CHASE CORP (Form: 10-Q, Received: 04/09/2015 16:39:35)

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended February 28, 2015

Commission File Number: 1-9852

CHASE CORPORATION

(Exact name of registrant as specified in its charter)

Massachusetts		11-1797126
(State or other jurisdiction of incorporation of organization)		(I.R.S. Employer Identification No.)

26 Summer Street, Bridgewater, Massachusetts 02324

(Address of Principal Executive Offices, Including Zip Code)

(508) 819-4200

(Registrant’s Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. YES x NO o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). YES x NO o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer”, “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o		Accelerated filer x
Non-accelerated filer o (Do not check if a smaller reporting company)		Smaller reporting company o

Indicate by checkmark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES o NO x

The number of shares of Common Stock outstanding as of March 31, 2015 was 9,182,762.

Table of Contents

CHASE CORPORATION

INDEX TO FORM 10-Q

For the Quarter Ended February 28, 2015

Part I - FINANCIAL INFORMATION

Item 1 — Unaudited Financial Statements

	Consolidated Balance Sheets as of February 28, 2015 and August 31, 2014	3

	Consolidated Statements of Operations for the three and six months ended February 28, 2015 and 2014	4

	Consolidated Statements of Comprehensive Income for the three and six months ended February 28, 2015 and 2014	5

	Consolidated Statement of Equity for the six months ended February 28, 2015	6

	Consolidated Statements of Cash Flows for the six months ended February 28, 2015 and 2014	7

	Notes to Consolidated Financial Statements	8

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations		20

Item 3 — Quantitative and Qualitative Disclosures About Market Risk		29

Item 4 — Controls and Procedures		30

Part II — OTHER INFORMATION

Item 1 — Legal Proceedings		31

Item 1A — Risk Factors		31

Item 6 — Exhibits		31

SIGNATURES		32

Table of Contents

Part 1 — FINANCIAL INFORMATION

Item 1 — Unaudited Financial Statements

CHASE CORPORATION

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

In thousands, except share and per share amounts

	February 28,			August 31,
	2015			2014
ASSETS
Current Assets:
Cash & cash equivalents	$	17,406		$	53,222
Accounts receivable, less allowance for doubtful accounts of $713 and $670	35,073			35,601
Inventories	33,376			31,539
Prepaid expenses and other current assets	2,607			2,437
Due from sale of product line	739			739
Prepaid income taxes		2,468		—
Deferred income taxes	2,314			2,315
Total current assets	93,983			125,853

Property, plant and equipment, net	43,183			44,085

Other Assets:
Goodwill	44,137			38,280
Intangible assets, less accumulated amortization of $25,077 and $22,941	49,137			27,215
Cash surrender value of life insurance	7,256			7,249
Restricted investments	1,377			1,256
Funded pension plan	1,022			962
Deferred income taxes	437			470
Other assets	156			175
	$	240,688		$	245,545
LIABILITIES AND EQUITY
Current Liabilities:
Accounts payable	$	13,666		$	15,121
Accrued payroll and other compensation	3,475			7,754
Accrued expenses	4,880			4,842
Accrued income taxes		1,030		1,377
Current portion of long-term debt	9,700			7,000
Total current liabilities		32,751		36,094

Long-term debt, less current portion	47,600			51,800
Deferred compensation	2,121			2,037
Accumulated pension obligation	10,566			10,418
Other liabilities	106			126
Deferred income taxes	7,578			7,580

Commitments and Contingencies (Note 10)

Equity:
First Serial Preferred Stock, $1.00 par value: Authorized 100,000 shares; none issued	—			—
Common stock, $.10 par value: Authorized 20,000,000 shares; 9,153,724 shares at February 28, 2015 and 9,103,292 shares at August 31, 2014 issued and outstanding	915			910
Additional paid-in capital	14,233			13,620
Accumulated other comprehensive loss	(6,948		)	(4,250		)
Retained earnings	131,766			126,272
Chase Corporation stockholders’ equity	139,966			136,552
Non-controlling interest	—			938
Total equity	139,966			137,490
Total liabilities and equity	$	240,688		$	245,545

See accompanying notes to the consolidated financial statements

Table of Contents

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(UNAUDITED)

In thousands, except share and per share amounts

	Three Months Ended February 28,						Six Months Ended February 28,
	2015			2014			2015			2014

Revenue
Sales	$	51,380		$	50,412		$	106,670		$	104,067
Royalties and commissions	924			779			1,567			1,307
	52,304			51,191			108,237			105,374
Costs and Expenses
Cost of products and services sold	34,235			33,951			68,715			69,429
Selling, general and administrative expenses	11,924			9,930			22,719			20,369

Operating income	6,145			7,310			16,803			15,576

Interest expense	(270		)	(285		)	(544		)	(588		)
Gain on sale of product line (Note 8)	—			—			—			5,706
Other (expense) income	381			(125		)	766			(230		)

Income before income taxes	6,256			6,900			17,025			20,464

Income taxes	2,190			2,415			5,959			7,162

Net income	$	4,066		$	4,485		$	11,066		$	13,302

Net loss (gain) attributable to non-controlling interest	—			35			(95		)	(7		)

Net income attributable to Chase Corporation	$	4,066		$	4,520		$	10,971		$	13,295

Net income available to common shareholders, per common and common equivalent share

Basic	$	0.45		$	0.50		$	1.20		$	1.46

Diluted	$	0.44		$	0.48		$	1.18		$	1.43

Weighted average shares outstanding
Basic	9,065,511			8,942,045			9,057,738			8,940,075
Diluted	9,224,985			9,166,370			9,213,431			9,158,527

Cash dividends paid per share							$	0.60		$	0.45

See accompanying notes to the consolidated financial statements

Table of Contents

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(UNAUDITED)

In thousands, except share and per share amounts

	Three Months Ended February 28,					Six Months Ended February 28,
	2015			2014		2015			2014
Net income	$	4,066		$	4,485	$	11,066		$	13,302

Other comprehensive income:
Net unrealized (loss) gain on restricted investments, net of tax	(20		)	2		(8		)	73
Change in funded status of pension plans, net of tax	109			48		219			96
Foreign currency translation adjustment	(818		)	605		(2,909		)	2,183
Total other comprehensive (loss) income	(729		)	655		(2,698		)	2,352
Comprehensive income	3,337			5,140		8,368			15,654

Comprehensive (income) loss attributable to non-controlling interest	—			35		(95		)	(7		)

Comprehensive income attributable to Chase Corporation	$	3,337		$	5,175	$	8,273		$	15,647

See accompanying notes to the consolidated financial statements

Table of Contents

CHASE CORPORATION

CONSOLIDATED STATEMENT OF EQUITY

SIX MONTHS ENDED FEBRUARY 28, 2015

(UNAUDITED)

In thousands, except share and per share amounts

						Additional			Accumulated Other						Chase
	Common Stock					Paid-In			Comprehensive			Retained			Stockholders’			Non-conrolling			Total
	Shares		Amount			Capital			Income (loss)			Earnings			Equity			Interest			Equity
Balance at August 31, 2014	9,103,292		$	910		$	13,620		$	(4,250	)	$	126,272		$	136,552		$	938		$	137,490
Restricted stock grants, net of forfeitures	13,785		1			(1		)							—						—
Amortization of restricted stock grants						411									411						411
Amortization of stock option grants						126									126						126
Exercise of stock options	115,000		12			1,755									1,767						1,767
Common stock received for payment of stock option exercises	(47,486	)	(5		)	(1,762		)							(1,767		)				(1,767		)
Excess tax benefit (expense) from stock based compensation						730									730						730
Common stock retained to pay statutory minimum withholding taxes on common stock	(30,867	)	(3		)	(1,179		)							(1,182		)				(1,182		)
Annual cash dividend paid, $0.60 per share												(5,477		)	(5,477		)	—			(5,477		)
Purchase of outstanding non-controlling interest						533									533			(1,033		)	(500		)
Change in funded status of pension plan, net of tax of $118									219						219						219
Foreign currency translation adjustment									(2,909		)				(2,909		)				(2,909		)
Net unrealized loss on restricted investments, net of tax of $4									(8		)				(8		)				(8		)
Net income												10,971			10,971			95			11,066
Balance at February 28, 2015	9,153,724		$	915		$	14,233		$	(6,948	)	$	131,766		$	139,966		—			$	139,966

See accompanying notes to the consolidated financial statements

Table of Contents

CHASE CORPORATION

CONSOLIDATED STATEMENT OF CASH FLOWS

(UNAUDITED)

In thousands, except share and per share amounts

	Six Months Ended February 28,
	2015			2014
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	11,066		$	13,302
Adjustments to reconcile net income to net cash provided by operating activities
Gain on sale of assets	—			(4		)
Gain on sale of product line	—			(5,706		)
Depreciation	2,812			2,852
Amortization	2,884			2,386
Inventory step-up to fair value	49			—
Provision (recovery) for allowance for doubtful accounts	64			(12		)
Stock based compensation	537			638
Realized gain on restricted investments	(75		)	(37		)
Decrease in cash surrender value life insurance	90			60
Excess tax benefit from stock based compensation	(730		)	(34		)
Increase (decrease) from changes in assets and liabilities, net of effects of acquisitions
Accounts receivable	(144		)	(102		)
Inventories	(1,617		)	(3,345		)
Prepaid expenses & other assets	(163		)	(678		)
Accounts payable	(1,216		)	2,535
Accrued compensation and other expenses	(3,824		)	(4,355		)
Accrued income taxes	(2,029		)	(1,632		)
Deferred compensation	85			161
Net cash provided by operating activities	7,789			6,029

CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment	(1,142		)	(2,190		)
Cost to acquire intangible assets	(10		)	(77		)
Contingent purchase price paid for acquisition	—			(156		)
Payments for acquisitions	(33,285		)	—
Proceeds from sale of fixed assets	—			14
Net proceeds from sale of product line	—			9,179
Contributions from restricted investments	(58		)	(36		)
Payments for cash surrender value life insurance	(92		)	(88		)
Net cash provided by (used in) investing activities	(34,587		)	6,646

CASH FLOWS FROM FINANCING ACTIVITIES
Borrowings on debt	2,000			2,104
Payments of principal on debt	(3,500		)	(4,904		)
Payments of statutory minimum taxes on stock options and restricted stock	(1,182		)	—
Dividend paid	(5,477		)	(4,093		)
Proceeds from exercise of common stock options	—			32
Excess tax benefit from stock based compensation	730			34
Payment for acquisition of non-controlling interest	(500		)	—
Net cash used in financing activities	(7,929		)	(6,827		)

INCREASE (DECREASE) IN CASH & CASH EQUIVALENTS	(34,727		)	5,848
Effect of foreign exchange rates on cash	(1,089		)	794
CASH & CASH EQUIVALENTS, BEGINNING OF PERIOD	53,222			29,997

CASH & CASH EQUIVALENTS, END OF PERIOD	$	17,406		$	36,639

Non-cash Investing and Financing Activities
Property, plant & equipment additions included in accounts payable	$	23		$	195

See accompanying notes to the consolidated financial statements

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

Note 1 - Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial reporting and instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Therefore, they do not include all information and footnote disclosure necessary for a complete presentation of Chase Corporation’s financial position, results of operations and cash flows, in conformity with generally accepted accounting principles. Chase Corporation (the “Company,” “Chase,” “we,” or “us”) filed audited consolidated financial statements, which included all information and notes necessary for such complete presentation for the three years ended August 31, 2014 in conjunction with its 2014 Annual Report on Form 10-K. Certain immaterial reclassifications have been made to the prior year amounts to conform to the current year’s presentation.

The results of operations for the interim periods ended February 28, 2015 are not necessarily indicative of the results to be expected for any future period or the entire fiscal year. These interim condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for the year ended August 31, 2014, which are contained in the Company’s 2014 Annual Report on Form 10-K.

The accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of normal recurring items) which are, in the opinion of management, necessary for a fair statement of the Company’s financial position as of February 28, 2015, the results of operations, comprehensive income and cash flows for the interim periods ended February 28, 2015 and 2014, and changes in equity for the interim period ended February 28, 2015.

The financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany transactions and balances have been eliminated in consolidation. The Company uses the US dollar as the reporting currency for financial reporting. The financial position and results of operations of the Company’s UK-based operations are measured using the UK pound sterling as the functional currency and the financial position and results of operations of the Company’s operations based in France are measured using the euro as the functional currency. Foreign currency translation gains and losses are determined using current exchange rates for monetary items and historical exchange rates for other balance sheet items and are recorded as a change in other comprehensive income. Transaction gains and losses generated from the remeasurement of assets and liabilities denominated in currencies other than the functional currency of our foreign operations are included in Other (expense) / income on the consolidated statements of operations.

On January 30, 2015, the Company acquired two product lines from Henkel Corporation (the “Seller”). The product lines were acquired for a purchase price of $33,285, after initial working capital adjustments, subject to the finalization of purchase accounting, and excluding any acquisition related costs. As part of this transaction, Chase acquired the Seller’s microspheres product line, sold under the Dualite® brand, located in Greenville, SC, as well as obtained exclusive distribution rights and intellectual property related to the Seller’s polyurethane dispersions product line, operating in the Elgin, IL location. We refer to these collectively as the specialty chemical product lines. Under the agreement, Chase entered into a ten-year facility operating lease at the Seller’s Greenville, SC location, and the Seller will perform certain manufacturing and application services for Chase for the next three years. The purchase was funded entirely with available cash on hand. Since the effective date for this acquisition, the financial results of the specialty chemical product lines have been included in the Company’s financial statements within the Company’s Industrial Materials operating segment.

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

On October 31, 2014, the Company purchased the 50% non-controlling membership interest of NEPTCO JV LLC (the “JV”) owned by its now-former joint venture partner, an otherwise unrelated party. Because of the Company’s controlling financial interest, the JV’s assets, liabilities and results of operations have been consolidated within the Company’s consolidated financial statements since June 27, 2012, the date the Company acquired NEPTCO. The Company will continue to fully consolidate the assets, liabilities and results of operations of the JV, but will no longer record an offsetting amount for a non-controlling interest subsequent to October 31, 2014. The ($95) recorded in the Consolidated Statement of Operations as Net (gain) loss attributable to non-controlling interest for the six months ended February 28, 2015, represents the now-former joint venture partner’s share of the results of operations of the JV for the period from September 1, 2014 through October 31, 2014.

Note 2 — Recent Accounting Policies

Recently Issued Accounting Pronouncements

In May 2014, the FASB issued Accounting Standards Update (“ASU”) No. 2014-09, “Revenue from Contracts with Customers”, which will replace most of the existing revenue recognition guidance under U.S. Generally Accepted Accounting Principles. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The ASU will be effective for the Company beginning September 1, 2017 (fiscal 2018), including interim periods in its fiscal year 2018, and allows for both retrospective and prospective methods of adoption. The Company is in the process of determining the method of adoption and assessing the impact of this ASU on the Company’s consolidated financial position, results of operations or cash flows.

In February 2015, the FASB issued ASU No. 2015-2, “Consolidation (Topic 820): Amendments to the Consolidation Analysis.” ASU 2015-2 provides a revised consolidation model for all reporting entities to use in evaluating whether they should consolidate certain legal entities. All legal entities will be subject to reevaluation under this revised consolidation model. The revised consolidation model, among other things, (i) modifies the evaluation of whether limited partnerships and similar legal entities are VIEs or voting interest entities, (ii) eliminates the presumption that a general partner should consolidate a limited partnership, and (iii) modifies the consolidation analysis of reporting entities that are involved with VIEs through fee arrangements and related party relationships. ASU 2015-2 is effective for fiscal years, and interim reporting periods within those fiscal years, beginning after September 1, 2016 (fiscal 2017). We are still evaluating what impact, if any, this ASU on the Company’s consolidated financial position, results of operations or cash flows.

Note 3 — Inventories

Inventories consist of the following as of February 28, 2015 and August 31, 2014:

	February 28, 2015		August 31, 2014
Raw materials	$	13,232	$	13,785
Work in process	7,434		7,359
Finished goods	12,710		10,395
Total Inventories	$	33,376	$	31,539

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

Note 4 — Net Income Per Share

The Company has unvested share-based payment awards with a right to receive nonforfeitable dividends which are considered participating securities under ASC Topic 260, “Earnings Per Share”. The Company allocates earnings to participating securities and computes earnings per share using the two-class method. The determination of earnings per share under the two-class method is as follows:

	Three Months Ended February 28,				Six Months Ended February 28,
	2015		2014		2015		2014
Basic Earnings per Share
Net income attributable to Chase Corporation	$	4,066	$	4,520	$	10,971	$	13,295
Less: Allocated to participating securities	30		77		81		228
Net income available to common shareholders	$	4,036	$	4,443	$	10,890	$	13,067

Basic weighted average shares outstanding	9,065,511		8,942,045		9,057,738		8,940,075
Net income per share - Basic	$	0.45	$	0.50	$	1.20	$	1.46

Diluted Earnings per Share
Net income attributable to Chase Corporation	$	4,066	$	4,520	$	10,971	$	13,295
Less: Allocated to participating securities	30		75		81		223
Net income available to common shareholders	$	4,036	$	4,445	$	10,890	$	13,072

Basic weighted average shares outstanding	9,065,511		8,942,045		9,057,738		8,940,075
Additional dilutive common stock equivalents	159,474		224,325		155,693		218,452

Diluted weighted average shares outstanding	9,224,985		9,166,370		9,213,431		9,158,527
Net income per share - Diluted	$	0.44	$	0.48	$	1.18	$	1.43

For the three and six months ended February 28, 2015, stock options to purchase 22,750 and 27,863 shares of common stock were outstanding, respectively, but were not included in the calculation of diluted income per share because their inclusion would be anti-dilutive. For the three and six months ended February 28, 2014, stock options to purchase 25,969 and 18,222 shares of common stock were outstanding, respectively, but were not included in the calculation of diluted income per share because their inclusion would be anti-dilutive. Included in the calculation of dilutive common stock equivalents are the unvested portion of restricted stock and stock options.

Note 5 — Stock-Based Compensation

In September 2013, the Board of Directors of the Company approved the fiscal year 2014 Long Term Incentive Plan (“2014 LTIP”) for the executive officers and other members of management. The 2014 LTIP is an equity based plan with a grant date of September 1, 2013 and contains a performance and service based restricted stock grant of 7,529 shares in the aggregate, subject to adjustment, with a vesting date of August 31, 2016. Based on the fiscal year 2014 financial results, 5,485 additional shares of restricted stock (total of 13,014 shares) were earned and granted subsequent to the end of fiscal year 2014 in accordance with the performance measurement criteria. No further performance-based measurements apply to this award. Compensation expense is being recognized on a ratable basis over the vesting period.

In August 2014, the Board of Directors of the Company approved the fiscal year 2015 Long Term Incentive Plan (“2015 LTIP”) for the executive officers and other members of management. The 2015 LTIP is an equity based plan with a grant date of September 1, 2014 and contains the following equity components:

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

Restricted Shares — (a) performance and service based restricted stock grant of 6,993 shares in the aggregate, subject to adjustment based on fiscal 2015 results, with a vesting date of August 31, 2017. Compensation expense is recognized on a ratable basis over the vesting period based on quarterly probability assessments with a vesting date of August 31, 2017; (b) time-based restricted stock grant of 8,132 shares in the aggregate, with a vesting date of August 31, 2017. Compensation expense is recognized on a ratable basis over the vesting period.

Stock options — options to purchase 22,750 shares of common stock in the aggregate with an exercise price of $35.50 per share. The options will vest in three equal annual installments beginning on August 31, 2015 and ending on August 31, 2017. Of the options granted, 7,438 will expire on August 31, 2024 and 15,312 will expire on September 1, 2024. Compensation expense is recognized over the period of the award on an annual basis consistent with the vesting terms.

As part of their annual retainer, non-employee members of the Board of Directors receive a combined total of $194 of Chase Corporation common stock, in the form of restricted stock valued in conjunction with the start of the new year of Board service which generally coincides with the Company’s annual shareholder meeting. The stock award vests one year from the date of grant. In February 2015, non-employee members of the Board received a total grant of 5,361 shares of restricted stock for service for the period from January 31, 2015 through January 31, 2016. The shares of restricted stock will vest at the conclusion of this service period. Compensation is being recognized on a ratable basis over the twelve month vesting period.

Note 6 — Segment Data and Foreign Operations

The Company is organized into two operating segments, an Industrial Materials segment and a Construction Materials segment. The segments are distinguished by the nature of the products and how they are delivered to their respective markets.

The Industrial Materials segment reflects specified products that are used in, or integrated into, another company’s product with demand typically dependent upon general economic conditions. Industrial Materials products include insulating and conducting materials for wire and cable manufacturers, moisture protective coatings for electronics and printing services, laminated durable papers, laminates for the packaging and industrial laminate markets, pulling and detection tapes used in the installation, measurement and location of fiber optic cables and water and natural gas lines, cover tapes essential to delivering semiconductor components via tape and reel packaging, wind energy composite materials and elements and glass-based strength elements products, designed to allow fiber optic cables to withstand mechanical and environmental strain and stress and which we operated as a joint venture prior to October 31, 2014. Further, beginning January 30, 2015, the Industrial Materials segment includes microspheres, sold under the Dualite brand, and polyurethane dispersions; both obtained through acquisition, and included in the Company’s specialty chemical product line.

The Construction Materials segment comprises of typically project-oriented product offerings that are primarily sold and used as “Chase” branded products. Construction Materials products include protective coatings for pipeline applications, coating and lining systems for use in liquid storage and containment applications, adhesives and sealants used in architectural and building envelope water proofing applications, high performance polymeric asphalt additives, and expansion and control joint systems for use in the transportation and architectural markets.

The following tables summarize financial information about the Company’s reportable segments:

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

	Three Months Ended February 28,						Six Months Ended February 28,
	2015			2014			2015			2014
Revenue from external customers
Industrial Materials	$	40,330		$	39,920		$	82,725		$	81,590
Construction Materials	11,974			11,271			25,512			23,784
Total	$	52,304		$	51,191		$	108,237		$	105,374

Income (loss) before income taxes
Industrial Materials	$	10,213	(a)	$	10,075	(c)	$	22,828		$	26,817	(c), (d)
Construction Materials	2,592			1,507		(c)	6,465			3,944		(c)
Total for reportable segments	12,805			11,582			29,293			30,761
Corporate and Common Costs	(6,549		)(b)	(4,682		)(c)	(12,268		)(b)	(10,297		)(c)
Total	$	6,256		$	6,900		$	17,025		$	20,464

Includes the following costs by segment:
Industrial Materials
Interest	$	225		$	237		$	455		$	484
Depreciation	976			998			1,953			1,981
Amortization	1,283			766			2,053			1,520

Construction Materials
Interest	$	45		$	48		$	89		$	104
Depreciation	280			286			569			577
Amortization	418			427			831			866

(a) Includes $49 of expenses related to inventory step-up in fair value related to the January 2015 acquisition of the specialty chemical product lines

(b) Includes $584 in expenses related to the January 2015 acquisition of the specialty chemical product lines

(c) Includes the reclassification of $2,367, $640, $5,502 and $1,486 of Selling, general and administrative expense from Industrial Materials and Construction Materials segments, respectively, into Corporate and Common Costs for the second fiscal quarter of 2014 and year to date February 28, 2014, respectively. The reclassification reflects the methodology with which the Company internally reviews expenses in the current year

(d) Includes $5,706 gain on sale of Insulfab product line, for the year to date period ended February 28, 2014

The Company’s products are sold world-wide. For the quarters ended February 28, 2015 and 2014, sales from its operations located in the United Kingdom accounted for 14% and 12% of consolidated revenue, respectively. In the fiscal year to date period, sales from its operations located in the United Kingdom accounted for 12% of total Company revenue compared to 10% in the same period in fiscal 2014. No other foreign geographic area accounted for more than 10% of consolidated revenue for the three or six month periods ended February 28, 2015 or 2014.

	February 28, 2015	August 31, 2014
Total assets
Industrial Materials	$155,878	$127,820
Construction Materials	50,269	50,972
Total for reportable segments	206,147	178,792
Corporate and Common Assets	34,541	66,753
Total	$240,688	$245,545

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

As of February 28, 2015 and August 31, 2014, the Company had long-lived assets (that will provide a future economic benefit beyond the current year or operating period, including buildings, equipment and leasehold improvements) of $4,064 and $4,349, respectively, located in the United Kingdom. These balances exclude goodwill and intangibles of $9,873 and $9,924, as of February 28, 2015 and August 31, 2014, respectively, associated with its operations in the United Kingdom.

Note 7 — Goodwill and Other Intangibles

The changes in the carrying value of goodwill are as follows:

	Industrial Materials			Construction Materials			Consolidated
Balance at August 31, 2014	$	27,528		$	10,752		$	38,280
Acquisition of specialty chemical product lines	6,371						6,371
Foreign currency translation adjustment	(495		)	(19		)	(514		)
Balance at February 28, 2015	$	33,404		$	10,733		$	44,137

The Company’s goodwill is allocated to each reporting unit based on the nature of the products manufactured by the respective business combinations that originally created the goodwill. The Company identified several reporting units within each of its two operating segments that are used to evaluate the possible impairment of goodwill. Goodwill impairment exists when the carrying amount of goodwill exceeds its fair value. Assessments of possible impairment of goodwill are made when events or changes in circumstances indicate that the carrying value of the asset may not be recoverable through future operations. Additionally, testing for possible impairment of recorded goodwill balances is required annually. The amount and timing of any impairment charges based on these assessments require the estimation of future cash flows and the fair market value of the related assets based on management’s best estimates of certain key factors, including future selling prices and volumes, operating, raw material and energy costs, and various other projected operating and economic factors. When testing, fair values of the reporting units and the related implied fair values of their respective goodwill are established using public company analysis and discounted cash flows. The Company evaluates the possible impairment of goodwill annually each fourth quarter and whenever events or circumstances indicate the carrying value of goodwill may not be recoverable.

Intangible assets subject to amortization consist of the following as of February 28, 2015 and August 31, 2014:

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

	Weighted-Average	Gross Carrying		Accumulated		Net Carrying
	Amortization Period	Value		Amortization		Value
February 28, 2015
Patents and agreements	12.0 years	$	3,036	$	2,301	$	735
Formulas and technology	8.4 years	8,455		3,084		5,371
Trade names	5.9 years	7,242		3,601		3,641
Customer lists and relationships	9.3 years	55,481		16,091		39,390
		$	74,214	$	25,077	$	49,137

August 31, 2014
Patents and agreements	11.9 years	$	3,104	$	2,281	$	823
Formulas and technology	9.1 years	5,849		2,851		2,998
Trade names	5.7 years	6,406		3,153		3,253
Customer lists and relationships	10.2 years	34,797		14,656		20,141
		$	50,156	$	22,941	$	27,215

Aggregate amortization expense related to intangible assets for the six months ended February 28, 2015 and 2014 was $2,884 and $2,386, respectively. Estimated amortization expense for the remainder of fiscal year 2015 and for future periods is as follows:

Years ending August 31,
2015 (remaining 6 months)	$	3,991
2016	7,848
2017	7,411
2018	7,180
2019	6,481
2020	5,613
	$	38,524

Note 8 — Sale of Insulfab Product Line

On October 7, 2013, the Company sold substantially all of the property and assets, including intellectual property, comprising the Insulfab® product line, to an unrelated third party (“Buyer”). The Insulfab product line is primarily focused on manufacturing high quality, engineered barrier laminates used in aerospace applications. The sale proceeds of $7,394 were subject to certain post-closing adjustments based on the change in the final net book value compared to the bid date net book value. In the quarter ending November 30, 2013, management determined these post-closing adjustments resulted in an increase in the sale proceeds of $2,516 based on the increase of inventory sold to the Buyer at closing. This adjustment was settled and paid by the Buyer to the Company in the quarter ending February 28, 2014, net of amounts held in escrow. The net proceeds from the sale are available for debt reduction, investment in the Company’s core businesses and future acquisitions.

This transaction resulted in a pre-tax book gain of $5,706 ($3,709 after-tax gain) which was recorded in the quarter ending November 30, 2013. The portion of the sale price held in escrow of $739 is recorded as a current asset (Due from sale of product line) as of both February 28, 2015 and August 31, 2014, and is available to resolve any submitted claims or adjustments up to 18 months from the closing date of the Insulfab sale.

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

Note 9 — Joint Venture

On October 31, 2014, the Company purchased the 50% non-controlling membership interest of NEPTCO JV LLC (the “JV”) owned by its now-former joint venture partner, an otherwise unrelated party. The purchase consideration is subject to certain contingent adjustments based on certain future events related to the JV. The purchase price, including these contingent adjustments, was not, nor will be, material to the Company. Because of the Company’s controlling financial interest, the JV’s assets, liabilities and results of operations have been consolidated within the Company’s consolidated financial statements since June 27, 2012, the date the Company acquired NEPTCO. The Company will continue to fully consolidate the assets, liabilities and results of operations of the JV, but will no longer record an offsetting amount for a non-controlling interest. The ($95) recorded in the Consolidated Statement of Operations as Net (gain) loss attributable to non-controlling interest for the six months ended February 28, 2015, represents the now-former joint venture partner’s share of the results of operations of the JV for the period from September 1, 2014 through October 31, 2014.

The Company accounted for the joint venture partner’s non-controlling interest in the JV under ASC Topic 810 “Consolidations” (“ASC 810”). Based on the criteria in ASC 810, the Company had determined that the JV qualified as a variable interest entity (“VIE”).

Under the JV agreement, which terminated with the Company’s October 2014 acquisition of the 50% outstanding non-controlling membership interest in the JV, the JV had agreed to purchase a minimum of 80% of its total glass fiber requirements from the now-former joint venture partner. Additionally, the JV agreed to purchase private-label products exclusively from an affiliate of the now-former joint venture partner; however, the JV was not subject to a minimum purchase requirement on private-label products. Purchases from the now-former joint venture partner totaled $332 for the period from September 1, 2014 through October 31, 2014 and $300 and $767 for the three and six month periods ended February 28, 2014, respectively. The JV had amounts due to the now-former joint venture partner of $385 and $394 at February 28, 2015 and August 31, 2014, respectively.

Note 10 — Commitments and Contingencies

The Company is involved from time to time in litigation incidental to the conduct of its business. Although the Company does not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on its financial condition, results of operations or cashflows, litigation is inherently unpredictable. Therefore, judgments could be rendered or settlements entered, that could adversely affect the Company’s operating results or cash flows in a particular period. The Company routinely assesses all of its litigation and threatened litigation as to the probability of ultimately incurring a liability, and records its best estimate of the ultimate loss in situations where the Company assesses the likelihood of loss as probable.

Note 11 - Pensions and Other Post-Retirement Benefits

The components of net periodic benefit cost for the three and six months ended February 28, 2015 and 2014 are as follows:

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

	Three Months Ended February 28,						Six Months Ended February 28,
	2015			2014			2015			2014
Service cost	$	91		$	81		$	181		$	161
Interest cost	170			161			339			321
Expected return on plan assets	(153		)	(178		)	(306		)	(355		)
Amortization of prior service cost	1			1			2			2
Amortization of unrecognized loss	167			73			335			147
Net periodic benefit cost	$	276		$	138		$	551		$	276

When funding is required, the Company’s policy is to contribute amounts that are deductible for federal income tax purposes. As of February 28, 2015, the Company has made contributions of $115 in the current fiscal year to fund its obligations under its pension plan, and plans to make the necessary contributions over the remainder of fiscal 2015 to ensure the qualified plan continues to be adequately funded given the current market conditions. The Company made contributions of $200 in the first six months of the prior year.

Note 12 — Fair Value Measurements

The Company defines fair value as the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The Company uses a three-tier fair value hierarchy, which classifies the inputs used in measuring fair values. These tiers include: Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets; Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable; and Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions.

The Company utilizes the best available information in measuring fair value. Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement. The financial assets classified as Level 1 and Level 2 as of February 28, 2015 and August 31, 2014 represent investments that are restricted for use in a nonqualified retirement savings plan for certain key employees and directors.

The following table sets forth the Company’s financial assets that were accounted for at fair value on a recurring basis as of February 28, 2015 and August 31, 2014:

				Fair value measurement category
	Fair value measurement date	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Assets:
Restricted investments	February 28, 2015	$	1,377	$	1,339	$	38	$	—

Restricted investments	August 31, 2014	$	1,256	$	1,216	$	40	$	—

The following table presents the fair value of the Company’s long-term debt as of February 28, 2015 and August 31, 2014, which is recorded at its carrying value:

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

				Fair value measurement category
	Fair value measurement date	Total		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Liabilities:
Long-term debt	February 28, 2015	$	57,300	$	—	$	57,300	$	—

Long-term debt	August 31, 2014	$	58,800	$	—	$	58,800	$	—

The carrying value of the long-term debt approximates its fair value, as the monthly interest rate is set based on the movement of the underlying market rates.

Note 13 — Accumulated Other Comprehensive Income

The changes in accumulated other comprehensive income (loss), net of tax, were as follows:

	Restricted Investments			Change in Funded Status of Pension Plan			Foreign Currency Translation Adjustment			Total
Balance at August 31, 2014	$	209		$	(4,785	)	$	326		$	(4,250	)

Other comprehensive gains (losses) before reclassifications (1)	40			—			(2,909		)	(2,869		)
Reclassifications to net income of previously deferred (gains) losses (2)	(48		)	219			—			171
Other comprehensive income (loss)	(8		)	219			(2,909		)	(2,698		)

Balance at February 28, 2015	$	201		$	(4,566	)	$	(2,583	)	$	(6,948	)

(1) Net of tax benefit of $22, $0, $0, respectively.

(2) Net of tax expense of $26, tax benefit of $118, $0, respectively.

The following table summarizes the reclassifications from accumulated other comprehensive income (loss) to the unaudited condensed consolidated statements of income:

	Amount of Gain (Loss) Reclassified from Accumulated Other Comprehensive Income (Loss) into Income
	Three Months Ended February 28,						Six Months Ended February 28,						Location of Gain (Loss) Reclassified from Accumulated Other
	2015			2014			2015			2014			Comprehensive Income (Loss) into Income
Gains on Restricted Investments:
Realized gain on sale of restricted investments	$	(75	)	$	(32	)	$	(76	)	$	(37	)	Selling, general and administrative expenses
Tax expense (benefit)	26			11			27			13
Gain net of tax	$	(48	)	$	(21	)	$	(48	)	$	(24	)

Loss on Funded Pension Plan adjustments:
Amortization of prior pension service costs and unrecognized losses	$	5		$	20		$	10		$	40		Cost of products and services sold
Amortization of prior pension service costs and unrecognized losses	163			54			326			108			Selling, general and administrative expenses
Tax expense (benefit)	(59		)	(26		)	(118		)	(52		)
Loss net of tax	$	109		$	48		$	219		$	96

Total net loss reclassified for the period	$	62		$	27		$	171		$	72

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

Note: Gains on Restricted Investments and losses on funded pension plan adjustments may not sum for the quarter end or year to date period due to rounding.

Note 14 — Acquisition of Specialty Chemical Product Lines

On January 30, 2015, the Company acquired two product lines from Henkel Corporation (the “Seller”). The product lines were acquired for a purchase price of $33,285, after initial working capital adjustments, and excluding any acquisition related costs. As part of this transaction, which was completed to expand the products and service offerings of the Company, Chase acquired the Seller’s microspheres product line, sold under the Dualite brand, located in Greenville, SC, as well as obtained exclusive distribution rights and intellectual property related to the Seller’s polyurethane dispersions product line, operating in the Elgin, IL location. Under the agreement, Chase entered into a ten-year facility operating lease at the Seller’s Greenville, SC location, and the Seller will perform certain manufacturing and application services, at the Seller’s Elgin, IL location for Chase for the next three years. The purchase was funded entirely with available cash on hand.

Since the effective date for this acquisition, January 30, 2015, the financial results of the specialty chemical product lines, have been included in the Company’s financial statements within the Industrial Materials operating segment. The acquisition was accounted for as a business combination under ASC Topic 805, “Business Combinations.” In accordance with this accounting standard, the Company expensed $584 of acquisition related costs during both the three and six month periods ended February 28, 2015 to selling, general and administrative expenses.

Management is currently in the process of finalizing purchase accounting pending final valuation of customer relationships. The purchase price has been initially allocated to the acquired tangible and identifiable intangible assets assumed based on their fair values as of the date of the acquisition:

Assets & Liabilities	Amount
Inventory	$	610
Property, plant & equipment	1,064
Goodwill	6,371
Intangible assets	25,240
Total purchase price	$	33,285

The excess of the purchase price over the net tangible and intangible assets acquired resulted in goodwill of $6,371 that is largely attributable to the synergies and economies of scale from combining the operations and technologies of Chase and the two product lines, particularly as it pertains to the expansion of the Company’s product and service offerings, the established workforce, and marketing efforts. This goodwill is not deductible for income tax purposes.

All assets, including goodwill, acquired as part of the specialty chemical product lines are included in the Industrial Materials operating segment. Identifiable intangible assets purchased with this transaction are as follows:

Table of Contents

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(UNAUDITED)

In thousands, except share and per share amounts

Intangible Asset	Amount		Useful life
Customer relationships	$	21,300	8 years
Technology	2,700		7 years
Trade name	910		7 years
Backlog	330		2 months
Total intangible assets	$	25,240

Supplemental Pro Forma Data

The following table presents the pro forma results of the Company for the three and six month periods ended February 28, 2015 and 2014, as though the specialty chemical product lines acquisition described above occurred on September 1, 2013. The actual revenue and expenses for the specialty chemical product lines acquisition are included in the Company’s fiscal 2015 consolidated results beginning on January 30, 2015. Revenue and net loss attributable to Chase Corporation for the specialty chemicals product lines since the acquisition date included in the consolidated statement of operations were $1,462 and $445, respectively, inclusive of the effects of the $584 in acquisition costs, $49 in sale of inventory step-up cost and additional amortization expense recognized as part of the transaction. The pro forma results include adjustments for the estimated amortization of intangibles, acquisition related costs, sale of inventory step-up cost and the income tax impact of the pro forma adjustments at the statutory rate of 35%. The following pro forma information is not necessarily indicative of the results that would have been achieved if the acquisition had been effective on September 1, 2013.

	Three Months Ended February 28,				Six Months Ended February 28,
	2015		2014		2015		2014
Revenue	$	55,873	$	56,291	$	116,766	$	114,929
Net income	4,955		4,923		12,329		13,405
Net income attributable to Chase Corporation	4,955		4,958		12,234		13,398

Net income available to common shareholders, per common and common equivalent share
Basic earnings per share	$	0.54	$	0.55	$	1.34	$	1.47
Diluted earnings per share	$	0.53	$	0.53	$	1.32	$	1.44

Table of Contents

Item 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion provides an analysis of the Company’s financial condition and results of operations and should be read in conjunction with the Consolidated Financial Statements and notes thereto included in Item 1 of Part I of this Quarterly Report on Form 10-Q and with the Company’s Annual Report on Form 10-K filed for the fiscal year ended August 31, 2014.

Overview

Revenue and operating income in the year to date period exceeded prior year results primarily due to increased demand, more favorable sales mix and additional sales generated by the January 30, 2015 acquisition of the specialty chemical product lines. Revenue for the current quarter increased over the same prior year period, but operating income for the quarterly period decreased from the prior year, primarily as a result of additional expenses recognized in the current quarter, in part related to the January 30, 2015 acquisition of the specialty chemical product lines. These acquisition related expenses also affected operating income for the year to date period, but to an overall lesser degree. These increases in cost were partially offset by our ongoing efforts with production facility consolidation, efficiency improvements and streamlining overhead costs.

Revenue from our Industrial Materials segment increased over the prior year periods primarily due to increased sales volume from our electronic coatings, pulling and detection, and fiber optic cable components products, as well as the inclusion of the specialty chemical product lines for one month of the current quarter. These increases were partially offset by a reduction in demand for wire and cable, durable paper products and cover tape products.

Revenue for our Construction Materials segment increased over the prior year periods primarily due to increased sales volume from our pipeline coatings and coating and linings systems products. This segment saw increased demand for pipeline coatings products produced at our Rye, UK facility from continuing water infrastructure projects in the Middle East in the quarter and year to date periods ended February 28, 2015.

Our second fiscal quarter has historically generated lower sales for several of our product lines, particularly the seasonally affected domestic sales of our Construction Materials segment, especially compared to our third and fourth quarters. During the remainder of the fiscal year, we will continue to focus on our key strategies, which include marketing and product development efforts, and a continued emphasis on identifying potential acquisition targets, as well as fully integrating the specialty chemical product lines acquired in the second quarter.

Our balance sheet remains strong, with cash on hand of $17,406,000 and a current ratio of 2.9 as of February 28, 2015. The balance of our term debt was $57,300,000, including a $2,000,000 draw on our line of credit at the end of the second quarter. Given subsequent repayment of the draw, our $15,000,000 million line of credit is fully available as of March 31, 2015.

We have two reportable segments as summarized below:

Segment

Product Lines

Manufacturing Focus and Products

Industrial Materials

· Wire and Cable

· Electronic Coatings

· Specialty Products

· Pulling and Detection

· Electronic Materials

· Structural Composites

· Fiber Optic Cable Components (JV) (1)

· Specialty Chemical

Protective coatings and tape products, including insulating and conducting materials for wire and cable manufacturers; moisture protective coatings for electronics and printing services; laminated durable papers, packaging and industrial laminate products; pulling and detection tapes used in the installation, measurement and location of fiber optic cables and water and natural gas lines; cover tapes essential to delivering semiconductor components via tape and reel packaging; wind energy composite materials

Table of Contents

Intermediates

elements; glass-based strength elements designed to allow fiber optic cables to withstand mechanical and environmental strain and stress; microspheres, sold under the Dualite® brand; and polyurethane dispersions.

Construction Materials

· Pipeline

· Bridge and Highway

· Coating and Lining Systems

· Building Envelope

Protective coatings and tape products, including coating and lining systems for use in liquid storage and containment applications; protective coatings for pipeline and general construction applications; adhesives and sealants used in architectural and building envelope water proofing applications; high-performance polymeric asphalt additives; and expansion and control joint systems for use in the transportation and architectural markets.

(1) Through a 50% owned joint venture until October 31, 2014, when we purchased the non-controlling 50% interest.

Results of Operations

Revenue and Operating Profit by Segment are as follows (dollars in thousands):

	Three Months Ended February 28, 2015		% of Total Revenue		Three Months Ended February 28, 2014		% of Total Revenue		Six Months Ended February 28, 2015		% of Total Revenue		Six Months Ended February 28, 2014		% of Total Revenue

Revenue from external customers
Industrial Materials	$	40,330	77	%	$	39,920	78	%	$	82,725	76	%	$	81,590	77	%
Construction Materials	11,974		23	%	11,271		22	%	25,512		24	%	23,784		23	%
Total	$	52,304			$	51,191			$	108,237			$	105,374

	Three Months Ended February 28, 2015			% of Segment Revenue		Three Months Ended February 28, 2014			% of Segment Revenue		Six Months Ended February 28, 2015			% of Segment Revenue		Six Months Ended February 28, 2014			% of Segment Revenue
Income (loss) before income taxes
Industrial Materials	$	10,213	(a)	25	%	$	10,075	(c)	25	%	$	22,828		28	%	$	26,817	(c), (d)	33	%
Construction Materials	2,592			22	%	1,507		(c)	13	%	6,465			25	%	3,944		(c)	17	%
Total for reportable segments	12,805			24	%	11,582			23	%	29,293			27	%	30,761			29	%
Corporate and Common Costs	(6,549		)(b)			(4,682		)(c)			(12,268		)(b)			(10,297		)(c)
Total	$	6,256		12	%	$	6,900		13	%	$	17,025		16	%	$	20,464		19	%

(a) Includes $49 of expenses for inventory step-up in fair value related to the January 2015 acquisition of the specialty chemical product lines

(b) Includes $584 in expenses related to the January 2015 acquisition of the specialty chemical product lines

(d) Includes $5,706 gain on sale of Insulfab product line, for the year to date period ended February 28, 2014

Total Revenue

Total revenue increased $1,113,000 or 2% to $52,304,000 for the quarter ended February 28, 2015 compared to $51,191,000 in the same quarter of the prior year. Total revenue increased $2,863,000 or 3% to $108,237,000 in the fiscal year to date period compared to $105,374,000 in the same period in fiscal 2014.

Revenue in our Industrial Materials segment increased $410,000 or 1% and $1,135,000 or 1% in the current quarter and year to date periods, respectively. The increase in this segment compared to the prior year periods is primarily due to the following for the current quarter and year to date periods, respectively: (a) our newly acquired specialty chemical product lines’ first full, but seasonally affected, month of sales totaling $1,462,000 (b) increased sales of $1,071,000 and $1,485,000 from our electronic coatings products resulting from higher sales volume domestically, as well as in Europe and Asia, including increased demand from the automotive and appliance markets; (c) increase sales of $606,000

Table of Contents

and $1,407,000 from our pulling and detection products reflecting higher demand in product volume by the utility and telecom industries; and (d) increased sales of $631,000 and $821,000 from fiber optic cable components products. These increases were partially offset by: (a) decreased sales volume of our wire and cable products in the current quarter and year to date periods of $2,083,000 and $2,200,000, respectively, reflecting reduced demand in the energy markets; (b) decreased sales volume for durable paper products of $412,000 and $1,154,000 for the current quarter and year to date periods, respectively; and (c) a decrease in cover tape product sales in the current quarter and year to date fiscal 2015 periods of $554,000 and $426,000, respectively.

Revenue from our Construction Materials segment increased $703,000 or 6% and $1,728,000 or 7% in the current quarter and year to date periods, respectively, compared to the same periods in the prior year. Increases in sales from this segment were primarily due to a net increase in sales of $419,000 and $1,389,000 from our pipeline coatings products for the current quarter and year to date periods, respectively, over the same prior year periods. The net increase within pipeline coatings, for both the current quarter and year to date periods, was the result of increases in sales of our Rye, UK produced water infrastructure pipeline products sold into the Middle East, offset by period-over-period reductions in sales on domestically produced oil and gas pipeline products, which are sold primarily in the Americas. The segment also benefited from an increase in sales volume of its coating and lining systems products of $87,000 and $307,000 for the current quarter and year to date periods, respectively, over the prior year.

Cost of Products and Services Sold

Cost of products and services sold increased $284,000 or 1% to $34,235,000 for the quarter ended February 28, 2015 compared to $33,951,000 in the prior year quarter. Cost of products and services sold decreased $714,000 or 1% to $68,715,000 in the fiscal year to date period compared to $69,429,000 in the same period in fiscal 2014.

The following table summarizes our cost of products and services sold as a percentage of revenue for each of our reporting segments:

	Three Months Ended February 28,				Six Months Ended February 28,
Cost of products and services sold	2015		2014		2015		2014

Industrial Materials	64.5	%	64.7	%	63.0	%	64.8	%
Construction Materials	68.6	%	72.2	%	65.0	%	69.7	%
Total	65.5	%	66.3	%	63.5	%	65.9	%

Cost of products and services sold in our Industrial Materials segment was $26,022,000 and $52,128,000 in the current quarter and year to date periods compared to $25,817,000 and $52,850,000 in the comparable periods in the prior year. Cost of products and services sold in our Construction Materials segment was $8,213,000 and $16,587,000 for the quarter and fiscal year to date periods ended February 28, 2015, respectively, compared to $8,134,000 and $16,579,000 in the same periods of the prior year. As a percentage of revenue, cost of products and services sold in both segments decreased primarily due to product mix as we had decreased sales volume from our lower margin products within the segments. We continue to closely monitor raw material pricing across all product lines in both segments to preserve margins.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased $1,994,000 or 20% to $11,924,000 for the quarter ended February 28, 2015 compared to $9,930,000 in the prior year quarter. As a percentage of revenue, selling, general and administrative expenses increased to 23% in the current fiscal quarter compared to 19% in the prior year period. Selling, general and administrative expenses increased $2,350,000 or 12%

Table of Contents

to $22,719,000 in the fiscal year to date period compared to $20,369,000 in the same period in fiscal 2014. For the current fiscal year to date period, selling, general and administrative expenses as a percentage of revenue increased to 21% compared to 19% in the same period in fiscal 2014. The percentage increase for both the current fiscal quarter and year to date period compared to the prior year periods is primarily attributable to: (a) $584,000 in professional fees incurred related to the acquisition of the specialty chemical product lines; (b) an additional $493,000 in amortization expense recognized in the quarter and year to date periods associated with the intangible assets obtained as part of the acquisition; (c) increased international sales commission expenses of $375,000 and $661,000 over the prior year quarter and year to date periods, respectively, incurred related to increased revenue generated by those sales activities; (d) quarter over quarter decrease of $130,000 and year over year decrease of $142,000 in the capitalization of internal labor, most notably related to our multiyear companywide single ERP system rollout, which was substantively completed with regard to our previously existing locations in December 2014; and (e) increased pension periodic benefit costs of $138,000 in the current quarter against the same period in the prior year, and a $275,000 increase against the prior year to date period. The Company continues its emphasis on controlling operating costs, while maintaining an active mergers and acquisitions program, exploring new sales channels and staying focused on its key strategies.

Interest Expense

Interest expense decreased $15,000 or 5% to $270,000 for the quarter ended February 28, 2015 compared to $285,000 in the prior year quarter. Interest expense decreased $44,000 or 7% to $544,000 for the fiscal year to date period compared to $588,000 in the same period in fiscal 2014. The decrease in interest expense from the prior year period is a direct result of a reduction in our overall average debt balance through principal payments made from operating cash flow over the past year.

Gain on sale of product line

On October 7, 2013, we sold substantially all of our property and assets, including intellectual property, comprising the Insulfab product line, to an unrelated buyer. This transaction resulted in a pre-tax book gain of $5,706,000, which was recorded in the six month period ended February 28, 2014.

Other Income (Expense)

Other income (expense) was an income of $381,000 in the quarter ended February 28, 2015 compared to an expense of $125,000 in the same period in the prior year, a difference of $506,000. Other income (expense) was an income of $766,000 for the fiscal year to date period compared to an expense of $230,000 in the same period in the prior year, a difference of $996,000. Other income (expense) primarily includes interest income and foreign exchange gains (losses) caused by changes in exchange rates on transactions or balances denominated in currencies other than the functional currency of our subsidiaries. Income in the current quarter and year to date periods are primarily the result of sales made from our UK based operations, denominated in US dollars.

Income Taxes

The effective tax rate for the second quarter and the six month period ended February 28 was 35%, for both fiscal 2015 and fiscal 2014.

Non-controlling Interest

The income (loss) from non-controlling interest relates to a joint venture we had, prior to our October 2014 acquisition of the 50% outstanding non-controlling membership interest. The joint venture between

Table of Contents

the Company and its now-former joint venture partner (an otherwise unrelated party) was managed and operated on a day-to-day basis by the Company.

Net Income attributable to Chase Corporation

Net income attributable to Chase Corporation decreased $454,000 or 10% to $4,066,000 in the quarter ended February 28, 2015 compared to $4,520,000 in the prior year quarter. The decrease in net income in the current quarter is primarily due to the previously mentioned acquisition related expenses, inclusive of both professional services fees and the increased amortization expense recognized as a result of intangibles acquired in the transaction.

Net income attributable to Chase Corporation decreased $2,324,000 or 17% to $10,971,000 for the fiscal year to date period compared to $13,295,000 in the same period in fiscal 2014. The decrease in net income in the year to date period is primarily due to the $5,706,000 pre-tax gain on the Company’s Insulfab product line sold in October 2013 which significantly contributed to earnings and cash flows in the first half of the prior fiscal year, and which did not reoccur in the first half of fiscal 2015. Additionally, year to date net income was reduced by the previously mentioned acquisition related expenses.

Table of Contents

Other Important Performance Measures

We believe that EBITDA and Adjusted EBITDA are useful performance measures. They are used by our executive management team and board of directors to measure operating performance, to allocate resources, to evaluate the effectiveness of our business strategies and to communicate with our board of directors and investors concerning our financial performance. EBITDA and Adjusted EBITDA are non-GAAP financial measures.

We define EBITDA as follows: net income attributable to Chase Corporation before interest expense from borrowings, income tax expense, depreciation expense from fixed assets, and amortization expense from intangible assets. We define Adjusted EBITDA as EBITDA excluding costs and gains/losses related to our acquisitions and divestitures, costs of products sold related to inventory step-up to fair value, settlement (gains), losses resulting from lump sum distributions to participants from our defined benefit plan, and other significant nonrecurring items.

The use of EBITDA and Adjusted EBITDA has limitations and these performance measures should not be considered in isolation from, or as an alternative to, U.S. GAAP measures such as net income. Our measurement of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

The following unaudited table provides a reconciliation of net income attributable to Chase Corporation, the most directly comparable financial measure presented in accordance with U.S. GAAP, to EBITDA and Adjusted EBITDA for the periods presented:

	Three Months Ended February 28,				Six Months Ended February 28,
	2015		2014		2015		2014
Net income attributable to Chase Corporation	$	4,066,000	$	4,520,000	$	10,971,000	$	13,295,000
Interest expense	270,000		285,000		544,000		588,000
Income taxes	2,190,000		2,415,000		5,959,000		7,162,000
Depreciation expense	1,395,000		1,426,000		2,812,000		2,852,000
Amortization expense	1,701,000		1,192,000		2,884,000		2,386,000
EBITDA	$	9,622,000	$	9,838,000	$	23,170,000	$	26,283,000
Acquisition related costs (a)	584,000		—		584,000		—
Gain on sale of Insulfab (b)	—		—		—		(5,706,000		)
Cost of sale of inventory step-up (c)	49,000		—		49,000		—
Adjusted EBITDA	$	10,255,000	$	9,838,000	$	23,803,000	$	20,577,000

(a) Represents costs related to the January 2015 acquisition of the specialty chemical product lines

(b) Represents gain on sale of Insulfab product line that was completed in October 2013

(c) Represents expenses related to the step-up in fair value of inventory through purchase accounting from the January 2015 acquisition of specialty chemical product lines

Liquidity and Sources of Capital

Our overall cash and cash equivalents balance decreased $35,816,000 to $17,406,000 at February 28, 2015, from $53,222,000 at August 31, 2014. The decreased cash balance is primarily attributable to the $33,285,000 purchase of the specialty chemical product lines, and payment of $5,477,000 for the annual dividend in December 2014, partially offset by cash from operations and a $2,000,000 draw on our revolving line of credit. Of the above noted amounts, $14,128,000 and $14,575,000 were held outside the U.S. by our foreign subsidiaries as of February 28, 2015 and August 31, 2014, respectively. Given our cash position and borrowing capability in the U.S. and the potential for increased investment and acquisitions in foreign jurisdictions, we do not have a history of permanently repatriating a significant portion of our foreign cash. However, we do not currently take the position that undistributed foreign subsidiaries’ earnings are considered to be permanently reinvested. Accordingly, we recognize a deferred

Table of Contents

tax liability for the estimated future tax effects attributable to temporary differences due to these unremitted earnings. In the event that circumstances should change in the future and we decide to repatriate these foreign amounts to fund U.S. operations, the Company would pay the applicable U.S. taxes on these repatriated foreign amounts, less any tax credit offsets, to satisfy all previously recorded tax liabilities.

Cash flow provided by operations was $7,789,000 in the first six months of fiscal year 2015 compared to $6,029,000 in the prior year period. Cash provided by operations during the first half of fiscal 2015 was primarily due to operating income offset by increased inventories and decreased accounts payable, accrued expenses due to the timing of tax payments and payment of our annual incentive compensation.

The ratio of current assets to current liabilities was 2.9 as of February 28, 2015, compared to 3.5 as of August 31, 2014. The decrease in our current ratio at February 28, 2015 was primarily attributable to a decrease in cash due to the acquisition of the specialty chemical product lines in January 2015. This was partially offset by increased inventories and decreases in accounts payable, accrued income taxes and accrued compensation and other expenses, which decreased largely due to the payment of our annual employee incentive plan in the first half of fiscal 2015.

Cash flow used in investing activities of $34,587,000 was primarily due to the acquisition of the specialty chemical product lines in January 2015, in addition to cash paid for purchases of machinery and equipment at our manufacturing locations during the first half of fiscal 2015.

Cash flow used in financing activities of $7,929,000 was primarily due to our annual dividend payment and payments made on the bank loans used to finance our acquisition of NEPTCO and partially offset by a draw taken on our revolving line of credit, described in more detail below.

On October 23, 2014, we announced a cash dividend of $0.60 per share (totaling $5,477,000), composed of $0.50 related to earnings from continuing operations and $0.10 related to the sale of a product line. The dividend was paid on December 4, 2014 to shareholders of record on November 3, 2014.

In June 2012, as part of our acquisition of NEPTCO, we borrowed $70,000,000 under a five year term debt financing arrangement led and arranged by Bank of America, with participation from RBS Citizens (the “Credit Facility”). The applicable interest rate is based on the effective LIBOR plus a range of 1.75% to 2.25%, depending on our consolidated leverage ratio. At February 28, 2015, the applicable interest rate was 1.92% per annum and the outstanding principal amount was $55,300,000. We are required to repay the principal amount of the term loan in quarterly installments of $1,400,000 beginning in September 2012 through June 2014, increasing to $1,750,000 per quarter thereafter through June 2015, and to $2,100,000 per quarter thereafter through March 2017. The Credit Facility matures in June 2017 and prepayment of the Credit Facility is allowed at any time.

We have a revolving line of credit with Bank of America (the “Revolver”) totaling $15,000,000, which bears interest at LIBOR plus a range of 1.75% to 2.25%, depending on our consolidated leverage ratio, or, at our option, at the bank’s base lending rate. As of February 28, 2015 and March 31, 2015, $13,000,000 and $15,000,000 was available for use, respectively. At February 28, 2015, the applicable interest rate was 3.25% per annum. The Revolver is scheduled to mature in June 2017. This Revolver allows for increased flexibility for working capital requirements going forward, and we plan to use this availability to help finance our cash needs, including potential acquisitions, in fiscal 2015 and future periods.

The Credit Facility with Bank of America contains customary affirmative and negative covenants that, among other things, restrict our ability to incur additional indebtedness. It also requires us to maintain a ratio of consolidated indebtedness to consolidated EBITDA (each as defined in the facility) of no more

Table of Contents

than 3.00 to 1.00, and to maintain a consolidated fixed charge coverage ratio (as calculated in the facility) of at least 1.25 to 1.00. We were in compliance with our debt covenants as of February 28, 2015.

We currently have several on-going capital projects that are important to our long term strategic goals. Machinery and equipment will also be added as needed to increase capacity or enhance operating efficiencies in our manufacturing plants.

We may also consider the acquisition of companies or other assets in fiscal 2015 or in future periods which are complementary to our business. We believe that our existing resources, including cash on hand and our Revolver, together with cash generated from operations and additional bank borrowings, will be sufficient to fund our cash flow requirements through at least the next twelve months. However, there can be no assurances that additional financing will be available on favorable terms, if at all.

To the extent that interest rates increase in future periods, we will assess the impact of these higher interest rates on the financial and cash flow projections of our potential acquisitions.

We have no significant off-balance sheet arrangements.

Contractual Obligations

Please refer to Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section in our Annual Report on Form 10-K for the fiscal year ended August 31, 2014 for a complete discussion of our contractual obligations.

Recent Accounting Standards

In May 2014, the FASB issued ASU No. 2014-09, “Revenue from Contracts with Customers”, which will replace most of the existing revenue recognition guidance under U.S. Generally Accepted Accounting Principles. The core principle of the ASU is that an entity should recognize revenue for the transfer of goods or services equal to the amount that it expects to be entitled to receive for those goods or services. The ASU requires additional disclosure about the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments. The ASU will be effective for our fiscal year 2018, beginning September 1, 2017, including interim periods, and allows for both retrospective and prospective methods of adoption. We are in the process of determining the method of adoption and assessing the impact of this ASU on our consolidated financial position, results of operations or cash flows.

Table of Contents

Critical Accounting Policies

Our financial statements are prepared in accordance with accounting principles generally accepted in the United States. To apply these principles, we must make estimates and judgments that affect our reported amounts of assets, liabilities, revenue and expenses, and related disclosure of contingent assets and liabilities. In many instances, we reasonably could have used different accounting estimates and, in other instances, changes in the accounting estimates are reasonably likely to occur from period to period. Accordingly, actual results could differ significantly from our estimates. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations will be affected. We base our estimates and judgments on historical experience and other assumptions that we believe to be reasonable at the time and under the circumstances, and we evaluate these estimates and judgments on an ongoing basis. We refer to accounting estimates and judgments of this type as critical accounting policies, judgments, and estimates. Management believes there have been no material changes during the six months ended February 28, 2015 to the critical accounting policies reported in Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the fiscal year ended August 31, 2014.

Table of Contents

Forward Looking Information

The part of this Quarterly Report on Form 10-Q captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations” contains certain forward-looking statements, which involve risks and uncertainties. Forward-looking statements include, without limitation, statements as to our future operating results, seasonality expectations, plans for manufacturing facilities, future economic conditions and expectations or plans relating to the implementation or realization of our strategic goals and future growth. These statements are based on current expectations, estimates and projections about the industries in which we operate, and the beliefs and assumptions made by management. Readers should refer to the discussions under “Forward Looking Information” and “Risk Factors” contained in our Annual Report on Form 10-K for the fiscal year ended August 31, 2014 concerning certain factors that could cause our actual results to differ materially from the results anticipated in such forward-looking statements. These discussions and Risk Factors are hereby incorporated by reference into this Quarterly Report.

Item 3 - Quantitative and Qualitative Disclosures about Market Risk

We limit the amount of credit exposure to any one issuer. At February 28, 2015, other than our restricted investments (which are restricted for use in a non-qualified retirement savings plan for certain key employees and members of the Board of Directors), all of our funds were either in demand deposit accounts or investment instruments that meet high credit quality standards such as money market funds, government securities, or commercial paper.

Our domestic operations have limited currency exposure since substantially all transactions are denominated in U.S. dollars. However, our European operations are subject to currency exchange fluctuations. We continue to review our policies and procedures to control this exposure while maintaining the benefit from these operations and sales to European customers. As of February 28, 2015, the Company had cash balances in the following foreign currencies (with USD equivalents):

Currency Code	Currency Name	USD Equivalent at February 28, 2015
GBP	British Pound	$	10,584,461
EUR	Euro	$	2,618,007
CNY	Chinese Yuan	$	380,596
CAD	Canadian Dollar	$	145,368

We will continue to review our current cash balances denominated in foreign currency in light of current tax guidelines, working capital requirements, infrastructure improvements and potential acquisitions.

We recognized a foreign currency translation loss for the six months ended February 28, 2015 in the amount of $2,909,000 related to our European operations, which is recorded in other comprehensive income (loss) within our Statement of Equity and Statement of Comprehensive Income. We do not have or utilize any derivative financial instruments.

We pay interest on our outstanding long-term debt at interest rates that fluctuate based upon changes in various base interest rates. The carrying value of our long-term debt was $57,300,000 at February 28, 2014; inclusive of a $2,000,000 draw taken on the Revolver that was paid back subsequent to February 28, 2015. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Sources of Capital” and Note 12 — “Fair Value Measurements” to the Consolidated Financial Statements for additional information regarding our outstanding long-term debt. The effect of an immediate hypothetical 10% change in variable interest rates would not have a material effect on our Consolidated Financial Statements.

Table of Contents

Item 4 - Controls and Procedures

Evaluation of disclosure controls and procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow for timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, and management is required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

We carry out a variety of ongoing procedures under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, to evaluate the effectiveness of the design and operation of our disclosure controls and procedures. Based on the foregoing, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at a reasonable assurance level as of the end of the period covered by this report.

Changes in internal control over financial reporting

Effective April 1, 2013, the Company began the process of implementing a single enterprise resource planning (“ERP”) computer system world-wide. During the past 23 months, the Company expanded its existing ERP modules to all of its domestic and international locations, expanding to the final previously existing location in December 2014, which resulted in changes to the Company’s processes and procedures affecting its internal control over financial reporting. The Company also began the process of expanding the ERP computer system to the two newly acquired product lines in the second fiscal quarter, and plans to have them fully integrated by the end of the third quarter of fiscal 2015.

As part of the Company’s succession plan, effective with its annual shareholders meeting held on February 3, 2015, and as approved by the board at that time, Adam P. Chase has been named President and Chief Executive Officer of Chase Corporation and Peter R. Chase, the former Chief Executive Officer, has been named Executive Chairman of Chase Corporation.

Otherwise, there have not been any changes in the Company’s internal control over financial reporting during its most recent fiscal year that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.

Table of Contents

Part II — OTHER INFORMATION

Item 1 — Legal Proceedings

We are involved from time to time in litigation incidental to the conduct of our business. Although we do not expect that the outcome in any of these matters, individually or collectively, will have a material adverse effect on our financial condition, results of operations or cash flows, litigation is inherently unpredictable. Therefore, judgments could be rendered or settlements entered into, that could adversely affect our operating results or cash flows in a particular period. We routinely assess all of our litigation and threatened litigation as to the probability of ultimately incurring a liability, and record our best estimate of the ultimate loss in situations where we assess the likelihood of loss as probable.

Item 1A — Risk Factors

Please refer to Item 1A in our Annual Report on Form 10-K for the fiscal year ended August 31, 2014 for a complete discussion of the risk factors which could materially affect our business, financial condition or future results.

Item 6 - Exhibits

Exhibit Number		Description

10.1		Asset Purchase and Sale Agreement dated as of January 28, 2015 between Henkel Corporation, as the Seller and Chase Corporation, as the Buyer
31.1		Certification of principal executive officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2		Certification of principal financial officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of principal executive officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
32.2		Certification of principal financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*

101.INS		XBRL Instance Document
101.SCH		XBRL Taxonomy Extension Schema Document
101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB		XBRL Taxonomy Extension Label Linkbase Document
101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document
101.DEF		XBRL Taxonomy Extension Definition Linkbase Document

* Furnished, not filed

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	Chase Corporation


Dated: April 9, 2015	By:	/s/ Adam P. Chase
		Adam P. Chase,
		President and Chief Executive Officer


Dated: April 9, 2015	By:	/s/ Kenneth J. Feroldi
		Kenneth J. Feroldi,
		Treasurer and Chief Financial Officer

Exhibit 10.1

ASSET PURCHASE AND SALE AGREEMENT

dated as of January 28 , 2015

between

HENKEL CORPORATION, as the Seller

and

CHASE CORPORATION, as the Buyer

TABLE OF CONTENTS

		Page

ARTICLE 1 TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES		2
1.1	Transferred Assets; License Rights; Transitional Services	2
1.2	Excluded Assets	3
1.3	Assumption of Liabilities	6
1.4	Retained Liabilities	7
1.5	Assignment and Assumption of Transferred Contracts	8

ARTICLE 2 PURCHASE PRICE AND PAYMENT		10
2.1	Purchase Price and Payment	10
2.2	Inventory Adjustment	10
2.3	Allocation of Purchase Price	12
2.4	Transfer Taxes	12

ARTICLE 3 CLOSING AND CLOSING DELIVERIES		12
3.1	Closing	12
3.2	Closing Deliveries by the Seller	13
3.3	Closing Deliveries by the Buyer	14

ARTICLE 4 REPRESENTATIONS AND WARRANTIES OF THE SELLER		14
4.1	Organization; Qualification	14
4.2	Authorization and Validity	14
4.3	No Conflicts or Violations; No Consents or Approvals Required	15
4.4	Financial Information	15
4.5	Title	16
4.6	Absence of Certain Changes or Events	16
4.7	Tax Matters	18
4.8	Contracts	18
4.9	Compliance with Law and Permits	19
4.10	Environmental and Safety Matters	19
4.11	Litigation	22
4.12	Customers	22
4.13	Benefit Plans and Employment Arrangements	22
4.14	Know-How	23
4.15	Transferred Trademark and Transferred Patent	25
4.16	Sufficiency of Transferred Assets and Licensed Know-How	25
4.17	Inventory	25
4.18	Warranties; Product Liability	25
4.19	Brokers and Finders	26
4.20	No Other Representations and Warranties	26

ARTICLE 5 REPRESENTATIONS AND WARRANTIES OF THE BUYER		26
5.1	Organization; Qualification	26
5.2	Authorization and Validity	26

5.3	No Conflicts or Violations; No Consents or Approvals Required	27
5.4	Brokers and Finders	27
5.5	Due Diligence Investigation	28
5.6	Financial Wherewithal	28

ARTICLE 6 COVENANTS		28
6.1	Covenants of the Seller	28
6.2	Covenants of the Buyer	30

ARTICLE 7 CONDITIONS TO CLOSING		31
7.1	Conditions to the Buyer’s Obligation to Close	31
7.2	Conditions to the Seller’s Obligation to Close	32

ARTICLE 8 EMPLOYEES		33
8.1	Employment	33
8.2	Employee Benefits for Transferred Employees	34
8.3	Severance	35
8.4	Bonus Plans; Accrued Vacation	36
8.5	COBRA	36
8.6	No Third-Party Beneficiaries	36

ARTICLE 9 INDEMNIFICATION		36
9.1	Indemnification by the Seller	36
9.2	Indemnification by the Buyer	37
9.3	Mitigation	37
9.4	Notice of Claim; No Punitive or Remote Damages	37
9.5	Limitations on Indemnification	39
9.6	Tax Treatment of Indemnification Payments	40
9.7	Exclusive Remedy	40
9.8	Treatment of Materiality	40

ARTICLE 10 ADDITIONAL AGREEMENTS		40
10.1	Covenant Not to Compete; Non-Solicitation	40
10.2	Use of Excluded Trademarks After the Closing	43
10.3	Confidentiality	44
10.4	Access to Records	45
10.5	Litigation Support	46
10.6	Wrong Pockets; Referrals; Administration of Receivables	46
10.7	Public Announcements	47
10.8	Termination of Insurance	47
10.9	Further Assurances	47

ARTICLE 11 MISCELLANEOUS		47
11.1	Expenses	47
11.2	Bulk Transfer Laws	48
11.3	Notices	48
11.4	Entire Agreement	49

11.5	Termination	49
11.6	Effect of Termination	49
11.7	Amendment; Waiver	50
11.8	Binding Effect; Third Party Rights	50
11.9	Severability	50
11.10	Assignment	50
11.11	Affiliates; Common Controlled Affiliate; Persons	51
11.12	Governing Law and Jurisdiction	51
11.13	Interpretation	51
11.14	Counterparts; Facsimile Signature	52

iii

ATTACHMENTS

Schedules

Schedule A		Polyurethane Intermediates

Schedule 1.1(a)(i)		Transferred Equipment

Schedule 1.1(a)(iv)		Transferred Contracts

Schedule 1.1(a)(v)		Transferred Trademark

Schedule 1.1(a)(vi)		Transferred Patent and Transferred Know-How

Schedule 1.2(v)		Excluded Assets

Schedule 2.3		Allocation of Purchase Price

Schedule 4		Disclosure Letter

Schedule 7.1(e)		Customer Contacts

Schedule 7.1(g)		Required Consents

Schedule 8.1(a)		Inactive Employees

Schedule 11.13(g)		Knowledge Individuals

Exhibits

Exhibit A		Form of License Agreement

Exhibit B		Form of Polyurethane Supply Agreement

Exhibit B-1		Form of Polyurethane Services Agreement

Exhibit C		Form of Lease Agreement

Exhibit D		Form of Bill of Sale and Assignment and Assumption Agreement

Exhibit E		Form of Microspheres Supply Agreement

Exhibit E-1		Form of Microspheres Services Agreement

Exhibit F		Form of Trademark Assignment

Exhibit G		Form of Domain Name Assignment

Exhibit H		Form of Patent Assignment

Exhibit I		Retained Resale Rights

Exhibit J		Escrow Agreement

Exhibit K		Consent to Employee Transfer

INDEX TO DEFINED TERMS

	Page

1W/Y Severance Amount	36
Affiliate	52
Agreement	1
Ancillary Documents	14
Assumed Liabilities	6
Bill of Sale, Assignment and Assumption Agreement	13
Business Day	10
Business Product Lines	1
Buyer	1
Buyer Indemnitees	37
Buyer Welfare Benefit Plans	35
Closing	13
Closing Date	13
Closing Date Inventory	11
Closing Date Inventory Statement	11
Closing Date Payment	10
Code	12
Common Controlled Affiliate	52
Competing Business	42
Confidential Information	45
Consent to Employee Transfer	14
Contamination	22
Contracts	2
Disclosed	14
Disclosure Letter	14
Domain Name Assignment	14
Effective Time	13
Employees	23
Environmental and Safety Laws	22
Environmental Permits	20
ERISA	24
ERISA Affiliate	24
Escrow Agreement	14
Excluded Assets	4
Excluded Trademarks	5
Hazardous Substances	22
Henkel CAS	11
Inactive Employees	34
Independent Auditor	11
Intermediates	1
Law or Laws	19
Lease Agreement	13
License Agreement	3

Licensed Know-How	3
Lien	15
Losses	37
Material Adverse Effect	18
Microspheres Product Line	1
Microspheres Products	1
Microspheres Supply and Services Agreements	3
Multiemployer Plan	24
Notice of Objection	11
Patent Assignment	14
Permitted Liens	16
Person	52
Plan	24
Polyurethane Intermediate Line	1
Polyurethane Intermediates	1
Polyurethane Supply and Services Agreements	3
Products	1
Pro-Forma Financial Statements	16
Purchase Price	10
Registered Intellectual Property	25
Remote Damages	39
Required Contract Consent	8
Restricted Period	41
Retained Liabilities	7
Review Period	11
Seller	1
Seller Group	4
Seller Indemnitees	38
Seller Severance Plan	36
Seller Welfare Benefit Plans	35
Seller’s Savings Plan	35
Specified Representations	40
Target	42
Target Inventory Value	12
Tax or Taxes	5
Tax Returns	12
Trademark Assignment	13
Transferred Assets	2
Transferred Contracts	2
Transferred Domain Name	2
Transferred Employees	34
Transferred Equipment	2
Transferred Inventory	2
Transferred Know-How	3
Transferred Patent	2
Transferred Records	3

vii

Transferred Trademark

viii

ASSET PURCHASE AND SALE AGREEMENT

THIS ASSET PURCHASE AND SALE AGREEMENT dated as of January 28, 2015 (this “ Agreement ”), between HENKEL CORPORATION , a corporation organized under the laws of Delaware having its principal place of business at One Henkel Way, Rocky Hill, CT 06067 (the “ Seller ”), and CHASE CORPORATION , a corporation organized under the laws of the Commonwealth of Massachusetts having its principal place of business at 295 University Avenue, Westwood, MA 02090 (the “ Buyer ”).

RECITALS

WHEREAS, the Seller, through a segment of its and its Affiliates’ Adhesives Technologies Business Unit, manufactures, markets and sells its Dualite® brand line of expanded and unexpanded polymeric microspheres (the “ Microspheres Products ” and such product line the “ Microspheres Product Line ”);

WHEREAS, the Seller, through a segment of its and its Affiliates’ Adhesives Technologies Business Unit, manufactures, markets and sells the Polyurethane Intermediates. “ Polyurethane Intermediates ” means the chemical polyurethane backbones and polyurethane dispersions products listed on Schedule A hereto which have been manufactured by the Seller in the United States and sold as industrial chemical Intermediates to customers throughout the world listed on Schedule A . “ Intermediates ” means products sold to third parties who further incorporate such products with other substances into finished goods or otherwise modify the product for use by their end customers. For the avoidance of doubt, under no circumstances shall the Polyurethane Intermediates include or be deemed to include any formulated finished products for end applications as adhesives, sealants or coatings. The Polyurethane Intermediate line of business is referred to herein as the “ Polyurethane Intermediate Line ”. The Microspheres Products and Polyurethane Intermediates are referred to herein collectively as the “ Products ” and the Microspheres Product Line and Polyurethane Intermediate Line are referred to herein collectively as the “ Business Product Lines ”; and

WHEREAS, the Seller wishes to sell, as set forth herein, and the Buyer wishes to purchase, as set forth herein, on the Closing Date, certain assets of the Business Product Lines, subject to certain liabilities related thereto, and hire certain employees of the Business Product Lines, all on the terms and conditions of this Agreement.

NOW, THEREFORE, in consideration of the premises and the mutual agreements and covenants hereinafter set forth, and intending to be legally bound hereby, the Seller and the Buyer hereby agree as follows:

ARTICLE 1

TRANSFER OF ASSETS AND ASSUMPTION OF LIABILITIES

1.1 Transferred Assets; License Rights; Transitional Services

(a) Transferred Assets

At the Closing, the Seller shall sell and the Buyer shall purchase all right, title and interest of the Seller or the applicable member of the Seller Group in and to the following assets, as they exist at the Effective Time, in each case only if, subject to the terms and conditions of this Agreement, related to or used in the Business Product Lines (except as otherwise specifically provided below), but excluding the Excluded Assets (collectively, the “Transferred Assets” ):

(i) Equipment, tooling, spare parts, furniture and other tangible property listed on Schedule 1.1(a)(i) utilized in the Microspheres Product Line (the “ Transferred Equipment ”);

(ii) all inventories of raw material, intermediates and finished Microspheres Products used or held for use exclusively in the Microspheres Product Line (the “ Transferred Inventory ”);

(iii) subject to Section 1.4, all rights against suppliers under warranties covering the Transferred Inventory and related claims, credits, rights of recovery and set-off with respect thereto;

(iv) subject to Section 1.4, all rights and benefits, subject to the Assumed Liabilities, of the Seller under the written contracts, commitments, understandings, arrangements, purchase orders and other agreements (“ Contracts ”) to which the Seller is a party on the date of this Agreement and listed on Schedule 1.1(a)(iv) , or to which the Seller becomes a party in the ordinary course of the Business Product Lines and in compliance with Section 6.1(a) between the date of this Agreement and the Closing Date (collectively, the “ Transferred Contracts ”);

(v) (A) the Dualite trademark registered in the United States and Mexico and set forth on Schedule 1.1(v) , and the goodwill associated therewith (the “ Transferred Trademark ”), together with any common law rights in and to the Dualite trademark anywhere in the world, and (B) the Dualite domain name (the “ Transferred Domain Name ”);

(vi) (A) the registered patent listed on Schedule 1.1(a)(vi) (the “ Transferred Patent ”), together with all rights to reissues, divisionals, provisionals, continuations and continuations-in-part, re-examinations, renewals, substitutions and extensions thereof, and (B) the formulae, specifications, know-how, manufacturing methods and processes, trade secrets and technical information required or used in the manufacture of the

Microspheres Product Line, which will be listed on Schedule 1.1(a)(vi) and delivered to Buyer under separate, confidential communication at Closing (collectively, the “ Transferred Know-How ”);

(vii) except as provided in Section 1.2(p) and subject to Section 10.4, all books, records and documentation in the possession or control of the Seller relating exclusively to the Transferred Assets or the Business Product Lines, regardless of the medium on which the same are stored or maintained, but excluding any such records that (x) contain proprietary information unrelated to the Business Product Lines (in which case redacted copies shall be made available) or (y) relate to Excluded Assets or Retained Liabilities (collectively, the “ Transferred Records ”);

(viii) the customer and supplier lists used by the Business Product Lines to sell the Products; and

(ix) the goodwill of the Business Product Lines, including the exclusive right to represent oneself as the successor to the Business Product Lines.

(b) License Rights

At the Closing, the Seller shall execute and deliver that certain License Agreement between the Buyer and the Seller, in substantially the same form as attached hereto as Exhibit A (the “ License Agreement ”), which such agreement will grant to the Buyer a license to the Licensed Know-How, as defined in the License Agreement (the “ Licensed Know-How ”).

(c) Transitional Services

At the Closing, the Seller and the Buyer shall execute and deliver those certain (i) Polyurethane Supply Agreement and Polyurethane Transition Services Agreement, in substantially the same forms as attached hereto as Exhibit B and Exhibit B-1 (the “ Polyurethane Supply and Services Agreements ”), pursuant to which the Seller will perform certain limited toll manufacturing and related services on behalf of the Buyer with respect to the Polyurethane Intermediate Line following the Closing for the term set forth therein and (ii) Microspheres Supply Agreement and Microspheres Transition Services Agreement, in substantially the same forms as attached hereto as Exhibit E and Exhibit E-1 (the “ Microspheres Supply and Services Agreements ”), pursuant to which the Buyer will perform certain limited manufacturing services on behalf of the Seller and Seller will provide certain transition services with respect to the Microspheres Business Line following the Closing for the term set forth therein.

1.2 Excluded Assets

For the avoidance of doubt, and notwithstanding anything to the contrary in Section 1.1, the Seller shall not sell, and the Buyer shall not purchase, acquire or accept from the Seller, ownership of any assets or properties not specifically referred to in Section 1.1,

including without limitation any of those assets set forth below (collectively, the “ Excluded Assets ”):

(a) any interest in real property other than pursuant to the Lease Agreement;

(b) any tangible assets (i) not constituting Transferred Equipment, Transferred Inventory or Transferred Records or (ii) not exclusively related to the Business Product Lines;

(c) cash on hand, cash on deposit in banks and cash equivalents, investments (including without limitation shares in any other Person) and bank accounts (and any cash balances in such accounts);

(d) accounts and notes receivable, deferred charges, chattel paper and any other rights of the Seller to receive payments at the Effective Time, whether or not arising out of the operation of the Business Product Lines;

(e) any rights under Contracts other than Transferred Contracts;

(f) any rights under the Transferred Contracts that do not relate to the Business Product Lines or the Products or that have accrued prior to the Effective Time;

(g) the Licensed Know-How and any other formulae, specifications, know-how, manufacturing methods and processes, trade secrets and technical information used or held for use by the Seller for or in relation to the manufacture of the Products, subject to the license rights granted to the Buyer under the License Agreement;

(h) any patents, patent applications, formulae, specifications, know-how, manufacturing methods and processes, trade secrets and technical information that are associated with or used or held for use in any product line or business of the Seller or any of its Affiliates (collectively, the “Seller Group” ) other than the Business Product Lines;

(i) any other assets, including customer and supplier lists, that are associated with or used in any product line or business of the Seller or any other member of the Seller Group other than the Business Product Lines, including without limitation rights to sell microspheres to the customers and for the applications set forth on Exhibit I ;

(j) any trademarks, trademark applications, trade names, service marks, service names, logos or designs other than the Transferred Trademarks, including without limitation the following marks: Aquence, Dorus, EA, Loctite, Macroplast and Technomelt (collectively, the “Excluded Trademarks” );

(k) any universal resource locators or domain names of any member of the Seller Group, other than the Transferred Domain Name;

(l) any rights of the Seller under any employment or employee related agreements;

(m) any Contracts or assets related to any employee benefit plan or any written, unwritten, formal or informal plan or agreement involving direct or indirect compensation in which any employees of the Seller or any member of the Seller Group (including the Transferred Employees) participate;

(n) any refunds, claims to refunds or rights to receive refunds from Federal, state, local or foreign taxing authority with respect to any and all taxes, customs, duties and governmental charges of whatever kind or nature, however denominated, including without limitation all income taxes, payroll and employee withholding taxes, unemployment insurance, social security, sales and use taxes, excise taxes, franchise taxes, gross receipts taxes, occupation taxes, real and property taxes, stamp taxes, transfer taxes, workers’ compensation taxes and other obligations of the same or a similar nature, including any interest, penalties or other additions to tax that may become payable in respect thereof, imposed (whether or not imposed by way of withholding) by any such authority (collectively, “Tax” or “Taxes” ) relating to or accrued in any period ending prior to the Closing Date;

(o) (i) all books, records and other assets of the Seller or any other member of the Seller Group relating to corporate level activities including, without limitation, those relating to filings with the Internal Revenue Service or other Tax authorities and those relating to accounting and Tax functions, (ii) any corporate minute books, stock ledgers, charter documents, corporate seal and other corporate books and records of the Seller or any other member of the Seller Group, (iii) all books and records relating to any division, business unit or product line of the Seller or any other member of the Seller Group other than the Business Product Lines; and (iv) all documents and analyses prepared by the Seller or any other member of the Seller Group for internal evaluation purposes in connection with this Agreement or the sale of assets and operations of the Business Product Lines;

(p) any insurance policies or rights to refunds or recoveries of Seller or its Affiliates (including policies relating to property, liability, business interruption, health and workers’ compensation), whether or not relating to the Transferred Assets or the Business Product Lines;

(q) any computer hardware, software or other information technology rights or systems or infrastructure owned or operated by any member of the Seller Group or provided by outside contractors other than the Transferred Know How or Transferred Records;

(r) any assets used in the provision to the Business Product Lines of corporate, administrative or other programs and services;

(s) the Seller’s rights under this Agreement and the Ancillary Documents;

(t) financial assurance instruments, including without limitation letters of credit and surety or other bonds, related to permits and licenses of the Business Product

Lines, all of which may be cancelled by the Seller as of the Closing at the Seller’s sole option;

(u) all rights of the Seller to any inventory or other assets related to the Seller’s claims against customers in bankruptcy as of the Closing Date; and

(v) any other assets specifically listed in Schedule 1.2(v) .

1.3 Assumption of Liabilities

On the Closing Date, the Buyer shall assume and thereafter pay, perform and discharge when due and payable or required to be performed or discharged the following (and only the following) liabilities and obligations of the Seller relating to the Business Product Lines and the Transferred Assets (collectively, the “Assumed Liabilities” ):

(a) all obligations, liabilities and commitments of the Seller under the Transferred Contracts, excluding any liability, obligation or commitment incurred by the Seller arising from any breach thereof by the Seller prior to the Closing Date or the occurrence of any event prior to the Closing Date which but for the giving of notice or lapse of time or both would constitute a breach or default thereof by the Seller;

(b) all obligations and liabilities arising from the operation of the Business Product Lines or the ownership of the Transferred Assets arising on or after the Closing Date;

(c) all obligations required to be assumed by the Buyer under Article 8 of this Agreement;

(d) all Taxes related to the Business Product Lines arising on or after the Closing Date;

(e) all product liability claims asserted on or after the Closing Date or obligations associated with Product returns made on or after the Closing Date, in each case solely to the extent related to Products manufactured on or after the Closing Date;

(f) warranty claims arising on or after the Closing Date for Products manufactured or sold on or after the Closing Date; and

(g) all obligations regarding payment of customer rebates, discounts, allowances and other similar payments related to sales of Products, but only to the extent such obligations relate to commitments made by Buyer on or after the Closing Date.

Notwithstanding the foregoing, nothing in this Section 1.3 shall limit Buyer’s rights to indemnification from Seller under this Agreement based upon a breach by Seller of its representations, warranties or covenants set forth in this Agreement or any other Transaction Document.

1.4 Retained Liabilities

Subject to the terms and conditions set forth in this Agreement, and notwithstanding anything in this Agreement to the contrary, the Buyer will not assume or in any way become liable for, and Seller shall retain, and hold Buyer harmless from, and shall indemnify and defend Buyer with respect to, all of the Seller’s and its Affiliates’ debts, liabilities and obligations of any nature whatsoever, whether accrued, absolute or contingent, whether known or unknown, whether due or to become due, including, without limitation, the following (collectively, the “ Retained Liabilities ”):

(a) any liabilities or obligations of the Seller to its stockholders respecting dividends, distributions to its stockholders in liquidation, redemption of stock or otherwise;

(b) any liabilities or obligations of the Seller incurred on or after the Closing Date or arising out of any transactions occurring on or after the Closing Date, excluding the Assumed Liabilities;

(c) any liabilities or obligations of the Seller for expenses, commissions or fees incident to or arising out of the negotiation, preparation, approval or authorization of this Agreement or the consummation of the transactions contemplated hereby, including, without limitation, fees or commissions to any investment banker, broker, finder, agent, attorney or accountant claiming by, through or under the Seller with respect to the transactions contemplated hereby;

(d) any liabilities or obligations of the Seller arising out of this Agreement;

(e) any liabilities or obligations of the Business Product Lines to Seller or any Affiliates of Seller;

(f) any liabilities and obligations of the Seller to indemnify its officers, directors, employees or agents;

(g) all Taxes related to the Business Product Lines for any period or portion thereof ending prior to the Closing Date;

(h) all product liability claims asserted on or after the Closing Date solely to the extent related to Products manufactured prior to the Closing Date;

(i) all warranty claims arising prior to the Closing Date for Products manufactured or sold prior to the Closing Date;

(j) all liabilities and obligations of the Seller relating to any collective bargaining agreement by and between Seller and any certified collective bargaining unit;

(k) subject to the Buyer’s compliance with the terms of the Lease Agreement, all liabilities and obligations of the Seller arising under or imposed pursuant to Environmental and Safety Laws relating to or resulting from the operation of the

Business Product Lines or the real properties related thereto at any time prior to the Closing Date;

(l) all liabilities and obligations for employee benefits of employees of the Business Product Lines incurred prior to the Closing Date;

(m) all liabilities and obligations of the Seller for the trade accounts payable accrued prior to the Closing Date payable with respect to the Business Product Lines;

(n) all other liabilities or obligations of Seller arising out of its conduct of the Business Product Lines prior to the Closing Date, including without limitation, product liabilities; warranty claims, liabilities or obligations related to the infringement by Seller of any intellectual property of another Person; and any liabilities or obligations of Seller related to any lawsuit, cause of action, litigation or legal proceeding with respect to any losses, occurrences or events occurring prior to the Closing Date, whether commenced prior to or after the Closing Date, except for those liabilities or obligations constituting a part of the Assumed Liabilities;

(o) warranty claims arising after the Closing Date for Products manufactured or sold prior to the Closing Date in the Polyurethane Intermediate Line; and

(p) all liabilities and obligations with respect to indebtedness for borrowed money, bank debt and any mortgage on any real property whether currently or previously occupied or used in the Business Product Lines.

1.5 Assignment and Assumption of Transferred Contracts

(a) Required Consents

If the assignment to the Buyer of the rights and benefits relating to the Business Product Lines under any Transferred Contract or the assumption by the Buyer of the Assumed Liabilities relating to the Business Product Lines under any Transferred Contract would, in the absence of the consent of the other party or parties to such Transferred Contract to such assignment and assumption (such consent being referred to herein as a “Required Contract Consent” ), constitute a breach of the terms of such Transferred Contract, then neither this Agreement nor any Ancillary Document shall constitute an agreement to effect such an assignment and assumption unless and until a Required Contract Consent has been obtained.

(b) Consents Not Obtained Prior to the Closing Date

The parties shall cooperate with a view to obtaining Required Contract Consents prior to the Closing Date, and if a Required Contract Consent has not been obtained on or prior to the Closing Date, the Closing shall nevertheless take place and the parties shall cooperate and use commercially reasonable efforts to secure such Required Contract Consent as soon as possible after (but with effect from

and after) the Closing Date. Such efforts shall not require the payment of additional consideration to the other party to any Transferred Contract, provided that the Buyer shall provide financial information, execute agreements of assignment and assumption, and provide such performance guarantees as any third party shall reasonably request in connection therewith. Pending the receipt of such Required Contract Consent:

(i) Except where the exercise of rights relating to the Business Product Lines or the performance and discharge by the Buyer of the Assumed Liabilities under the relevant Transferred Contract as the Seller’s subcontractor or agent or otherwise would, in the absence of a Required Contract Consent, constitute a breach of the terms of such Transferred Contract, the Buyer shall exercise such rights and perform and discharge such Assumed Liabilities to be performed or discharged after the Closing Date as the Seller’s subcontractor or agent or in any other permitted capacity; and

(ii) the Seller shall promptly pay and remit to the Buyer all monies and other consideration (net of any unreimbursed expenses) received by the Seller after the Closing Date pursuant to each such Transferred Contract and that relate to the period from and after the Closing Date.

(c) Where Rights and Obligations Cannot be Exercised or Performed by the Buyer

Where the exercise by the Buyer of rights, or the performance and discharge by the Buyer of the Assumed Liabilities, under any Transferred Contract pursuant to Section 1.5(b) would, in the absence of a Required Contract Consent, constitute a breach of the terms of such Transferred Contract, then pending the receipt of the Required Contract Consent:

(i) the Seller shall continue to perform and discharge the Assumed Liabilities under such Transferred Contract for the Buyer’s account to the extent necessary to avoid any such breach and exercise the rights relating to the Business Product Lines under such Transferred Contract in such manner as the Buyer may reasonably direct or approve;

(ii) the Buyer shall reimburse the Seller for any costs and expenses properly incurred by the Seller in performing its obligations under subsection (i) above, including without limitation the Assumed Liabilities;

(iii) the Seller shall hold in trust for the benefit of the Buyer all rights, benefits and claims accruing after the Closing Date in relation to the Business Product Lines under such Transferred Contract; and

(iv) the Seller shall promptly pay and remit to the Buyer all monies and other consideration received by the Seller that are payable pursuant to and related to the Business Product Lines under such Transferred Contract (net

of any unreimbursed expenses) and that relate to the period from and after the Closing Date.

Notwithstanding the foregoing, if any such Required Contract Consent has not been obtained within one hundred eighty (180) days after the Closing Date, then following written notice from the Seller to the Buyer, the Seller shall be entitled to exercise any right it may have under the terms of such Transferred Contract or otherwise to terminate (or cause to be terminated) such Transferred Contract. It is expressly agreed by the parties that Required Contract Consents with respect to the assignment and assumption of the Transferred Contracts shall not be a condition to either party’s obligation to proceed with the Closing hereunder.

ARTICLE 2

PURCHASE PRICE AND PAYMENT

2.1 Purchase Price and Payment

The purchase price for the Transferred Assets is Thirty Two Million Seven Hundred Ten Thousand U.S. Dollars ($32,710,000) plus the Target Inventory Value (the “Closing Date Payment ”), subject to any adjustment required under Section 2.2 (as so adjusted, the “Purchase Price ”). The Closing Date Payment shall be paid by the Buyer on the Closing Date as follows: (a) ten percent (10%) shall be paid by wire transfer to the Escrow Agent to be held in accordance with the Escrow Agreement and (b) the balance shall be paid to the Seller by wire transfer of immediately available funds to an account designated by the Seller in writing not less than three (3) Business Days prior to the Closing Date and allocated for Tax purposes in accordance with Section 2.3. For purposes of this Agreement, a “ Business Day ” shall mean a day (other than a Saturday or Sunday) on which banks are generally open for normal business in New York City, New York.

2.2 Inventory Adjustment

(a) Closing Date Inventory Statement

Not more than three (3) Business Days prior to the Closing Date, the Seller shall conduct (or cause its auditors to conduct) a full physical count of the Transferred Inventory located at the Seller’s Greenville, South Carolina facility (which count the Buyer shall have the right to observe). Within thirty (30) days following the Closing Date, the Seller shall prepare, or cause its auditors to prepare, and deliver to the Buyer a statement (the “ Closing Date Inventory Statement ”) of the value of the Transferred Inventory as of the Closing Date based on Seller’s cost basis in the Transferred Inventory and the results of the physical count and the Seller’s good faith estimate of the amount of Transferred Inventory in transit or located at a customer facility, adjusted for sales made after the physical count and prior to Closing (the “ Closing Date Inventory ”), prepared in accordance with the IFRS/IAS-based Henkel Corporate Accounting Standards (the “ Henkel CAS ”) (a

copy of the relevant portions of which has been or shall be provided to the Buyer), and a schedule showing in reasonable detail the variance, if any, between the Closing Date Inventory and the Target Inventory Value.

(b) Objections; Resolution of Disputes

The Buyer shall have a period of thirty (30) days after its receipt of the Closing Date Inventory Statement (the “Review Period ”) to review the same and to notify the Seller of any objection to the valuation of the Closing Date Inventory set forth therein, which notice shall specify in reasonable detail the basis for the objections set forth therein as well as the Buyer’s calculation of the value of the Closing Date Inventory (a “Notice of Objection ”). During the Review Period, the Buyer and its advisors shall have reasonable post-closing access to the Seller’s and its internal accountants’ workpapers used in connection with the Seller’s preparation of the Closing Date Inventory Statement. Unless a Notice of Objection is received by the Seller within the Review Period, the valuation as set forth in the Closing Date Inventory Statement shall be final and binding, and the Buyer shall have no further right to make any claim against the Seller in respect of the Transferred Inventory. If the Buyer provides a Notice of Objection to the Seller during the Review Period, then the parties shall negotiate in good faith in an effort to resolve the Buyer’s objections. If the parties are unable to resolve all such objections within thirty (30) days after the Seller receives the Buyer’s Notice of Objection, then either party may submit the matters remaining in dispute to the New York office of Grant Thorton LLP (or, if such firm is unwilling or unable to perform such services, to an independent accounting firm of recognized national or regional standing mutually acceptable to the Buyer and the Seller) (the “ Independent Auditor ”) for resolution. The resolution of disputed items by the Independent Auditor shall be set forth in a written statement delivered to both parties and shall be conclusive and binding upon the parties. The fees and expenses of the Independent Auditor shall be paid (i) by the Buyer if the final determination of the value of the Closing Date Inventory by the Independent Auditor is at least 100% of the Seller’s determination of such value or (ii) by the Seller if the final determination of the value of the Closing Date Inventory by the Independent Auditor is less than 100% of the Seller’s determination of such value. Payment of such fees shall be made within ten (10) days of determination by the Independent Auditor. The parties acknowledge and agree that KPMG LLP is not independent and the parties will not use KPMG as an Independent Auditor or as an expert or arbitrator in the event of a dispute between the parties under this Agreement.

(c) Inventory Adjustment Payment

As of the date hereof, the parties estimate that the Closing Date Inventory as finally determined in accordance with Section 2.2(b) will be approximately US $615,000 (the “ Target Inventory Value ”). If the value of the Closing Date Inventory as finally determined in accordance with Section 2.2(b) is (i) less than $585,000, then the Seller shall pay to the Buyer the amount of such deficiency, or

(ii) in excess of $646,000, then the Buyer shall pay to the Seller the amount of such excess. All payments under this subsection shall be rounded to the nearest $1,000 and bear simple interest from the Closing Date through the date of payment at the rate of six percent (6%) per annum to (but excluding) the date of payment and shall be made by wire transfer of immediately available funds in US dollars to an account designated by the party or parties to whom such payments are to be made and shall be made within five (5) days after the expiration of the Review Period (or, if later, three (3) days following the date on which all disputes with respect thereto have been resolved in accordance with Section 2.2(b)).

2.3 Allocation of Purchase Price

The Buyer and the Seller agree to allocate the Purchase Price for all Tax purposes in accordance with Schedule 2.3 and in accordance with Section 1060 of the Internal Revenue Code of 1986, as amended, including the regulations promulgated thereunder (the “Code” ). All returns, reports, information returns or other documents (including any related or supporting information) filed or required to be filed with any governmental body in connection with the determination, assessment, collection or administration of any Taxes ( “Tax Returns” ), including IRS Form 8594, filed by either party or its Affiliates shall report the Tax consequences of the transactions contemplated hereby in a manner consistent with such Allocation Statement and neither party shall voluntarily take any position inconsistent therewith in connection with any examination of any Tax Return, any refund claim or in any litigation, investigation or other proceeding relating thereto except to reflect costs of sale incurred by the Seller and costs of acquisition incurred by the Buyer.

2.4 Transfer Taxes

All sales, use, excise, documentary, stamp and other transfer Taxes, if any, arising from the transfer of the Transferred Assets to the Buyer pursuant to this Agreement shall be paid by the Buyer. The Seller shall, within fifteen (15) Business Days after demand therefor, reimburse the Buyer for fifty percent (50%) of the Transfer Taxes paid by the Buyer. The Buyer shall provide the Seller with valid exemption certificates (if applicable) for the states in the United States where the Seller holds the Transferred Assets, including the Transferred Inventory.

ARTICLE 3

CLOSING AND CLOSING DELIVERIES

3.1 Closing

The closing of the transactions contemplated hereby (the “ Closing ”) shall be held at the Seller’s headquarters at One Henkel Way, Rocky Hill, CT 06067, at 10:00 a.m. on January 30, 2015, or by such other means or at such other location or on such other date and time as the parties may agree in writing. The date on which the Closing takes place is referred to herein as the “ Closing Date ”. The transfers and deliveries at the Closing

shall be deemed to have occurred and the Closing shall be deemed to be effective as of 11:59 p.m. (prevailing Eastern Time) on the Closing Date (the “ Effective Time ”). Such transfers and deliveries shall be mutually interdependent and regarded as occurring simultaneously, and no such transfer or delivery shall become effective until all the other transfers and deliveries required to be made at or prior to the Closing under this Agreement have also been consummated.

3.2 Closing Deliveries by the Seller

At the Closing, the Seller shall deliver or cause to be delivered the following documents, duly executed on behalf of the Seller or any relevant Affiliate of the Seller:

(a) the License Agreement;

(b) a Lease Agreement with respect to the Microspheres Product Line in substantially the same form as attached hereto as Exhibit C (the “ Lease Agreement ”);

(c) a bill of sale and assignment and assumption agreement in substantially the same form as attached hereto as Exhibit D , evidencing the transfer of all right, title and interest of the Seller in and to the Transferred Assets to the Buyer and the assumption by the Buyer of the Assumed Liabilities (the “ Bill of Sale, Assignment and Assumption Agreement ”);

(d) the Microspheres Supply and Services Agreements;

(e) the Polyurethane Supply and Services Agreements;

(f) an Assignment of the Transferred Trademark in substantially the same form as attached hereto as Exhibit F (the “ Trademark Assignment ”);

(g) an Assignment of the Transferred Domain Name in substantially the same form as attached hereto as Exhibit G (the “ Domain Name Assignment ” );

(h) an Assignment of the Transferred Patent in substantially the same form as attached hereto as Exhibit H (the “ Patent Assignment ”);

(i) the Escrow Agreement in substantially the same form as attached hereto as Exhibit J (the “ Escrow Agreement ”);

(j) the Consent to Employee Transfer in substantially the same form as attached hereto as Exhibit K (the “ Consent to Employee Transfer “); and

(k) any additional assurances, transfers, local agreements, assignments or other instruments, duly executed on behalf of the Seller or any Affiliate of the Seller that are necessary or reasonably required by the Buyer to evidence the sale and transfer of the Transferred Assets to, or the assumption of the Assumed Liabilities by, the Buyer (together with the agreements and instruments referred to in clauses (a) through (i) of this Section 3.2, the “ Ancillary Documents ”).

The Seller shall deliver or cause to be delivered the Transferred Records to or as directed by the Buyer as promptly as practicable after the Closing Date.

3.3 Closing Deliveries by the Buyer

At the Closing, the Buyer shall pay or cause to be paid the Closing Date Payment in the manner set forth in Section 2.1 and deliver or cause to be delivered to the Seller each of the Ancillary Documents, duly executed on behalf of the Buyer in the case of each such Ancillary Document which provides for a signature on behalf of the Buyer.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF THE SELLER

Subject to the limitations set forth in Section 4.20, the Seller hereby represents and warrants to the Buyer that the statements made in this Article 4 are true and correct on the date of this Agreement and on and as of the Closing Date, subject to the other terms and conditions of this Agreement and except as disclosed in the disclosure letter delivered by the Seller to the Buyer simultaneously with the execution and delivery of this Agreement (the “Disclosure Letter” ) and attached hereto as Schedule 4 or in any document listed or specifically referred to therein that has been provided to the Buyer ( “Disclosed” ). Each item Disclosed in the Disclosure Letter shall reference the section in this Agreement to which it relates, provided, however, that any matter Disclosed in the Disclosure Letter whose applicability to another section is readily apparent shall be deemed Disclosed.

4.1 Organization; Qualification

The Seller is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware and has all requisite corporate power and authority to own its properties and assets and to conduct the Business Product Lines as now conducted. The Seller is duly qualified to do business as a foreign corporation in all jurisdictions where the conduct of the Business Product Lines or its ownership of Transferred Assets make such qualification necessary, except where the failure to so qualify would not reasonably be expected to have a Material Adverse Effect.

4.2 Authorization and Validity

The Seller has all requisite corporate power and authority to enter into this Agreement and each of the Ancillary Documents to which it is a party and to carry out its obligations hereunder and thereunder. The execution and delivery by the Seller of this Agreement and the Ancillary Documents to which the Seller is a party and the performance of its obligations hereunder and thereunder have been duly authorized by all necessary corporate action by the Board of Directors of the Seller, and no other corporate proceeding on the part of the Seller is necessary to authorize such execution, delivery and performance. This Agreement has been, and as of the Closing Date each Ancillary Document to which the Seller is a party will be, duly executed by the Seller and constitutes, or as of the Closing Date will constitute, the valid and binding obligation of the Seller, enforceable against it in accordance with its terms, except as such

enforceability may be limited or affected by applicable bankruptcy, insolvency, moratorium, reorganization or other Laws of general application relating to or affecting creditors’ rights generally.

4.3 No Conflicts or Violations; No Consents or Approvals Required

(a) The execution, delivery and performance by the Seller of this Agreement and of the Ancillary Documents to which it is a party (i) do not and will not violate or conflict with any provision of the Certificate of Incorporation or By-laws of the Seller, (ii) do not and will not violate any provision of Law or any order, judgment or decree of any court or other governmental or regulatory authority, (iii) assuming any Required Contract Consent has been obtained, do not and will not violate or result in a breach of or constitute (with due notice or lapse of time or both) a default under any Transferred Contract (except, in the case of the matters described in clause (ii), for such violations, breaches and defaults that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect), and (iv) will not result in the creation or imposition of any mortgage, pledge, security interest, encumbrance, lien (statutory or other) or conditional sale agreement ( “Lien” ) (other than Permitted Liens upon any of the Transferred Assets).

(b) Other than Required Contract Consents, no notice, declaration, report or other filing or registration with, and no waiver, consent, approval or authorization of, any governmental or regulatory authority or any other Person is required to be made or obtained by the Seller in connection with the execution and delivery by the Seller of this Agreement or any Ancillary Document or the consummation by the Seller of the transactions contemplated hereby and thereby.

4.4 Financial Information

(a) Seller has delivered to Buyer an unaudited, pro-forma consolidated balance sheet of the Business Product Lines as of December 31, 2013 and an unaudited, pro-forma consolidated statement of income and cash flow for the year then ended, and an unaudited, pro-forma consolidated balance sheet of the Business Product Lines as of September 30, 2014, and an unaudited, pro-forma consolidated statement of income and cash flow for the nine-month period then ended, copies of which are attached hereto as Schedule 4.4 (the “ Pro-Forma Financial Statements ”). The Pro-Forma Financial Statements have been prepared in accordance with the methodology and assumptions set out in the Disclosure Letter, applied throughout the periods involved, and present fairly, in all material respects, the assets, liabilities and financial condition of the Business Product Lines as of the dates thereof and results of its operations for such periods, subject to the methodology and assumptions set out in the Disclosure Letter.

(b) Seller has no liabilities or obligations relating to the Business Product Lines of a nature or type required to be set forth on the Pro Forma Financial Statements in

accordance with the methodology and assumptions set out in the Disclosure Letter, except:

(i) those liabilities and obligations set forth on the Pro Forma Financial Statements and not heretofore paid or discharged;

(ii) those liabilities and obligations arising in the ordinary course of the Business consistent with past practice under any Transferred Contract, Lease or other commitment specifically disclosed in the Disclosure Letter hereto that are included in the Assumed Liabilities; and

(iii) those liabilities and obligations incurred in the ordinary course of the Business Product Lines consistent with past practice since September 30, 2014.

4.5 Title

The Seller has good title in and to the tangible Transferred Assets, free and clear of any Liens other than Permitted Liens. As used herein, the term “ Permitted Liens ” means (a) Liens for Taxes not yet due and delinquent or being diligently contested in good faith, (b) Liens arising out of, or in connection with, this Agreement, (c) statutory Liens of carriers, warehousemen, mechanics, materialmen and the like arising in the ordinary course of business, (d) minor defects or Liens that do not materially impact the value of the Transferred Assets taken as a whole, and (e) any Liens set forth in the Disclosure Letter. The Seller is not a party to any license with respect to, and has not made any sale, pledge or other transfer of, and has not granted any rights or options to purchase or acquire, all or any part of the Transferred Assets (other than Inventory in the ordinary course of business), except as contemplated by this Agreement.

4.6 Absence of Certain Changes or Events

Except as Disclosed, since September 30, 2014:

(a) The Seller has not sold, leased, transferred or assigned any of the assets of the Business Product Lines, tangible or intangible, other than for a fair consideration in the ordinary course of business;

(b) The Seller has not entered into any contract, lease or license (or series of related contracts, leases, and licenses) relating to the Business Product Lines either involving more than $25,000 or outside the ordinary course of business;

(c) No party (including Seller), has accelerated, terminated, modified or cancelled any contract, lease, agreement or license (or series of related contracts, leases, agreements and licenses) relating to the Business Product Lines involving more than $25,000 to which Seller is a party or by which it is bound;

(d) Seller has not imposed or suffered any Lien upon any of the assets relating to the Business Product Lines, tangible or intangible;

(e) The Seller has not made any capital expenditure (or series of related capital expenditures) relating to the Business Product Lines either involving more than $25,000 or outside the ordinary course of business;

(f) Seller has not made any capital investment in, any loan to, or any acquisition of the securities or assets of, any other Person (or series of related capital investments, loans and acquisitions) relating to the Business Product Lines either involving more than $25,000 or outside the ordinary course of business;

(g) Seller has not issued any note, bond or other debt security or created, incurred, assumed or guaranteed any indebtedness for borrowed money or capitalized lease obligation relating to the Business Product Lines;

(h) The Seller has not cancelled, compromised, waived or released any right or claim (or series of related rights and claims) relating to the Business Product Lines and involving more than $25,000;

(i) The Seller has not experienced any damage, destruction or loss (whether or not covered by insurance) to the property of the Business Product Lines exceeding $25,000 in the aggregate;

(j) Seller has not made any loan to, or entered into any other transaction with, any of its directors, officers, employees or Affiliates relating to the Business Product Lines outside the ordinary course of business;

(k) The Seller has not entered into any employment contract or collective bargaining agreement relating to the Microspheres Product Line, written or oral, or modified the terms of any existing such contract or agreement;

(l) The Seller has not granted any increase in the base compensation of any of the officers, employees or contractors of the Microspheres Product Line;

(m) The Seller has not adopted, amended, modified or terminated any bonus, profit-sharing, incentive, severance or other plan, contract or commitment for the benefit of any of the officers or employees of the Microspheres Product Line (or taken any such action with respect to any other employee benefit plan) except for non-material changes made in the ordinary course of business consistent with past practice;

(n) The Seller has not made any other change in employment terms for any of the officers, employees or contractors of the Microspheres Product Line;

(o) There has not been any other change, occurrence, event, incident, action, failure to act or transaction outside the ordinary course of business involving the Business Product Lines that could reasonably be expected to have a Material Adverse Effect; and

(p) The Seller has not committed to do or perform any of the foregoing.

For purposes of this Agreement, “Material Adverse Effect” means, in the case of the Seller, an event, occurrence, development or circumstance that, individually or in the aggregate, materially and adversely affects the Transferred Assets or the Business Product Lines, considered as a whole, and, in the case of the Buyer, means an event, occurrence, development or circumstance that, individually or in the aggregate, materially and adversely affects the Buyer’s assets or business, considered as a whole; but excluding in both the Buyer and Seller’s case any event, occurrence, development or circumstance that is temporary in nature or that directly or indirectly constitutes, relates to or arises out of any of the following :

(i) any general economic or political events, changes, conditions or effects;

(ii) an adverse change in any industry in which Seller participates through (or with respect to) the Business Product Lines, or in which any of Seller’s customers participate, or any past, existing or prospective general economic, financial, market or regulatory conditions affecting such industries other than an adverse change that disproportionately affects the Business Product Lines as compared to others in such industry;

(iii) the public announcement of the transactions contemplated hereby or press release or actions or inactions of employees, customers or vendors); or

(iv) any matter or circumstance Disclosed in the Disclosure Letter.

4.7 Tax Matters

(a) The Seller has timely filed, or prior to the Closing Date will have timely filed (taking into account all relevant extensions of time to file), all Tax Returns that are required to have been filed in connection with or relating to the Business Product Lines, and the Seller has, or will have by the Closing Date (taking into account all relevant extensions of time to pay), paid, accrued or otherwise adequately reserved for the payment of all Taxes required to be paid in respect of the Business Product Lines for the periods covered by such Tax Returns, other than transfer and similar Taxes for which the Buyer is liable under Section 2.4 and any such Taxes being contested in good faith by the Seller, and the Seller has or will have by the Closing Date adequately reserved for the payment of all Taxes with respect to the Business Product Lines for periods ended on or before the Closing Date for which Tax Returns have not yet been filed.

(b) There are no Liens for Taxes (other than for current Taxes not yet due and payable) on any of the Transferred Assets.

4.8 Contracts

(a) The Disclosure Letter sets forth a list of the Transferred Contracts.

(b) Except as Disclosed, no other party to any of the Transferred Contracts has notified the Seller in writing that such other party considers the Seller to be in

breach or default thereunder, and to the knowledge of the Seller no other party to any of the Transferred Contracts is in breach or default thereunder, except in either case where such breach or default would not reasonably be expected to have a Material Adverse Effect. The Seller has delivered or made available to the Buyer complete and correct copies of all written Transferred Contracts in effect on the date of this Agreement.

(c) Except as Disclosed, none of the Transferred Contracts limits or restrains the Seller’s right to compete with third parties in connection with the development, commercialization, manufacture, marketing, distribution and/or sale of the Products.

4.9 Compliance with Law and Permits

Except as Disclosed, and specifically excluding all matters pertaining to Environmental and Safety Laws, (a) the Seller is in material compliance with all applicable statutes, laws, rules, regulations, orders, ordinances, judgments and decrees of all governmental and regulatory authorities (collectively, “ Law ” or “ Laws ”) in its operation of the Business Product Lines and (b) the Seller currently holds and is in material compliance with all permits required in connection with the operation of the Business Product Lines. All such permits are in full force and effect and, to the knowledge of the Seller, no suspension or cancellation of any have been threatened. No such permit will be terminated as a result of the execution of this Agreement or the consummation of the transactions contemplated herein.

4.10 Environmental and Safety Matters

(a) Except as Disclosed, the Seller has conducted all activities of the Business Product Lines in compliance with, and, to the knowledge of the Seller, all properties owned, leased or operated by the Seller in connection with the Business Product Lines comply with, all Environmental and Safety Laws, except where the failure to do so would not reasonably be expected to have a Material Adverse Effect.

(b) The Disclosure Letter sets forth a true and complete list of the environmental permits currently held by the Seller for the operation of the Business Product Lines (the “ Environmental Permits ”). Except as Disclosed, all Environmental Permits are in full force and effect and, to the knowledge of the Seller, are not subject to any appeals or further regulatory review by any governmental authority. The Seller has not received any written notice that modification, suspension, rescission, relocation or cancellation of any Environmental Permit is pending or threatened, and no Environmental Permit will be cancelled or withdrawn, or otherwise adversely affected by the execution of this Agreement or the consummation of the transactions contemplated hereby.

(c) Except as Disclosed, no Contamination is present or has emanated from or at any property now or previously owned, leased or operated by the Seller in connection

with the Business Product Lines which could reasonably be expected to give rise to liability or response obligation on the Seller or the Buyer under any applicable Environmental and Safety Laws that would reasonably be expected to have a Material Adverse Effect. Except as Disclosed, no property now owned, leased or operated by the Seller in connection with the Business Product Lines is subject to an environmental lien or to any recorded restrictions on use as the result of environmental conditions pertaining to the property. Except as Disclosed, in the past three (3) years the Seller has not incurred costs or liabilities, and has not received a written order from any governmental authority to investigate, remediate or otherwise respond to a potential environmental threat of Contamination in connection with the Business Product Lines.

(d) The Disclosure Letter sets forth a true and correct list of all sites at or to which any waste generated by or on behalf of the Seller in connection with its operation of the Business Product Lines has been transported, stored, treated or disposed and all arrangements for such disposal. Except as Disclosed:

(i) none of the sites identified in the Disclosure Letter is the subject of a response action under CERCLA or any similar federal, state or local law imposing liability for remediation;

(ii) the Seller has not, in connection with the Business Product Lines in the past three (3) years, received (A) a written request for information from any governmental authority with respect to any discharge or removal of any Hazardous Substance, or (B) other written notice that it has been identified in any litigation, administrative proceeding or investigation as a responsible party or a potentially responsible party for any liability under any Environmental Law or in connection with any Hazardous Substance.

(iii) the Seller has not filed any notice under any Environmental Law in the past three (3) years reporting a release of Hazardous Substances in connection with the Business Product Lines or any property owned, leased or operated by the Business Product Lines; and

(iv) the Seller has not, in connection with the Business Product Lines, entered into any negotiations or agreements with any Person relating to any response action or other cleanup or remediation of any Hazardous Substance.

(e) Except as Disclosed, no portion of any property owned, leased or operated by the Seller in connection with the Business Product Lines contains any of the following:

(i) polychlorinated biphenyls or substances containing polychlorinated biphenyls;

(ii) asbestos or materials containing asbestos;

(iii) urea formaldehyde foam insulation;

(iv) radon gas or the presence of the radioactive decay products of radon in excess of an air concentration of four picocuries/liter; or

(v) tanks presently or formerly used for the storage of any Hazardous Substance or any other liquid or gas above or below ground.

(f) Except as Disclosed, no portion of any property owned, leased or operated by the Seller in connection with the Business Product Lines constitutes any of the following:

(i) a wetland or other “water of the United States” for purposes of Section 404 of the Federal Clean Water Act, or any similar area regulated under any applicable state law;

(ii) a floodplain or other flood hazard area;

(iii) a portion of the coastal zone for purposes of the Federal Coastal Zone Management Act; or

(iv) any other area development of which is specifically restricted under applicable law by reason of its physical characteristics or prior use.

(g) Except as Disclosed, Seller has not, in connection with the Business Product Lines, either expressly or by operation or law, assumed or undertaken any liability or corrective or response action obligation of any other Person relating to Environmental and Safety Laws.

(h) The Seller has made available to the Buyer all final environmental site assessment reports and related environmental sampling results in the Seller’s possession that apply to property now owned, leased or operated by the Seller in connection with the Business Product Lines.

As used herein, Environmental and Safety Laws means all applicable Laws and the common law that relate to or otherwise impose liability, obligations or standards with respect to human health or safety or the environment, the protection of indoor and ambient air, water (surface or groundwater) or land (including without limitation soil, sediment, and other such terrestrial material) and flora and fauna, including without limitation to the extent applicable, the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. §§ 9601 et seq.), the Resource Conservation and Recovery Act (42 U.S.C. §§ 6901 et seq.), the Clean Water Act (33 U.S.C. §§ 1251 et seq.), the Atomic Energy Act (42 U.S.C. § 2201 et seq.), the Toxic Substances Control Act (15 U.S.C. §§ 2601 et seq.), the Occupational Health and Safety Act (29 U.S.C. §§ 651 et seq.), the Clean Air Act (42 U.S.C. §§ 7401 et seq.), the Hazardous Material Transportation Act (49 U.S.C. §§ 1801 et seq.), and similar state and local laws. “ Contamination ” means the uncontained presence of Hazardous Substances at any property, or arising from any property, which may require remediation or otherwise give rise to liability under any applicable law. “ Hazardous Substances ” means “hazardous substances” or

“pollutants or contaminants” as defined pursuant to CERCLA, “regulated substances” within the meaning of Subtitle I of the Resource Conservation and Liability Act, as amended, hazardous substances as defined under any applicable state or local Environmental and Safety Laws, petroleum or petroleum products, asbestos, polychlorinated biphenyls, and any other toxic, hazardous, or radioactive substance, material, contaminant, irritant, pollutant or waste.

4.11 Litigation

Except as Disclosed, no claim, action, suit, proceeding or investigation in relation to the Business Product Lines has been brought before any court, tribunal or governmental, administrative or regulatory agency, or before any arbitrator since January 1, 2010 nor, to the knowledge of the Seller, has any such action been threatened. To the knowledge of the Seller, no Person seeks to restrain, enjoin or otherwise prevent the consummation of the transactions contemplated by this Agreement. None of the Transferred Assets are subject to any order, judgment, injunction, decree, determination or award of any governmental authority.

4.12 Customers

The Disclosure Letter includes a list of (a) each customer of each Business Product Line at any time during the twelve (12) month period ending on September 30, 2014 and (b) the amount of consideration paid by each such customer during such period. Except as Disclosed, since September 30, 2014, the Seller has not received any written notification from any such customer stating that any such customer will discontinue its commercial relationship with the Business Product Lines.

4.13 Benefit Plans and Employment Arrangements

(a) The Disclosure Letter set forth a true and correct list of (i) the name, title, current base salary rate, target bonus amount, severance benefits and annual vacation entitlement for each employee of the Microspheres Product Line on the Closing Date (the “ Employees ”); (ii) each collective bargaining, union or other employee organization agreement relating to the Microspheres Product Line; (iii) each employment, advisory or consulting agreement relating to the Microspheres Product Line; (iv) each employee confidentiality or other agreement protecting proprietary processes, formulae or information relating to the Microspheres Product Line; and (v) each Plan. The Disclosure Letter identifies which Plans, if any, are (i) defined benefit pension plans intended to be qualified under Section 401(a) of the Code, (ii) defined contribution plans intended to be qualified under Section 401(a) of the Code, or (iii) Multiemployer Plans.

(b) With respect to each Plan, the Seller has delivered to the Buyer true, correct and complete copies of all current written documents setting forth the terms and conditions of such Plan (or a written summary of such terms in the case of an unwritten Plan).

(c) Except as Disclosed, the Seller has no unfulfilled obligation to contribute to any Multiemployer Plan or collectively bargained welfare plan that covers or covered

employees of the Microspheres Product Line. Neither the Seller nor any ERISA Affiliate has incurred any liability which arises from either a complete or partial withdrawal (as defined in Section 4203 or 4205 of ERISA, respectively) from any Multiemployer Plan that covers or covered employees of the Microspheres Product Line that has not been discharged.

(d) Except as Disclosed, neither the Seller nor any ERISA Affiliate maintains or contributes to, or has ever maintained or had an obligation to contribute to, a Plan subject to Title IV of ERISA or to the minimum funding requirements or standards of Section 412 of the Code or Section 302 of ERISA that covers or covered employees of the Microspheres Product Line. To the knowledge of the Seller, there does not exist any condition, there has not occurred any event, and there has not been any omission, with respect to the sponsorship, funding or administration of any Plan that covers or covered employees of the Microspheres Product Line, which has or could reasonably be expected to result in a Lien upon or claim with respect to any of the Transferred Assets, or the Buyer’s being liable for any contribution, withdrawal liability, benefit, claim, settlement, Tax, penalty or payment of any nature.

(e) The Seller has not carried on discussions regarding organization with any labor union and there has not been any strike, work stoppage, labor dispute or other labor trouble relating to the Employees, and there are no significant threats of work stoppage or labor trouble by the Employees.

(f) The Seller has obtained a completed form I-9 from each Employee, and to the Seller’s knowledge each Employee is authorized to work in the United States.

As used herein, “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended. “ ERISA Affiliate ” means an entity the employees of which are treated as the employees of the Seller under Section 414(b), (c), (m) or (o) of the Code. “ Multiemployer Plan ” means a “multiemployer plan” within the meaning of Section 3(37)(A) of ERISA. “ Plan ” means any welfare plan as defined by Section 3(1) of ERISA, any pension plan as defined by Section 3(2) of ERISA, any other retirement, severance, continuation pay, termination pay, bonus, stock bonus, deferred compensation, insurance, vacation, personal leave, tuition reimbursement, dependent care assistance, cafeteria plan or other plan, policy or arrangement providing employee benefits (whether or not described in ERISA), provided that for purposes of this Agreement, the term “Plan” shall only include plans maintained by or sponsored by the Seller (or an ERISA Affiliate of the Seller) with respect to the Microspheres Product Line or to which the Seller or any ERISA Affiliate contributes or is obligated to contribute with respect to the Employees.

4.14 Know-How

(a) Except as Disclosed, the Seller Group owns all rights in and to the Licensed Know-How free and clear of any Liens (other than Permitted Liens). Except as Disclosed, the Seller Group has the right to use the Licensed Know-How in the manner currently used in the Polyurethane Intermediate Line, and following the

Closing Date the Buyer will have the right to use the Licensed Know-How in the Polyurethane Intermediate Line in the manner as set forth in the License Agreement, and the Buyer shall have such rights without the payment of any royalty or similar payment to any third party or the consent of any third party. Except as Disclosed, the Seller Group has not granted to any third party any license or other right to any of the Licensed Know-How. Except as Disclosed, (i) no claim is pending or, to the knowledge of the Seller, threatened, alleging that the Seller’s use of the Licensed Know-How in the Polyurethane Intermediate Line infringes, misappropriates, or otherwise violates the rights of any Person and, (ii) the Licensed Know-How as practiced by Seller in the Polyurethane Intermediate Line in the United States and Canada prior to the Closing Date does not infringe, misappropriate or otherwise violate any such rights. To the knowledge of the Seller, except as Disclosed, no other Person is infringing, misappropriating or otherwise violating the Seller’s rights or the rights of any other member of the Seller Group in the Licensed Know-How.

(b) Except as Disclosed, the Seller Group owns all rights in and to the Transferred Know-How free and clear of any Liens (other than Permitted Liens). Except as Disclosed, the Seller Group has the right to use the Transferred Know-How in the manner currently used in the Microspheres Product Line, and the Buyer shall have such rights without the payment of any royalty or similar payment to any third party or the consent of any third party. Except as Disclosed, the Seller Group has not granted to any third party any license or other right to any of the Transferred Know-How. Except as Disclosed, no claim is pending or, to the knowledge of the Seller, threatened, alleging that the Seller’s use of the Transferred Know-How in the Business Product Lines infringes, misappropriates, or otherwise violates the rights of any Person and, to the knowledge of the Seller, such use does not infringe, misappropriate or otherwise violate any such rights. To the knowledge of the Seller, except as Disclosed, no other Person is infringing, misappropriating or otherwise violating the Seller’s rights or the rights of any other member of the Seller Group in the Transferred Know-How.

(c) The Licensed Know-How and Transferred Know-How include all intellectual property and proprietary rights necessary to carry on the Business Product Lines as currently conducted by the Seller. The Seller requires no rights under any patent, trade secret or other proprietary information which the Seller does not have or does not have the lawful right to use in order to conduct the Business Product Lines as currently conducted. All patents, copyrights (where such registration is permitted or required by applicable law), trademarks, tradenames and service marks included in the Licensed Know-How and Transferred Know-How are registered to or owned by or licensed to the Seller, are valid and enforceable (or, in the case of any unregistered or unpatented rights, may be freely used by the Seller) or pending (in the case of patents), and all annuities, if any, are fully paid.

4.15 Transferred Trademark and Transferred Patent

The Seller Group owns all rights in and to the Transferred Trademark and Transferred Patent (together, the “ Registered Intellectual Property ”) free and clear of any Liens (other than Permitted Liens). Except as Disclosed, the Seller Group has not granted to any third party any license or other right to any of the Registered Intellectual Property. Except as Disclosed, no claim is pending or, to the knowledge of the Seller, threatened, alleging that the Seller’s use of the Registered Intellectual Property in the Business Product Lines infringes, misappropriates, or otherwise violates the rights of any Person and, to the knowledge of the Seller, such use does not infringe, misappropriate or otherwise violate any such rights. To the knowledge of the Seller, except as Disclosed, no other Person is infringing, misappropriating or otherwise violating the Seller’s rights or the rights of any other member of the Seller Group in the Registered Intellectual Property.

4.16 Sufficiency of Transferred Assets and Licensed Know-How

Except for (a) the Buyer’s replacement of the services and resources provided by the Seller under the Microspheres Services Agreement and Polyurethane Services Agreement (including without limitation the procurement of raw materials and finished goods manufactured or otherwise supplied by third parties), (b) the Buyer’s provision of its own functional, administrative and production support resources typical and customary of organizations engaged in the Buyer’s industry and used by the Seller as of the Effective Time, including but not limited to legal, tax, treasury, human resources, and other typical corporate support services, (c) the provision of shared space under the Lease Agreement, (d) services of any employee, other than the Transferred Employees, and (e) (i) rights in any Contract, other than the Transferred Contracts, (ii) the Excluded Trademarks, (iii) the assets listed in Sections 1.2(r) and (s), and (iv) the assets listed on Schedule 1.2(v) , the Transferred Assets, together with the Licensed Know-How, include substantially all the assets necessary to permit the Buyer to manufacture, use, market, promote and sell the Products in the Business Product Lines in substantially the same manner as conducted by the Seller as of the Effective Time.

4.17 Inventory

The Transferred Inventory consists of items which are merchantable and fit for the purposes for which they are intended in connection with the Business Product Lines. The Transferred Inventory is carried in the books and records of the Seller at an amount that is equal to the lower of its cost or its current fair market value and is saleable at prices at least equal to the value thereof in the books and records of the Seller.

4.18 Warranties; Product Liability

(a) All goods and products manufactured by Seller in the Business Product Lines were manufactured in compliance with all contractual requirements, all applicable federal and state laws, rules and regulations in all material respects. Except as disclosed, there is not presently any action, suit, proceeding, claim or

investigation pending or, to Seller’s knowledge, threatened against Seller for product liabilities or otherwise relating to the safety or fitness or quality of the goods or products manufactured or repaired by Seller in the Business Product Lines.

(b) Since January 1, 2010, the Seller has not had any material claims of liability arising from or relating to the safety or fitness or quality of any of the products manufactured by Seller in the Business Product Lines or material warranty claims with respect to the Business Product Lines.

4.19 Brokers and Finders

Except as Disclosed, the Seller has not incurred any liability for finder’s or similar fees to any finders, brokers, agents or others in connection with the transactions contemplated by this Agreement.

4.20 No Other Representations and Warranties

EXCEPT FOR THE REPRESENTATIONS AND WARRANTIES OF THE SELLER CONTAINED IN THIS AGREEMENT, ALL WARRANTIES AND REPRESENTATIONS ON THE PART OF THE SELLER, WHETHER EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE ARE, TO THE EXTENT PERMITTED BY LAW, HEREBY EXPRESSLY EXCLUDED AND DISCLAIMED.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF THE BUYER

The Buyer hereby represents and warrants to the Seller that the statements made in this Article 5 are true and correct on the date of this Agreement and as of the Closing Date subject to the other terms and conditions of this Agreement.

5.1 Organization; Qualification

The Buyer is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Massachusetts, and the Buyer has all requisite corporate power and authority to own its properties and assets and to conduct its businesses as now conducted. The Buyer is duly qualified to do business as a foreign corporation in all jurisdictions in which the character of the properties owned or leased by it or the nature of the businesses conducted by it makes such qualification necessary, except where the failure to so qualify would not reasonably be expected to have a Material Adverse Effect.

5.2 Authorization and Validity

The Buyer has all requisite corporate power and authority to enter into this Agreement and each of the Ancillary Documents to which it is a party and to carry out its obligations hereunder and thereunder. The execution and delivery by the Buyer of this Agreement

and the Ancillary Documents to which the Buyer is a party and the performance of its obligations hereunder and thereunder have been duly authorized by all necessary corporate action by the Board of Directors of the Buyer, and no other corporate proceeding on the part of the Buyer is necessary to authorize such execution, delivery and performance. This Agreement has been, and as of the Closing Date each Ancillary Document to which the Buyer is a party will be, duly executed by the Buyer and constitutes, or as of the Closing Date will constitute, the valid and binding obligation of the Buyer, enforceable against it in accordance with its terms, except as such enforceability may be limited or affected by applicable bankruptcy, insolvency, moratorium, reorganization or other Laws of general application relating to or affecting creditors’ rights generally.

5.3 No Conflicts or Violations; No Consents or Approvals Required

(a) The execution, delivery and performance by the Buyer of this Agreement and of the Ancillary Documents to which it is a party (i) do not and will not violate or conflict with any provision of the Articles of Incorporation or By-laws (or equivalent constituent documents) of the Buyer, (ii) do not and will not violate any provision of Law or any order, judgment or decree of any court or other governmental or regulatory authority and (iii) do not and will not violate or result in a breach of or constitute (with due notice or lapse of time or both) a default under any Contract to which the Buyer is a party or by which it is bound or to which its properties or assets is subject except, in the case of the matters described in foregoing clauses (ii) and (iii), for such violations, breaches or defaults that, individually or in the aggregate, would not reasonably be expected to have a Material Adverse Effect.

(b) Other than Required Contract Consents (to the extent of the obligation of the Buyer under Section 1.5(b) to cooperate with the Seller in using reasonable endeavors to obtain the same), no notice, declaration, report or other filing or registration with, and no waiver, consent, approval or authorization of, any governmental or regulatory authority or any other Person is required to be made or obtained by the Buyer in connection with the execution and delivery by the Buyer of this Agreement or any Ancillary Document or the consummation by the Buyer of the transactions contemplated hereby and thereby, except where the failure to do so would not prevent the Buyer from performing any of its material obligations under this Agreement and the Ancillary Documents.

5.4 Brokers and Finders

Except as Disclosed, the Buyer and its Affiliates have not incurred any liability for finder’s or similar fees to any finders, brokers, agents or others in connection with the transactions contemplated by this Agreement.

5.5 Due Diligence Investigation

The Buyer has had the opportunity to review the due diligence materials supplied or made available by the Seller, has made its own inquiry and investigation into the Seller, the Business Product Lines, the Transferred Assets and the Assumed Liabilities and has formed an independent judgment based thereon. The Buyer acknowledges that no representations or warranties have been given or made by or on behalf of the Seller in relation to such matters other than those expressly set out in this Agreement, the Ancillary Agreements or the Disclosure Letter.

5.6 Financial Wherewithal

The Buyer has in place, or prior to the Closing Date will have in place, the necessary financial resources to pay to the Seller the Closing Date Payment at Closing and the Purchase Price in accordance with the terms of this Agreement and to otherwise fulfill its obligations under this Agreement and each of the Ancillary Documents to which it is a party.

ARTICLE 6

COVENANTS

6.1 Covenants of the Seller

(a) Conduct of Business

Between the date of this Agreement and the Closing Date (or the effective date of any earlier termination of this Agreement pursuant to Section 11.5), the Seller shall continue to operate the Business Product Lines in the ordinary course consistent with past practice. Without limiting the generality of the foregoing, the Seller will not, without the prior written consent of the Buyer (which consent will not be unreasonably withheld or delayed):

(i) sell, transfer or dispose of any Transferred Assets, except for dispositions and consumption of inventory or consumption of supplies and other personal property in the ordinary course of business consistent with past practice;

(ii) create or knowingly permit to be created any Lien on any of the Transferred Assets other than (w) Permitted Liens, (x) Liens that will be released at or prior to the Closing Date, (y) Liens as may arise in the ordinary course of business consistent with past practice, and (z) Liens otherwise created by operation of Law;

(iii) incur any material obligation or liability relating to the operation of the Business Product Lines except in the ordinary course of business consistent with past practice;

(iv) fail to pay or satisfy by its due date for payment or performance any obligation or liability arising from the operation of the Business Product Lines, other than liabilities being contested in good faith and for which adequate reserves have been provided;

(v) make any capital expenditure directly in relation to the Business Product Lines in excess of Twenty-Five Thousand US Dollars ($25,000);

(vi) except as permitted by this Section 6.1(a), knowingly take any action which would cause it to be in breach in any material respect of any of its representations, warranties, covenants or agreements contained in this Agreement; or

(vii) enter into any binding commitment to do any of the foregoing.

(b) Consents and Approvals

Between the date of this Agreement and the Closing Date (or the effective date of any earlier termination of this Agreement pursuant to Section 11.5), and thereafter in accordance with this Agreement and the Ancillary Documents, the Seller shall use commercially reasonable efforts (in cooperation with the Buyer where contemplated by this Agreement) to obtain Required Contract Consents and other consents and approvals of third parties in accordance with Section 1.5, and shall execute and deliver all notices of assignment to third parties as are reasonably requested by the Buyer.

(c) Access and Notice of Certain Events

The Seller shall promptly notify the Buyer in writing of:

(i) any written communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

(ii) any written communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement;

(iii) any actions, suits, charges, complaints, claims, investigations or proceedings commenced or, to the Seller’s knowledge, threatened, to restrain, prohibit or otherwise challenge the legality of any transaction contemplated by this Agreement; and

(iv) any developments pertaining to the Business Product Lines that would reasonably be expected to result in a Material Adverse Effect.

(d) Access to Offices, Officers, Accountants, Etc .

The Seller will afford to, and will cause its Affiliates to afford to, the officers and authorized representatives of the Buyer (including without limitation, attorneys, accountants, surveyors, building inspectors, engineers, environmental consultants, insurance brokers, financial advisors and bankers, subject to confirmation of confidentiality obligations and reasonable assurances as to insurance coverage) reasonable access to the offices, properties, books and records of the Business Product Lines, and to the accountants and other representatives of the Seller and its Affiliates in order to enable the Buyer to collect relevant information to consummate the transactions contemplated hereby, and will furnish the Buyer with such additional financial and operating data and other information as to the Business Product Lines and Transferred Assets as the Buyer may from time to time reasonably request.

6.2 Covenants of the Buyer

(a) Actions

Between the date of this Agreement and the Closing Date (or the effective date of any earlier termination of this Agreement pursuant to Section 11.5), the Buyer shall not knowingly take any action which would cause it to be in breach in any material respect of any of its representations, warranties, covenants or agreements contained in this Agreement.

(b) Consents and Approvals

Between the date of this Agreement and the Closing Date (or the effective date of any earlier termination of this Agreement pursuant to Section 11.5), and thereafter in accordance with this Agreement and the Ancillary Documents, the Buyer shall use commercially reasonable efforts (in cooperation with the Seller where contemplated by this Agreement) to obtain Required Contract Consents and other consents and approvals of third parties in accordance with Section 1.5.

(c) Notice of Certain Events

Between the date of this Agreement and the Closing Date (or the effective date of any earlier termination of this Agreement pursuant to Section 11.5), the Buyer shall promptly notify the Seller in writing of:

(i) any written communication from any Person alleging that the consent of such Person is or may be required in connection with the transactions contemplated by this Agreement;

(ii) any written communication from any governmental or regulatory agency or authority in connection with the transactions contemplated by this Agreement; and

(iii) any actions, suits, charges, complaints, claims, investigations or proceedings commenced or, to the Buyer’s knowledge, threatened, to

restrain, prohibit or otherwise challenge the legality of any transaction contemplated by this Agreement.

ARTICLE 7

CONDITIONS TO CLOSING

7.1 Conditions to the Buyer’s Obligation to Close

The obligations of the Buyer to purchase the Transferred Assets, assume the Assumed Liabilities and otherwise consummate the transactions contemplated by this Agreement at the Closing shall be subject to the satisfaction (or waiver by the Buyer) at or before the Closing of the following conditions:

(a) no Law shall have been enacted, entered, promulgated or enforced by any court of competent jurisdiction or any governmental or regulatory authority or instrumentality that prohibits the consummation of the transactions contemplated hereby on the Closing Date, and no action or proceeding shall be pending that is brought by any governmental or regulatory authority or instrumentality seeking to recover any damages or obtain other relief as a result of the consummation of such transactions;

(b) the Seller shall have performed in all material respects the obligations required under this Agreement to be performed by it on or before the Closing Date, and the Buyer shall have received a certificate dated the Closing Date and signed by the President or any Vice President of the Seller to such effect;

(c) the representations and warranties made by the Seller contained in Article 4 shall be true and correct in all material respects (and in all respects in the case of each representation and warranty that is qualified as to materiality) when made on the date of this Agreement and on and as of the Closing Date, except (i) that any representation or warranty that by its terms is stated to be true as of a particular date need be true and correct only as of such date and (ii) to the extent of any inaccuracies (y) which are capable of remedy and have been remedied by the Seller at or prior to the Closing or (z) which result from changes and occurrences (which shall not include a breach by the Seller of a covenant, agreement or obligation under this Agreement) arising in the ordinary course of the Business Product Lines after the date of this Agreement that have not had, and would not reasonably be expected to have, a Material Adverse Effect, and the Buyer shall have received a certificate dated the Closing Date and signed by the President or any Vice President of the Seller to such effect;

(d) there shall not have occurred a Material Adverse Effect during the period from the date of this Agreement to the Closing Date;

(e) Buyer shall have completed customer calls or visits with three (3) of the top five (5) customer(s) of each Business Product Line listed on Schedule 7.1(e) hereto, at a time to be reasonably agreed upon by the parties, and based upon such

discussions the Buyer shall be satisfied in its sole reasonable discretion that none of such customers intends to cease or materially reduce its purchase of Products from the applicable Business Product Line during the twelve (12) month period following the Closing.

(f) the Seller shall have delivered to the Buyer the Ancillary Documents in accordance with Section 3.2, together with financing statement releases or termination statements with respect to any Liens on the Transferred Assets, other than Permitted Liens;

(g) except to the extent waived by the Buyer, the Seller shall have obtained the consents and approvals of all Persons and all governmental authorities set forth on Schedule 7.1(g) required for the transactions contemplated hereby; and

(h) the Seller shall have delivered physical possession of all Transferred Equipment, Transferred Inventory, technical information and tangible Transferred Assets and any tangible evidence of all Transferred Know-How to the Buyer.

7.2 Conditions to the Seller’s Obligation to Close

The obligations of the Seller to sell, convey, transfer and assign the Transferred Assets and otherwise consummate the transactions contemplated by this Agreement at the Closing shall be subject to the satisfaction (or waiver by the Seller) at or before the Closing of the following conditions:

(b) the Buyer shall have performed in all material respects the obligations required under this Agreement to be performed by it on or before the Closing Date, and the Seller shall have received a certificate dated the Closing Date and signed by the President or any Vice President of the Buyer to such effect;

(c) the representations and warranties made by the Buyer contained in Article 5 shall be true and correct in all material respects (and in all respects in the case of any representation and warranty that is qualified as to materiality) when made on the date of this Agreement and on and as of the Closing Date, except (i) that any representation or warranty that by its terms is stated to be true as of a particular date need be true and correct only as of such date and (ii) to the extent of any inaccuracies which (y) are capable of remedy and have been remedied by the Buyer at or prior to the Closing or (z) result from changes and occurrences (which shall not include a breach by the Buyer of a covenant, agreement or obligation under this Agreement) arising in the ordinary course of business after the date of

this Agreement that have not had, and would not reasonably be expected to have, a Material Adverse Effect, and the Seller shall have received a certificate dated the Closing Date and signed by the President or any Vice President of the Buyer to such effect; and

(d) the Buyer shall have paid the Closing Date Payment to the Seller in accordance with Section 2.1 and shall have delivered to the Seller the Ancillary Documents to be delivered by it in accordance with Section 3.3.

ARTICLE 8

EMPLOYEES

8.1 Employment

(a) Offers of Employment

Effective as of the Closing Date, the Buyer shall offer employment on the terms set forth in this Agreement to all Employees employed by the Seller on the Closing Date, including all such Employees who are absent from work on the Closing Date for any authorized reason, such as leave of absence, vacation, bereavement leave, maternity leave, paternity leave, Family and Medical Leave Act leave, jury duty, sickness or injury, disability, military service protected under the United States’ Uniformed Services Employment and Reemployment Rights Act, workers’ compensation or any other authorized leave of absence (“ Inactive Employees” ); provided that such offers to Inactive Employees shall be subject to the condition that any such Inactive Employee returns to work with the Buyer within the time permitted by the relevant benefit plan, policy, agreement or Law governing the terms and conditions of such absence. Inactive Employees as of the date of this Agreement are listed on Schedule 8.1(a) . As between the Seller and the Buyer, an Employee will be deemed to have accepted the Buyer’s offer of employment unless (i) he or she notifies either the Buyer or the Seller prior to the Closing that he or she has rejected such offer of employment, or (ii) if the Buyer has failed to make such an offer as required by this Section 8.1(a), Employees who accept or are deemed to have accepted the Buyer’s offer of employment are referred to herein as “ Transferred Employees ”. Each Transferred Employee will be terminated by the Seller as of the Closing Date.

(b) Terms of Employment of Transferred Employees

For a period of twelve (12) months following the Closing Date, the Buyer shall provide each Transferred Employee terms and conditions of employment that are similar in the aggregate than the terms and conditions provided to the Transferred Employees by the Seller on the Closing Date, including but not limited to, salary and incentive compensation, life insurance, accidental death and dismemberment insurance, workers’ compensation, disability plans, retirement and savings plans, and vacation; provided , however , that Buyer shall provide to each of the

Transferred Employees a health care plan and a dental plan each of similar plan design as that offered by Seller, with such plans being provided by Buyer through United Healthcare and Altus respectively, as well as a vision care plan of similar plan design as that offered by Seller, by a vision care provider chosen by Buyer, and provided further that for a period of twelve (12) months following the Closing Date, base salary and annual bonus payment shall be equivalent to what was available to such Transferred Employees immediately prior to the Closing Date as listed in the Disclosure Letter.

(c) Access to Employees

The Seller shall permit the Buyer to have reasonable access to discuss the possibility of employment with current Employees.

8.2 Employee Benefits for Transferred Employees

(a) Service Credit

To the extent requested by the Buyer, the Seller will provide to the Buyer for each Transferred Employee such employee’s credited years of service recognized by the Seller as set forth in the Disclosure Letter. In administering any employee benefit plans for Transferred Employees after the Closing Date, the Buyer shall recognize service completed by Transferred Employees while employed by the Seller for purposes of determining eligibility for participation and vesting in the Buyer’s benefit plans, but not for purposes of benefit accrual. Notwithstanding the preceding sentence, the Buyer shall recognize service completed by Transferred Employees while employed by the Seller for purposes of calculating any severance or vacation accrual benefits provided to Transferred Employees after the Closing Date.

(b) Defined Contribution Plans

The Seller’s obligation to make contributions to the Henkel of America Investment Plan (the “ Seller’s Savings Plan ”) with respect to the Transferred Employees shall cease as of the Closing Date. The account balances of Transferred Employees under the Seller’s Savings Plan as of the Closing Date shall be fully vested.

(c) Welfare Benefits

Effective at the Effective Time, the Buyer shall have in place or cause to be established, at its own expense, benefit plans (the “ Buyer Welfare Benefit Plans ”) including but not limited to, life insurance, accidental death and dismemberment insurance, workers’ compensation, disability and other group non-pension benefits for the Transferred Employees from and after the Closing Date. Effective as of the Closing Date, the Transferred Employees shall cease to participate in the Seller’s life insurance, accidental death and dismemberment insurance, workers’ compensation, disability and other group non-pension benefit

arrangements (collectively, the “ Seller Welfare Benefit Plans ”) and shall commence participation in the Buyer Welfare Benefit Plans. Effective as of the first day of the first month following the Effective Time, the Transferred Employees shall cease to participate in Seller’s health care, dental care, and vision plans and shall commence participation in similar plans offered by Buyer as required by this Agreement as part of the Buyer Welfare Benefit Plans. Buyer shall reimburse Seller for all claims arising under Seller’s health care, dental care, and vision plans with respect to the Transferred Employees arising from occurrences following the Effective Time. Benefits provided under the Buyer Welfare Benefit Plans to Transferred Employees shall be similar in the aggregate than those provided by the Seller under the Seller Welfare Benefit Plans as of the Closing Date. No waiting period or exclusion from coverage for any pre-existing medical condition shall apply to any such Transferred Employee’s participation in any employee benefit plan of the Buyer Welfare Benefit Plans after the Closing Date (including group term life insurance but not including optional universal group life insurance), except to the extent such restrictions were imposed on a Transferred Employee by the Seller immediately prior to the Closing Date. The Buyer shall maintain a welfare benefit plan under Code Section 125 of the Internal Revenue Code of 1986, as amended, which includes a medical spending account component and a dependent care spending account component. All charges and expenses of each Transferred Employee and his or her eligible dependents that were applied to the deductible and out-of-pocket maximums under any Seller Welfare Benefit Plan during the plan year of the Seller in which the Closing Date falls shall be credited toward any deductible and out-of-pocket maximum applicable under any corresponding the Buyer Welfare Benefit Plans in the plan year of the Buyer in which the Closing Date falls. The Seller shall retain responsibility under the Seller Welfare Benefit Plans for all amounts payable by reason of claims incurred by the Transferred Employees prior to the Closing Date, and the Buyer shall be responsible under the Buyer Welfare Benefit Plans for all amounts payable by reason of claims incurred by the Transferred Employees on or after the Closing Date. For purposes of this Section 8.2(c), a claim shall be deemed to have been incurred on the date of the occurrence of (i) death or dismemberment in the case of claims under life insurance and accidental death and dismemberment policies, (ii) the date of the initial determination of disability in the case of claims under disability policies, or (iii) the date on which the charge or expense giving rise to such claim is incurred in the case of all other claims.

8.3 Severance

For a period of twelve (12) months after the Closing Date, the Buyer shall maintain a severance policy or plan for Transferred Employees that provides terms and benefits that are no less favorable in the aggregate to the terms and benefits provided under the Henkel of America, Inc. Severance Pay Plan (as Amended and Restated Effective July, 2011) (the “ Seller Severance Plan” ). During such twelve (12) month period, the Buyer shall be responsible for severance benefits payable to the Transferred Employees as would have been required under the Seller Severance Plan; provided, that if a Transferred Employee is terminated during such twelve (12) month period following the Closing

under circumstances that would have required severance under the Seller Severance Plan, then Seller shall reimburse the Buyer for severance paid to such Transferred Employee in excess of an amount equal to one-week’s pay per year of service (the “ 1W/Y Severance Amount ”), not to exceed an amount equal to the 1W/Y Severance Amount for such Transferred Employee. The Buyer shall indemnify and hold the Seller harmless against any other claims resulting from the manner in which the Buyer effects the termination at Closing or thereafter (including a termination not in compliance with employment Laws) of any Transferred Employee except to the extent such other claims arose out of actions taken by the Seller prior to Closing.

8.4 Bonus Plans; Accrued Vacation

Except as otherwise stated herein, the Seller shall, following the Closing Date, pay the Seller’s obligations and liabilities to the Transferred Employees, and indemnify and hold the Buyer harmless, with respect to employee bonuses and incentives accrued prior to the Closing Date (but only if required under the terms of the applicable plans, policies or other written agreement). The Buyer shall pay when due all payments to the Transferred Employees with respect to any bonus or incentive plan established by the Buyer and for which such Transferred Employees are eligible on and after the Closing Date. The Seller shall refund to the Transferred Employees all amounts paid by such employees under the Seller’s vacation buy/sell program that have not been used as of the Closing Date. The Seller shall pay to the Transferred Employees all accrued, unused vacation as of the Closing Date.

8.5 COBRA

The Buyer, at no expense to the Seller, shall provide the benefits, if any, required from and after the Closing Date pursuant to Section 4980B of the Code or Part 6 of Title I of ERISA for any Transferred Employee with respect to whom a qualifying event under Code Section 4980B occurs on or after the Closing Date.

8.6 No Third-Party Beneficiaries

No provision of this Agreement shall create any third party beneficiary rights in any Employee, any beneficiary or dependents thereof, or any collective bargaining representative thereof, with respect to the compensation, terms and conditions of employment and benefits that may be provided to any Transferred Employee by the Buyer or under any benefit plan which the Buyer or its Affiliates may maintain.

ARTICLE 9

INDEMNIFICATION

9.1 Indemnification by the Seller

Subject to the limitations and other terms and provisions set forth in this Article 9, the Seller shall indemnify, defend and hold harmless the Buyer and its Affiliates, officers, directors, employees and agents (the “ Buyer Indemnitees ”) from and against any and all

claims, losses, damages, liabilities, deficiencies, fines, judgments, obligations, costs and expenses, including without limitation reasonable legal fees and court costs and costs and expenses of investigation (collectively, “ Losses ”) incurred by a Buyer Indemnitee arising out of or resulting from any of the following:

(a) the failure of the Seller to pay or otherwise discharge any of the Retained Liabilities, including, without limitation, any Taxes imposed on Seller for all periods prior to the Closing Date, or in any way related to Excluded Assets;

(b) the breach or non-fulfillment of any agreement, covenant, liability or obligation of the Seller hereunder or under any Ancillary Document;

(c) the failure of any representation or warranty made by the Seller in this Agreement to be true and correct as of the Closing Date; and

(d) the failure of the Seller to manage particulate matter, contamination, pollutants, constituents, dust, irritants or other circumstances concerning indoor or outdoor air conditions that may constitute a threat to or endangerment of human health or safety.

9.2 Indemnification by the Buyer

Subject to the limitations and other terms and provisions set forth in this Article 9, the Buyer shall indemnify, defend and hold harmless the Seller and its Affiliates, officers, directors and employees (“ Seller Indemnitees ”) from and against any and all Losses incurred by a Seller Indemnitee arising out of or resulting from any of the following:

(a) the failure of the Buyer to pay or otherwise discharge any of the Assumed Liabilities;

(b) the breach or non-fulfillment of any agreement, covenant, liability or obligation of the Buyer hereunder or under any Ancillary Document; and

(c) the failure of any representation or warranty made by the Buyer in this Agreement to be true and correct as of the Closing Date.

9.3 Mitigation

Each party shall take all reasonable steps to avoid or mitigate any Loss which might otherwise give rise to a claim against the other party under this Article 9 to the extent required by law.

9.4 Notice of Claim; No Punitive or Remote Damages

(a) Notice of Claim; Indemnification Procedures

The Indemnified Party shall promptly notify the Indemnifying Party in writing in reasonable detail of any claim, demand, action or proceeding for which

indemnification will be sought under this Article 9, including the nature of the misrepresentation, breach of covenant or claim to which each item of Loss is related and, if then ascertainable, the computation of the amount to which the Indemnified Party claims to be entitled hereunder. If such claim, demand, action or proceeding is a third party claim, demand, action or proceeding (a “ Third Party Claim ”), the Indemnifying Party will have the right at its expense to assume the defense thereof using counsel reasonably acceptable to the Indemnified Party. The Indemnified Party shall have the right to participate, at its own expense, with respect to any such Third Party Claim. In connection with any such Third Party Claim, the parties shall cooperate with each other and provide each other with reasonable access to relevant books and records in their possession. No such Third Party Claim shall be settled without the prior written consent of the indemnified party which consent shall not be unreasonably withheld, delayed or conditioned. Notwithstanding the foregoing, if the Indemnified Party determines in good faith that the Indemnified Party may have available to it one or more material defenses or counterclaims that are conflicting with one or more of those which may be available to, or asserted by the Indemnifying Party in respect of such Third Party Claim, the Indemnified Party shall have the right to take over and assume control of, participate in the defense, settlement, negotiations or litigation relating to such claim at its own expense. No Third Party Claim shall be settled without the prior written consent of the Indemnifying Party which consent shall not be unreasonably withheld, delayed or conditioned (provided, however, that if the Indemnified Party fails to either (i) consent to a settlement or (ii) respond in writing setting forth the reasonable basis for the failure to give such consent within the time period provided in the settlement offer, the Indemnifying Party shall have the right to pay the amount of such settlement to the Indemnified Party, in which event the Indemnifying Party shall be relieved of any further liability or obligation arising out of such Third Party Claim and the Indemnified Party shall be entitled to proceed with the defense of such Third Party Claim). The party controlling the defense of any Third Party Claim shall not consent to entry of any judgment or enter into any settlement that provides for injunctive or other monetary relief affecting the other party or that does not include as a term thereof the giving by each claimant to the other parties a complete release from all liabilities with respect to such claim or litigation.

(b) No Punitive or Remote Damages

The Indemnified Party shall not be entitled to recover from an Indemnifying Party as Losses for which indemnification is provided under this Agreement any amounts in excess of actual direct Losses, court costs and reasonable attorneys’ fees, and the parties expressly waive the right to recover punitive damages or for Losses that are remote or speculative (“ Remote Damages ”), other than such Remote Damages as may be awarded to a third party under a Third Party Claim.

9.5 Limitations on Indemnification

Notwithstanding Sections 9.1 and 9.2 and without any limitation of Sections 9.3 and 9.4:

(a) all representations and warranties and agreements made by the parties in this Agreement shall survive the Closing hereunder; provided that the Seller shall not be responsible for any indemnifiable Losses suffered by any Buyer Indemnitee arising out of breaches of the representations and warranties of the Seller contained in this Agreement unless a claim therefor is asserted in writing by such Buyer Indemnitee on or prior to the date that is eighteen months after the Closing Date, except with respect to a breach of the representations and warranties under Sections 4.1-4.3(a), 4.5, 4.7 and 4.13(c) and (d) (the “ Specified Representations ”), or under Section 4.10, as to which the only limitations shall be those provided by any applicable statutes of limitation.

(b) The Seller shall not be liable for any Losses suffered by the Buyer or any Buyer Indemnitee arising out of breaches of the representations and warranties of the Seller contained herein:

(i) unless, the aggregate amount of such Losses (except with respect to Specified Representations and the representations in Section 4.10) exceeds $247,500 in which event Seller shall be liable for all such Losses beginning with the first dollar;

(ii) to the extent such Losses have otherwise been recovered by the Buyer;

(iii) to the extent that the claim that is the basis for such Losses would not have arisen but for the passing of, or a change in, any Law after the Closing Date;

(iv) to the extent that the claim that is the basis for such Losses would not have arisen but for any change in any accounting or taxation policies of the Buyer after the Closing Date;

(v) except with respect to Specified Representations, to the extent that the claim that is the basis for such Losses would have not arisen but for any act carried out by the Seller at the express request of the Buyer; or

(vi) except with respect to Specified Representations or for fraud or willful misconduct, in excess of $5,000,000.

(c) The foregoing limitations shall not restrict or otherwise limit the Buyer’s rights to claims for indemnification against the Seller under Section 9.1(a) based on Retained Liabilities.

(d) The Buyer acknowledges and agrees that in the event it is entitled to indemnification from Seller hereunder, it shall recover its Losses from the

amounts held in escrow maintained pursuant to the Escrow Agreement before the Buyer shall be entitled to recover amounts directly from Seller.

9.6 Tax Treatment of Indemnification Payments

Except as otherwise required by Law, the parties shall treat any indemnification payment made hereunder as an adjustment to the Purchase Price for Tax purposes.

9.7 Exclusive Remedy

Except for such equitable remedies as may be available to enforce any of the provisions of this Agreement or any Ancillary Document, the remedies provided in this Article 9 shall be exclusive with respect to matters arising under or relating to this Agreement or any Ancillary Document, of any kind or nature, and shall preclude assertion by the Indemnified Party of any other rights or the seeking of any and all other remedies against the Indemnifying Party arising out of or relating to this Agreement or any Ancillary Document; provided that nothing in Agreement shall limit or exclude any liability for fraud.

9.8 Treatment of Materiality

For purposes of Article 9, in determining the amount of Losses related to a breach of a representation and warranty (but not, for the purposes of clarity, in determining whether or not a breach of a representation and warranty has occurred), such representation and warranty shall be read without regard to any materiality or Material Adverse Effect type qualifier contained therein.

ARTICLE 10

ADDITIONAL AGREEMENTS

10.1 Covenant Not to Compete; Non-Solicitation.

(a) Non-Competition

The Seller acknowledges that an important part of the benefit that the Buyer will receive in connection with this Agreement is the ability to carry on the Business Product Lines free from competition by the Seller and its Common Controlled Affiliates for a certain period of time. In order that the Buyer may enjoy such benefits, the Seller agrees that for a period of five (5) years from and after the Closing Date (the “ Restricted Period ”), the Seller and its Common Controlled Affiliates will not, except as stated in this Section 10.1(a), (i) manufacture, market or sell anywhere in the world, directly or indirectly, any products that compete with the Microspheres Products or (ii) manufacture, market or sell anywhere in the United States or Canada, directly or indirectly, any non-adhesive products that compete as industrial chemical Intermediates with the Polyurethane Intermediates or (iii) manufacture, market or sell anywhere in the United States or Canada, directly or indirectly, formulated products that (x) substitute or compete with

Polyurethane Intermediates anywhere in the United States or Canada or (y) disrupt the demand for Polyurethane Intermediates of any persons who were customers of the Polyurethane Intermediate Line in the United States and Canada that are identified on Schedule A ; provided , however , that the Seller and its Common Controlled Affiliates (A) may own as an investment, directly or indirectly, securities of any corporation or other entity which are publicly traded if the Seller and its Common Controlled Affiliates do not, directly or indirectly, beneficially own three percent (3%) or more of the outstanding shares of such entity; (B) shall have the ability to perform their respective obligations to the Buyer under any of the Ancillary Documents, including the Supply and Services Agreements, (C) shall have the right to market and sell products that use or otherwise incorporate microspheres (including microspheres that have been coated or otherwise treated), (D) shall have the right to sell microspheres to the customers and for the applications set forth on Exhibit I , (E) shall have the right to acquire, produce or manufacture chemical Intermediates, including the Polyurethane Intermediates, solely for their own use, including without limitation incorporating such products in products manufactured, marketed and sold by Seller and its Common Controlled Affiliates outside of the Polyurethane Intermediates Line, and (F) shall have the ability to engage in any acquisition of any Person or all or substantially all of a business enterprise (in each case, the “ Target ”) that includes, as an ancillary business, a business that manufactures, markets or sells products that compete with the Microspheres Products throughout the world or with the Polyurethane Intermediates in North America (a “ Competing Business ”), provided that such Competing Business generated no more than the lesser of (1) two million dollars ($2,000,000.00) in aggregate gross sales or (2) ten percent (10%) of its average annual total gross sales, in each case during its most recent three completed financial years ended prior to such acquisition. In the event that the Seller consummates the acquisition of a Competing Business during the Restricted Period which exceeds the lesser of the immediately preceding amounts, the Seller and its Common Controlled Affiliates shall within sixty (60) days of the completion of the acquisition, notify the Buyer in writing of such acquisition and offer to sell the Competing Business to the Buyer at a price and on terms which are no less favorable than the price and terms upon which the Seller and its Common Controlled Affiliates acquired the Target. For the purposes of this Section 10.1(a), the sale price to be offered to the Buyer shall be determined as the pro rata percentage of gross annual revenues for the most recent three (3) completed financial years ended prior to such acquisition represented by the Competing Business over the entire gross revenues of the Target for the same period, multiplied by the aggregate purchase price paid by the Seller and its Common Controlled Affiliates for the Target. If either (x) the Buyer shall fail to respond to such offer or shall decline in writing to proceed with the purchase of such interest at such price and terms within sixty (60) days after the date of the delivery of such written notice to the Buyer or (y) the Buyer and the Seller or its Common Controlled Affiliates shall fail to agree on a definitive and binding agreement containing all terms and conditions for the purchase and sale of such interest within six (6) calendar months after the date on which the

Seller or its Common Controlled Affiliates delivered such written notice and offer, then the Seller or its Affiliates shall be free to retain its interest in the Competing Business.

(b) Non-Solicitation

Except as provided below, for a period of five (5) years from and after the Closing Date, the Seller shall not, directly or indirectly, hire any Transferred Employee or solicit or otherwise encourage any Transferred Employee to leave his or her employment with the Buyer, without the express prior written consent of the Buyer; provided , however , that nothing in this Section 10.1(b) shall prohibit any member of the Seller Group from (i) placing in general circulation any solicitation for employment (including by way of a search firm) not specifically directed towards such employees or the geographic area in which such employees are employed or (ii) soliciting or hiring any Transferred Employee whose employment has been terminated by the Buyer.

(c) Severability

In the event that any portion of this Section 10.1 should be found by a court of competent jurisdiction to be invalid or unenforceable because of public policy or for any similar reason, such court shall be authorized by the parties to exercise its discretion in reforming such portion for the purpose of affording and granting the broadest protection under this Section 10.1 which such court deems permissible and enforceable under the circumstances. The covenant contained in this Section 10.1 shall be construed as independent of any other provision of this Agreement and the unenforceability of one provision shall not affect the remaining covenants. It is agreed by the parties that the covenants contained in this Section 10.1 are necessary for the legitimate business interests of the Buyer and impose a reasonable restraint on the Seller in light of the activities and business of the Buyer on the date of the execution of this Agreement and on the Closing Date.

(d) Acknowledgements

The parties acknowledge that the license of the Licensed Know How (as that term is defined in the License Agreement) granted by the Seller under the License Agreement with respect to the Polyurethane Intermediates Line is worldwide, and that the Buyer is not restricted under the License Agreement from using the Licensed Know How to sell Polyurethane Intermediates in areas outside of the United States and Canada. The Buyer understands that Seller and its Common Controlled Affiliates operate, and will continue to operate, an adhesives, sealants and coatings business throughout the world through which they manufacture, market and sell formulated polyurethane products for end applications as adhesives, sealants and coatings. Seller’s Common Controlled Affiliates do not presently operate, and do not have a present intention of operating, a strategic line of business for the manufacture and sale of non-adhesive chemical Polyurethane

Intermediates outside of the United States and Canada; however, Seller acknowledges, and Buyer understands, that in the course of operating its existing businesses, Seller’s Common Controlled Affiliates from time to time may procure, manufacture and/or sell Polyurethane Intermediates outside of the United States and Canada in response to opportunities as they arise but that, as of the date hereof, such activities are non-strategic and generally engaged in for capacity utilization purposes or on inquiries from third parties. For the avoidance of doubt, nothing in this Section 10.1(a) shall limit Seller’s Common Controlled Affiliates’ rights to continue to own and operate such businesses outside of the United States and Canada.

10.2 Use of Excluded Trademarks After the Closing

(a) General

The Buyer acknowledges and agrees that the Seller shall retain all rights to use the Excluded Trademarks. Except as otherwise provided in this Section 10.2, after the Closing Date the Buyer will not use, and will cause its Affiliates to refrain from using, the Excluded Trademarks or any name that is confusingly or colorably similar to any Excluded Trademark as part of any trademark, trade name, service mark, internet domain name, website or otherwise.

(b) Transferred Inventory, Packaging Materials and Technical Documentation

After the Closing Date, the Buyer shall have the right, solely in connection with its conduct of the Business Product Lines, to sell existing stocks of finished Products included in the Transferred Inventory, or in inventory of the Polyurethane Intermediate Line existing on the Closing Date and sold to Buyer pursuant to the Polyurethane Supply and Service Agreements, in each case which bear Excluded Trademarks, and to use any existing stocks of packaging, labeling, canisters and containers that display the Excluded Trademarks as well as technical data sheets and any similar materials included in the Transferred Records that bear the Excluded Trademarks until the earlier of (i) the date such existing stocks are exhausted or (ii) the expiration of three (3) months following the Closing Date. After the expiration of such three (3) month period, the Buyer shall remove any reference to the Excluded Trademarks from any such remaining stocks or (to the extent such removal is impossible or impracticable) place stickers on any such remaining stocks in a manner reasonably satisfactory to the Seller that obscures any reference to the same originating from or being connected with the Seller Group or that otherwise makes it clear that the Business Product Lines are no longer owned by or affiliated with the Seller Group.

(c) Promotional Materials

The Buyer shall not use any sales or promotional materials, catalogues or advertising literature included in the Transferred Records after the Closing Date unless the Buyer shall first have removed therefrom any reference to the Excluded

Trademarks, provided that if such promotional or other materials cannot practicably be changed so as to remove any such reference to the Excluded Trademarks, such materials may be used solely in connection with the Business Product Lines for a period of up to three (3) months after the Closing Date, provided in such case that such materials shall have been modified in a manner reasonably satisfactory to the Seller to make it clear that the Business Product Lines are no longer owned by or affiliated with the Seller Group.

10.3 Confidentiality

(a) As used in this Section 10.3, the “ Confidential Information ” of a party shall mean all information concerning or related to the business, operations, financial condition or prospects of such party or any of its Affiliates, regardless of the form in which such information appears and whether or not such information has been reduced to a tangible form, and shall specifically include (i) all information regarding the officers, directors, employees, equity holders, customers, suppliers, distributors, sales representatives and licensees of such party and its Affiliates, in each case whether present or prospective, (ii) all inventions, discoveries, trade secrets, processes, techniques, methods, formulae, ideas and know-how of such party and its Affiliates, (iii) all financial statements, audit reports, budgets and business plans or forecasts of such party and its Affiliates and (iv) any information disclosed under the Existing Confidentiality Agreement; provided , however , that the Confidential Information of a party shall not include (y) information which is or becomes generally known to the public through no act or omission of the other party or (z) information which has been or hereafter is lawfully obtained by the other party from a source other than the party to whom such Confidential Information belongs (or any of its Affiliates or their respective officers, directors, employees, equity holders or agents) so long as, in the case of information obtained from a third party, such third party was or is not, directly or indirectly, subject to an obligation of confidentiality owed to the party to whom such Confidential Information belongs or any of its Affiliates at the time such Confidential Information was or is disclosed to the other party.

(b) Except as otherwise permitted by subsection (c) below, each party agrees that it will not, without the prior written consent of the other party, disclose or use for its own benefit any Confidential Information of the other party.

(c) Notwithstanding subsection (b) above, each of the parties shall be permitted to:

(i) disclose Confidential Information of the other party to its officers, directors, employees, equity holders, lenders, agents and Affiliates, but only to the extent reasonably necessary in order for such party to perform its obligations and exercise its rights and remedies under this Agreement, and such party shall take all such action as shall be necessary or desirable in order to ensure that each of such Persons maintains the confidentiality of any Confidential Information that is so disclosed;

(ii) make additional disclosures of or use for its own benefit Confidential Information of the other party, but only if and to the extent that such disclosures or use are specifically contemplated by this Agreement; and

(iii) disclose Confidential Information of the other party to the extent, but only to the extent, required by Law; provided , that prior to making any disclosure pursuant to this subparagraph, the disclosing party shall notify the affected party of the same, and the affected party shall have the right to participate with the disclosing party in determining the amount and type of Confidential Information of the affected party, if any, which must be disclosed in order to comply with Law.

(d) In the event that this Agreement is terminated at any time pursuant to Section 11.5 hereof, the Existing Confidentiality Agreement shall continue in full force and effect for the term specified therein. In the event the Closing takes place in accordance with this Agreement, such Existing Confidentiality Agreement shall be deemed terminated and of no further force and effect, other than the non-solicitation obligations of the Buyer thereunder which shall survive for the term specified therein for such obligations (which the Buyer hereby accepts and acknowledges as its own obligations to the extent the Existing Confidentiality Agreement was signed by an Affiliate of the Buyer or a representative of the Buyer rather than the Buyer itself), and the provisions of this Section 10.3 shall thereafter govern the confidentiality obligations of the parties hereto with respect to Confidential Information.

(e) With respect to Confidential Information regarding any business of the Seller Group other than the Business Product Lines, or any products of the Seller Group other than the Products, notwithstanding any other agreement between the Seller and the Buyer, the Buyer shall hold all such Confidential Information in confidence and shall not use or disclose it for any purpose at any time. This provision shall survive indefinitely the expiration or termination of this Agreement and the Closing of the transactions contemplated hereby.

10.4 Access to Records

(a) For a period of three (3) years after the Closing, the Seller shall have reasonable access to all of the books and records of the Business Product Lines with respect to periods prior to the Closing Date that are held by the Buyer to the extent that such access may reasonably be required by the Seller in connection with matters relating to or affected by the operations of the Business Product Lines prior to the Closing Date. The Buyer shall afford such access upon receipt of reasonable advance notice and during normal business hours. The Buyer shall permit the Seller to make copies of such books and records at the Seller’s expense. Notwithstanding the foregoing and the consummation of the transactions contemplated hereby, the Seller may retain copies of certain financial, Tax and personnel records and files with the consent of the Buyer (which consent shall not be unreasonably withheld). The Seller shall be solely responsible for any costs or

expenses incurred by it pursuant to this Section 10.4(a). If the Buyer wishes to dispose of any of such books and records prior to the expiration of such three (3) year period, the Buyer shall, prior to such disposition, give the Seller a reasonable opportunity, at the Seller’s expense, to segregate and remove such books and records as the Seller may elect.

(b) For a period of three (3) years after the Closing, the Buyer shall have reasonable access to all of the books and records relating to the Business Product Lines which the Seller may retain after the Closing Date. Such access shall be afforded by the Seller upon receipt of reasonable advance notice and during normal business hours. The Seller shall permit the Buyer to make copies of such books and records at the Buyer’s expense. The Buyer shall be solely responsible for any costs and expenses incurred by it pursuant to this Section 10.4(b). If the Seller shall desire to dispose of any of such books and records prior to the expiration of such three (3) year period, the Seller shall, prior to such disposition, give the Buyer a reasonable opportunity, at the Buyer’s expense, to segregate and remove such books and records as the Buyer may elect.

10.5 Litigation Support

In the event and for so long as the Seller actively is contesting or defending against any action, suit, proceeding, hearing, investigation, charge, complaint, claim, or demand involving the Business Product Lines or in connection with any transaction contemplated under this Agreement, the Buyer will cooperate to the extent requested by the Seller with the contesting or defending of the contest or defense, make available its personnel, and provide such testimony and access to its books and records as shall be necessary in connection with the contest or defense, all at the sole cost and expense of the Seller (unless the Seller is entitled to indemnification therefor under Article 9).

10.6 Wrong Pockets; Referrals; Administration of Receivables

To the extent that it is determined following the Closing that (a) any asset intended hereunder to be a Transferred Asset and to transfer to the Buyer at the Closing was not so transferred, such asset shall promptly be transferred in accordance with the terms of this Agreement, or (b) any asset intended hereunder to have been an Excluded Asset or otherwise intended not to transfer to the Buyer at the Closing was so transferred, the Buyer shall promptly re-transfer such asset to the Seller, in each case without additional consideration. The Seller and the Buyer shall each attempt in good faith to direct or deliver to the other all incoming mail, telephone or other communications or deliveries which are not received by the appropriate party (that is, the Buyer in the case of matters or materials pertaining to the Business Product Lines or the Transferred Assets or the Seller in the case of matters or materials pertaining to any other business of the Seller Group or to Excluded Assets or Retained Liabilities). Without limiting the generality of the foregoing, the Buyer shall, subsequent to the Closing Date, forward to the Seller any payments received by the Buyer from customers for products invoiced or shipped by the Seller to such customers prior to the Effective Time; and the Seller shall do likewise for

the benefit of the Buyer with respect to any payments received by the Seller from customers for sales made by the Buyer subsequent to the Effective Time.

10.7 Public Announcements

Neither party will issue any press release or other public announcement with respect to this Agreement or the transactions contemplated hereby without the prior written approval of the other party, unless such press release or public announcement is required by Law; provided , however , that the parties shall be permitted to disclose any material term of this Agreement in its reasonable discretion in response to analysts’ and other media inquiries or as necessary to comply with applicable accounting standards and policies or the requirements of any applicable securities exchange. If any such press release or public announcement is determined to be required by Law, the party required to issue the same agrees to give the other party prior notice and an opportunity to comment on the proposed press release or public announcement and to obtain such other party’s prior written approval of the proposed press release or public announcement, such approval not to be unreasonably withheld, conditioned or delayed.

10.8 Termination of Insurance

The Buyer acknowledges that the Seller Group’s insurance policies shall cease to provide coverage for the Transferred Assets and liabilities of the Business Product Lines effective at the Closing Date, and the Buyer acknowledges and agrees that it shall not have any right to make a claim under any such policy after the Closing Date.

10.9 Further Assurances

After the Closing, and without limitation of any other provision of this Agreement, each party shall take or cause to be taken such further actions and execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered such further documents as may be necessary or reasonably requested by the other party in order to effectuate the intent of this Agreement and to provide such other party with the benefits of this Agreement.

ARTICLE 11

MISCELLANEOUS

11.1 Expenses

Each of the parties hereto shall pay its own legal, accounting and other fees and expenses incurred in connection with the preparation, execution and delivery of this Agreement and all documents and instruments executed pursuant hereto and the consummation of the transactions contemplated hereby, and any other costs and expenses incurred by such party, including without limitation any legal and accounting fees, except as otherwise expressly set forth herein.

11.2 Bulk Transfer Laws

The Buyer and the Seller hereby waive compliance with the provisions of any so-called “bulk transfer law” of any jurisdiction in connection with the sale of the Transferred Assets to the Buyer.

11.3 Notices

Any notice or other communication given under this Agreement shall be in writing and shall be (a) sent by FedEx or similar recognized overnight prepaid delivery service or (b) sent by facsimile transmission, provided that telephonic confirmation of receipt is obtained promptly after completion of transmission or (c) mailed by first class mail, registered or certified, postage prepaid. Such notice shall be deemed to have been duly given (i) on the Business Day after dispatch by recognized overnight prepaid delivery service, if sent in such manner, (ii) on the date of facsimile transmission, if so transmitted or (iii) on the fifth (5 th ) day after mailing, if mailed by first class mail, registered or certified, postage prepaid. Notices or other communications shall be directed to the following addresses:

Notices to the Seller:

Henkel Corporation
One Henkel Way
Rocky Hill, CT 06067
Attention: Joseph DeBiase, Senior Vice President - Sales
Facsimile No.: (860) 571-5305

with copies to:

Henkel Corporation
One Henkel Way
Rocky Hill, Connecticut 06067
Attention: Chief Legal Officer
Facsimile No.: (860) 571-5028

and

Cohen & Grigsby, P.C.
625 Liberty Avenue
Pittsburgh, PA 15222-3152
Attention: Christopher Carson
Facsimile No.: (412) 209-0672

Notices to the Buyer:

Chase Corporation
295 University Avenue
Westwood, MA 02090

Attn: Chief Executive Officer
Facsimile No.: (781) 332-0701

with copies to:

Choate, Hall & Stewart, LLP
Two International Place
Boston, MA 02110
Attn: Charles J. Johnson
Facsimile No.: (617) 502-4020

Either party may, by notice given in accordance with this Section 11.3, specify a new address for notices under this Agreement.

11.4 Entire Agreement

This Agreement shall include the recitals and all Exhibits and Schedules attached hereto, and together with the Ancillary Documents and, subject to Section 10.3(a) and (d), the Existing Confidentiality Agreement, shall constitute the entire agreement and understanding between the parties with respect to the subject matter hereof and thereof, superseding all other prior and contemporaneous agreements and understandings, oral or written, with respect to such subject matter.

11.5 Termination

Notwithstanding anything to the contrary contained herein, this Agreement may be terminated at any time before the Closing:

(a) by mutual written consent of the Seller and the Buyer;

(b) by either the Seller or the Buyer if the Closing shall not have occurred by March 31, 2015, provided that the right to terminate this Agreement under this Section 11.5(a) shall not be available to a party whose breach of a representation, warranty, covenant or agreement under this Agreement has been the cause of or resulted in the failure of the Closing to occur on or before such date.

11.6 Effect of Termination

If this Agreement is terminated pursuant to Section 11.5(a) above, this Agreement shall become void and of no further force and effect (except as provided in the last sentence of this Section 11.6), and neither party (nor its Affiliates, directors, shareholders, officers, employees, agents, consultants, attorneys-in-fact or other representatives) shall have any liability in respect of such termination. No termination of this Agreement pursuant to Section 11.5(b) above shall affect or diminish any rights accruing to either party pursuant to this Agreement at or prior to such termination, and if there has been a breach of this Agreement, the breaching party shall remain liable to the other party on account of such breach and the non-breaching party shall retain all rights inequity or Law arising as a

result of such breach. This provision shall not affect or diminish any rights which by their terms survive termination of this Agreement.

11.7 Amendment; Waiver

This Agreement may be amended only in a writing signed by both parties hereto. Any provision of this Agreement may be waived only in a writing signed by an authorized representative of the waiving party. The failure in any one or more instances of a party to insist upon performance of any of the terms, covenants or conditions of this Agreement, to exercise any right or privilege conferred in this Agreement, or the waiver by said party of any breach of any of the terms, covenants or conditions of this Agreement, shall not be construed as a further, continuing or subsequent waiver of any such terms, covenants, conditions, rights or privileges, or as a breach of any other term, covenant, condition, right or privilege hereunder, but the same shall continue and remain in full force and effect as if no such forbearance or waiver had occurred. No course of dealing between the parties shall be effective to amend or waive any provision of this Agreement.

11.8 Binding Effect; Third Party Rights

This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and permitted assigns. This Agreement is for the sole benefit of the Seller and the Buyer and except as may be otherwise specifically provided, nothing herein expressed or implied shall confer or be construed to confer any legal or equitable rights hereunder on any other Person. Nothing in this Agreement is intended to relieve or discharge the obligations or liability of any other Person to the Seller or the Buyer. No provision of this Agreement shall give any third persons any right of subrogation or action over or against the Seller or the Buyer.

11.9 Severability

In the event that any provision contained in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any jurisdiction, such provision shall be reformed so as to be valid, legal and enforceable to the maximum extent permitted in such jurisdiction and otherwise shall be ineffective as to such jurisdiction to the extent of such invalidity, illegality or unenforceability, in either case without invalidating or affecting the remaining provisions hereof or affecting the validity, legality or enforceability of such provision in any other jurisdiction.

11.10 Assignment

Each party’s rights under this Agreement may not be assigned in whole or in part to any third party, nor may its obligations hereunder be delegated and assumed in whole or in part by any third party, without the prior written consent of the other party, except that the Buyer may assign its rights hereunder (a) to an Affiliate, (b) to any Person providing secured financing in connection with the transactions contemplated hereby as collateral security for such financing provided that no such assignment shall reduce or otherwise vitiate any of the obligations of the Buyer hereunder or (c) to a purchaser of a substantial

portion of the Business Product Lines. Any purported assignment made in contravention of this Section 11.10 shall be null and void and of no force or effect.

11.11 Affiliates; Common Controlled Affiliate; Persons

For purposes of this Agreement, (a) an “Affiliate” of a party means any Person directly or indirectly controlling, controlled by or under common control with such party and, in the case of the Seller, shall include a Common Controlled Affiliate, (b) a “ Common Controlled Affiliate ” of the Seller means any entity a majority of the voting shares of which is owned directly or indirectly by Henkel AG & CO. KGaA and (c) “ Person” means any individual, corporation, limited liability company, partnership, joint venture, trust, association, joint-stock company, unincorporated organization or other entity, any domestic or foreign national, state, multi-state or municipal or other local government or any subdivision, agency, commission or authority thereof, or any quasi-governmental or private body exercising any regulatory or taxing authority. For purposes of the preceding sentence, “control” (including, with correlative meanings, the terms “controlled by” and “under common control with”), as used with respect to any entity or organization, shall mean the possession, directly or indirectly, of the power (i) to vote more than 50% of the securities having ordinary voting power for the election of directors of the controlled entity or organization, or (ii) to direct or cause the direction of management and policies of the controlled entity or organization, whether through the ownership of voting securities or by contract or otherwise.

11.12 Governing Law and Jurisdiction

This Agreement shall be construed, performed and enforced in accordance with, and governed by, the internal laws of the State of Delaware, without giving effect to the principles of conflicts of laws thereof. The parties hereto irrevocably elect as the sole judicial forum for the adjudication of any matters arising under or in connection with this Agreement and the Ancillary Documents, and consent to the jurisdiction of, the United States District Court for the District of Delaware or in the courts of the State of Delaware. Notwithstanding the foregoing, in no event shall Henkel AG & Co. KGaA be subject to the jurisdiction of any court, federal or state, located in the United States. To the extent that any action is brought under this Agreement or under any Ancillary Document which relates in any manner to rights or obligations of Henkel AG & Co. KGaA, the Seller shall automatically become the assignee of Henkel AG & Co. KGaA for all such purposes to enforce such rights, and the designee for all such purposes to perform such obligations, and the Buyer (on behalf of itself and any Buyer Indemnitee) agrees to look solely to the Seller for the enforcement of any such obligations.

11.13 Interpretation

In this Agreement, unless the context requires otherwise:

(a) the meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term and vice versa, and words denoting either gender shall include both genders and the neuter gender as the

context requires. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning;

(b) the terms “hereof”, “herein” and “herewith” and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement;

(c) when a reference is made in this Agreement to an Article, Section, Exhibit or Schedule, such reference is to an Article, Section, Exhibit or Schedule to this Agreement unless otherwise specified;

(d) the words “include”, “includes”, and “including” when used in this Agreement shall be deemed to be followed by the words “without limitation”, unless otherwise specified;

(e) a reference to a party to this Agreement or any other agreement or document shall include such party’s predecessors, successors and permitted assigns;

(f) captions are for purposes of reference only and shall not limit or otherwise affect the interpretation hereof; and

(g) a representation and warranty made to “the knowledge of the Seller” or “to the best of the Seller’s knowledge” or words of like import shall be deemed to be breached only if the individuals set forth on Schedule 11.13(g) had actual knowledge of the falsity of such representation or of the breach of such warranty.

The parties have participated jointly in the negotiation and drafting of this Agreement. Any rule of construction or interpretation otherwise requiring this Agreement to be construed or interpreted against any party by virtue of the authorship of this Agreement shall not apply to the construction and interpretation hereof.

11.14 Counterparts; Facsimile Signature

This Agreement may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. Any counterpart of this Agreement may be executed by facsimile or electronic signature, and delivery of such counterpart shall be deemed to be an original.

[SIGNATURE PAGE FOLLOWS]

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first set forth above with the intent to be legally bound.

HENKEL CORPORATION


By:	/s/ Jeffrey Piccolomini
	Name:	Jeffrey Piccolomini
	Title:	President and Chief Financial Officer

By:	/s/ Jeffrey B. Ross
	Name:	Jeffrey B. Ross
	Title:	Vice President, AG SBU, General Industry


CHASE CORPORATION


By:	/s/ Adam P. Chase
	Name:	Adam P. Chase
	Title:	President & Chief Operating Officer

Exhibit 31.1

CERTIFICATION

I, Adam P. Chase, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Chase Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: April 9, 2015

	/s/ Adam P. Chase
	Adam P. Chase
	President and Chief Executive Officer
	(Principal Executive Officer)

Exhibit 31.2

CERTIFICATION

I, Kenneth J. Feroldi, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Chase Corporation;

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: April 9, 2015

	/s/ Kenneth J. Feroldi
	Kenneth J. Feroldi
	Treasurer and Chief Financial Officer
	(Principal Financial and Accounting Officer)

Exhibit 32.1

CERTIFICATION

PURSUANT TO

18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

The undersigned officer of Chase Corporation (the “Company”) hereby certifies that the Company’s Quarterly Report on Form 10-Q for the period ended February 28, 2015 (the “Report”), as filed with the Securities and Exchange Commission on the date hereof, fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, as amended, and that the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. This certificate is furnished solely pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Date: April 9, 2015

/s/ Adam P. Chase
Adam P. Chase
President and Chief Executive Officer
(Principal Executive Officer)

Exhibit 32.2

CERTIFICATION

PURSUANT TO

18 U.S.C. 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Date: April 9, 2015

/s/ Kenneth J. Feroldi
Kenneth J. Feroldi
Treasurer and Chief Financial Officer
(Principal Financial and Accounting Officer)