Document:

EXHIBIT 10(ff)

 

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.

 

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“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.

 

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“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

 

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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,

 

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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

 

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(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

 

46

 

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.

 

47

 

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:

 

48

 

	
  (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

 

49

 

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.

 

50

 

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

  

 

51

 

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.

 

52

 

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:

  

 

53EXHIBIT 10.5.3

 

Third Amendment to the

Amended and Restated Revolving Credit Agreement

 

This Third Amendment to the Amended and
Restated Revolving Credit Agreement (this “Amendment”) is made effective
as of September 30, 2005 and is entered into between Union Carbide Corporation,
as Borrower (“Borrower”), The Dow Chemical Company, as Lender (“Lender”),
and Union Carbide Subsidiary C, Inc. and Union Carbide Chemicals & Plastics
Technology Corporation as the Subsidiary Guarantors (the “Subsidiary
Guarantors”) (together, the “Parties”).

 

BACKGROUND

 

The Parties have entered into the Amended and
Restated Revolving Credit Agreement dated as of May 28, 2004, as amended by the
First Amendment to the Amended and Restated Revolving Credit Agreement dated
October 29, 2004 and the Second Amendment to the Amended and Restated Revolving
Credit Agreement dated December 30, 2004 (the “Credit Agreement”).

 

The Parties desire to amend the Credit
Agreement according to the terms in this Amendment.  Any capitalized terms used in this Amendment,
but not otherwise defined in this Amendment, are as defined in the Credit
Agreement.

 

THE
AGREEMENT

 

1.             Amendment
to Section 1.1.  The Parties agree to
amend Section 1.1 of the Credit Agreement by replacing the definitions of “LIBOR”
and “Scheduled Termination Date” in their entirety with the following
definitions:

 

“‘LIBOR’
means the rate of interest announced publicly by the British Bankers
Association as its one (1) month LIBOR rate for U.S. Dollars on the date that
is two Business Days prior to the first day of the applicable period for which
such interest is payable.

 

‘Scheduled Termination Date’ means December 30, 2006.”

 

2.             No Other Amendment or Waiver.  Except as expressly amended by this
Amendment, the Credit Agreement and all other Loan Documents remain in full
force and effect in accordance with their terms, and the Parties ratify and
confirm the Credit Agreement and all other Loan Documents in all respects.

 

3.             Execution in Counterparts.  This Amendment may be executed in any number
of counterparts and by different Parties in separate counterparts, each of
which when so executed will be deemed to be an original and all of which taken
together will constitute one and the same agreement.  Signature pages may be detached from multiple
separate counterparts and attached to a single counterpart so that all
signature pages are attached to the same document.

 

4.             Governing Law. 
This Amendment and the rights and obligations of the Parties to this
Amendment will be governed by, and construed and interpreted in accordance
with, the law of the State of New York.

 

[Signature pages follow.]

 

21

 

The
Parties agree that this Amendment is effective as of September 30, 2005, and
they have caused their authorized representatives to execute this Amendment
below.

 

	
  LENDER: 

  	
   

  	
  SUBSIDIARY GUARANTORS:

  
	
   

  	
   

  	
   

  
	
  THE
  DOW CHEMICAL COMPANY

  	
   

  	
  UNION CARBIDE SUBSIDIARY C,
  INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ J. P. REINHARD 

  	
   

  	
   

  	
  By:

  	
  /s/ JOHN P. YIMOYINES

  	
   

  
	
  Name:

  	
  J. P. Reinhard

  	
   

  	
  Name:

  	
  John P. Yimoyines 

  
	
  Title:

  	
  Executive Vice
  President and

  Chief Financial Officer 

  	
   

  	
  Title:

  	
  President 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  BORROWER:

  	
   

  	
  UNION CARBIDE CHEMICALS &

  PLASTICS TECHNOLOGY CORPORATION 

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  UNION
  CARBIDE CORPORATION 

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/ ALEXANDER J. MAKAI

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Alexander J. Makai 

  
	
  By: 

  	
  /s/ EDWARD W. RICH

  	
   

  	
   

  	
  Title:

  	
  President

  
	
  Name:

  	
  Edward W. Rich 

  	
   

  	
   

  	
   

  
	
  Title:

  	
  Chief Financial
  Officer, Vice President and

  Treasurer

  	
   

  	
   

  	
   

  
									

 

22

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