with any of the transactions contemplated by this Agreement. 

        5.    Cash Dividends; Voting Rights.    Unless an Event of Default shall have occurred and be continuing and the
Company shall have given notice to the Pledgor of the Company's intent to exercise its corresponding rights pursuant to Section 6 below, the Pledgor shall be permitted to receive all cash
dividends, if any, paid in respect of the Pledged Stock and to exercise all voting and corporate rights with respect to the Pledged Stock. 

        6.    Rights of the Company.    If an Event of Default shall occur and be continuing and (except in the case of an
Event of Default described in clause (d) of the definition thereof in the Note, in which case no notice shall be required) the Company shall give notice of its intent to exercise such rights to
the Pledgor, the Company shall have the right to receive any and all cash dividends paid in respect of the Pledged Stock and make application thereof to the Obligations in such order as the Company
may determine. 

        7.    Remedies.    (a) If an Event of Default shall have occurred and be continuing, at any time at the
Company's election, the Company may apply all or any part of the Proceeds held in any Collateral Account in payment of the Obligations in such order as the Company may elect. 

        (b)   If
an Event of Default shall have occurred and be continuing, the Company may exercise, in addition to all other rights and remedies granted in this Agreement and in any
other instrument or agreement securing, evidencing or relating to the Obligations, all rights and remedies of a secured party under the Code. Without limiting the generality of the foregoing, the
Company, without demand of performance or other demand, presentment, protect, advertisement, or notice of any kind (except any notice required by law referred to below) to or upon the Pledgor or any
other Person (all and each of which demands, defenses, advertisements and notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon Collateral, or
any part thereof, and/or may forthwith sell, assign, give option or options to purchase or otherwise dispose of an deliver the Collateral or any part thereof (or contract to do any of the foregoing),
in one or more parcels at public or private sale or sales, in the over-the-counter market, at any exchange, broker's board or office of the Company or elsewhere upon such terms
and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for future delivery without assumption of any credit risks. The Company shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity
of redemption in the Pledgor, which right or equity hereby is waived or released. The 

3

 

Company
shall apply any Proceeds from time to time held by it and the net proceeds of any such collections, recovery, receipt, appropriation, realization or sale, after deducting all reasonable costs
and expenses of every kind incurred in respect thereof or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or to the rights of the Company
hereunder, including, without limitation, reasonable attorneys' fees and disbursements of counsel to the Company, to the payment in whole or in part of the Obligations, in such order as the Company
may elect, and only after such application and after the payment by the Company of any other amount required by any provision of law, including, without limitation,
Section 9-504(1)(c) of the Code, need the Company account for the surplus, if any, to the Pledgor. To the extent permitted by applicable law, the Pledgor waives all claims, damages
and demands it may acquire against the Company arising out of the exercise by it of any rights hereunder. If any notice of a proposed sale or other disposition of collateral shall be required by law,
such notice shall be deemed reasonable and proper if given at least 10 days before such sale or other disposition. The Pledgor shall remain liable for any deficiency if the proceeds of any sale
or other disposition of Collateral are insufficient to pay the Obligations and the fees and disbursements of any attorneys employed by the Company to collect such deficiency. 

        8.    Execution of Financing Statements.    Pursuant to Section 9-402 of the Code, the Pledgor
authorizes the Company to file financing statements with respect to the Collateral without the signature of the Pledgor in such form and in such filing offices as the Company reasonably determines
appropriate to perfect the security interest of the Company under this Agreement. A carbon, photographic or other reproduction of this Agreement shall be sufficient as a financing statement for filing
in any jurisdiction. 

        9.    Notices.    All notices, requests and demands to or upon the Company or the Pledgor to be effective shall be in
writing (or by facsimile or similar electronic transfer confirmed in writing) and shall be deemed to have been duly given or made (a) when delivered by hand or (b) if given by mail, when
deposited in the mails by certified mail, return receipt requested, or (c) if by facsimile or similar
electronic transfer, when sent and receipt has been confirmed, addressed to the Company or the Pledgor at their addresses or transmission numbers for notices provided below: 

        If
to the Company: 

Rockwood
Specialties Inc.

22 Chambers Street

Suite 201

Princeton, NJ 08542 

E-Mail
Address: triordan@rockwoodspecialties.com

Attention: Tom Riordan 

        If
to the Pledgor: 

[NAME]
[HOME ADDRESS]

        The
Company and the Pledgor may change their addresses and transmission numbers for notices by notice in the manner provided in this Section. 

        10.    Severability.    Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 

4

 

        11.    Amendments in Writing; No Waiver; Cumulative Remedies.    (a) None of the terms of provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by the Pledgor and the Company, provided that any provision of this Agreement may be waived
by the Company in a letter or agreement executed by the Company or by telex or facsimile transmission from the Company. 

        (b)   The
Company shall not by any act (except by a written instrument pursuant to paragraph 11(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 or 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 Company, 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 Company of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the Company otherwise would have on any future occasion. 

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

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

        13.    Successors and Assigns.    This Agreement shall be binding upon the successors and assigns of the Pledgor and
shall inure to the benefit of this Company and its successors and assigns. 

        14.    Governing Law.    This Agreement shall be governed by, and construed and interpreted in accordance with, the
law of the State of New York. 

        IN
WITNESS WHEREOF, the Pledgor has caused this Agreement to be duly executed and delivered as of the date first above written. 

	 	PLEDGOR:
	

 	

[NAME]

5

 
 
 

Schedule 1    
    

        1.     [# SHARES PURCHASED] shares of Common Stock (including shares of Common Stock acquired pursuant to
the Management Stockholder's Agreement entered into by and between Rockwood Holdings, Inc. and the Pledgor dated as of  [DATE] and the exercise by the Pledgor of any options to purchase shares of
Common Stock granted pursuant to the Stock Option
Agreement entered into by and between Rockwood Holdings, Inc. and the Pledgor dated as of [DATE]. 

        2.     Stock
Certificate No.(s): 

6

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EXHIBIT 10.9

PLEDGE AGREEMENT

Schedule 1

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