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EXHIBIT 10.29    
  


 
  Pledge and Security Agreement    
  



        This PLEDGE AND SECURITY AGREEMENT is dated as of March 25, 2003, by UNION CARBIDE CORPORATION, a New York
corporation ("Carbide" or "Grantor"), in favor of THE DOW CHEMICAL COMPANY, a Delaware corporation
("TDCC" or "Lender"). 


 
 

W I T N E S S E T H:    
  


        WHEREAS, Carbide is a party to a Credit Agreement dated as of the date first above written (as the same may be hereafter amended, modified, supplemented or
restated from time to time, the "Credit Agreement") between Carbide, as borrower, and TDCC, as lender; 


        WHEREAS,
as a condition precedent to the effectiveness of the Credit Agreement, Carbide is required to execute and deliver this Agreement; and 


        WHEREAS,
to secure the due and punctual payment and performance of, among other things, the obligations of Carbide arising under the Credit Agreement, Carbide wishes to grant to TDCC a
security interest in the Collateral (as defined below), subject to the limitations set forth herein; 



        NOW,
THEREFORE, in consideration of the premises and to induce TDCC to enter into the Credit Agreement and to induce TDCC to make and/or continue extensions of credit to Carbide
thereunder, Carbide hereby agrees with TDCC as follows: 


 
 

ARTICLE I    
    
    DEFINED TERMS    
  


        Section 1.1    Definitions.    



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


        (b)  Terms
used herein that are defined in the UCC have the meanings given to them in the UCC, including the following which are capitalized herein: 




"Account Debtor"

"Cash proceeds"

"Deposit Account"

"Instruments"

"Investment Property"

"Proceeds"

"Security"

"Security Entitlement"





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




        "Agreement" means this Pledge and Security Agreement. 


        "Approved Deposit Account" means a Deposit Account maintained by Grantor with a Deposit Account Bank, which account is the subject of an
effective Deposit Account Control Agreement, and includes all monies on deposit therein and all certificates and instruments, if any, representing or evidencing such Deposit Account. 



        "Collateral" has the meaning specified in Section 2.1. 


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        "Consolidated Net Tangible Assets" means total assets less (a) total current liabilities (excluding indebtedness for borrowed money
or guarantees thereof due within 12 months) and (b) goodwill, as reflected in the Company's most recent consolidated balance sheet preceding the relevant date of a determination, such
amount to be calculated in accordance with Section 4.04(9) of the Indenture. 


        "Debt Obligations" means (i) at any time when Grantor is bound by the restrictions set forth in Section 5.5 of the
Participation Agreement, any Obligation that would constitute "Debt" as defined in Section 5.1 of the Participation Agreement, and (ii) at any time when Grantor is not bound by the
restrictions set forth in Section 5.5 of the Participation Agreement, any Obligations for borrowed money or any guarantee of such Obligation. 



        "Deposit Account Bank" means a financial institution selected or approved by Lender and with respect to which Grantor has delivered to
Lender an executed Deposit Account Control Agreement. 


        "Deposit Account Control Agreement" means a letter agreement in form and substance satisfactory to Lender, executed by Grantor, Lender and
the relevant Deposit Account Bank. 


        "Designated Joint Ventures" means any of the Pledged Collateral identified as a "Designated Joint Venture" on  Schedule 2. 



        "Indenture" means the Indenture dated as of June 1, 1995 between Grantor and Chemical Bank, as trustee, as amended. 


        "Intercompany Note" means any promissory note evidencing Intercompany Indebtedness. 


        "LLC" means each limited liability company in which Grantor has an interest identified on  Schedule 2. 



        "LLC Agreement" means each operating agreement with respect to an LLC, as each agreement has heretofore been and may hereafter be amended,
restated, supplemented or otherwise modified from time to time. 


        "Non-Debt Obligations" means all Obligations other than Debt Obligations. 


        "Obligations" means all advances, debts, liabilities, obligations, covenants and duties owing by Grantor to Lender of every type and
description, arising under (i) the Credit Agreement or under any other Loan Document, including all Loans and Credit Enhancement Obligations and all fees and expenses and all interest, charges,
expenses, fees, attorneys' fees and disbursements and other sums chargeable to Grantor under the Credit Agreement or any other Loan Document, or (ii) any other transaction, arrangement,
agreement, guarantee, indemnity or extension or enhancement of credit entered into or provided by Lender to or on behalf of Grantor from and after the date hereof, in each case whether direct or
indirect, absolute or contingent, or due or to become due. 


        "Participation Agreement" means the Participation Agreement dated as of April 1, 2000, with respect to Union Carbide Trust
No. 2000-A, as amended from time to time. 


        "Partnership" means each partnership in which Grantor has an interest identified on  Schedule 2. 


        "Partnership Agreement" means each partnership agreement governing a Partnership, as each such agreement has heretofore been and may
hereafter be amended, restated, supplemented or otherwise modified. 


        "Pledged Collateral" means, collectively, the Pledged Notes, the Pledged Stock, the Pledged Partnership Interests, the Pledged LLC
Interests, all certificates or other instruments representing any of the foregoing, all Security Entitlements of Grantor in respect of any of the foregoing, all dividends, interest distributions,
cash, warrants, rights, instruments and other property or Proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of the foregoing. 


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        "Pledged LLC Interests" means all of Grantor's right, title and interest as a member of the LLCs set forth on  Schedule 2 and all of Grantor's right, title and
interest in, to and under any LLC Agreement with respect thereto to which it is a party.
 


        "Pledged Notes" means all right, title and interest of Grantor in the Instruments evidencing Intercompany Indebtedness (including any
Intercompany Notes) owed to Grantor, including all Indebtedness described on Schedule 2, issued by the obligors named therein, and all interest,
cash,
Instruments and other property or Proceeds from time to time received, receivable or otherwise distributed in respect of or in exchange for any or all of such Indebtedness. 


        "Pledged Partnership Interests" means all of Grantor's right, title and interest as a limited and/or general partner in the Partnerships
set forth on Schedule 2 and all of Grantor's right, title and interest in, to and under any Partnership Agreements with respect thereto to which
it is a party. 


        "Pledged Stock" means the shares of capital stock owned by Grantor identified on  Schedule 2; provided, however, that
so long as doing otherwise would result in adverse tax
consequences to Grantor, the amount of outstanding capital stock of any Subsidiary that is not a domestic Subsidiary that is pledged or deemed to be pledged hereunder shall not exceed the amount of
shares of capital stock possessing up to but not exceeding 65% of the voting power of all classes of capital stock of such Subsidiary entitled to vote. 



        "Restricted Property" means any shares of capital stock of a Restricted Subsidiary owned by the Company or a Restricted Subsidiary. 


        "Restricted Subsidiary" means a Wholly-Owned Subsidiary that has substantially all of its assets located in the United States and owns a
manufacturing facility located in the United States. 


        "Secured Obligations" means the Debt Obligations and Non-Debt Obligations owed by Grantor to Lender. 



        "Securities Act" means the Securities Act of 1933, as amended. 


        "UCC" means the Uniform Commercial Code as in effect in the State of New York on the date hereof; provided,
however, that in the event that, by reason of mandatory provisions of law, any or all of the attachment, perfection or priority of Lender's security interest in any Collateral
is governed by the Uniform Commercial Code as in effect in a jurisdiction other than the State of New York, the term "UCC" shall mean the Uniform Commercial Code as in effect on the date hereof in
such other jurisdiction for purposes of the provisions hereof relating to such attachment, perfection or priority and for purposes of definitions related to such provisions. 


        "Wholly-Owned Subsidiary" means a Subsidiary of which 100% of the outstanding voting stock or equity securities are owned directly or
indirectly by Grantor. 


        Section 1.2    Certain Other Terms.    



        (a)  The
words "herein", "hereof",
"hereto" and "hereunder" and similar words refer to this Agreement as a whole and not to any particular
Article, Section, subsection or clause in this Agreement. 


        (b)  References
herein to Schedule, Article, Section, subsection or clause refer to the appropriate Schedule to, or Article, Section, subsection or clause in this Agreement. 


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



        (d)  Any
reference in this Agreement to a Loan Document shall include all appendices, exhibits and schedules thereto, and, unless specifically stated otherwise, all
amendments, 



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restatements, supplements or other modifications thereto, and as the same may be in effect at any and all times such reference becomes operative. 


        (e)  The
term "including" means "including without limitation" except when used in the computation of time periods. 



        (f)    The
terms "Lender" and "Grantor" include their respective successors. 


        (g)  References
in this Agreement to any statute shall be to such statute as amended or modified and in effect from time to time. 



 
 

ARTICLE II    
    
    GRANT OF SECURITY INTEREST    
  



        Section 2.1    Collateral.    For the purposes of this Agreement, all of the following property now owned by
Grantor or in which Grantor now has any right, title or interests is collectively referred to as the "Collateral": 



        (a)  all
Pledged Collateral; 


        (b)  all
Deposit Accounts; 


        (c)  all
books and records pertaining to the property described in clauses (a) and (b) of this  Section 2.1; and 


        (d)  to
the extent not otherwise included, all Proceeds and products of each of the foregoing and all accessions to, substitutions and replacements for, and any and all
proceeds of any insurance, indemnity, warranty or guaranty payable to Grantor from time to time with respect to any of the foregoing. 




Notwithstanding
anything to the contrary contained above: (1) to the extent the security interest created by this Agreement is securing indebtedness for borrowed money or guarantees of
indebtedness for borrowed money (collectively "Funded Debt"), such security interest shall not extend to, and the term "Collateral" shall not include,
any Restricted Property (except to the extent the aggregate Funded Debt secured by Restricted Property hereunder does not exceed at any time outstanding 10% of Consolidated Net Tangible Assets);
(2) so long as Grantor is bound by Section 5.5 of the Participation Agreement, the maximum principal amount of Debt Obligations secured hereunder shall not exceed at any time outstanding
the sum of (x) $800,000,000 plus (y) the amount of Debt Obligations to the extent secured by Designated Joint Ventures; (3) any
Pledged Collateral if the grant of a security interest therein would constitute a violation or breach of any other agreement by which Grantor is bound; and (4) any Deposit Accounts for which
the relevant depository bank's jurisdiction is not in the United States and acceptable arrangements cannot be made in the United States. The parties hereto agree that the amount of Debt Obligations
that may be secured under this Agreement is limited under clauses (1) and (2) above, as required under the Indenture and the Participation Agreement, to only a portion of the aggregate
Debt Obligations owing or which may become owing by Grantor to Lender and that any payments or repayments of such Debt Obligations shall be and be deemed to be applied first to the portion of such
Debt Obligations that is not secured hereby, it being the parties' intent that the portion of such Debt Obligations last remaining unpaid shall be secured hereby. 



        Section 2.2    Grant of Security Interest in Collateral.    Subject to the limitations expressly set forth in  Section 2.1, Grantor, as
security for the full, prompt and complete payment and performance when due (whether at stated maturity, by acceleration
or otherwise) of the Secured Obligations, hereby collaterally pledges to Lender and grants to Lender a Lien on and security interest in, all of its right, title and interest in, to and under the
Collateral. 


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ARTICLE III    
    
    REPRESENTATIONS AND WARRANTIES    
  


        To induce Lender to enter into the Credit Agreement, Grantor hereby represents and warrants to Lender that: 


        Section 3.1    Title; No Other Liens.    Except for the Lien granted to Lender pursuant to this Agreement and
the other Liens permitted to exist on the Collateral under the Credit Agreement, (a) Grantor is the record and beneficial owner of the Pledged Collateral pledged by it hereunder constituting
Instruments or certificated securities and owns each other item of Collateral in which a Lien is granted by it hereunder and (b) all such Collateral is owned free and clear of any and all
Liens. 


        Section 3.2    Perfection and Priority.    The security interest granted pursuant to this Agreement will
constitute a valid and continuing perfected security interest in favor of Lender in the Collateral for which perfection is governed by the UCC upon (i) the completion of the filings and other
actions specified on Schedule 3 (which, in the case of all filings and other documents referred to on such schedule, have been delivered to
Lender in completed and duly executed form), (ii) the delivery to Lender of all Collateral consisting of Instruments and certificated securities, in each case properly endorsed for transfer to
Lender or in blank, and (iii) the execution of Deposit Account Control Agreements with respect to all Deposit Accounts. Such security interest will be prior to all other Liens on the Collateral
except for Customary Permitted Liens which have priority over Lender's Lien by operation of law or otherwise as permitted under the Credit Agreement or any Loan Document. 



        Section 3.3    State of Incorporation; Chief Executive Office.    On the date hereof Grantor's jurisdiction of
organization, organizational identification number, if any, and the location of Grantor's chief executive office or sole place of business is specified on  Schedule 1. 


        Section 3.4    Pledged Collateral.    



        (a)  The
Pledged Stock, Pledged Partnership Interests and Pledged LLC Interests pledged hereunder by Grantor constitutes that percentage of the issued and outstanding equity
of all classes of each issuer thereof as set forth on Schedule 2. 


        (b)  All
of the Pledged Stock, and (to the extent relevant) all Pledged Partnership Interests and Pledged LLC Interests have been duly and validly issued and are fully paid
and nonassessable. 


        (c)  Each
of the Pledged Notes constitutes the legal, valid and binding obligation of the obligor with respect thereto, enforceable in accordance with its terms, subject to
the effects of bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally, and general equitable principles
(whether considered in a proceeding in equity or at law). 


        (d)  All
Pledged Collateral consisting of certificated securities or Instruments has been delivered to Lender in accordance with  Section 4.4(a). 



 
 

ARTICLE IV    
    
    COVENANTS    
  


        As long as any of the Obligations (other than contingent indemnification Obligations not yet due and payable) remain outstanding, unless the Lender otherwise
consents in writing, Grantor agrees with Lender that: 


        Section 4.1    Generally.    Grantor shall (a) except for the security interest created by this
Agreement, not create or suffer to exist any Lien upon or with respect to any of the Collateral, except Liens permitted under the Credit Agreement; (b) not use or permit any Collateral to be
used 


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unlawfully or in violation of any provision of this Agreement, any other Loan Document, any Requirement of Law or any policy of insurance covering the Collateral; (c) not sell, transfer or
assign (by operation of law or otherwise) any Collateral except as permitted under the Credit Agreement; (d) not enter into any agreement or undertaking restricting the right or ability of
Grantor or Lender to sell, assign or transfer any of the Collateral if such restriction would have a Material Adverse Effect; and (e) promptly notify Lender of its entry into any agreement or
assumption of undertaking that restricts the ability to sell, assign or transfer any of the Collateral regardless of whether or not it has a Material Adverse Effect. 


        Section 4.2    Maintenance of Perfected Security Interest; Further Documentation.    



        (a)  Following
the perfection of any security interest created by this Agreement with respect to any item of Collateral, Grantor will maintain such as a perfected security
interest having at least the priority described in Section 3.2 and shall defend such security interest against the claims and demands of all
Persons. 


        (b)  Grantor
will furnish to Lender from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the
Collateral as Lender may reasonably request, all in reasonable detail. 


        (c)  At
any time and from time to time, upon the written request of Lender, and at the sole expense of Grantor, Grantor will promptly and duly execute and deliver, and have
recorded, such further instruments and documents and take such further action as Lender may reasonably request for the purpose of obtaining or preserving the full benefits of this Agreement and of the
rights and powers herein granted, including the filing of any financing or continuation statement under the UCC (or other similar laws) in effect in any jurisdiction with respect to the security
interest created hereby and the execution and delivery of Deposit Account Control Agreements. 




        Section 4.3    Changes in Locations, Name, Etc.    



        (a)  Except
upon 15 days' prior written notice to Lender and delivery to Lender of all additional executed financing statements and other documents reasonably
requested by Lender to maintain the validity, perfection and priority of the security interests provided for herein, Grantor will not: 



        (i)    change
its state of incorporation or the location of its chief executive office or sole place of business from that referred to in  Section 3.3; or 


        (ii)  change
its name, identity or corporate structure to such an extent that any financing statement filed by Lender in connection with this Agreement would become
misleading. 




        Grantor
will keep and maintain at its own cost and expense satisfactory and complete records of the Collateral, including a record of all payments received and all credits granted with
respect to the Collateral and all other dealings with the Collateral as is consistent with past practices. 




        Section 4.4    Pledged Collateral.    



        (a)  Grantor
will deliver to Lender, all certificates or Instruments representing or evidencing any Pledged Collateral, in suitable form for transfer by delivery or, as
applicable, accompanied by Grantor's endorsement, where necessary, or duly executed instruments of transfer or assignment in blank, all in form and substance reasonably satisfactory to Lender. Lender
shall have the right, upon the occurrence and during the continuance of an Event of Default, in its discretion and without notice to Grantor, to transfer to or to register in its name or in the name
of its nominees any or all of the Pledged Collateral. Lender shall have the right to, upon the occurrence and during the continuance of an Event of Default, exchange certificates or instruments
representing or 



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evidencing any of the Pledged Collateral for certificates or instruments of smaller or larger denominations. 


        (b)  Except
as provided in Article V, Grantor shall be entitled to receive all cash dividends paid in respect of the
Pledged Collateral (other than liquidating dividends constituting a distribution of capital) with respect to the Pledged Collateral. Any sums paid upon or in respect of any of the Pledged Collateral
upon the liquidation or dissolution of any issuer of any of the Pledged Collateral, any distribution of capital made on or in respect of any of the Pledged Collateral or any property distributed upon
or with respect to any of the Pledged Collateral pursuant to the recapitalization or reclassification of the capital of any issuer of Pledged Collateral or pursuant to the reorganization thereof
shall, unless otherwise subject to a perfected security interest in favor of Lender, be delivered to Lender to be held by it hereunder as additional collateral security for the Secured Obligations or
be deposited into an Approved Deposit Account. If any sums of money or property so paid or distributed in respect of any of the Pledged Collateral shall be received by Grantor, Grantor shall, to the
extent such money is not otherwise deposited into an Approved Deposit Account and until such money or property is paid or delivered to Lender, hold such money or property in trust for Lender,
segregated from other funds of Grantor, as additional security for the Secured Obligations. 



        (c)  Except
as provided in Article V, Grantor will be entitled to exercise all voting, consent and corporate rights
with respect to the Pledged Collateral and to give consents, waivers or ratifications in respect thereof; provided, however, that no vote shall be cast,
consent given or right exercised or other action taken by Grantor which would have a Material Adverse Effect or which would be inconsistent with or breach the terms of the Credit Agreement, this
Agreement or any other Loan Document. 


        (d)  Grantor
will not agree to any amendment of an LLC Agreement or Partnership Agreement that in any way adversely affects the perfection of the security interest of Lender
in the Pledged Partnership Interests or Pledged LLC Interests pledged by Grantor hereunder, including electing to treat the membership interest or partnership interest of Grantor as a security under
Section 8-103 of the UCC. 




        Section 4.5    Approved Deposit Accounts.    Except as otherwise permitted by the Credit Agreement, if required
by Lender under the Credit Agreement, Grantor will (i) deposit in an Approved Deposit Account all cash and all Proceeds received by Grantor, and (ii) not establish or maintain any
Deposit Account other than with a Deposit Account Bank. 



        Section 4.6    Payment of Taxes and Other Obligations.    Grantor will, to the extent required under the Credit
Agreement, pay and discharge or otherwise satisfy at or before maturity or before they become delinquent, as the case may be, all taxes, assessments and governmental charges or levies imposed upon the
Collateral or in respect of income or profits therefrom, as well as all claims of any kind (including claims for labor, materials and supplies) against or with respect to the Collateral, except that
no such charge need be paid if the amount or validity thereof is currently being contested in good faith by appropriate proceedings, reserves in conformity with GAAP with respect thereto have been
provided on the books of Grantor and such proceedings could not reasonably be expected to result in the sale, forfeiture or loss of any material portion of the Collateral or any interest therein. 


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ARTICLE V    
    
    REMEDIAL PROVISIONS    
  


        Section 5.1    Code and Other Remedies.    During the continuance of an Event of Default, Lender may exercise,
in addition to all other rights and remedies granted to it in this Agreement and in any other instrument or agreement securing, evidencing or relating to the Secured Obligations, all rights and
remedies of a secured party under the UCC or any other applicable law. Without limiting the generality of the foregoing, Lender, without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (in each case except any required by law referred to below) to or upon Grantor or any other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of Lender or elsewhere upon such terms and conditions as it may deem advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. Lender shall have the right upon any such public sale or sales, and, to the extent permitted by law, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in Grantor, which right or equity is hereby waived and released. Lender shall apply the net proceeds of any action taken by it pursuant to
this Section 5.1, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of Lender hereunder, including reasonable attorneys' fees and disbursements, to the payment in whole or in
part of the Secured Obligations, in such order as the Credit Agreement shall proscribe, and only after such application and after the payment by Lender of any other amount required by any provision of
law, need Lender account for the surplus, if any, to Grantor. To the extent permitted by applicable law, Grantor waives all claims, damages and demands it may acquire against Lender arising out of the
exercise by it of any rights hereunder. If any notice of a proposed sale or other disposition of Collateral shall be required by law, such notice shall be deemed reasonable and proper if given at
least 10 days before such sale or other disposition. 


        Section 5.2    Pledged Collateral.    



        (a)  During
the continuance of an Event of Default, upon notice by Lender to Grantor, (i) Lender shall have the right to receive any and all cash dividends, payments
or other Proceeds paid in respect of the Pledged Collateral and make application thereof to the Obligations in the order set forth in the Credit Agreement, and (ii) Lender or its nominee may
exercise (A) all voting, consent, corporate and other rights pertaining to the Pledged Collateral at any meeting of shareholders, partners or members, as the case may be, of the relevant issuer
or issuers of Pledged Collateral or otherwise and (B) any and all rights of conversion, exchange and subscription and any other rights, privileges or options pertaining to the Pledged
Collateral as if it were the absolute owner thereof (including the right to exchange at its discretion any and all of the Pledged Collateral upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate structure of any issuer of Pledged Securities, the right to deposit and deliver any and all of the Pledged Collateral with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms and conditions as Lender may determine), all without liability except to account for property actually received by it,
but Lender shall have no duty to Grantor to exercise any such right, privilege or option and shall not be responsible for any failure to do so or delay in so doing. 


        (b)  In
order to permit Lender to exercise the voting and other consensual rights which it may be entitled to exercise pursuant hereto and to receive all dividends and other
distributions which it may be entitled to receive hereunder, (i) upon the occurrence and during the continuance of an 



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Event of Default, Grantor shall promptly execute and deliver (or cause to be executed and delivered) to Lender all such proxies, dividend payment orders and other instruments as Lender may from time
to time reasonably request and (ii) without limiting the effect of clause (i) above, Grantor hereby grants to Lender an irrevocable proxy to vote all or any part of the Pledged
Collateral and to exercise all other rights, powers, privileges and remedies to which a holder of the Pledged Collateral would be entitled (including giving or withholding written consents of
shareholders, partners or members, as the case may be, calling special meetings of shareholders, partners or members, as the case may be, and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of any Pledged Collateral on the record books of the issuer thereof) by any other person (including the issuer of such
Pledged Collateral or any officer or agent thereof) during the continuance of an Event of Default and which proxy shall only terminate upon the payment in full of the Secured Obligations (in respect
of Loans and Reimbursement Obligations and interest and fees thereon and expenses related thereto) and the termination of the Commitment. 


        (c)  Grantor
hereby expressly authorizes and instructs each issuer of any Pledged Collateral pledged hereunder by Grantor to (i) comply with any instruction received
by it from Lender in writing that (A) states that an Event of Default has occurred and is continuing and (B) is otherwise in accordance with the terms of this Agreement, without any
other or further instructions from Grantor, and Grantor agrees that such issuer shall be fully protected in so complying and (ii) unless otherwise expressly permitted hereby, pay any dividends
or other payments with respect to the Pledged Collateral directly to an Approved Deposit Account approved for such purpose by Lender. 




        Section 5.3    Sale of Pledged Collateral.    



        (a)  Grantor
recognizes that Lender may be unable to effect a sale of any or all the Pledged Collateral by reason of certain prohibitions contained in the Securities Act and
applicable state securities laws or otherwise or may determine that a public sale is impracticable or not commercially reasonable and, accordingly, may resort to one or more private sales thereof to a
restricted group of purchasers which will be obliged to agree, among other things, to acquire such securities for their own account for investment and not with a view to the distribution or resale
thereof. Grantor acknowledges and agrees that any such private sale may result in prices and other terms less favorable than if such sale were a public sale and, notwithstanding such circumstances,
agrees that any such private sale shall be deemed to have been made in a commercially reasonable manner. Lender shall be under no obligation to delay a sale of any of the Pledged Collateral for the
period of time necessary to permit the issuer thereof to register such securities for public sale under the Securities Act, or under applicable state securities laws, even if such issuer would agree
to do so. 


        (b)  Grantor
agrees to use its commercially reasonable efforts to do or cause to be done all such acts as may be necessary to make such sale or sales of all or any portion of
the Pledged Collateral pursuant to this Section 5.3 valid and binding and in compliance with any and all applicable Requirements of Law,
provided, however, that Grantor shall not be obligated to register any portion of the Pledged Collateral under the provisions of the Securities Act. Grantor further agrees that a breach of any of the
covenants contained in this Section 5.3 will cause irreparable injury to Lender, that Lender has no adequate remedy at law in respect of such
breach and, as a consequence, that each and every covenant contained in this Section 5.3 shall be specifically enforceable against Grantor, and
Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no Event of Default has occurred and is continuing. 



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        Section 5.4    Deficiency.    Grantor shall remain liable for any deficiency if the proceeds of any sale or
other disposition of the Collateral are insufficient to pay the Secured Obligations and the fees and disbursements of any attorneys employed by Lender to collect such deficiency. 


 
 

ARTICLE VI    
    
    POWER OF ATTORNEY    
  


        Section 6.1    Lender's Appointment as Attorney-in-Fact.    



        (a)  Grantor
hereby irrevocably constitutes and appoints Lender and any officer or agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and stead of Grantor and in the name of Grantor or in its own name, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Agreement,
and, without limiting the generality of the foregoing, Grantor hereby gives Lender the power and right, on behalf of Grantor, without notice to or assent by Grantor, to do any or all of the following: 


          (i)  pay
or discharge taxes and Liens levied or placed on the Collateral, effect any repairs or any insurance called for by the terms of this Agreement and pay all or any
part of the premiums therefor and the costs thereof; 


        (ii)  execute,
in connection with any sale provided for in Section 5.1 or  5.3, any endorsements, assignments or other instruments of conveyance or transfer with
respect to the Collateral; and 



        (iii)  (A)
direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to Lender or as
Lender shall direct; (B) ask or demand for, collect, and receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to enforce any other right in respect of
any Collateral; (D) defend any suit, action or proceeding brought against Grantor with respect to any Collateral; (E) settle, compromise or adjust any such suit, action or proceeding
and, in connection therewith, give such discharges or releases as Lender may deem appropriate; and (F) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though Lender were the absolute owner thereof for all purposes, and do, at Lender's option and Grantor's expense, at any time, or from time to
time, all acts and things which Lender deems necessary to protect, preserve or realize upon the Collateral and Lender's security interests therein and to effect the intent of this Agreement, all as
fully and effectively as Grantor might do. 




Anything
in this Section 6.1(a) to the contrary notwithstanding, Lender agrees that it will not exercise any rights under the power of attorney
provided for in this Section 6.1(a) unless an Event of Default shall have occurred and be continuing. 



        (b)  If
Grantor fails to perform or comply with any of its agreements contained herein, and such failure constitutes an Event of Default, Lender (so long as such Event of
Default is continuing), at its option, but without any obligation so to do, may perform or comply, or otherwise cause performance or compliance, with such agreement. 


        (c)  The
expenses of Lender incurred in connection with actions undertaken as provided in this Section 6.1, together with interest thereon at a rate per annum equal to
the Applicable Rate at which interest would then be payable on past due Loans under the Credit Agreement, from the 



94





 





date of payment by Lender to the date reimbursed by Grantor, shall be payable by Grantor to Lender on demand. 


        (d)  Grantor
hereby ratifies all that said attorneys shall lawfully do or cause to be done by virtue hereof. All powers, authorizations and agencies contained in this
Agreement are coupled with an interest and are irrevocable until this Agreement is terminated and the security interests created hereby are released. 




        Section 6.2    Duty of Lender.    Lender's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession shall be to deal with it in the same manner as Lender deals with similar property for its own account. Subject to applicable law, neither Lender nor
any of its officers, directors, employees or agents shall be liable for failure to demand, collect or realize upon any of the Collateral or for any delay in doing so or shall be under any obligation
to sell or otherwise dispose of any Collateral upon the request of Grantor or any other Person or to take any other action whatsoever with regard to the Collateral or any part thereof. The powers
conferred on Lender hereunder are solely to protect Lender's interest in the Collateral and shall not impose any duty upon Lender to exercise any such powers. Lender shall be accountable only for
amounts that Lender actually receives as a result of the exercise of such powers, and neither Lender nor any of its officers, directors, employees or agents shall be responsible to Grantor for any act
or failure to act hereunder. 


        Section 6.3    Execution of Financing Statements.    Grantor authorizes Lender to file or record financing
statements and other filing or recording documents or instruments with respect to the Collateral in such form and in such offices as Lender reasonably determines appropriate to perfect the security
interests of Lender under this Agreement. A photographic or other reproduction of this Agreement shall be sufficient as a financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction. 


 
 

ARTICLE VII    
    
    MISCELLANEOUS    
  


        Section 7.1    Amendments in Writing.    None of the terms or provisions of this Agreement may be waived,
amended, supplemented or otherwise modified except in accordance with Section 10.1 of the Credit Agreement. 


        Section 7.2    Notices.    All notices, requests and demands to or upon Lender or Grantor hereunder shall be
effected in the manner provided for in Section 10.6 of the Credit Agreement. 


        Section 7.3    No Waiver by Course of Conduct; Cumulative Remedies.    Lender shall not by any act (except by a
written instrument pursuant to Section 7.1), delay, indulgence, omission or otherwise be deemed to have waived any right or remedy hereunder or to have acquiesced in any Default or Event of
Default. No failure to exercise, nor any delay in exercising, on the part of Lender any right, power or privilege hereunder shall operate as a waiver thereof. No single or partial exercise of any
right, power or privilege hereunder shall preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Lender of any right or remedy hereunder on
any one occasion shall not be construed as a bar to any right or remedy which Lender would otherwise have on any future occasion. The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or remedies provided by law. 


        Section 7.4    Successors and Assigns.    This Agreement shall be binding upon the successors and assigns of
Grantor and shall inure to the benefit of Lender and its successors and assigns; provided, however, that Grantor may not assign, transfer or delegate any of its rights or obligations under this
Agreement without the prior written consent of Lender. 


95





 



        Section 7.5    Counterparts.    This Agreement may be executed by one or more of the parties to this Agreement
on any number of separate counterparts (including by telecopy), and all of said counterparts taken together shall be deemed to constitute one and the same agreement. 


        Section 7.6    Severability.    Any provision of this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision in any other jurisdiction. 



        Section 7.7    Section Headings.    The Article and Section titles contained in this Agreement are and shall be
without substantive meaning or content of any kind whatsoever and are not part of the agreement of the parties hereto. 


        Section 7.8    Entire Agreement.    This Agreement together with the other Loan Documents represents the entire
agreement of the parties and supersedes all prior agreements and understandings relating to the subject matter hereof. 



        Section 7.9    Governing Law.    This agreement and the rights and obligations of the
parties hereto shall be governed by, and construed and interpreted in accordance with, the law of the state of New York.


        Section 7.10    Release of Collateral; Termination.    



        (a)  Upon
termination of the Commitment and payment and satisfaction in full of all Loans, Reimbursement Obligations and all other Obligations which have matured and which
are then due and payable, the Collateral shall automatically be released from the Lien created hereby and this Agreement and all obligations (other than those expressly stated to survive such
termination) of Lender and Grantor hereunder shall immediately terminate, all without delivery of any instrument or performance of any act by any party, and all rights to the Collateral shall revert
to Grantor. At the request and sole expense of Grantor following any such termination, Lender shall deliver to Grantor any Collateral of Grantor held by Lender hereunder and execute and deliver to
Grantor such documents as Grantor shall reasonably request to evidence such termination. 


        (b)  If
any of the Collateral shall be sold or disposed of by Grantor in a transaction permitted by the Credit Agreement (including by operation of Lender's written consent
or waiver), the Collateral so sold or disposed of shall be automatically released from the Lien created hereby and, in connection therewith, Lender, at the request and sole expense of Grantor, shall
execute and deliver to Grantor all releases or other documents reasonably necessary or desirable for the release of the Lien created hereby on such Collateral. 




        Section 7.11    Reinstatement.    Grantor further agrees that, if any payment made by Grantor or any other
Person and applied to the Obligations is at any time annulled, avoided, set aside, rescinded, invalidated, declared to be fraudulent or preferential or otherwise required to be refunded or repaid, or
the proceeds of Collateral are required to be returned by Lender to such person, its estate, trustee, receiver or any other party, including Grantor, under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or repayment, any Lien or other Collateral securing such liability shall be and remain in full force and effect, as fully as if such
payment had never been made or, if prior thereto the Lien granted hereby or other Collateral securing such liability hereunder shall have been released or terminated), such Lien or other Collateral
shall be reinstated in full force and effect, and such prior release or termination shall not diminish, release, discharge, impair or otherwise affect any Lien or other Collateral securing the
obligations of Grantor in respect of the amount of such payment. 


[SIGNATURE
PAGES FOLLOW] 


96





 

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



	 	 	 	 	UNION CARBIDE CORPORATION
	

 	
 	

 	
 	

By:	
 	

/s/  EDWARD W. RICH      
	 	 	 	 	 	 	
 Name: Edward W. Rich

Title: Vice President and Treasurer
	

ACCEPTED AND AGREED:

THE DOW CHEMICAL COMPANY	
 	

 	
 	

 
	

By:	
 	

/s/  J.P. REINHARD      	
 	

 	
 	

 
	 	 	
 Name: J.P. Reinhard

Title: Executive Vice President and

          Chief Financial Officer	 	 	 	 




97






  



 
 

Schedule 1
  State of Incorporation; Principal Place of Business    
  


	1.
	Union Carbide Corporation



Jurisdiction
of organization: New York 


I.R.S.
Employer Identification Number: 13-1421730 


Principal
place of business: 39 Old Ridgebury Road

                                         
   Danbury, Connecticut 06817-0001 





98






  



 
 

Schedule 2
  Pledged Collateral(1)    
  


	1.
	Pledged
Stock 




	Issuer
 
	 	Holder
	 	Shares
	 	Class (if

known)
	 	%

Ownership

	Dow International Holdings Company	 	UCC	 	831	 	Common	 	7.4
	Dow Chemical Canada Inc.°	 	UCC	 	64,444	 	Common	 	11.2
	Modeland International Holdings Inc.°	 	UCC	 	 	 	Class A Common	 	41
	Dow Quimica Argentina S.A.°	 	UCC	 	4,933,170	 	Common	 	11.99
	Dow Venezuela, C.A.°	 	UCC	 	 	 	 	 	19.61
	Dow Quimica Mexicana S.A. de C.V.°	 	UCC	 	 	 	 	 	15.42
	EQUATE Petrochemical Company K.S.C.*°	 	UCC	 	387,000,000	 	Common	 	45
	EQUATE Marketing Company E.C.*°	 	UCC	 	250,500	 	Ordinary	 	50.1
	Optimal Chemicals (Malaysia) Sdn. Bhd.*°	 	UCC	 	165,160	 	Ordinary	 	50
	Optimal Olefins (Malaysia) Sdn. Bhd.*°	 	UCC	 	100,906	 	Ordinary	 	23.75
	Union Carbide Subsidiary C, Inc.(2)	 	UCC	 	1,000	 	Common	 	100
	Catalysts, Adsorbents and Process Systems, Inc.(3)	 	UCC	 	5	 	Common	 	100
	Union Carbide Pan America, Inc.	 	UCC	 	75	 	Common	 	100
	Dow Pacific (Thailand) Limited°	 	UCC	 	75,994	 	Ordinary	 	99.9921
	UCAR Emulsions Systems International, Inc.	 	UCC	 	100	 	Common	 	100
	Union Carbide Inter-America, Inc.(DE)	 	UCC	 	100	 	Capital	 	100
	Union Carbide China Investment Co., Ltd.°	 	UCC	 	 	 	 	 	100
	Union Carbide Asia Limited°	 	UCC	 	75,999	 	Ordinary	 	99.9987
	American Acetyls	 	UCC	 	 	 	No shares	 	50
	Amerchol Corporation	 	UCC	 	1,000	 	Common	 	100
	Chemicals Marine Fleet, Inc.	 	UCC	 	1,000	 	Common	 	100
	Global Industrial Corporation	 	UCC	 	103	 	Capital	 	100
	UC Finco Inc. (f/k/a Prentiss Glycol Company)	 	UCC	 	1,000	 	Common	 	100
	UCAR Pipeline Incorporated	 	UCC	 	18,010	 	Common	 	100
	UCAR Louisiana Pipeline Company	 	UCC	 	10	 	Common	 	100
	Union Carbide Asia Pacific, Inc.	 	UCC	 	1,000	 	Common	 	100
	Union Carbide Inter-America, Inc.(NJ)	 	UCC	 	10	 	Capital	 	100
	Union Carbide Chemicals & Plastics Technology Corporation	 	UCC	 	100	 	Common	 	100
	Union Carbide Polyolefins Development Company, Inc.	 	UCC	 	1,000	 	Common	 	100
	Union Carbide Middle East Limited	 	UCC	 	24,000	 	Capital	 	100
	Union Carbide Ethylene Oxide/Glycol Company	 	UCC	 	1,000	 	Common	 	100
	Seadrift Pipeline Corporation	 	UCC	 	15,000	 	Capital	 	100
	National Carbon Company Pakistan (Private) Limited°	 	UCC	 	4,998	 	Ordinary	 	100
	Nippon Unicar Company Limited°	 	UCC	 	250,000	 	Common	 	50
	P.T. Union Carbide Indonesia°	 	UCC	 	22,167,900	 	Ordinary	 	99.9995
	Union Carbide Formosa Company Ltd.°	 	UCC	 	819,997	 	Ordinary	 	99.9996
	Union Carbide Iberica, S.A.°	 	UCC	 	1,000	 	Common	 	100
	Union Carbide Pakistan (Private) Limited°	 	UCC	 	6,000	 	Common	 	60
	Westbridge Insurance Ltd.°	 	UCC	 	416,668	 	Common	 	100
	Industrias Carlisil, S.A.°	 	UCC	 	7,496	 	Common	 	99.9467
	Servicios de Quimicos Agricolas, S.A.°	 	UCC	 	246	 	Common	 	98.40
	Mineracao Liguria Ltda.°	 	UCC	 	 	 	 	 	100
	Mineracao Sao Damaso Ltda.°	 	UCC	 	 	 	 	 	100



99





 

	Union Carbide Commercial Nicaragua, S.A.°	 	UCC	 	700	 	Common	 	100
	Union Polymers Sdn. Bhd.°	 	UCC	 	900,000



578,772	 	Cum. Preferred Ordinary	 	60
	Union Carbide Customer Service Pte. Ltd.°	 	UCC	 	10,226,590	 	Ordinary	 	100
	GlenGate Insurance Brokers Limited°	 	UCC	 	 	 	 	 	100
	UCAR Vanor (Proprietary) Limited°	 	UCC	 	599,999	 	Common	 	99.9998
	Dow Chemical (Malaysia) Sdn. Bhd.°	 	UCC	 	2,162,000	 	Ordinary	 	100
	Union Carbide South Africa (Proprietary) Limited°	 	UCC	 	4,000	 	Common	 	100
	Dow Chemical Philippines, Inc.°	 	UCC	 	88,495	 	Ordinary	 	99.9944
	Codim Desenvolvimento de Industrias Minerais Ltda.°	 	UCC	 	 	 	 	 	100
	Union Carbide Foreign Sales Corporation°	 	UCC	 	1,000	 	Common	 	100






	(1)
	The
security interests granted with respect to some of the Pledged Collateral identified on this Schedule 2 are limited by Section 2.1 of the Agreement.



	°
	Pledged
Stock of non-U.S. entities will be limited to 65% of the voting power of all outstanding equity interests of such entities entitled to vote.



	*
	These
entities constitute Designated Joint Ventures, pursuant to Exhibit J of the Participation Agreement, dated April 1, 2000, by and
among UCC, First Security Bank, National Association, First Security Trust Company of Nevada, the Certificate Purchasers, the Liquidity Banks, Hatteras Funding Corporation and Bank of America National
Association (the "Participation Agreement").



	(2)
	Union
Carbide Subsidiary C, Inc. is the entity through which UCC indirectly holds its interest in Univation Technologies, LLC, a Designated Joint Venture pursuant to the Participation
Agreement.



	(3)
	Catalysts,
Adsorbents and Process Systems, Inc. is the entity through which UCC indirectly holds its interest in UOP LLC. UOP is not a Designated Joint Venture.



	2.
	Pledged
Partnership Interests 



None. 



	3.
	Pledged
LLC Interests 




	Issuer
 
	 	Holder
	 	% Ownership

	UCMG LLC.(4)	 	UCC	 	100
	Union Carbide Caribe LLC	 	UCC	 	100






	(4)
	UCMG
LLC is the entity though which UCC indirectly holds its interest in Optimal Glycols (Malaysia) Sdn. Bhd., a Designated Joint Venture pursuant to the Participation Agreement.



	4.
	Pledged
Notes 



        a.    Revolving
Loan Agreement, dated as of November 1, 2001, by and between UCC and Union Carbide Caribe LLC. 



        b.    Revolving
Loan Agreement, dated as of October 1, 2001, by and between UCC and UCMG LLC, as amended on December 1, 2001. 


        c.    Revolving
Loan Agreement, dated as of December 1, 2001, by and between UCC and Westbridge Insurance Ltd. 


100





 



        d.    Revolving
Loan Agreement, dated as of November 1, 2001, by and between UCC and UNISON Transformer Services, Inc., as amended on December 1, 2001. 


        e.    Revolving
Loan Agreement, dated as of November 1, 2001, by and between UCC and UniGlobal Logistics, Inc. 


        f.      Revolving
Loan Agreement, dated as of November 1, 2001, by and between UCC and UCAR Interam Inc. 



        g.    Revolving
Loan Agreement, dated as of November 1, 2001, by and between UCC and Union Carbide Finance Corporation. 


        h.    Revolving
Loan Agreement, dated as of November 1, 2001, by and between UCC and Union Carbide Polyolefins Development Company, Inc. 


        i.      Revolving
Loan Agreement, dated as of July 1, 2001, by and between UCC and Union Carbide Chemicals & Plastics Technology Corporation. 


        j.      Revolving
Loan Agreement, dated as of November 1, 2001, by and between UCC and KTI Chemicals, Inc. 


        k.    Revolving
Loan Agreement, dated as of November 1, 2001, by and between UCC and Amerchol Corporation. 


        l.      Revolving
Loan Agreement, dated as of December 1, 2001, by and between UCC and Chemars II LLC. 


101








  



 
 

Schedule 3
  Required Action for Perfection    
  


1.    UCC
must obtain the consent of Petrochemical Industries Company K.S.C. in order to pledge its interest in EQUATE Petrochemical Company K.S.C.
("EQUATE") to TDCC. 


2.    UCC
must obtain the consent of Samsung Fine Chemicals Co., Ltd. and BP Chemicals (Korea) Limited in order pledge its shares in Asian Acetyls Co., Ltd.
("Asian Acetyls") to TDCC. 


3.    UCC
must obtain the consent of Exxon Corporation in order to pledge its indirect interest in Univation Technologies, LLC ("Univation")
to TDCC. 


4.    Once
each of the above consents has been obtained, the pledge must be made and TDCC must maintain possession of the certificated interests. 


5.    UCC-1's
must be filed for the Pledged Notes and non-certificated interests. 


6.    Any
consent required in the financing documents related to (i) EQUATE, (ii) Asian Acetyls, (iii) UOP LLC, (iv) Nippon Unicar Co., Ltd.
(v) Univation and (vi) Optimal Glycols (Malaysia) Sdn. Bhd., Optimal Chemicals (Malaysia) Sdn. Bhd. and Optimal Olefins (Malaysia) Sdn. Bhd. 


7.    Such
actions as foreign counsel advises are necessary for the perfection of interests in non-U.S. entities. 


102











QuickLinks



EXHIBIT 10.29


Pledge and Security Agreement

W I T N E S S E T H

ARTICLE I DEFINED TERMS

ARTICLE II GRANT OF SECURITY INTEREST

ARTICLE III REPRESENTATIONS AND WARRANTIES

ARTICLE IV COVENANTS


ARTICLE V REMEDIAL PROVISIONS

ARTICLE VI POWER OF ATTORNEY

ARTICLE VII MISCELLANEOUS



Schedule 1 State of Incorporation; Principal Place of Business



Schedule 2 Pledged Collateral(1)


Schedule 3 Required Action for Perfection