**EXHIBIT 10.8**

 

**Purchase and Sale Agreement**

 

**THIS PURCHASE AND SALE AGREEMENT**is made as of September 30, 2005 by and between Catalysts, Adsorbents andProcess Systems, Inc., a corporation organized under the laws of the State ofMaryland (“Seller”), and Honeywell Specialty Materials, LLC, a limitedliability company organized under the laws of the State of Delaware (“Purchaser”)and an assignee of EMS (as defined below).

 

**WHEREAS**, eachof Seller and Purchaser is a holder of a fifty percent (50%) membership interest(each, a “Membership Interest” and collectively, the “MembershipInterests”) in UOP LLC, a Delaware limited liability company (the “Company”);

 

**WHEREAS,** thetransfer of a Membership Interest is governed by the Limited Liability CompanyAgreement, dated as of November 3, 1997, between Seller and EM Sector HoldingsInc., a Delaware corporation (“EMS”), as amended by the LetterAgreement, dated as of October 6, 1998 and the Amendment of Limited LiabilityCompany Agreement, dated as of March 12, 2004 (the “LLC Agreement”);

 

**WHEREAS,** pursuant to Section 8.5(a) of the LLCAgreement, Seller delivered to Purchaser an Offer Notice (as defined in the LLCAgreement) dated August 18, 2005, and Purchaser delivered to Seller anAcceptance Notice (as defined in the LLC Agreement) dated September 8, 2005notifying Seller of Purchaser’s desire to purchase Seller’s Membership Interestfrom Seller on the terms and subject to the conditions set forth in the OfferNotice and the LLC Agreement; and

 

**WHEREAS**, the parties desire to set forth certainactions to be completed in connection with such purchase and sale and providefor certain other agreements between the parties.

 

**NOW, THEREFORE**, the partiesagree as follows:

 

**ARTICLEIDEFINITIONS**

** **

**Section1.01      **Definitions.  The following terms shall have the followingmeanings for the purposes of this Agreement:

 

“Accounting Firm”shall have the meaning set forth in Section 2.04(b).

 

“Affiliate” shallmean, with respect to any specified Person, any other Person which, directly orindirectly, controls, is under common control with, or is controlled by, suchspecified Person. The term “control” as used in the preceding sentencemeans, with respect to a corporation, the right to exercise, directly orindirectly, more than 50% of the voting rights attributable to the shares ofthe controlled corporation, or with respect to any Person other than acorporation, the possession, directly or indirectly, of the power to direct orcause the direction of the management or policies of such Person.

 

“Agreement” shallmean this Purchase and Sale Agreement, including the Exhibits hereto, as it maybe amended, modified or supplemented from time to time in accordance with itsterms.

 

“Board of Managers”shall mean the board of managers of the Company created pursuant to Section 5.1of the LLC Agreement.

 

“Business Day”shall mean any day of the year other than (i) any Saturday or Sunday or(ii) any other day on which banks located in the United States generally areclosed for business.

 

“CAPS Transfer Agreement” shall mean the CAPS TransferAgreement, dated August 22, 1988, by and among Union Carbide Corporation,Katalistiks International, Inc., UOP, Allied-Signal Inc. and UOP Inc.

 

“Closing” shall mean the consummation of the transactionscontemplated hereby in accordance with Article VI.

 

“Closing Date” shall mean the date on which the Closing occursor is to occur.

 

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“Closing Net Cash” shall have the meaning set forth in Section2.04(a).

 

“Code” shall mean the Internal Revenue Code of 1986, as amended,including the regulations promulgated thereunder.

 

“Company” shall have the meaning set forth in the recitals tothis Agreement.

 

“Confidentiality Agreement” shall have the meaning set forth in Section5.03.

 

“Dollars” or numbers preceded by the symbol “$” shall meanamounts in United States Dollars.

 

“EMS” shall have the meaning set forth in the recitals to thisAgreement.

 

“Estimated Closing NetCash” shall have the meaning set forth in Section 2.03.

 

“GovernmentalAuthority” shall mean any federal, state, local or foreign government orsubdivision thereof, court of competent jurisdiction, governmental agency,authority, instrumentality or regulatory body.

 

“Initial PurchasePrice” shall have the meaning set forth in Section 2.02.

 

“Law” shall meanany law, statute, regulation, ordinance, rule, order, decree or governmentalrequirement enacted, promulgated or imposed by any Governmental Authority.

 

“LIBOR Rate” shallmean the rate of interest announced publicly by the British Bankers Associationas its three (3) month LIBOR rate for Dollars on the Business Day immediatelyfollowing the day the Statement becomes final and binding as provided in Section2.04(b).

 

“LLC Agreement” shall have the meaning set forth in the recitalsto this Agreement.

 

“Mayer Brown” shall have the meaning set forth in Section5.03.

 

“Membership Interest”or “Membership Interests” shall have the meaning set forth in therecitals to this Agreement.

 

“Net Cash” shallhave the meaning set forth in Section 2.03.

 

“Person” shallmean an individual, partnership, corporation, limited liability company, trust,unincorporated association or other entity or association.

 

“Purchaser” shallhave the meaning set forth in the preamble to this Agreement.

 

“Seller” shall have the meaning set forth in the preamble tothis Agreement.

 

“Seller’s Membership Interest” shall mean the MembershipInterest held by Seller.

 

“Statement” shall have the meaning set forth in Section2.04(a).

 

“Statement of Objections” shall have the meaning set forth in Section2.04(b).

 

“Taxes” shall meanall taxes, charges, fees, duties, levies or other assessments (includingincome, gross receipts, net proceeds, ad valorem, turnover, real and personalproperty (tangible and intangible), sales, use, franchise, excise, goods andservices, value added, stamp, user, transfer, fuel, excess profits,occupational, interest equalization, windfall profits, severance, payroll,unemployment and Social Security taxes) that are imposed by any GovernmentalAuthority, and such term shall include any interest, penalties or additions totax attributable thereto.

 

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“Tax Matters Agreement” shall mean the Tax Matters Agreement,dated November 3, 1997, by and between EMS and Seller.

 

**Section1.02      **Interpretation.  The headings preceding the text of Articlesand Sections included in this Agreement and the headings to the Exhibitsattached to this Agreement are for convenience only and shall not be deemedpart of this Agreement or be given any effect in interpreting thisAgreement.  The use of the masculine,feminine or neuter gender or the singular or plural form of words herein shallnot limit any provision of this Agreement. The use of the terms “including” or “include” shall in all cases hereinmean “including, without limitation” or “include, without limitation,”respectively.  Reference to any Personincludes such Person’s successors and assigns to the extent such successors andassigns are permitted by the terms of the applicable agreement, and referenceto a Person in a particular capacity excludes such Person in any other capacityor individually.  Reference to anyagreement (including this Agreement), document or instrument means such agreement,document or instrument as amended or modified and in effect from time to timein accordance with the terms thereof and, if applicable, the terms hereof.  Underscored references to Articles, Sections,clauses, or the Exhibits shall refer to those portions of this Agreement.  The use of the terms “hereunder,” “hereof,” “hereto,”“hereby” and words of similar import shall refer to this Agreement as a wholeand not to any particular Article, Section or clause of, or Exhibit to, thisAgreement.

 

**ARTICLE IIPURCHASE AND SALE OF MEMBERSHIP INTEREST**

** **

**Section2.01      **Purchaseand Sale.  On the terms and subjectto the conditions hereof, at the Closing, Seller shall sell, transfer, conveyand assign to Purchaser, free and clear of all liens, claims and encumbrances,and Purchaser shall purchase, acquire and accept, all right, title and interestin and to Seller’s Membership Interest.

 

**Section2.02      **Payment ofInitial Purchase Price.  Inconsideration of and in exchange for the sale of Seller’s Membership Interestto Purchaser, at the Closing, Purchaser shall pay to Seller an aggregate sum of(a) eight hundred twenty-five million Dollars ($825,000,000) and (b) an amountequal to fifty percent (50%) of the Estimated Closing Net Cash (collectively,the “Initial Purchase Price”), subject to adjustment as set forth in Section2.04.  The Initial Purchase Priceshall be paid in accordance with Section 9.04 at the Closing to theaccount designated by Seller not later than three (3) Business Days prior tothe Closing Date.

 

**Section2.03      **Calculationof Estimated Closing Net Cash. Seller and Purchaser shall cause the Company to deliver to Seller andPurchaser not later than seven (7) days prior to the Closing Date a writtenstatement setting forth the Company’s good faith estimate of the Net Cash ofthe Company as of the Closing Date (the “Estimated Closing Net Cash”),together with any supporting information that Seller or Purchaser mayreasonably request; provided, that each party will receive a copy of anyinformation delivered by the Company with respect to any such request.  Seller and Purchaser shall in good faith worktogether in the seven (7) days prior to Closing to agree on the amount of theEstimated Closing Net Cash; provided, however, that in theabsence of agreement by the parties with respect to the Estimated Closing NetCash, the Closing shall occur in accordance with Article VI based on theCompany’s good faith estimate of the Net Cash of the Company delivered toSeller and Purchaser in accordance with this Section 2.03.  “Net Cash” means, as of any specifieddate, an amount determined by subtracting (a) the aggregate amount of theCompany’s consolidated indebtedness as of such date from (b) the aggregateamount of the Company’s consolidated cash and cash equivalents as of suchdate.  For purposes of calculating NetCash, the Company’s cash and cash equivalents and indebtedness will bedetermined in accordance with the accounting principles and consistent with theaccounting practices used by the Company to prepare its audited consolidatedbalance sheet for the year ended December 31, 2004.  For illustrative purposes only, Exhibit Asets forth the calculation of Net Cash of the Company as of December 31, 2004.

 

**Section2.04      **PurchasePrice Adjustment.

 

(a)   Within ninety (90) days after the ClosingDate, Seller shall prepare and deliver to Purchaser a statement (the “Statement”),setting forth the Net Cash as of the close of business on the Closing Date (the“Closing Net Cash”) determined in accordance with Section 2.03, togetherwith any supporting information that Purchaser may reasonably request.  In connection with preparing the Statement,Seller shall have the right, but not the obligation, to conduct, at

 

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Seller’s expense, anaudit of the balance sheet of the Company as of the Closing Date in accordancewith generally accepted auditing standards; provided, however,that nothing in this sentence shall either change the definition of Net Cashfrom that set forth in Section 2.03 or extend the time frame in whichSeller must deliver the Statement to Purchaser. After the Closing Date, at Seller’s request, Purchaser shall, and shallcause the Company to, assist Seller and its representatives in the preparationof the Statement and the conduct of the audit and shall provide Seller and itsrepresentatives any information reasonably requested and shall provide themaccess at all reasonable times to the personnel, properties and books andrecords of the Company for such purposes.

 

(b)   Within thirty (30) days after receipt of theStatement, Purchaser shall deliver to Seller a written statement describing itsobjections, if any, to the Statement (the “Statement of Objections”).  If Purchaser does not deliver a Statement ofObjections to Seller within such thirty-day period, the Statement shall becomefinal and binding upon the parties.  IfPurchaser delivers a Statement of Objections to Seller within such thirty-dayperiod, and the parties cannot resolve any such objection within ten (10)Business Days after the receipt by Seller of such Statement of Objections, anyremaining disputes shall be resolved by Ernst & Young LLP (the “AccountingFirm”).  The Accounting Firm shall beinstructed to resolve such disputes within thirty (30) days after receipt bythe Accounting Firm of the materials delivered by Seller to Purchaser pursuantto Section 2.04(a) and by Purchaser to Seller pursuant to this Section2.04(b), which materials shall be delivered by Seller and Purchaser to theAccounting Firm within five (5) Business Days following the expiration of theten (10) Business Day period referenced in the preceding sentence.  The resolution of disputes by the AccountingFirm shall be set forth in writing and shall be conclusive and binding upon theparties, and the Statement, as modified by such resolution, shall become finaland binding upon the date of such resolution. The determination of the Accounting Firm for any item in dispute cannotbe in excess of, nor less than, the greatest or lowest value, respectively,claimed for that particular item in the Statement, in the case of Seller, or inthe Statement of Objections, in the case of Purchaser.  The Accounting Firm shall have no right tomake any determination with respect to the undisputed portions of theStatement, and no such determination with respect to the undisputed portions ofthe Statement shall be binding on Seller or Purchaser.  The Accounting Firm shall be instructed tocalculate Net Cash in accordance with Section 2.03.  The fees and expenses of the Accounting Firmshall be apportioned between Seller and Purchaser by the Accounting Firm basedon the degree to which Seller’s and Purchaser’s claims were unsuccessful andshall be paid by Seller and Purchaser in accordance with such determination.

 

(c)   Uponthe Statement becoming final and binding in accordance with Section 2.04(b),the Initial Purchase Price shall be increased by fifty percent (50%) of theamount by which the Closing Net Cash exceeds the Estimated Closing Net Cash or decreasedby fifty percent (50%) of the amount by which the Closing Net Cash is less thanthe Estimated Closing Net Cash.  If theClosing Net Cash exceeds the Estimated Closing Net Cash, Purchaser shall pay toSeller fifty percent (50%) of the amount of such excess, together with a sumequivalent to interest thereon at a rate equal to the LIBOR Rate from theClosing Date to the date of payment.  Ifthe Estimated Closing Net Cash exceeds the Closing Net Cash, Seller shall payto Purchaser fifty percent (50%) of the amount of such excess, together with asum equivalent to interest thereon at a rate equal to the LIBOR Rate from theClosing Date to the date of payment.  Anysuch payment hereunder shall be made in accordance with Section 9.04 withinfive (5) Business Days after final determination of the Statement to an accountdesignated in writing by Purchaser or Seller, as the case may be.

 

**ARTICLE IIIREPRESENTATIONS AND WARRANTIES OF SELLER**

** **

Seller represents andwarrants to Purchaser as follows:

 

**Section3.01      **Ownershipof Seller’s Membership Interest. Seller has good and marketable title to Seller’s Membership Interest,free and clear of all liens, claims and encumbrances (other than anyrestrictions or obligations pursuant to the LLC Agreement).  Other than as set forth in the LLC Agreement,there are no (a) options, warrants, convertible securities or other rights,agreements, arrangements or commitments of any character relating to Seller’sMembership Interest or obligating Seller to issue or sell any membershipinterest in the Company or (b) voting trusts, stockholder or membershipagreements, proxies or other agreements or understandings in effect withrespect to the voting or transfer of any of Seller’s Membership Interest.  At the Closing, pursuant to Section 2.01,Seller shall sell, transfer,

 

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convey and assignto Purchaser, free and clear of all liens, claims and encumbrances, all right,title and interest in and to Seller’s fifty percent (50%) membership interestin the Company.

 

**Section3.02      **Authority.  Seller is duly organized, validly existingand in good standing under the laws of the jurisdiction of its formation andSeller has full right, power and authority to enter into this Agreement, to performits obligations hereunder and to consummate the transactions contemplatedhereby.  The execution of this Agreementby Seller, the performance by Seller of its obligations hereunder and theconsummation by Seller of the transactions contemplated hereby have been dulyauthorized by all requisite action on the part of Seller.  This Agreement has been duly executed anddelivered by Seller and, assuming due authorization, execution and delivery byPurchaser, this Agreement constitutes legal, valid and binding obligations ofSeller enforceable against Seller in accordance with its terms, except to theextent that enforcement may be affected by Laws relating to bankruptcy,reorganization, insolvency, fraudulent conveyance, moratorium and other Lawsaffecting creditors’ rights, and by the availability of injunctive relief,specific performance and other equitable remedies.

 

**Section3.03      **NoConflict.  Assuming that all filingsand notifications contemplated by Section 5.02 have been made and anyapplicable waiting periods have expired or been terminated, the execution,delivery and performance of this Agreement by Seller does not and will not (a)violate, conflict with or result in the breach of any provision of theorganizational documents of Seller, (b) conflict with or violate any Lawapplicable to Seller, where such conflict or violation would adversely affectthe ability of Seller to carry out its obligations under, and to consummate thetransaction contemplated by, this Agreement, or (c) conflict with, result inany breach of, constitute a default (or event which with the giving of noticeor lapse of time, or both, would become a default) under, require any consentunder, or give to others any right of termination, amendment, acceleration,suspension, revocation or cancellation of, or result in the creation of anylien or encumbrance on Seller’s Membership Interest pursuant to, any note,bond, mortgage, indenture, contract, agreement, lease, sublease, license,permit or other instrument or arrangement to which Seller is a party or bywhich any of Seller’s Membership Interest is bound or affected.  The execution, delivery and performance ofthis Agreement by Seller does not and will not require (i) any consent,approval, authorization or other order of, action by, filing with, ornotification to any Governmental Authority, except as contemplated by Section5.02 or (ii) any other third party consents, approvals or authorizations.

 

**ARTICLE IVREPRESENTATIONS AND WARRANTIES OF PURCHASER**

** **

**Section4.01      **Authority.  Purchaser is duly organized, validly existingand in good standing under the laws of the jurisdiction of its formation andPurchaser has full right, power and authority to enter into this Agreement, toperform its obligations hereunder and to consummate the transactionscontemplated hereby.  The execution ofthis Agreement by Purchaser, the performance by Purchaser of its obligationshereunder and the consummation by Purchaser of the transactions contemplatedhereby have been duly authorized by all requisite action on the part ofPurchaser.  This Agreement has been dulyexecuted and delivered by Purchaser and, assuming due authorization, executionand delivery by Seller, this Agreement constitutes legal, valid and bindingobligations of Purchaser enforceable against Purchaser in accordance with itsterms, except to the extent that enforcement may be affected by Laws relatingto bankruptcy, reorganization, insolvency, fraudulent conveyance, moratoriumand other Laws affecting creditors’ rights, and by the availability ofinjunctive relief, specific performance and other equitable remedies.

 

**Section4.02      **NoConflict.  Assuming that all filingsand notifications contemplated by Section 5.02 have been made and anyapplicable waiting periods have expired or been terminated, the execution,delivery and performance of this Agreement by Purchaser does not and will not(a) violate, conflict with or result in the breach of any provision of theorganizational documents of Purchaser, (b) conflict with or violate any Law applicableto Purchaser, where such conflict or violation would adversely affect theability of Purchaser to carry out its obligations under, and to consummate thetransaction contemplated by, this Agreement, or (c) conflict with, result inany breach of, constitute a default (or event which with the giving of noticeor lapse of time, or both, would become a default) under, require any consentunder, or give to others any right of termination, amendment, acceleration,suspension, revocation or cancellation of any note, bond, mortgage, indenture,contract, agreement, lease, sublease, license, permit or other instrument orarrangement to which Purchaser is a party. The execution, delivery and performance of this Agreement by Purchaserdoes not and will not require

 

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(i) any consent,approval, authorization or other order of, action by, filing with, ornotification to any Governmental Authority, except as contemplated by Section5.02 or (ii) any other third party consents, approvals or authorizations.

 

**ARTICLE VCONDITIONS TO CLOSING; PRE-CLOSING COVENANTS**

** **

**Section5.01      **ClosingConditions.

 

(a)   Subject to Section 6.01, theobligations of Seller and Purchaser under Article VI are subject to theconditions set forth in Section 8.5(f)(i)-(iv) of the LLC Agreement; provided,however, that Purchaser may waive the conditions set forth in Section8.5(f)(iii) and/or (iv) of the LLC Agreement, in which case (assuming thesatisfaction of all other conditions contemplated by this Section 5.01)Seller and Purchaser would be obligated to complete the transactionscontemplated hereby.

 

(b)   Unless waived by Purchaser in its solediscretion, the obligations of Purchaser to be performed by Purchaser atClosing are also subject to and conditioned upon each representation andwarranty of Seller set forth in Article III being true and correct as ofthe Closing as though such representation and warranty were made on and as ofsuch time.

 

(c)   Unless waived by Seller in its solediscretion, the obligations of Seller to be performed by Seller at Closing arealso subject to and conditioned upon each representation and warranty ofPurchaser set forth in Article IV being true and correct as of theClosing as though such representation and warranty were made on and as of suchtime.

 

**Section5.02      **GovernmentalApprovals.  Purchaser shall, aspromptly as practicable following the date hereof, make all necessary filings,applications, statements and reports to all Governmental Authorities in orderto obtain any approval or clearance from any Governmental Authority required toconsummate the transactions contemplated hereby.  Purchaser shall respond promptly to inquiriesfrom any Governmental Authority in connection with such filings, applications,statements and reports, including providing any supplemental information thatmay be requested.  Purchaser shallprovide to Seller copies of all filings made with any Governmental Authority atthe time they are filed or delivered and shall keep Seller informed of anydiscussions with, or further requests by, any Governmental Authority.  Seller shall provide to Purchaser suchreasonable assistance as is necessary to make any such filing, application,statement or report or obtain any such approval or clearance.

 

**Section5.03      **Terminationof the Confidentiality Agreement.  Onor before the Closing Date, (a) Seller and Purchaser shall, and to the extentapplicable shall cause their Affiliates to, terminate the Agreement, datedNovember 8, 2004, between Purchaser, Honeywell International Inc., Seller,Union Carbide Corporation and The Dow Chemical Company (the “ConfidentialityAgreement”), and (b) Seller shall return the data room materials located atthe offices of Mayer, Brown, Rowe & Maw LLP, at 71 South Wacker Drive,Chicago, Illinois, 60606 (“Mayer Brown”) to the Company and shallrequest the return or destruction of any Evaluation Information (as defined inthe Confidentiality Agreement) that was received by any third party inconnection with a proposed transfer of Seller’s Membership Interest subsequentto the termination of the Discussions (as defined in the ConfidentialityAgreement).

 

**ARTICLE VICLOSING**

** **

**Section6.01      **Closing.

 

(a)   The Closing shall take place at Mayer Brown,at 9:00 a.m., Central Time, on November 30, 2005, provided allconditions to the obligations of Purchaser and Seller set forth in Section5.01 shall have been satisfied or waived, other than those conditions to besatisfied at the Closing.  In the eventthat the Closing does not occur on November 30, 2005 because the conditions tothe obligations of Purchaser and Seller set forth in Section 5.01 havenot been satisfied or waived, then the Closing shall take place at Mayer Brown,at 9:00 a.m., Central Time, on the tenth (10th) day after all

 

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conditions to theobligations of Purchaser and Seller set forth in Section 5.01 shall havebeen satisfied or waived, other than those conditions to be satisfied at theClosing, or at such other place and on such other date as the parties agree.

 

(b)   If the Closing does not occur by July 1,2006, Seller shall have the right, but not the obligation, to terminate thisAgreement and to abandon the transactions contemplated herein.  If this Agreement is terminated pursuant tothis Section 6.01(b), this Agreement shall become null and void and ofno further force and effect.

 

**Section6.02      **Deliveriesby Seller.  At the Closing, Sellershall deliver to Purchaser the following:

 

(a)   a signed copy of the assignment agreement inthe form set forth in Exhibit B (the “Assignment Agreement”);

 

(b)   the resignations of each member of the Boardof Managers who was appointed by Seller;

 

(c)   a certificate to the effect that Seller isnot a “foreign person” within the meaning of Section 1445(f)(3) of the Code;and

 

(d)   a certificate, dated as of the date of theClosing and duly executed by an authorized representative of Seller, to theeffect that the conditions set forth in Section 5.01(b) have beensatisfied.

 

**Section6.03      **Deliveriesby Purchaser.  At the Closing,Purchaser shall deliver to Seller the following:

 

(a)   the Initial Purchase Price;

 

(b)   a signed copy of the Assignment Agreement;

 

(c)   a written acceptance of the resignations ofeach of the members of the Board of Managers who were appointed by Sellerdelivered pursuant to Section 6.02(b); and

 

(d)   a certificate, dated as of the date of theClosing and duly executed by an authorized representative of Purchaser, to theeffect that the conditions set forth in Section 5.01(c) have beensatisfied.

 

**ARTICLE VIIINDEMNIFICATION**

** **

**Section7.01      **Indemnificationby Purchaser.  Following the Closing,Purchaser agrees to indemnify Seller for (a) any breach of any representationor warranty of Purchaser set forth in Article IV and (b) all Companyliabilities; provided, however, that such agreement to indemnifyshall have no effect on and shall not limit the rights of any party toindemnification, or the obligation of Seller or its Affiliates to indemnify anyparty, pursuant to Article 13 of the CAPS Transfer Agreement.  Notwithstanding the foregoing, and for theavoidance of doubt, Purchaser and Seller agree that Purchaser’s indemnificationof Seller shall not include any U.S. federal, state or local or foreign incomeTaxes imposed on Seller with respect to the income of the Company for any Taxperiod or portion thereof ending on or prior to the Closing Date, or imposed onSeller’s sale of Seller’s Membership Interest hereunder.

 

**Section7.02      **Indemnificationby Seller.  Following the Closing,Seller agrees to indemnify Purchaser for any breach of any representation orwarranty of Seller set forth in Article III.

 

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**ARTICLE VIIICOVENANTS**

** **

**Section8.01      **Continuationof Certain Provisions of the LLC Agreement.

 

(a)   Following the Closing, Purchaser shall causethe Company to continue to provide the indemnity under Section 5.9 of the LLCAgreement (subject to the limitations set forth in Section 5.9 of the LLCAgreement) to any individual employed or appointed by Seller serving in any ofthe capacities set forth in Section 5.9 of the LLC Agreement.

 

(b)   The provisions of Sections 6.3 and 6.4 of theLLC Agreement and the provisions of the Tax Matters Agreement shall continue ineffect with respect to all taxable years (or portions thereof) ending on orbefore the Closing Date, including the Company’s short taxable year ending onthe Closing Date.

 

(c)   Purchaser shall cooperate with Seller withrespect to the preparation of all tax returns for the Company for all taxableperiods beginning before the Closing Date and to the extent necessary to permitSeller to perform its obligations pursuant to the Tax Matters Agreement forsuch periods.  Pursuant to the TaxMatters Agreement, Purchaser shall take no action inconsistent with pastpractices with respect to any taxable period or portion thereof of the Companyending on or prior to the Closing Date that would give rise to a materiallydetrimental income Tax consequence to Seller or any of its Affiliates.

 

(d)   Following the Closing, Seller shall continueto comply with the provisions of Section 6.7 of the LLC Agreement for theperiod of ten (10) years from the Closing Date.

 

(e)   For the avoidance of doubt, Selleracknowledges that, following the Closing, Seller shall remain bound by theprovisions of Section 11.2 of the LLC Agreement in accordance with the termsand conditions thereof.

 

(f)    While the parties have specificallyidentified certain sections of the LLC Agreement for clarification in this Agreement,inclusion of such sections in this Agreement shall have no precedential impactor create any inferences on the interpretation or applicability of any othersection of the LLC Agreement.

 

**ARTICLE IXMISCELLANEOUS**

** **

**Section9.01      **Expenses.  Each party hereto shall bear its own expensesincurred in connection with the negotiation, preparation, execution, deliveryand performance of this Agreement. Purchaser and Seller shall each be responsible for any transfer taxesimposed on it, and Purchaser and Seller shall each be responsible for fiftypercent (50%) of any transfer taxes imposed on the Company, by any GovernmentalAuthority as a result of the transactions contemplated by this agreement.

 

**Section9.02      **Amendment.  This Agreement may be amended, modified orsupplemented but only in writing signed by Purchaser and Seller.

 

**Section9.03      **Notices.  Any notice, request, instruction or otherdocument to be given hereunder by a party hereto shall be in writing and shallbe deemed to have been given, (a) when received if given in person or bycourier or a courier service or (b) on the date of transmission if sent bytelex, facsimile or other wire transmission (receipt confirmed) on a BusinessDay during or before the normal business hours of the intended recipient, andif not so sent on such a day and at such a time, on the following Business Day:

 

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| (i)    |   | If  to Purchaser, addressed as follows:          |
|--------|--------|--------------------------------------------------|
|   |   |                                             |
|   |   | Honeywell  Specialty Materials LLC               |
|   |   | c/o  Honeywell International Inc.                |
|   |   | Columbia  Road and Park Avenue                   |
|   |   | P.O.  Box 4000                                   |
|   |   | Morristown,  NJ 07962                            |
|   |   | Attention:                                       | Senior  Vice President and General Counsel |
|   |   | Facsimile:                                       | 973.455.4217 |
|   |   |                                             |   |
|   |   | Attention:                                       | Vice  President and General Counsel – |
|   |   |                                             | Specialty  Materials |
|   |   | Facsimile:                                       | 973.455.6840 |
|   |   |                                             |   |
| (ii)   |   | If  to Seller, addressed as follows:             |
|   |   |                                             |   |
|   |   | Catalysts,  Adsorbents and Process Systems, Inc. |
|   |   | 400  West Sam Houston Parkway South              |
|   |   | Houston,  TX 77042                               |
|   |   | Attention:                                       | President |
|   |   | Facsimile:                                       | 713.978.2394 |
|   |   |                                             |   |
|   |   | with  a copy to:                                 |   |
|   |   |                                             |   |
|   |   | Union  Carbide Corporation                       |
|   |   | 400  West Sam Houston Parkway South              |
|   |   | Houston,  TX 77042                               |
|   |   | Attention:                                       | General  Counsel |
|   |   | Facsimile:                                       | 713.978.2394 |
|   |   |                                             |   |
|   |   | The  Dow Chemical Company                        |
|   |   | 2030  Dow Center                                 |
|   |   | Midland,  MI 48674                               |
|   |   | Attention:                                       | General  Counsel |
|   |   | Facsimile:                                       | 989.636.7711 |

 

or to such other individual or address as a party hereto may designatefor itself by notice given as herein provided.

 

**Section9.04      **Paymentsin Dollars.  All payments pursuanthereto shall be made by wire transfer in Dollars in immediately available fundswithout any set-off, deduction or counterclaim whatsoever.

 

**Section9.05      **Allocationof Tax Items.

 

(a)   For purposes of Section 706(c)(2) and 706(d)of the Code, the Company’s taxable year with respect to Seller shall end as ofthe close of business on the Closing Date, and Seller’s distributive share ofthe Company’s income, gain, loss, deduction and credit and items thereof asdetermined for federal income Tax purposes with respect to its interest in theCompany shall be allocated between Seller and Purchaser based on a closing ofthe books of the Company as of the close of business on the Closing Date; provided,however, that any event not in the ordinary course of business occurringon the Closing Date but after the Closing shall, for purposes of this Section9.05(a) be treated as occurring after the close of business on the ClosingDate.  Without limiting the generality ofthe foregoing, the parties acknowledge that Purchaser intends, as soon aspossible after the Closing, to cause the Company to transfer its interest inits foreign subsidiaries to various foreign subsidiaries of HoneywellInternational Inc., the sole member of Purchaser.  Any such

 

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transfer occurring on theClosing Date, but after the Closing, shall, for purposes of this Section9.05(a), be treated as occurring after the close of business on the ClosingDate.

 

(b)   Notwithstanding anything to the contrarycontained herein or in the LLC Agreement, (i) following the Closing, Purchaseragrees to indemnify Seller for any foreign income Taxes imposed on the Company(but not any foreign income Taxes imposed on Seller with respect to income ofthe Company) for any Tax period or portion thereof ending on or prior to the ClosingDate and (ii) the foreign Tax credits with respect to any such foreign incomeTaxes shall be specially allocated to Purchaser.

 

**Section9.06      **Publicity.  Neither party shall issue any publicity,release or announcement concerning the execution of this Agreement, any of theprovisions of this Agreement or the transactions contemplated hereby withoutthe advance written approval of the form and content thereof by the otherparty, which approval shall not be unreasonably withheld; provided, however,that no such consent shall be required when such disclosure is required byapplicable Law or the rules or regulations of a national or foreign securitiesexchange.

 

**Section9.07      **Severability.  If any provision of this Agreement shall beheld invalid, illegal or unenforceable, the validity, legality orenforceability of the other provisions hereof shall not be affected thereby,and there shall be deemed substituted for the provision at issue a valid, legaland enforceable provision as similar as possible to the provision at issue.

 

**Section9.08      **Successorsand Assigns.  This Agreement shall bebinding upon and inure to the benefit of the parties hereto and theirrespective successors and permitted assigns, including any successor ofPurchaser to the Membership Interests (in whole or in part) or any interest inthe Company; provided, that no assignment of any rights or obligationshereunder, by operation of law or otherwise, shall be made by either partywithout the prior written consent of the other party.

 

**Section9.09      **ApplicableLaw.  This Agreement shall beconstrued and enforced in accordance with and governed by the laws of the Stateof New York, without reference to its conflict of laws rules or principles.

 

**Section9.10      **Jurisdictionof Disputes.  In the event eitherparty to this Agreement commences any litigation, proceeding or other legalaction in connection with or relating to this Agreement or any matterscontemplated hereby, each party to this Agreement hereby (a) agrees that anysuch litigation, proceeding or other legal action may be brought in a court ofcompetent jurisdiction of the State of New York and the federal courts of theUnited States, located in the City of New York; (b) agrees that in connectionwith any such litigation, proceeding or action, such party will consent andsubmit to personal jurisdiction in any such court described in clause (a)of this Section 9.10 and to service of process upon it inaccordance with the rules and statutes governing service of process; (c) agreesto waive to the full extent permitted by law any objection that it may now orhereafter have to the venue of any such litigation, proceeding or action in anysuch court or that any such litigation, proceeding or action was brought in aninconvenient forum; and (d) designates, appoints and directs either CTCorporation System or Corporation Service Company as its authorized agent toreceive on its behalf service of any and all process and documents in any suchlitigation, proceeding or action in the State of New York.

 

**Section9.11      **Counterparts.  This Agreement may be executed incounterparts, including by facsimile, each of which shall be deemed anoriginal, but both of which together shall constitute one and the sameinstrument.

 

**Section9.12      **EntireAgreement.  This Agreement incombination, where appropriate, with the LLC Agreement and other writtenagreements between Seller and Purchaser constitute the entire agreement andunderstanding between the parties with respect to the transfer of Seller’sMembership Interest to Purchaser, and this Agreement supercedes the variousdrafts and discussions leading hereto. The parties agree that no inferences may be based on prior verbaldiscussions or the deletion or revision of any language to this Agreementproposed by either party, including with respect to the interpretation of theLLC Agreement or any other written agreement between the parties.

 

**Section9.13      **Waiver.  Any waiver of rights hereunder must be setforth in a writing signed by the party against whom the waiver is to beeffective.  A waiver of any breach orfailure to enforce any of the terms or conditions of this Agreement shall notin any way affect, limit or waive any party’s rights at any time to enforcestrict compliance thereafter with every term or condition of this Agreement forany other breach or failure to comply with the terms of this Agreement.

 

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**Section9.14      **FurtherAssurances.  From time to time afterthe Closing, without further consideration, Seller and Purchaser shallcooperate with each other and shall execute and deliver instruments of transferor assignment or assumption or such other documents to the other as the otherreasonably may request to evidence or perfect Purchaser’s right, title andinterest to Seller’s Membership Interest and to otherwise carry out thetransactions contemplated hereby.

 

 

**IN WITNESS WHEREOF**, the partieshereto have caused this Agreement to be executed and delivered as of the datefirst above written.

 
|   | **CATALYSTS,  ADSORBENTS AND PROCESS SYSTEMS, INC.** |
|--------|------------------------------------------------------|
|   |                                                 |   |
|   |                                                 |   |
|   | By:                                                  |   | /s/  JOHN P. YIMOYINES |   |
|   | Name:                                                | John  P. Yimoyines |
|   | Title:                                               | President |
|   |                                                 |   |
|   |                                                 |   |
|   | **HONEYWELL  SPECIALTY MATERIALS, LLC**              |
|   |                                                 |   |
|   |                                                 |   |
|   | By:                                                  |   | /s/  NANCE K. DICCIANI |   |
|   | Name:                                                | Nance  K. Dicciani |
|   | Title:                                               | Authorized  Person |

 

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**Exhibit A**

 

**Net Cash**

 

**(as of December 31, 2004)**

 
| ** **                           | ** ** | **(U.S. dollars in thousands)** | ** ** |
|--------------------------------------|------------|---------------------------------|------------|
|                                 |       |                            |       |
| Cash &  cash equivalents         |       | 72,006                          |       |
|                                 |       |                            |       |
| Total cash & cash equivalents    |       | 72,006                          |       |
|                                 |       |                            |       |
| Short-term  debt                     |       | 15,995                          |       |
| [Current  portion of long-term debt] |       | —                          |       |
| Long-term  debt                      |       | 114,655                         |       |
|                                 |       |                            |       |
| Total indebtedness                   |       | 130,650                         |       |
|                                 |       |                            |       |
| Closing Net Cash                     |       | [58,644                         | ]*         |

 

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*  If,on the actual Closing Date, the total cash and cash equivalents exceeded totalindebtedness, the Closing Net Cash would be a positive number.

 

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**Exhibit B**

** **

**ASSIGNMENT AGREEMENT**

** **

**THIS ASSIGNMENT AGREEMENT**(this “Agreement”), dated as of [November 30,2005], is by and between Catalysts, Adsorbents and Process Systems, Inc., acorporation organized under the laws of the State of Maryland (“Seller”),and Honeywell Specialty Materials LLC, a limited liability company organizedunder the laws of Delaware (“Purchaser”).  Capitalized terms used herein that are nototherwise defined shall have the meaning assigned to such terms in the Purchaseand Sale Agreement, dated as of September     , 2005 (as itmay be amended or otherwise modified from time to time in accordance with itsterms, the “Purchase and Sale Agreement”), by and between Seller andPurchaser.

 

1.             On the terms and subject to theconditions of the Purchase and Sale Agreement, Seller hereby sells, transfers,conveys and assigns to Purchaser free and clear of all liens, claims andencumbrances, and Purchaser hereby accepts, all right, title and interest inand to Seller’s Membership Interest.

 

2.             Seller hereby acknowledges receiptfrom Purchaser of ___________________ Dollars ($____________), which amountshall be subject to adjustment as provided in Section 2.04 of the Purchase andSale Agreement.

 

3.             This Agreement shall be construedand enforced in accordance with and governed by the laws of the State ofDelaware, without reference to its conflict of laws rules or principles.

 

4.             This Agreement may be executed incounterparts, including by facsimile, each of which shall be deemed anoriginal, but both of which together shall constitute one and the sameinstrument.

 

 

**IN WITNESS WHEREOF**, the parties hereto have caused this Agreement to be executed anddelivered as of the date first above written.

 
|   | **CATALYSTS,  ADSORBENTS AND PROCESS SYSTEMS, INC.** |
|--------|------------------------------------------------------|
|   | ** **                                           |
|   |                                                 |
|   | By:                                                  |   |   |
|   | Name:                                                |
|   | Title:                                               |   |
|   |                                                 |   |
|   |                                                 |   |
|   | **HONEYWELL  SPECIALTY MATERIALS, LLC**              |
|   | ** **                                           |
|   |                                                 |   |
|   | By:                                                  |   |   |
|   | Name:                                                |
|   | Title:                                               |   |
|        |                                                      |  |  |  |  |

 

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