EXHIBIT 10.8


 


Purchase and Sale Agreement


 


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


 


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


 


WHEREAS, the
transfer of a Membership Interest is governed by the Limited Liability Company
Agreement, dated as of November 3, 1997, between Seller and EM Sector Holdings
Inc., a Delaware corporation (“EMS”), as amended by the Letter
Agreement, dated as of October 6, 1998 and the Amendment of Limited Liability
Company Agreement, dated as of March 12, 2004 (the “LLC Agreement”);


 


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


 


WHEREAS, the parties desire to set forth certain
actions to be completed in connection with such purchase and sale and provide
for certain other agreements between the parties.


 


NOW, THEREFORE, the parties
agree as follows:


 


ARTICLE
I



DEFINITIONS


 


Section
1.01       Definitions.  The following terms shall have the following
meanings for the purposes of this Agreement:


 


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


 


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


 


“Agreement” shall
mean this Purchase and Sale Agreement, including the Exhibits hereto, as it may
be amended, modified or supplemented from time to time in accordance with its
terms.


 


“Board of Managers”
shall mean the board of managers of the Company created pursuant to Section 5.1
of 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 are
closed for business.


 


“CAPS Transfer Agreement” shall mean the CAPS Transfer
Agreement, 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 transactions
contemplated hereby in accordance with Article VI.


 


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


 


23





















 


“Closing Net Cash” shall have the meaning set forth in Section
2.04(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 to
this Agreement.


 


“Confidentiality Agreement” shall have the meaning set forth in Section
5.03.


 


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


 


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


 


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


 


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


 


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


 


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


 


“LIBOR Rate” shall
mean the rate of interest announced publicly by the British Bankers Association
as its three (3) month LIBOR rate for Dollars on the Business Day immediately
following the day the Statement becomes final and binding as provided in Section
2.04(b).


 


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


 


“Mayer Brown” shall have the meaning set forth in Section
5.03.


 


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


 


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


 


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


 


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


 


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


 


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


 


“Statement” shall have the meaning set forth in Section
2.04(a).


 


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


 


“Taxes” shall mean
all taxes, charges, fees, duties, levies or other assessments (including
income, gross receipts, net proceeds, ad valorem, turnover, real and personal
property (tangible and intangible), sales, use, franchise, excise, goods and
services, 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 Governmental
Authority, and such term shall include any interest, penalties or additions to
tax attributable thereto.


 


24





















 


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


 


Section
1.02       Interpretation.  The headings preceding the text of Articles
and Sections included in this Agreement and the headings to the Exhibits
attached to this Agreement are for convenience only and shall not be deemed
part of this Agreement or be given any effect in interpreting this
Agreement.  The use of the masculine,
feminine or neuter gender or the singular or plural form of words herein shall
not limit any provision of this Agreement. 
The use of the terms “including” or “include” shall in all cases herein
mean “including, without limitation” or “include, without limitation,”
respectively.  Reference to any Person
includes such Person’s successors and assigns to the extent such successors and
assigns are permitted by the terms of the applicable agreement, and reference
to a Person in a particular capacity excludes such Person in any other capacity
or individually.  Reference to any
agreement (including this Agreement), document or instrument means such agreement,
document or instrument as amended or modified and in effect from time to time
in 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 whole
and not to any particular Article, Section or clause of, or Exhibit to, this
Agreement.


 


ARTICLE II



PURCHASE AND SALE OF MEMBERSHIP INTEREST


 


Section
2.01       Purchase
and Sale.  On the terms and subject
to the conditions hereof, at the Closing, Seller shall sell, transfer, convey
and assign to Purchaser, free and clear of all liens, claims and encumbrances,
and Purchaser shall purchase, acquire and accept, all right, title and interest
in and to Seller’s Membership Interest.


 


Section
2.02       Payment of
Initial Purchase Price.  In
consideration of and in exchange for the sale of Seller’s Membership Interest
to 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 amount
equal to fifty percent (50%) of the Estimated Closing Net Cash (collectively,
the “Initial Purchase Price”), subject to adjustment as set forth in Section
2.04.  The Initial Purchase Price
shall be paid in accordance with Section 9.04 at the Closing to the
account designated by Seller not later than three (3) Business Days prior to
the Closing Date.


 


Section
2.03       Calculation
of Estimated Closing Net Cash. 
Seller and Purchaser shall cause the Company to deliver to Seller and
Purchaser not later than seven (7) days prior to the Closing Date a written
statement setting forth the Company’s good faith estimate of the Net Cash of
the Company as of the Closing Date (the “Estimated Closing Net Cash”),
together with any supporting information that Seller or Purchaser may
reasonably request; provided, that each party will receive a copy of any
information delivered by the Company with respect to any such request.  Seller and Purchaser shall in good faith work
together in the seven (7) days prior to Closing to agree on the amount of the
Estimated Closing Net Cash; provided, however, that in the
absence of agreement by the parties with respect to the Estimated Closing Net
Cash, the Closing shall occur in accordance with Article VI based on the
Company’s good faith estimate of the Net Cash of the Company delivered to
Seller and Purchaser in accordance with this Section 2.03.  “Net Cash” means, as of any specified
date, an amount determined by subtracting (a) the aggregate amount of the
Company’s consolidated indebtedness as of such date from (b) the aggregate
amount of the Company’s consolidated cash and cash equivalents as of such
date.  For purposes of calculating Net
Cash, the Company’s cash and cash equivalents and indebtedness will be
determined in accordance with the accounting principles and consistent with the
accounting practices used by the Company to prepare its audited consolidated
balance sheet for the year ended December 31, 2004.  For illustrative purposes only, Exhibit A
sets forth the calculation of Net Cash of the Company as of December 31, 2004.


 


Section
2.04       Purchase
Price Adjustment.


 


(a)   Within ninety (90) days after the Closing
Date, 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, together
with 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


 


25





















 


Seller’s expense, an
audit of the balance sheet of the Company as of the Closing Date in accordance
with generally accepted auditing standards; provided, however,
that nothing in this sentence shall either change the definition of Net Cash
from that set forth in Section 2.03 or extend the time frame in which
Seller must deliver the Statement to Purchaser. 
After the Closing Date, at Seller’s request, Purchaser shall, and shall
cause the Company to, assist Seller and its representatives in the preparation
of the Statement and the conduct of the audit and shall provide Seller and its
representatives any information reasonably requested and shall provide them
access at all reasonable times to the personnel, properties and books and
records of the Company for such purposes.


 


(b)   Within thirty (30) days after receipt of the
Statement, Purchaser shall deliver to Seller a written statement describing its
objections, if any, to the Statement (the “Statement of Objections”).  If Purchaser does not deliver a Statement of
Objections to Seller within such thirty-day period, the Statement shall become
final and binding upon the parties.  If
Purchaser delivers a Statement of Objections to Seller within such thirty-day
period, and the parties cannot resolve any such objection within ten (10)
Business Days after the receipt by Seller of such Statement of Objections, any
remaining disputes shall be resolved by Ernst & Young LLP (the “Accounting
Firm”).  The Accounting Firm shall be
instructed to resolve such disputes within thirty (30) days after receipt by
the Accounting Firm of the materials delivered by Seller to Purchaser pursuant
to Section 2.04(a) and by Purchaser to Seller pursuant to this Section
2.04(b), which materials shall be delivered by Seller and Purchaser to the
Accounting Firm within five (5) Business Days following the expiration of the
ten (10) Business Day period referenced in the preceding sentence.  The resolution of disputes by the Accounting
Firm shall be set forth in writing and shall be conclusive and binding upon the
parties, and the Statement, as modified by such resolution, shall become final
and binding upon the date of such resolution. 
The determination of the Accounting Firm for any item in dispute cannot
be 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 in
the Statement of Objections, in the case of Purchaser.  The Accounting Firm shall have no right to
make any determination with respect to the undisputed portions of the
Statement, and no such determination with respect to the undisputed portions of
the Statement shall be binding on Seller or Purchaser.  The Accounting Firm shall be instructed to
calculate Net Cash in accordance with Section 2.03.  The fees and expenses of the Accounting Firm
shall be apportioned between Seller and Purchaser by the Accounting Firm based
on the degree to which Seller’s and Purchaser’s claims were unsuccessful and
shall be paid by Seller and Purchaser in accordance with such determination.


 


(c)   Upon
the Statement becoming final and binding in accordance with Section 2.04(b),
the Initial Purchase Price shall be increased by fifty percent (50%) of the
amount by which the Closing Net Cash exceeds the Estimated Closing Net Cash or decreased
by fifty percent (50%) of the amount by which the Closing Net Cash is less than
the Estimated Closing Net Cash.  If the
Closing Net Cash exceeds the Estimated Closing Net Cash, Purchaser shall pay to
Seller fifty percent (50%) of the amount of such excess, together with a sum
equivalent to interest thereon at a rate equal to the LIBOR Rate from the
Closing Date to the date of payment.  If
the Estimated Closing Net Cash exceeds the Closing Net Cash, Seller shall pay
to Purchaser fifty percent (50%) of the amount of such excess, together with a
sum equivalent to interest thereon at a rate equal to the LIBOR Rate from the
Closing Date to the date of payment.  Any
such payment hereunder shall be made in accordance with Section 9.04 within
five (5) Business Days after final determination of the Statement to an account
designated in writing by Purchaser or Seller, as the case may be.


 


ARTICLE III



REPRESENTATIONS AND WARRANTIES OF SELLER


 


Seller represents and
warrants to Purchaser as follows:


 


Section
3.01       Ownership
of 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 any
restrictions 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’s
Membership Interest or obligating Seller to issue or sell any membership
interest in the Company or (b) voting trusts, stockholder or membership
agreements, proxies or other agreements or understandings in effect with
respect to the voting or transfer of any of Seller’s Membership Interest.  At the Closing, pursuant to Section 2.01,
Seller shall sell, transfer,


 


26





















 


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


 


Section
3.02       Authority.  Seller is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its formation and
Seller has full right, power and authority to enter into this Agreement, to perform
its obligations hereunder and to consummate the transactions contemplated
hereby.  The execution of this Agreement
by Seller, the performance by Seller of its obligations hereunder and the
consummation by Seller of the transactions contemplated hereby have been duly
authorized by all requisite action on the part of Seller.  This Agreement has been duly executed and
delivered by Seller and, assuming due authorization, execution and delivery by
Purchaser, this Agreement constitutes legal, valid and binding obligations of
Seller enforceable against Seller in accordance with its terms, except to the
extent that enforcement may be affected by Laws relating to bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium and other Laws
affecting creditors’ rights, and by the availability of injunctive relief,
specific performance and other equitable remedies.


 


Section
3.03       No
Conflict.  Assuming that all filings
and notifications contemplated by Section 5.02 have been made and any
applicable 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 the
organizational documents of Seller, (b) conflict with or violate any Law
applicable to Seller, where such conflict or violation would adversely affect
the ability of Seller to carry out its obligations under, and to consummate the
transaction contemplated by, this Agreement, or (c) conflict with, result in
any breach of, constitute a default (or event which with the giving of notice
or lapse of time, or both, would become a default) under, require any consent
under, or give to others any right of termination, amendment, acceleration,
suspension, revocation or cancellation of, or result in the creation of any
lien 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 by
which any of Seller’s Membership Interest is bound or affected.  The execution, delivery and performance of
this Agreement by Seller does not and will not require (i) any consent,
approval, authorization or other order of, action by, filing with, or
notification to any Governmental Authority, except as contemplated by Section
5.02 or (ii) any other third party consents, approvals or authorizations.


 


ARTICLE IV



REPRESENTATIONS AND WARRANTIES OF PURCHASER


 


Section
4.01       Authority.  Purchaser is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its formation and
Purchaser has full right, power and authority to enter into this Agreement, to
perform its obligations hereunder and to consummate the transactions
contemplated hereby.  The execution of
this Agreement by Purchaser, the performance by Purchaser of its obligations
hereunder and the consummation by Purchaser of the transactions contemplated
hereby have been duly authorized by all requisite action on the part of
Purchaser.  This Agreement has been duly
executed and delivered by Purchaser and, assuming due authorization, execution
and delivery by Seller, this Agreement constitutes legal, valid and binding
obligations of Purchaser enforceable against Purchaser in accordance with its
terms, except to the extent that enforcement may be affected by Laws relating
to bankruptcy, reorganization, insolvency, fraudulent conveyance, moratorium
and other Laws affecting creditors’ rights, and by the availability of
injunctive relief, specific performance and other equitable remedies.


 


Section
4.02       No
Conflict.  Assuming that all filings
and notifications contemplated by Section 5.02 have been made and any
applicable 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 the
organizational documents of Purchaser, (b) conflict with or violate any Law applicable
to Purchaser, where such conflict or violation would adversely affect the
ability of Purchaser to carry out its obligations under, and to consummate the
transaction contemplated by, this Agreement, or (c) conflict with, result in
any breach of, constitute a default (or event which with the giving of notice
or lapse of time, or both, would become a default) under, require any consent
under, 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 or
arrangement to which Purchaser is a party. 
The execution, delivery and performance of this Agreement by Purchaser
does not and will not require


 


27





















 


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


 


ARTICLE V



CONDITIONS TO CLOSING; PRE-CLOSING COVENANTS


 


Section
5.01       Closing
Conditions.


 


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


 


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


 


(c)   Unless waived by Seller in its sole
discretion, the obligations of Seller to be performed by Seller at Closing are
also subject to and conditioned upon each representation and warranty of
Purchaser set forth in Article IV being true and correct as of the
Closing as though such representation and warranty were made on and as of such
time.


 


Section
5.02       Governmental
Approvals.  Purchaser shall, as
promptly as practicable following the date hereof, make all necessary filings,
applications, statements and reports to all Governmental Authorities in order
to obtain any approval or clearance from any Governmental Authority required to
consummate the transactions contemplated hereby.  Purchaser shall respond promptly to inquiries
from any Governmental Authority in connection with such filings, applications,
statements and reports, including providing any supplemental information that
may be requested.  Purchaser shall
provide to Seller copies of all filings made with any Governmental Authority at
the time they are filed or delivered and shall keep Seller informed of any
discussions with, or further requests by, any Governmental Authority.  Seller shall provide to Purchaser such
reasonable assistance as is necessary to make any such filing, application,
statement or report or obtain any such approval or clearance.


 


Section
5.03       Termination
of the Confidentiality Agreement.  On
or before the Closing Date, (a) Seller and Purchaser shall, and to the extent
applicable shall cause their Affiliates to, terminate the Agreement, dated
November 8, 2004, between Purchaser, Honeywell International Inc., Seller,
Union Carbide Corporation and The Dow Chemical Company (the “Confidentiality
Agreement”), and (b) Seller shall return the data room materials located at
the offices of Mayer, Brown, Rowe & Maw LLP, at 71 South Wacker Drive,
Chicago, Illinois, 60606 (“Mayer Brown”) to the Company and shall
request the return or destruction of any Evaluation Information (as defined in
the Confidentiality Agreement) that was received by any third party in
connection with a proposed transfer of Seller’s Membership Interest subsequent
to the termination of the Discussions (as defined in the Confidentiality
Agreement).


 


ARTICLE VI



CLOSING


 


Section
6.01       Closing.


 


(a)   The Closing shall take place at Mayer Brown,
at 9:00 a.m., Central Time, on November 30, 2005, provided all
conditions to the obligations of Purchaser and Seller set forth in Section
5.01 shall have been satisfied or waived, other than those conditions to be
satisfied at the Closing.  In the event
that the Closing does not occur on November 30, 2005 because the conditions to
the obligations of Purchaser and Seller set forth in Section 5.01 have
not 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


 


28





















 


conditions to the
obligations of Purchaser and Seller set forth in Section 5.01 shall have
been satisfied or waived, other than those conditions to be satisfied at the
Closing, 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 this
Agreement and to abandon the transactions contemplated herein.  If this Agreement is terminated pursuant to
this Section 6.01(b), this Agreement shall become null and void and of
no further force and effect.


 


Section
6.02       Deliveries
by Seller.  At the Closing, Seller
shall deliver to Purchaser the following:


 


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


 


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


 


(c)   a certificate to the effect that Seller is
not a “foreign person” within the meaning of Section 1445(f)(3) of the Code;
and


 


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


 


Section
6.03       Deliveries
by 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 of
each of the members of the Board of Managers who were appointed by Seller
delivered pursuant to Section 6.02(b); and


 


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


 


ARTICLE VII



INDEMNIFICATION


 


Section
7.01       Indemnification
by Purchaser.  Following the Closing,
Purchaser agrees to indemnify Seller for (a) any breach of any representation
or warranty of Purchaser set forth in Article IV and (b) all Company
liabilities; provided, however, that such agreement to indemnify
shall have no effect on and shall not limit the rights of any party to
indemnification, or the obligation of Seller or its Affiliates to indemnify any
party, pursuant to Article 13 of the CAPS Transfer Agreement.  Notwithstanding the foregoing, and for the
avoidance of doubt, Purchaser and Seller agree that Purchaser’s indemnification
of Seller shall not include any U.S. federal, state or local or foreign income
Taxes imposed on Seller with respect to the income of the Company for any Tax
period or portion thereof ending on or prior to the Closing Date, or imposed on
Seller’s sale of Seller’s Membership Interest hereunder.


 


Section
7.02       Indemnification
by Seller.  Following the Closing,
Seller agrees to indemnify Purchaser for any breach of any representation or
warranty of Seller set forth in Article III.


 


29





















 


ARTICLE VIII



COVENANTS


 


Section
8.01       Continuation
of Certain Provisions of the LLC Agreement.


 


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


 


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


 


(c)   Purchaser shall cooperate with Seller with
respect to the preparation of all tax returns for the Company for all taxable
periods beginning before the Closing Date and to the extent necessary to permit
Seller to perform its obligations pursuant to the Tax Matters Agreement for
such periods.  Pursuant to the Tax
Matters Agreement, Purchaser shall take no action inconsistent with past
practices with respect to any taxable period or portion thereof of the Company
ending on or prior to the Closing Date that would give rise to a materially
detrimental income Tax consequence to Seller or any of its Affiliates.


 


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


 


(e)   For the avoidance of doubt, Seller
acknowledges that, following the Closing, Seller shall remain bound by the
provisions of Section 11.2 of the LLC Agreement in accordance with the terms
and conditions thereof.


 


(f)    While the parties have specifically
identified certain sections of the LLC Agreement for clarification in this Agreement,
inclusion of such sections in this Agreement shall have no precedential impact
or create any inferences on the interpretation or applicability of any other
section of the LLC Agreement.


 


ARTICLE IX



MISCELLANEOUS


 


Section
9.01       Expenses.  Each party hereto shall bear its own expenses
incurred in connection with the negotiation, preparation, execution, delivery
and performance of this Agreement. 
Purchaser and Seller shall each be responsible for any transfer taxes
imposed on it, and Purchaser and Seller shall each be responsible for fifty
percent (50%) of any transfer taxes imposed on the Company, by any Governmental
Authority as a result of the transactions contemplated by this agreement.


 


Section
9.02       Amendment.  This Agreement may be amended, modified or
supplemented but only in writing signed by Purchaser and Seller.


 


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


 


30





















 


	
  (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 designate
for itself by notice given as herein provided.


 


Section
9.04       Payments
in Dollars.  All payments pursuant
hereto shall be made by wire transfer in Dollars in immediately available funds
without any set-off, deduction or counterclaim whatsoever.


 


Section
9.05       Allocation
of 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 of
the close of business on the Closing Date, and Seller’s distributive share of
the Company’s income, gain, loss, deduction and credit and items thereof as
determined for federal income Tax purposes with respect to its interest in the
Company shall be allocated between Seller and Purchaser based on a closing of
the 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 occurring
on the Closing Date but after the Closing shall, for purposes of this Section
9.05(a) be treated as occurring after the close of business on the Closing
Date.  Without limiting the generality of
the foregoing, the parties acknowledge that Purchaser intends, as soon as
possible after the Closing, to cause the Company to transfer its interest in
its foreign subsidiaries to various foreign subsidiaries of Honeywell
International Inc., the sole member of Purchaser.  Any such


 


31





















 


transfer occurring on the
Closing Date, but after the Closing, shall, for purposes of this Section
9.05(a), be treated as occurring after the close of business on the Closing
Date.


 


(b)   Notwithstanding anything to the contrary
contained herein or in the LLC Agreement, (i) following the Closing, Purchaser
agrees 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 of
the Company) for any Tax period or portion thereof ending on or prior to the Closing
Date and (ii) the foreign Tax credits with respect to any such foreign income
Taxes shall be specially allocated to Purchaser.


 


Section
9.06       Publicity.  Neither party shall issue any publicity,
release or announcement concerning the execution of this Agreement, any of the
provisions of this Agreement or the transactions contemplated hereby without
the advance written approval of the form and content thereof by the other
party, which approval shall not be unreasonably withheld; provided, however,
that no such consent shall be required when such disclosure is required by
applicable Law or the rules or regulations of a national or foreign securities
exchange.


 


Section
9.07       Severability.  If any provision of this Agreement shall be
held invalid, illegal or unenforceable, the validity, legality or
enforceability of the other provisions hereof shall not be affected thereby,
and there shall be deemed substituted for the provision at issue a valid, legal
and enforceable provision as similar as possible to the provision at issue.


 


Section
9.08       Successors
and Assigns.  This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, including any successor of
Purchaser to the Membership Interests (in whole or in part) or any interest in
the Company; provided, that no assignment of any rights or obligations
hereunder, by operation of law or otherwise, shall be made by either party
without the prior written consent of the other party.


 


Section
9.09       Applicable
Law.  This Agreement shall be
construed and enforced in accordance with and governed by the laws of the State
of New York, without reference to its conflict of laws rules or principles.


 


Section
9.10       Jurisdiction
of Disputes.  In the event either
party to this Agreement commences any litigation, proceeding or other legal
action in connection with or relating to this Agreement or any matters
contemplated hereby, each party to this Agreement hereby (a) agrees that any
such litigation, proceeding or other legal action may be brought in a court of
competent jurisdiction of the State of New York and the federal courts of the
United States, located in the City of New York; (b) agrees that in connection
with any such litigation, proceeding or action, such party will consent and
submit to personal jurisdiction in any such court described in clause (a)
of this Section 9.10 and to service of process upon it in
accordance with the rules and statutes governing service of process; (c) agrees
to waive to the full extent permitted by law any objection that it may now or
hereafter have to the venue of any such litigation, proceeding or action in any
such court or that any such litigation, proceeding or action was brought in an
inconvenient forum; and (d) designates, appoints and directs either CT
Corporation System or Corporation Service Company as its authorized agent to
receive on its behalf service of any and all process and documents in any such
litigation, proceeding or action in the State of New York.


 


Section
9.11       Counterparts.  This Agreement may be executed in
counterparts, including by facsimile, each of which shall be deemed an
original, but both of which together shall constitute one and the same
instrument.


 


Section
9.12       Entire
Agreement.  This Agreement in
combination, where appropriate, with the LLC Agreement and other written
agreements between Seller and Purchaser constitute the entire agreement and
understanding between the parties with respect to the transfer of Seller’s
Membership Interest to Purchaser, and this Agreement supercedes the various
drafts and discussions leading hereto. 
The parties agree that no inferences may be based on prior verbal
discussions or the deletion or revision of any language to this Agreement
proposed by either party, including with respect to the interpretation of the
LLC Agreement or any other written agreement between the parties.


 


Section
9.13       Waiver.  Any waiver of rights hereunder must be set
forth in a writing signed by the party against whom the waiver is to be
effective.  A waiver of any breach or
failure to enforce any of the terms or conditions of this Agreement shall not
in any way affect, limit or waive any party’s rights at any time to enforce
strict compliance thereafter with every term or condition of this Agreement for
any other breach or failure to comply with the terms of this Agreement.


 


32





















 


Section
9.14       Further
Assurances.  From time to time after
the Closing, without further consideration, Seller and Purchaser shall
cooperate with each other and shall execute and deliver instruments of transfer
or assignment or assumption or such other documents to the other as the other
reasonably may request to evidence or perfect Purchaser’s right, title and
interest to Seller’s Membership Interest and to otherwise carry out the
transactions contemplated hereby.


 


 


IN WITNESS WHEREOF, the parties
hereto have caused this Agreement to be executed and delivered as of the date
first 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

  



 


33





















 


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

  	
  ]*

  



 










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


 


34





















 


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., a
corporation organized under the laws of the State of Maryland (“Seller”),
and Honeywell Specialty Materials LLC, a limited liability company organized
under the laws of Delaware (“Purchaser”).  Capitalized terms used herein that are not
otherwise defined shall have the meaning assigned to such terms in the Purchase
and Sale Agreement, dated as of September     , 2005 (as it
may be amended or otherwise modified from time to time in accordance with its
terms, the “Purchase and Sale Agreement”), by and between Seller and
Purchaser.


 


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


 


2.             Seller hereby acknowledges receipt
from Purchaser of ___________________ Dollars ($____________), which amount
shall be subject to adjustment as provided in Section 2.04 of the Purchase and
Sale Agreement.


 


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


 


4.             This Agreement may be executed in
counterparts, including by facsimile, each of which shall be deemed an
original, but both of which together shall constitute one and the same
instrument.


 


 


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


 


	
   

  	
  CATALYSTS,
  ADSORBENTS AND PROCESS SYSTEMS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:
  

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  HONEYWELL
  SPECIALTY MATERIALS, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
  Name:

  
	
   

  	
  Title:

  	
   

  
						



 


35