10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended August 31, 2010

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) 279-1789
(Registrant's Telephone Number, Including Area Code)

Securities registered pursuant to section 12(b) of the Act:

Title of Each Class:	Name of Each Exchange on Which Registered
Common Stock ($0.10 Par Value)	NYSE Amex

         Securities registered pursuant to section 12(g) of the Act: None

         Indicate by check mark if the registrant is a well-known seasoned issuer (as defined in Rule 405 of the Securities Act). YES o    NO ý

         Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Exchange Act. YES o    NO ý

         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 ý    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 o    NO o

         Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

         Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. 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 ý Non-accelerated filer o
(Do not check if a smaller reporting company) Smaller reporting company o

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

         The aggregate market value of the common stock held by non-affiliates of the registrant, as of February 28, 2010 (the last business day of the registrant's second quarter of fiscal 2010), was approximately $73,674,997.

         As of October 31, 2010, the Company had outstanding 8,946,701 shares of common stock, $.10 par value, which is its only class of common stock.

Documents Incorporated By Reference:

         Portions of the registrant's definitive proxy statement for the Annual Meeting of Shareholders, which is expected to be filed within 120 days after the registrant's fiscal year ended August 31, 2010, are incorporated by reference into Part III hereof.

CHASE CORPORATION

INDEX TO ANNUAL REPORT ON FORM 10-K

For the Year Ended August 31, 2010

		Page No.
PART I
Item 1	Business		3
Item 1A	Risk Factors		7
Item 1B	Unresolved Staff Comments		9
Item 2	Properties		10
Item 3	Legal Proceedings		11
Item 4	[Removed and Reserved]		11
Item 4A	Executive Officers of the Registrant		11
PART II
Item 5	Market for the Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		12
Item 6	Selected Financial Data		13
Item 7	Management's Discussion and Analysis of Financial Condition and Results of Operations		14
Item 7A	Quantitative and Qualitative Disclosures About Market Risk		23
Item 8	Financial Statements and Supplementary Data		25
Item 9	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		63
Item 9A	Controls and Procedures		63
Item 9B	Other Information		64
PART III
Item 10	Directors, Executive Officers and Corporate Governance		65
Item 11	Executive Compensation		65
Item 12	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		65
Item 13	Certain Relationships and Related Transactions, and Director Independence		65
Item 14	Principal Accountant Fees and Services		65
PART IV
Item 15	Exhibits and Financial Statement Schedules		66
SIGNATURES			69

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PART I

ITEM 1—BUSINESS

Primary Operating Divisions and Facilities and Industry Segment

        Chase Corporation (the "Company," "Chase," "we," or "us") is a global manufacturer of tapes, laminates, sealants, and coatings for high reliability applications. Our strategy is to maximize the performance of our core businesses and brands while seeking future opportunities through strategic acquisitions. We are currently organized into one operating segment with multiple facilities. A summary of our operating structure as of August 31, 2010 is as follows:

Primary Manufacturing Location		Background/History	Key Products & Services
	SPECIALIZED MANUFACTURING SEGMENT
	Randolph, MA	This was one of our first operating facilities and has been producing products for the wire and cable industry for more than fifty years.	Electrical cable insulation tapes using the brand name Chase & Sons® and related products such as Chase BLH2OCK®, a water blocking compound sold to the wire and cable industry. Insulating and conducting materials for the manufacture of electrical and telephone wire and cable, electrical splicing, and terminating and repair tapes, which are marketed to wire and cable manufacturers and public utilities.
	Webster, MA	We began operating this facility, which manufactures tape and related products, in 1992. In December 2003, we acquired the assets of PaperTyger, LLC ("PaperTyger"). The PaperTyger product lines are also manufactured at this facility.	Specialty tapes and related products for the electronic and telecommunications industries using the brand name Chase & Sons®. PaperTyger® is a trademark for laminated durable papers sold to the envelope converting and commercial printing industries.
	Taylorsville, NC	In January 2004, we purchased certain manufacturing equipment and began operations at this facility. In March 2009, we moved the majority of our manufacturing processes that had been conducted at our Paterson, NJ facility to this location.	Flexible packaging for industrial and retail use. Slit film for the building wire market and for telecommunication cable. Flexible composites and laminates for the wire & cable, aerospace and industrial laminate markets including Insulfab®, an insulation material used in the aerospace industry.
	Evanston, IL	In November 2001, we acquired substantially all of the assets of Tapecoat, a division of T.C. Manufacturing Inc.	Manufacturer of technologically advanced products, including the brand Tapecoat®, for demanding anti-corrosion applications in the gas, oil and marine pipeline market segments, as well as tapes and membranes for roofing and other construction related applications.

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Primary Manufacturing Location		Background/History	Key Products & Services
	Pittsburgh, PA	The HumiSeal business and product lines were acquired in the early 1970's. The Royston business was acquired in the early 1970's. In April 2005, we acquired certain assets of E-Poxy Engineered Materials. Additionally, in September 2006, we acquired all of the capital stock of Capital Services Joint Systems. Both of these acquisitions were combined to form the Expansion Joints product line which is now manufactured in Pittsburgh.	Protective conformal coatings under the brand name HumiSeal®, moisture protective electronic coatings sold to the electronics industry. Protective pipe coating tapes and other protectants for valves, regulators, casings, joints, metals, concrete, and wood which are sold under the brand name Royston®, to oil companies, gas utilities, and pipeline companies. Rosphalt50® is a polymer additive that provides long term cost effective solutions in many applications such as waterproofing of approaches and bridges, ramps, race tracks, airports and specialty road applications. Waterproofing sealants, expansion joints and accessories for the transportation, industrial and architectural markets.
	Houston, TX	In September 2009, we acquired all of the outstanding capital stock of C.I.M. Industries Inc. ("CIM").	Specialized manufacturer of high performance coating and lining systems used worldwide in the liquid storage and containment applications.
	Camberley, Surrey, England	In October 2005, we acquired all of the capital stock of Concoat Holdings Ltd. and its subsidiaries. In 2006 Concoat was renamed HumiSeal Europe. In March 2007, we expanded our international presence with the formation of HumiSeal Europe SARL in France. In conjunction with establishing the new company, certain assets were acquired from Metronelec SARL, a former distributor of HumiSeal products.	Protective conformal coatings under the brand name HumiSeal®, moisture protective electronic coatings sold to the electronics industry. HumiSeal Europe SARL operates a sales/technical service office and warehouse near Paris. This business works closely with the HumiSeal operation in Camberley, Surrey, England allowing direct sales and service to the French market.

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Primary Manufacturing Location		Background/History	Key Products & Services
	Rye, East Sussex, England	On September 1, 2007, we purchased certain product lines and a related manufacturing facility in Rye, East Sussex, England through our wholly owned subsidiary, Chase Protective Coatings Ltd. In December 2009, we acquired the full range of ServiWrap® pipeline protection products ("ServiWrap") from Grace Construction Products Limited, a UK based unit of W.R. Grace & Co.	Manufacturer of waterproofing and corrosion protection systems for oil, gas and water pipelines and a supplier to Europe, the Middle East and Southeast Asia. This facility joins Chase's North American based Tapecoat® and Royston® brands to broaden the protective coatings product line and better address increasing global demand. The ServiWrap product line complements the portfolio of our pipeline protection tapes, coatings and accessories and will extend our global customer base.

Other Business Developments

Sale of Chase Electronic Manufacturing Services ("Chase EMS") Business

        On June 30, 2010, we completed the sale of our contract electronic manufacturing services business, Chase EMS, to MC Assembly. As part of this sale, we sold all of the assets relating to the Chase EMS business, excluding cash and certain other enumerated assets, and MC Assembly assumed certain of the liabilities. The purchase price received at the closing was $13.0 million plus an additional $1.5 million to be received subsequent to the closing due to the value of the net working capital of the business sold (as calculated under the Asset Purchase Agreement) exceeding $4.5 million. The proceeds from the sale are available for debt reduction and continued investment in our core tapes and coatings businesses.

Acquisition of ServiWrap Product Lines

        In December 2009, we acquired the full range of ServiWrap pipeline protection products ("ServiWrap") from Grace Construction Products Limited, a UK based unit of W.R. Grace & Co. (the "Seller"). ServiWrap / ServiShield anti-corrosion systems provide protection for new and refurbished oil, gas and water pipelines in projects around the world. The acquisition of ServiWrap complements the portfolio of our pipeline protection tapes, coatings and accessories and extends our global customer base. The total purchase price for this acquisition was £5.98 million (approximately US $9.7 million at the time of acquisition). The purchase was funded through a combination of cash on hand and a term loan in the amount of $7.0 million from RBS Citizens.

Acquisition of C.I.M. Industries Inc. ("CIM")

        In September 2009, we acquired all of the outstanding capital stock of CIM, which is based in Peterborough, NH and has a manufacturing facility in Houston, TX. CIM is a specialized manufacturer of high performance coating and lining systems used worldwide in the liquid storage and containment industry. With a primary focus on the water and wastewater industry, CIM has the preferred products that complement our product line of high performance tapes and coatings. The total purchase price for this acquisition was $18.9 million (net of cash acquired).

Products and Markets

        Our principal products are specialty tapes, laminates, sealants and coatings that are sold by our salespeople, manufacturers' representatives and distributors. These products consist of:

(i)

insulating and conducting materials for the manufacture of electrical and telephone wire and cable, electrical splicing, and terminating and repair tapes, which are marketed to wire and cable manufacturers;



(ii)

protective pipe coating tapes and other protectants for valves, regulators, casings, joints, metals, concrete and wood, which are sold to oil companies, gas utilities and pipeline companies;

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(iii)

protectants for highway bridge deck metal supported surfaces, which are sold to municipal transportation authorities;



(iv)

fluid applied coating and lining systems for use in the water and wastewater industry;



(v)

moisture protective coatings, which are sold to the electronics industry including circuitry used in automobiles and home appliances;



(vi)

laminated durable papers, including laminated paper with an inner security barrier used in personal and mail-stream privacy protection, which are sold primarily to the envelope converting and commercial printing industries;



(vii)

flexible composites and laminates for the wire & cable, aerospace, packaging and industrial laminate markets; and



(viii)

expansion and control joint systems designed for roads, bridges, stadiums and airport runways.

        There is some seasonality with our product offerings sold into the construction market as increased demand is often experienced when temperatures are warmer (April through October) with less demand occurring when temperatures are colder (typically our second fiscal quarter). We did not introduce any new products or segments requiring an investment of a material amount of our assets during fiscal year 2010.

Employees

        As of October 31, 2010, we employed approximately 305 people (including union employees). We consider our employee relations to be good. In the U.S., we offer our employees a wide array of company-paid benefits, which we believe are competitive relative to others in our industry. In our operations outside the U.S., we offer benefits that may vary from those offered to our U.S. employees due to customary local practices and statutory requirements.

Backlog, Customers and Competition

        As of October 31, 2010, the backlog of customer orders believed to be firm was approximately $11,451,000. This compared with a total of $4,776,000 as of October 31, 2009. The increase in backlog over the prior year amount is due to an overall increase in order activity across the majority of our product lines, as well as increased orders from the fiscal 2010 acquisitions of CIM and ServiWrap. The backlog of orders has some seasonality due to the construction season. During fiscal 2010, 2009 and 2008, no customer accounted for more than 10% of sales. No material portion of our business is subject to renegotiation or termination of profits or contracts at the election of the United States Federal Government.

        There are other companies that manufacture or sell products and services similar to those made and sold by us. Many of those companies are larger and have greater financial resources than we have. We compete principally on the basis of technical performance, service reliability, quality and price.

Raw Materials

        We obtain raw materials from a wide variety of suppliers with alternative sources of most essential materials available within reasonable lead times.

Patents, Trademarks, Licenses, Franchises and Concessions

        We own the following trademarks that we believe are of material importance to our business: Chase Corporation®, C-Spray (Logo), a trademark used in conjunction with most of the Company's business segment and product line marketing material and communications; HumiSeal®, a trademark for moisture protective coatings sold to the electronics industry; Chase & Sons® and Chase Facile®, trademarks for barrier and insulating tapes sold to the wire and cable industry; Chase BLH₂OCK®, a trademark for a water blocking compound sold to the wire and cable industry; Rosphalt50®, a trademark for an asphalt additive used predominantly on bridge decks for waterproofing protection; Insulfab®, a trademark for insulation material used in the aerospace industry; PaperTyger®, a trademark for laminated durable papers sold to the envelope converting and commercial printing industries, Tapecoat®, a trademark for corrosion preventative surface coatings and primers; Royston®, a trademark for corrosion inhibiting coating composition for use on pipes; Eva-Pox® and Ceva®, trademarks for epoxy pastes/gels/mortars and

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elastomeric concrete used in the construction industry; CIM® trademark for fluid applied coating and lining systems used in the water and wastewater industry; and ServiWrap® trademarks for pipeline protection tapes, coatings and accessories. We do not have any other material trademarks, licenses, franchises, or concessions. While we do hold various patents, at this time, we do not believe that they are material to the success of our business.

Working Capital

        We fund our business operations through a combination of available cash and cash equivalents, short-term investments and cash flows generated from operations. In addition, our revolving credit facility is available for additional working capital needs or investment opportunities.

Research and Development

        Approximately $1,748,000, $1,632,000 and $1,698,000 was spent for Company-sponsored research and development during fiscal 2010, 2009 and 2008, respectively. Research and development increased by $116,000 in fiscal 2010 as compared to the prior period primarily due to increased research and development expenses from the CIM business that was acquired in September 2009.

Available Information

        Chase maintains a website at http://www.chasecorp.com. Our annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to such reports filed or furnished pursuant to section 13(a) or 15(d) of the Securities Exchange Act of 1934, as well as section 16 reports on Form 3, 4, or 5, are available free of charge on this site as soon as is reasonably practicable after they are filed or furnished with the SEC. Our Financial Code of Ethics and the charters for the Audit Committee, the Nominating and Governance Committee and the Compensation and Management Development Committee of our Board of Directors are also available on our Internet site. The Code of Ethics and charters are also available in print to any shareholder upon request. Requests for such documents should be directed to Paula Myers, Shareholder and Investor Relations Department, at 26 Summer Street, Bridgewater, Massachusetts 02324. Our Internet site and the information contained on it or connected to it are not part of or incorporated by reference into this Form 10-K. Our filings with the SEC are also available on the SEC's website at http://www.sec.gov.

Financial Information About Segment and Geographic Areas

        Please see Notes 11 and 12 to the Company's Consolidated Financial Statements for financial information about the Company's industry segments and domestic and foreign operations for each of the last three fiscal years.

ITEM 1A—RISK FACTORS

        The following risk factors should be read carefully in connection with evaluating our business and the forward-looking information contained in this Annual Report on Form 10-K. We feel that any of the following risks could materially adversely affect our business, operations, industry, financial position or our future financial performance. While we believe that we have identified and discussed below the key risk factors affecting our business, there may be additional risks and uncertainties that are not presently known or that are not currently believed to be significant that may adversely affect our business, operations, industry, financial position and financial performance in the future.

We currently operate in mature markets where increases or decreases in market share could be significant.

        Our sales and net income are largely dependent on recurring sales from a consistent and well established customer base. Organic growth opportunities are minimal; however, we have and will continue to use strategic acquisitions as a means to build and grow the business. In this business environment, increases or decreases in market share could have a material effect on our business condition or results of operation. We face intense competition from a diverse range of competitors, including operating divisions of companies much larger and with far greater resources than we have. If we are unable to maintain our market share, our business could suffer.

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Our business strategy includes the pursuit of strategic acquisitions, which may not be successful if they happen at all.

        From time to time, we engage in discussions with potential target companies concerning potential acquisitions. In executing our acquisition strategy, we may be unable to identify suitable acquisition candidates. In addition, we may face competition from other companies for acquisition candidates, making it more difficult to acquire suitable companies on favorable terms.

        Even if we do identify a suitable acquisition target and are able to negotiate and close a transaction, the integration of an acquired business into our operations involves numerous risks, including potential difficulties in integrating an acquired company's product line with ours; the diversion of our resources and management's attention from other business concerns; the potential loss of key employees; limitations imposed by antitrust or merger control laws in the United States or other jurisdictions; risks associated with entering a new geographical or product market; and the day-to-day management of a larger and more diverse combined company.

        We may not realize the synergies, operating efficiencies, market position or revenue growth we anticipate from acquisitions and our failure to effectively manage the above risks and other problems associated with acquisitions could have a material adverse effect on our business, growth prospects and financial performance.

General economic factors, domestically and internationally, may adversely affect our financial performance through increased raw material costs or other expenses and by making access to capital more difficult.

        The cumulative effect of higher interest rates, energy costs, inflation, levels of unemployment, healthcare costs, unsettled financial markets, and other economic factors could adversely affect our financial condition by increasing our manufacturing costs and other expenses at the same time that our customers may be scaling back demand for our products. Prices of certain commodity products, including oil and petroleum-based products, are historically volatile and are subject to fluctuations arising from changes in domestic and international supply and demand, labor costs, competition, weather events, market speculation, government regulations and periodic delays in delivery. Rapid and significant changes in commodity prices may affect our sales and profit margins. These factors can also increase our merchandise costs and/or selling, general and administrative expenses, and otherwise adversely affect our operations and results. Recent turmoil in the credit markets may limit our ability to access debt capital for use in acquisitions or other purposes on advantageous terms or at all. If we are unable to manage our expenses in response to general economic conditions and margin pressures, or if we are unable to obtain capital for strategic acquisitions or other needs, then our results of operations would be negatively affected.

Fluctuations in the supply and prices of raw materials may negatively impact our financial results.

        We obtain raw materials needed to manufacture our products from a number of suppliers. Many of these raw materials are petroleum-based derivatives. Under normal market conditions, these materials are generally available on the open market and from a variety of producers. From time to time, however, the prices and availability of these raw materials fluctuate, which could impair our ability to procure necessary materials, or increase the cost of manufacturing our products. If the prices of raw materials increase, and we are unable to pass these increases on to our customers, we could experience reduced profit margins.

If our products fail to perform as expected, or if we experience product recalls, we could incur significant and unexpected costs and lose existing and future business.

        Our products are complex and could have defects or errors presently unknown to us, which may give rise to claims against us, diminish our brands or divert our resources from other purposes. Despite testing, new and existing products could contain defects and errors and may in the future contain manufacturing or design defects, errors or performance problems when first introduced, or even after these products have been used by our customers for a period of time. These problems could result in expensive and time-consuming design modifications or warranty charges, changes to our manufacturing processes, product recalls, significant increases in our maintenance costs, or exposure to liability for damages, any of which may result in substantial and unexpected expenditures, require significant management attention, damage our reputation and customer relationships, and adversely affect our business, our operating results and our cash flow.

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We are dependent on key personnel.

        We depend significantly on our executive officers including Chairman and Chief Executive Officer, Peter R. Chase, and on other key employees. The loss of the services of any of these key employees could have a material impact on our business and results of operations. In addition, our acquisition strategy will require that we attract, motivate and retain additional skilled and experienced personnel. The inability to satisfy such requirements could have a negative impact on our ability to remain competitive in the future.

If we cannot successfully manage the unique challenges presented by international markets, we may not be successful in expanding our international operations.

        Our strategy includes expansion of our operations in existing and new international markets by selective acquisitions and strategic alliances. Our ability to successfully execute our strategy in international markets is affected by many of the same operational risks we face in expanding our U.S. operations. In addition, our international expansion may be adversely affected by our ability to identify and gain access to local suppliers as well as by local laws and customs, legal and regulatory constraints, political and economic conditions and currency regulations of the countries or regions in which we currently operate or intend to operate in the future. Risks inherent in our international operations also include, among others, the costs and difficulties of managing international operations, adverse tax consequences and greater difficulty in enforcing intellectual property rights. Additionally, foreign currency exchange rates and fluctuations may have an impact on future costs or on future cash flows from our international operations.

Our results of operations could be adversely affected by uncertain economic and political conditions and the effects of these conditions on our customers' businesses and levels of business activity.

        Global economic and political conditions can affect the businesses of our customers and the markets they serve. A severe or prolonged economic downturn or a negative or uncertain political climate could adversely affect the levels of business activity of our customers and the industries they serve, including the automotive, housing, construction, transportation infrastructure and electronics manufacturing industries. This may reduce demand for our products or depress pricing of those products, either of which may have a material adverse effect on our results of operations. Changes in global economic conditions could also shift demand to products for which we do not have competitive advantages, and this could negatively affect the amount of business that we are able to obtain. In addition, if we are unable to successfully anticipate changing economic and political conditions, we may be unable to effectively plan for and respond to those changes and our business could be negatively affected.

Financial market performance may have a material adverse effect on our pension plan assets and require additional funding requirements.

        Significant and sustained declines in the financial markets may have a material adverse effect on the fair market value of our pension plan assets. While these pension plan assets are considered non-financial assets since they are not carried on our balance sheet, the fair market valuation of these assets could impact our funding requirements, funded status or net periodic pension cost. Any significant and sustained declines in the fair market value of these pension assets could require us to increase our funding requirements which would have an impact on our cash flow, and could also lead to additional pension expense.

Changes in accounting standards and subjective assumptions, estimates and judgments by management related to complex accounting matters could significantly affect our financial results.

        Generally accepted accounting principles and related accounting pronouncements, implementation guidelines and interpretations with regard to a wide range of matters that are relevant to our business, such as revenue recognition, asset impairment, inventories, pensions valuation and tax matters, are highly complex and involve many subjective assumptions, estimates and judgments. Changes in these rules or their interpretation or changes in underlying assumptions, estimates, or judgments could significantly change our reported or expected financial performance or financial condition.

ITEM 1B—UNRESOLVED STAFF COMMENTS

None

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ITEM 2—PROPERTIES

        We own and lease office and manufacturing properties as outlined in the table below.

Location	Square Feet		Owned/ Leased		Principal Use
Bridgewater, MA		5,200		Owned	Corporate headquarters and executive office
Westwood, MA		20,200		Leased	Global Operations Center including research and development, sales and administrative services
Randolph, MA		77,500		Owned	Manufacture of electrical protective coatings and tape products
Webster, MA		25,000		Owned	Manufacture of tape and related products for the electronic and telecommunications industries, as well as laminated durable papers
Oxford, MA (a)		73,600		Owned	Under renovation to provide capacity for storage needs and future growth
Paterson, NJ (b)		40,000		Leased	Under renovation for potential lease or sale of property
Taylorsville, NC		50,000		Leased	Manufacture of flexible packaging for industrial and retail use, as well as tape and related products for the electronic and telecommunications industries
Taylorsville, NC		2,500		Leased	Storage warehouse
Cranston, RI		500		Leased	Sales office
Pittsburgh, PA		44,000		Owned	Manufacture and sale of protective coatings and tape products
O'Hara Township, PA		109,000		Owned	Manufacture and sale of protective coatings, expansion joints and accessories
Evanston, IL (c)		100,000		Leased	Manufacture and sale of protective coatings and tape products
Peterborough, NH		8,800		Leased	Sales and administrative facility
Houston, TX		45,000		Owned	Manufacture of coating and lining systems for use in liquid storage and containment applications
Camberley, Surrey, England		6,700		Leased	Manufacture and sales of protective electronic coatings
Rye, East Sussex, England		36,600		Owned	Manufacture and sales of protective coatings and tape products
Paris, France		1,350		Leased	Sales/technical service office and warehouse allowing direct sales and service to the French market

(a)

In December 2008, we purchased real property (land and building) in Oxford, MA. We have begun initial renovations to this property and currently use it for inventory storage in order to reduce off-site storage expenses. In our 2011 fiscal year, we will continue to complete renovations on this property in order to provide capacity for future growth.

(b)

In December 2009, we ceased manufacturing operations at our Paterson, NJ manufacturing facility and have transitioned production of this facility's products to other Chase manufacturing sites with similar capabilities.

(c)

In June 2009, we entered into a sale leaseback transaction whereby we sold our real property (land and building) located in Evanston, IL. We have agreed to provide financing to the purchaser, and the purchaser has agreed to lease the property back to us for a term of 49 months ending July 2013. The term coincides with the period over which the financing will be repaid to us.

        The above facilities range in age from new to about 100 years, are generally in good condition and, in the opinion of management, adequate and suitable for present operations. We also own equipment and machinery that is in good repair and, in the opinion of management, adequate and suitable for present operations. We could significantly add to our capacity by increasing shift operations. Availability of machine hours through additional shifts would provide expansion of current product volume without significant additional capital investment.

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ITEM 3—LEGAL PROCEEDINGS

        We are one of over 100 defendants in a lawsuit pending in Ohio which alleges personal injury from exposure to asbestos contained in certain Chase products. The case is captioned Marie Lou Scott, Executrix of the Estate of James T. Scott v. A-Best Products, et al., No. 312901 in the Court of Common Pleas for Cuyahoga County, Ohio. The plaintiff in the case issued discovery requests to us in August 2005, to which we timely responded in September 2005. The trial had initially been scheduled to begin on April 30, 2007. However, that date had been postponed and no new trial date has been set. As of October 2010, there have been no new developments as this Ohio lawsuit has been inactive with respect to us.

        We were named as one of the defendants in a complaint filed on June 25, 2009, in a lawsuit captioned Lois Jansen, Individually and as Special Administrator of the Estate of Thomas Jansen v. Beazer East, Inc., et al., No: 09-CV-6248 in the Milwaukee County (Wisconsin) Circuit Court. The plaintiff alleges that her husband suffered and died from malignant mesothelioma resulting from exposure to asbestos in his workplace. The plaintiff has sued seven alleged manufacturers or distributors of asbestos-containing products, including Royston Laboratories (formerly an independent company and now a division of Chase Corporation). We have filed an answer to the claim denying the material allegations in the complaint. The parties are currently engaged in discovery.

        In addition to the matters described above, 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 or results of operations, litigation is inherently unpredictable. Therefore, judgments could be rendered or settlements entered, 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 4—[REMOVED AND RESERVED]

ITEM 4A—EXECUTIVE OFFICERS OF THE REGISTRANT

        The following table sets forth information concerning our Executive Officers as of August 31, 2010. Each of our Executive Officers is selected by our Board of Directors and holds office until his successor is elected and qualified.

Name	Age		Offices Held and Business Experience during the Past Five Years
Peter R. Chase		62	Chairman of the Board of the Company since February 2007, and Chief Executive Officer of the Company since September 1993.
Adam P. Chase		38	President of the Company since January 2008, Chief Operating Officer of the Company since February 2007, Vice President Operations February 2006 through February 2007, and Vice President Chase Coating & Laminating Division March 2003 through February 2007. Adam Chase is the son of Peter Chase.
Kenneth L. Dumas		39	Chief Financial Officer and Treasurer of the Company since February 2007, Director of Finance February 2006 through January 2007, and Corporate Controller January 2004 through January 2007.

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PART II

ITEM 5—MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

        Our common stock is traded on the NYSE Amex under the symbol CCF. As of October 31, 2010, there were 454 shareholders of record of our Common Stock and approximately 3,048 beneficial shareholders who held shares in nominee name. On that date, the closing price of our common stock was $15.86 per share as reported by the NYSE Amex.

        The following table sets forth the high and low daily sales prices for our common stock as reported by the NYSE Amex for each quarter in the fiscal years ended August 31, 2010 and 2009:

	Fiscal 2010				Fiscal 2009
	High		Low		High		Low
First Quarter	$	14.90	$	10.60	$	17.62	$	9.45
Second Quarter		12.50		10.21		14.81		9.00
Third Quarter		14.45		10.66		13.50		7.00
Fourth Quarter		14.65		10.61		12.79		10.07

        Single annual cash dividend payments were declared and paid subsequent to year end in the amounts of $0.35, $0.20, and $0.35 per common share, for the years ended August 31, 2010, 2009 and 2008, respectively. Certain borrowing facilities of ours contain financial covenants which may have the effect of limiting the amount of dividends that we can pay.

Comparative Stock Performance

        The following line graph compares the yearly percentage change in our cumulative total shareholder return on the Common Stock for the last five fiscal years with the cumulative total return on the Standard & Poor's 500 Stock Index (the "S&P 500 Index"), and a composite peer index that is weighted by market equity capitalization (the "Peer Group Index"). The companies included in the Peer Group Index are American Biltrite Inc., Material Sciences Corporation, H.B. Fuller Company, Quaker Chemical Corporation and RPM International, Inc. Cumulative total returns are calculated assuming that $100 was invested on August 31, 2005 in each of the Common Stock, the S&P 500 Index and the Peer Group Index, and that all dividends were reinvested.

Comparison of 5 Year Cumulative Total Return
Assumes Initial Investment of $100 on August 31, 2005

	2005		2006		2007		2008		2009		2010
Chase Corp	$	100	$	119	$	251	$	254	$	171	$	194
S&P 500 Index	$	100	$	109	$	125	$	111	$	91	$	96
Peer Group Index	$	100	$	105	$	135	$	134	$	103	$	112

        The information under the caption "Comparative Stock Performance" above is not deemed to be "filed" as part of this Annual Report, and is not subject to the liability provisions of Section 18 of the Securities Exchange Act of 1934. Such information will not be deemed to be incorporated by reference into any filing we make under the Securities Act of 1933 unless we explicitly incorporate it into such a filing at the time.

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ITEM 6—SELECTED FINANCIAL DATA

        The following selected financial data should be read in conjunction with "Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations" and "Item 8—Financial Statements and Supplementary Data."

			Fiscal Years Ended August 31,
			2010		2009		2008		2007		2006
			(In thousands, except per share amounts)
Statement of Operations Data
	Revenues from continuing operations		$	118,743	$	91,236	$	113,177	$	109,195	$	95,418
	Income from continuing operations, net of taxes		$	10,726	$	5,315	$	11,061	$	8,965	$	5,460
	Income from discontinued operations, net of taxes			1,790		1,070		1,313		1,228		654
	Net income		$	12,516	$	6,385	$	12,374	$	10,193	$	6,114
	Net income available to common shareholders, per common and common equivalent share:
	Basic:
		Continuing operations	$	1.19	$	0.62	$	1.32	$	1.11	$	0.70
		Discontinued operations		0.20		0.12		0.16		0.15		0.08
		Net income per common and common equivalent share	$	1.39	$	0.74	$	1.48	$	1.26	$	0.79
	Diluted:
		Continuing operations	$	1.18	$	0.60	$	1.27	$	1.07	$	0.69
		Discontinued operations		0.20		0.12		0.15		0.15		0.08
		Net income per common and common equivalent share	$	1.38	$	0.72	$	1.42	$	1.22	$	0.77
		The sum of individual share amounts may not equal due to rounding
Balance Sheet Data
	Total assets		$	123,201	$	91,066	$	90,297	$	83,965	$	78,837
	Long-term debt and capital leases			12,667		—		—		3,823		10,288
	Total stockholders' equity			81,531		70,213		66,186		56,212		46,074
	Cash dividends per common and common equivalent share		$	0.20	$	0.35	$	0.25	$	0.20	$	0.175

        As further detailed in Note 15 to the Consolidated Financial Statements included in this Report, the Electronic Manufacturing Services business was sold in June 2010 and the financial results of this previously reported segment are classified as discontinued operations. We have reflected the results of this business as discontinued operations in the consolidated statement of operations for all periods presented.

        Note: Information related to our acquisitions and dispositions can be found in the Recent Developments and Overview sections of "Item 7—Management's Discussion and Analysis of Financial Condition and Results of Operations."

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ITEM 7—MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

        The following discussion provides an analysis of our financial condition and results of operations and should be read in conjunction with the Consolidated Financial Statements and notes thereto included in Item 8 of this Annual Report on Form 10-K.

Selected Relationships within the Consolidated Statements of Operations

			Years Ended August 31,
			2010			2009			2008
			(Dollars in thousands)
Revenues from continuing operations			$	118,743		$	91,236		$	113,177
Income from continuing operations, net of taxes			$	10,726		$	5,315		$	11,061
Income from discontinued operations, net of taxes				1,790			1,070			1,313
Net income			$	12,516		$	6,385		$	12,374
Increase/(Decrease) in revenues from continuing operations from prior year
	Amount		$	27,507		$	(21,941	)	$	3,982
	Percentage			30	%		(19	)%		4	%
Increase/(Decrease) in income from continuing operations, net of taxes from prior year
	Amount		$	5,411		$	(5,746	)	$	2,096
	Percentage			102	%		(52	)%		23	%
Percentage of revenue:
	Revenues from continuing operations			100	%		100	%		100	%
	Expenses:
		Cost of products and services sold		63	%		68	%		65	%
		Selling, general and administrative expenses		23			23			20
		Loss on impairment of assets		—			1			—
		Other (income)		—			(1	)		—
	Income from continuing operations before income taxes			14			9			15
	Income taxes			5			3			5
	Income from continuing operations, net of taxes			9			6			10
	Income from discontinued operations, net of taxes			2			1			1
	Net income			11	%		7	%		11	%

Overview

        The positive results in fiscal 2010 were mainly attributable to our continued focus on our key strategies and initiatives: continuous improvement and dedication to our key brands, strategic acquisitions, long term consolidation and diligent cost management practices. Despite the economic challenges that negatively impacted fiscal 2009 and continue to impact our business, a strong second half to fiscal 2010 led to significant revenue and profit increases in fiscal 2010 over the prior year results. Our revenue growth was primarily attributable to sales generated from the acquisitions of CIM in September 2009 and ServiWrap in December 2009. The continued recovery in the automotive sector worldwide and protective products used in domestic infrastructure applications, as well as increased sales of specialty products and pipeline & construction contributed to the increase in revenues over the prior year. The revenue growth in fiscal 2010 is being partially offset by the negative impact of the weakened pound sterling and euro whose values against the dollar have decreased 5% and 11%, respectively, from August 2009 to August 2010.

        This past fiscal year we have been diligent in our efforts to consolidate and streamline our existing processes and related expenses. As part of these efforts, we ceased operations at our Paterson, NJ plant in December 2009 and the products previously produced in that facility are now being produced in our Webster, MA and Taylorsville, NC plants. In March 2010, we closed our Taunton, MA and Albany, NY offices and consolidated those sales, research and development and administrative functions into our Westwood, MA Global Operations Center. Development of the property purchased in Oxford, MA continues and the coatings plant in Pittsburgh, PA is now fully operational. In

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fiscal 2011, we will continue to perform the necessary building and equipment improvements required to integrate the ServiWrap product lines into our facility in Rye, East Sussex, England.

        In June 2010, we sold our Electronic Manufacturing Services business in an all cash transaction, structured as a sale of substantially all of the assets of the Chase EMS business. The sale was completed in accordance with our long term strategy to focus on our core protective materials technologies. Proceeds from the sale are available for debt reduction and continued investment in the Company's core tapes and coatings businesses.

        We maintained strong positive cash flows throughout fiscal 2010 and ended the fiscal year with our healthiest balance sheet ever, including $17.3 million in cash. We are in the midst of a strategic restructuring which includes new investment in product development and marketing. Our goal is to balance growth between internal resources and acquisitions. In fiscal 2011, we will continue to integrate CIM and ServiWrap while maximizing our existing resources and remaining focused on our key strategies and initiatives.

        The Company has one reportable segment summarized below:

Segment	Product Lines		Manufacturing Focus and Products
Specialized Manufacturing		•       Wire and Cable •       Electronic Coatings •       Pipeline & Construction •       Specialty Products	Produces protective coatings and tape products including insulating and conducting materials for wire and cable manufacturers, coating and lining systems for use in liquid storage and containment applications, protective coatings for pipeline and general construction applications, moisture protective coatings for electronics and printing services, high performance polymeric asphalt additives, and expansion and control joint systems for use in the transportation and architectural markets.

        As further detailed in Note 15 to the Consolidated Financial Statements included in this Report, the Electronic Manufacturing Services business was sold in June 2010 and the financial results of this previously reported segment are classified as discontinued operations. We have reflected the results of this business as discontinued operations in the consolidated statement of operations for all periods presented.

Results of Operations

Total Revenues

        Total revenues in fiscal 2010 increased $27,507,000 or 30% to $118,743,000 from $91,236,000 in the prior year. The increase in revenues in fiscal 2010 was primarily due to the following: (a) sales of $12,354,000 from CIM which we acquired in September 2009; (b) increased sales of $7,450,000 from specialty and construction products; (c) increased sales of $6,672,000 in the electronic coatings product line from both the worldwide automotive sector and protective products used in domestic infrastructure applications; and (d) sales of $4,991,000 from ServiWrap which was acquired in December 2009. These increases were partially offset by decreased sales of $4,050,000 in the transportation market.

        Royalties and commissions were $1,664,000, $1,077,000 and $1,775,000 for the years ended August 31, 2010, 2009 and 2008, respectively. The increase in royalties and commissions in fiscal 2010 from the prior year was due to increased sales of electronic coatings by our licensed manufacturer in Asia as demand returned to levels comparable to those observed in fiscal 2008.

        Export sales from domestic operations to unaffiliated third parties were $17,946,000, $14,611,000 and $15,818,000 for the years ended August 31, 2010, 2009 and 2008, respectively. The growth in our export sales in fiscal 2010 was primarily due to the CIM acquisition.

        Total revenues in fiscal 2009 decreased $21,941,000 or 19% to $91,236,000 from $113,177,000 in fiscal 2008. The decrease in revenues in fiscal 2009 was primarily due to the following: (a) decreased sales of $6,263,000 in the electronic coatings product lines due to reduced demand in the electronic and automotive markets; (b) decreased sales of $7,546,000 in the wire & cable market primarily due to less demand in the energy and communications markets; (c) decreased sales of $2,392,000 in the pipeline and construction product lines; and (d) decreased sales of $5,014,000 in specialty products.

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Cost of Products and Services Sold

        Cost of products and services sold increased $12,567,000 or 20% to $74,828,000 for the fiscal year ended August 31, 2010 compared to $62,261,000 in fiscal 2009. As a percentage of revenues, cost of products and services sold decreased to 63% in fiscal 2010 compared to 68% for fiscal 2009. The percentage of revenues decrease in the cost of products and services sold was primarily due to increased sales of higher margin products, management's ability to leverage its fixed overhead costs on a higher revenue base, and the favorable impact of ongoing cost reduction efforts.

        Cost of products and services sold decreased $11,507,000 or 16% to $62,261,000 for the fiscal year ended August 31, 2009 compared to $73,768,000 in fiscal 2008. As a percentage of revenues, cost of products and services sold increased to 68% in fiscal 2009 compared to 65% for fiscal 2008. The percentage of revenues increase in the cost of products and services sold was primarily due to decreased sales of our higher margin products and the resulting larger share of total sales that were made up of lower margin products, coupled with the impact of fixed manufacturing overhead costs on a lower revenue base. These increases were partially offset by the favorable impact of ongoing cost reduction efforts and continued focus on raw material costs through supply chain management.

Selling, General and Administrative Expenses

        Selling, general and administrative expenses increased $6,337,000 or 30% to $27,151,000 during fiscal 2010 compared to $20,814,000 in fiscal 2009. As a percentage of revenues, selling, general and administrative expenses remained flat at 23% in both fiscal 2010 and 2009. The dollar increase in fiscal 2010 is primarily attributable to incremental expenses from the CIM and ServiWrap acquisitions, including acquisition costs of $434,000 and amortization of intangible assets of $1,170,000. Additionally, increased revenues and profitability in the current year compared to the prior year have led to increased sales commissions and other selling related expenses and increased incentive compensation expense. These increases were partially offset by our continued emphasis on controlling costs, including reduced travel and external consulting costs.

        During fiscal 2009, selling, general and administrative expenses decreased $1,887,000 or 8% to $20,814,000, compared to $22,701,000 in fiscal 2008. As a percentage of revenues, selling, general and administrative expenses increased to 23% in fiscal 2009 compared to 20% for fiscal 2008. The dollar decrease in fiscal 2009 related primarily to our continued emphasis on controlling costs, including reduced incentive compensation, travel and external consulting costs. Additionally, lower revenues in fiscal 2009 compared to the prior year led to decreased sales commissions and other selling related expenses.

        Bad debt expense, net of recoveries, increased $219,000 to $178,000 in fiscal 2010 compared to a net gain of $41,000 in fiscal 2009 that was due to recoveries of previously identified bad debt that exceeded additions to bad debt expense for the fiscal year. This gain of $41,000 in fiscal 2009 compared to bad debt expense of $53,000 in fiscal 2008. The increase in bad debt expense in fiscal 2010 is primarily due to financial difficulties for several of our customers as well as overall increased receivable balances due to higher sales. We continue to monitor these developments and maintain a strict adherence to our established credit policies as well as closely monitoring the accounts receivable function and taking a proactive approach to the collections process.

Loss on Impairment of Goodwill

        In fiscal 2009, based on the decrease in sales activity in the fiscal year and the completion of the fiscal 2010 budget, we determined that the carrying value of goodwill associated with our Northeast Quality Products ("NEQP") division may not be recoverable. Accordingly, we performed a goodwill impairment analysis. Based on the present value of future cash flows utilizing projected results for the balance of fiscal year 2009 and projections for future years based on the fiscal year 2010 budgeting process, the goodwill impairment analysis yielded results that did not support the current book value of the goodwill associated with this division. As a result, we concluded that the carrying amount of goodwill for the NEQP division was not fully recoverable and an impairment charge of $237,000 was recorded as of May 31, 2009. Goodwill related to NEQP, having a pre-impairment book value of $349,000, was written down to its fair value of $112,000 in accordance with generally accepted accounting principles. The NEQP division was sold on August 14, 2009, and the adjusted fair value of $112,000 was realized upon the sale.

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Loss on Impairment of Fixed Assets

        In fiscal 2009, we recorded a $262,000 charge related to the impairment of real property (land and building) located in West Bridgewater, MA which was being leased to Sunburst Electronics Manufacturing Solutions, Inc. The real property, having a pre-impairment book value of $1,632,000, was written down to its fair value of $1,370,000, which was realized upon the June 24, 2009 sale of the property.

Interest Expense

        Interest expense was $360,000 in fiscal 2010 compared to $17,000 and $40,000 in fiscal 2009 and 2008, respectively. The increase in interest expense in fiscal 2010 compared to the previous two fiscal years is a direct result of the $10 million term note and $3 million promissory notes related to the acquisition of CIM, and the $7 million term loan related to the acquisition of ServiWrap.

Other Income

        Other income decreased $406,000 to $52,000 in fiscal 2010 compared to $458,000 and $477,000 in fiscal 2009 and 2008, respectively. Other income primarily includes bank interest 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. The decrease in other income as compared to the prior year periods is primarily due to foreign exchange losses caused by the weakening of both the sterling and the euro. Additionally, we no longer receive rental income on previously owned real property sold in June 2009.

Income Taxes

        The effective tax rate for fiscal 2010 was 34.8% compared to 34.4% and 35.5% in fiscal 2009 and 2008, respectively. In all three years, we have received the benefit of the domestic production deduction and foreign rate differential. The increase in the effective tax rate in fiscal 2010 as compared to fiscal 2009 is primarily due to a less favorable foreign tax rate differential and research credit in fiscal 2010 as compared to the prior year. The effective tax rate of 34.4% for fiscal 2009 compares favorably to 2008 due to a more favorable effective state income tax rate in 2009.

Net Income

        Consolidated net income in fiscal 2010 increased $6,131,000 or 96% to $12,516,000 compared to $6,385,000 in fiscal 2009. Income from continuing operations increased $5,411,000 or 102% to $10,726,000 for the year ended August 31, 2010 compared to $5,315,000 in fiscal 2009. The increase in net income from continuing operations in the current year is a result of the revenue growth discussed previously. Income from discontinued operations increased $720,000 or 67% to $1,790,000 for the year ended August 31, 2010 compared to $1,070,000 in fiscal 2009. The increase in income from discontinued operations in the current year is primarily a result of the $429,000 gain on the sale of the Chase EMS business as well as the overall growth in sales in fiscal 2010.

        Consolidated net income in fiscal 2009 decreased $5,989,000 or 48% to $6,385,000 compared to $12,374,000 in fiscal 2008. Income from continuing operations decreased $5,746,000 or 52% to $5,315,000 for the year ended August 31, 2009 compared to $11,061,000 in fiscal 2008. The decrease in income from continuing operations in fiscal 2009 was a direct result of decreased revenue across all of our core product lines as discussed previously. Additionally, net income was negatively impacted in fiscal 2009 by the impairment of our West Bridgewater, MA real property and the impairment of goodwill from NEQP. Income from discontinued operations decreased $243,000 or 19% to $1,070,000 for the year ended August 31, 2009 compared to $1,313,000 in fiscal 2008. The decrease in income from discontinued operations in fiscal 2009 was primarily a result of decreased customer orders and projects in this business as many of our key customers were assessing their inventory levels and closely monitoring their own customers' demand during the economic downturn.

Liquidity and Sources of Capital

        Our overall cash balance increased $5,697,000 to $17,340,000 at August 31, 2010 from $11,643,000 at August 31, 2009. The increased cash balance at August 31, 2010 was a result of the June sale of our Electronic Manufacturing Services business as well as cash flows generated from operations during the year, offset by cash

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used for acquisitions. Our overall cash balance increased $7,726,000 to $11,643,000 at August 31, 2009 from $3,917,000 at August 31, 2008. The increased cash balance at August 31, 2009 was a result of cash flow generated from operations during the year as well as the sale of the West Bridgewater property.

        Cash flow provided by operations was $11,322,000 for the year ended August 31, 2010 compared to $16,907,000 in fiscal 2009 and $15,562,000 in fiscal 2008. Cash provided by operations during fiscal 2010 was primarily due to operating income and decreased accounts payable and accrued expense balances, offset by increased accounts receivable and inventory balances. Cash provided by operations during fiscal 2009 was primarily due to operating income and decreased accounts receivable and inventory balances, offset by reduced accounts payable balances. Cash provided by operations during fiscal 2008 was primarily due to operating income and increased accounts payable and accrued expenses, offset by purchases of raw materials.

        The ratio of current assets to current liabilities was 2.6 as of August 31, 2010 compared to 3.2 as of August 31, 2009. The decrease in our current ratio at August 31, 2010 was primarily attributable to the increase in the current portion of long-term debt that was used to finance the CIM and ServiWrap acquisitions along with increases in accounts payable and accrued expenses. This was partially offset by an increase in our cash balance as a result of the proceeds received from the sale of our Chase EMS business, as well as increases in accounts receivable and inventory due to increased demand and overall sales volume.

        Cash flow used in investing activities was $17,305,000 for the year ended August 31, 2010 compared to $5,234,000 in fiscal 2009 and $5,796,000 in fiscal 2008. During fiscal 2010, cash flow used in investing activities was primarily due to $25,592,000 payments for the acquisitions of CIM and ServiWrap, and $3,572,000 paid for purchases of machinery and equipment at our other manufacturing locations during fiscal 2010. This was partially offset by the $12,689,000 of net proceeds received from the sale of our discontinued operations. During fiscal 2009, cash flow used in investing activities was primarily due to $2,509,000 used to pay for the purchase of real property in Oxford, MA, $1,280,000 paid for purchases related to the build out of our manufacturing facility in Pittsburgh, PA, and purchases of machinery and equipment at our other manufacturing locations. During fiscal 2008, cash flow used in investing activities was primarily due to $1,490,000 paid for the assets acquired by Chase Protective Coatings Ltd., purchases related to the build out of our manufacturing facility in Pittsburgh of $934,000, contingent payments related to previous acquisitions of $1,041,000, and cash paid for purchases of machinery and equipment at our other manufacturing locations.

        Cash flow provided by financing activities was $11,664,000 for the year ended August 31, 2010 as compared to cash flow used in financing activities of $3,856,000 in fiscal 2009 and $7,909,000 in fiscal 2008. During fiscal 2010, cash flow provided by financing activities primarily resulted from a total of $17,000,000 million in term debt used to finance our acquisitions of CIM and ServiWrap. These were partially offset by payments made on the acquisition loans and our line of credit arrangement, as well as our annual dividend. During fiscal 2009, cash flow used in financing activities reflected the payment of the annual dividend and payments of statutory minimum taxes on restricted stock. During fiscal 2008, cash flow used in financing activities reflected the annual dividend payment and our ability to use excess cash generated from operating results to pay off existing long-term debt, including $4,033,000 to pay the total outstanding balances of the term notes used to finance our acquisitions of Concoat Holdings Limited (acquired in October 2005) and Capital Services of New York, Inc. (acquired in September 2006).

        On October 15, 2009, we announced a cash dividend of $0.20 per share (totaling $1,759,000) to shareholders of record on October 31, 2009 and paid on December 3, 2009.

        On October 14, 2010, we announced a cash dividend of $0.35 per share (totaling approximately $3,131,000), comprised of $0.30 related to earnings from continuing operations and $0.05 related to earnings from discontinued operations, to shareholders of record on October 31, 2010 and payable on December 3, 2010.

        We continue to have long-term unsecured credit available up to $10 million with Bank of America at the bank's base lending rate or, at the option of the Company, at the effective London Interbank Offered Rate (LIBOR) plus 150 basis points. On June 8, 2010, we executed an amendment to this credit facility, extending its maturity to March 31, 2013. As part of this amendment, the interest rate was increased by 25 basis points, from its original rate of LIBOR plus 125 basis points. All other terms of the credit facility remain the same. As of August 31, 2010 and October 31, 2010, the entire amount of $10 million was available for use. We plan to use this availability to help finance our cash needs, including potential acquisitions, in fiscal 2011 and future periods.

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        Under the terms of our credit facility, we must comply with certain debt covenants related to (a) the ratio of total liabilities to tangible net worth and (b) the ratio of operating cash flow to debt service on a rolling twelve month basis. We were in compliance with our debt covenants as of August 31, 2010.

        We borrowed $10.0 million from Bank of America in September 2009 in order to fund our acquisition of CIM. This borrowing involved an unsecured, three year term note (the "Term Note") with interest and principal payments due monthly. Interest is calculated at the applicable LIBOR rate plus a margin of 175 basis points, with interest payments due on the last day of each month. At August 31, 2010, the applicable interest rate was 2.01% per annum and the outstanding principal amount was $8.0 million. In addition to monthly interest payments, we are repaying the principal in equal installments of $167,000 per month, beginning on September 30, 2009, and on the last day of each month thereafter, ending on August 31, 2012, when we will repay the remaining principal balance plus any interest then due. The Term Note is subject to the same debt covenants as our line of credit discussed above. Prepayment of the Term Note is allowed at any time during the term of the loan.

        As part of the CIM acquisition in September 2009, we also delivered $3,000,000 in non-negotiable promissory notes (the "Notes") payable to five CIM shareholders, who were the holders of all of the issued and outstanding shares of capital stock of CIM as of the acquisition date. The principal of the Notes will be paid in three consecutive annual installments of $1,000,000 each, with the initial payment due on September 4, 2010. Interest on the unpaid principal balance of the Notes is accruing at a rate per annum equal to the applicable Federal rate, and will be paid annually with each principal payment. At August 31, 2010, the applicable interest rate was 0.84% per annum. We paid the first installment on the Notes in September 2010.

        In December 2009, we borrowed $7.0 million from RBS Citizens in order to fund our acquisition of the ServiWrap product lines. This borrowing involved an unsecured, three year term note (the "Term Loan") with interest and principal payments due monthly. Interest is calculated at the applicable LIBOR rate plus a margin of 190 basis points, with interest payments due on the last day of each month. In addition to monthly interest payments, we are repaying the principal in equal installments of $117,000 each, beginning on January 15, 2010, and on the 15th day of each month thereafter, ending on December 15, 2012, when we will repay the remaining principal balance plus any interest then due. The Term Loan is subject to the same debt covenants as our line of credit discussed above. Prepayment of the Term Loan is allowed at any time. At August 31, 2010, the applicable interest rate was 2.18% per annum, and the outstanding principal amount was approximately $6.1 million.

        We are currently renovating our facility (land and building) in Oxford, MA, purchased in 2008, to provide capacity for storage needs and future growth; and assessing building and equipment improvements needed in order to integrate ServiWrap production into our existing operations in England. Machinery and equipment will also be added as needed to increase capacity or enhance operating efficiencies in our other manufacturing plants.

        We may consider the acquisition of companies or other assets this year or in future periods which are complementary to our business. We believe that our existing resources, including cash on hand and our line of credit, 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.

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Contractual Obligations

        The following table summarizes our contractual cash obligations at August 31, 2010 and the effect such obligations are expected to have on our liquidity and cash flow in future periods.

Contractual Obligations		Total		Payments Due Less than 1 Year		Payments Due 1 - 3 Years		Payments Due 4 - 5 Years		Payments After 5 Years
		(Dollars in thousands)
Long-term debt		$	17,067	$	4,400	$	12,667	$	—	$	—
Operating leases			4,837		606		1,025		856		2,350
Purchase Obligations			2,157		2,157		—		—		—
	Total(1)	$	24,061	$	7,163	$	13,692	$	856	$	2,350

(1)

We may be required to make payments related to our unrecognized tax benefits. However, due to the uncertainty of the timing of future cash flows associated with these unrecognized tax benefits, we are unable to make reasonably reliable estimates of the period of cash settlement, if any, with the respective taxing authorities. Accordingly, unrecognized tax benefits of $887,000 as of August 31, 2010 have been excluded from the contractual obligations table above. See Note 7 "Income Taxes" to the Consolidated Financial Statements for further information.

Recently Issued Accounting Standards

        In June 2009, the Financial Accounting Standards Board's (FASB) approved the "FASB Accounting Standards Codification" ("ASC" or the "Codification") as the single source of authoritative nongovernmental U.S. GAAP. The Codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All existing accounting standard documents will be superseded and all other accounting literature not included in the Codification will be considered nonauthoritative. The Codification became effective for us in the quarter ending November 30, 2009 and the adoption did not have an effect on our consolidated financial position, results of operations or cash flows.

        In December 2007, the FASB issued new guidance under ASC Topic 805, "Business Combinations" ("ASC 805"). The new guidance under ASC 805 establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial statements the identifiable assets acquired, the liabilities assumed and any noncontrolling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; expenses acquisition related costs as incurred; and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. We adopted the new guidance under ASC 805 as of September 1, 2009, and our recent acquisitions of CIM and ServiWrap were both accounted for under this standard.

        In June 2008, the FASB issued guidance within ASC Topic 260, "Earnings Per Share" ("ASC 260"), to clarify that unvested share-based payment awards with a right to receive nonforfeitable dividends are participating securities. The standard provides guidance on how to allocate earnings to participating securities and compute earnings per share using the two-class method. We adopted the provisions of this standard on September 1, 2009 and the disclosures required by ASC 260 have been made in Note 19 to the Consolidated Financial Statements included in this Report.

        In December 2008, the FASB issued ASC Topic 715, "Compensation—Retirement Benefits" ("ASC 715"). ASC 715 provides additional guidance on an employer's disclosures about plan assets of a defined benefit pension or other post-retirement plan enabling users of the financial statements to assess the inputs and valuation techniques used to develop fair value measurements of plan assets at the annual reporting date. The guidance requires more detailed disclosures about the assets of a defined benefit pension or other post-retirement plan and is effective for fiscal years ending after December 15, 2009. Since the guidance only requires enhanced disclosures, the adoption of ASC 715 did not have an impact on our consolidated financial position and results of operations. See Note 9 to the Consolidated Financial Statements included in this Report for more information on the additional disclosures required for our adoption of ASC 715.

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        In January 2010, the FASB issued Accounting Standards Update ("ASU") No. 2010-06, "Fair Value Measurements and Disclosures (ASC Topic 820) — Improving Disclosures about Fair Value Measurements" ("ASU 2010-06"). The updated standard requires new disclosures around transfers into and out of Levels 1 and 2 in the fair value hierarchy and separate disclosures about purchases, sales, issuances, and settlements related to Level 3 measurements. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009 with early adoption permitted, except for the disclosures about purchases, sales, issuances, and settlements in the rollforward of Level 3 activity. Those disclosures are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years with early adoption permitted. We adopted all of the provisions of ASU 2010-06 effective March 1, 2010 and the adoption did not have any effect on our consolidated financial position, results of operations or cash flows.

Critical Accounting Policies, Judgments, and Estimates

        The U.S. Securities and Exchange Commission ("SEC") requires companies to provide additional disclosure and commentary on their most critical accounting policies. The SEC has defined the most critical accounting policies as the ones that are most important to the portrayal of a company's financial condition and operating results, and requires management to make its most significant estimates and judgments in the preparation of its consolidated financial statements. Our critical accounting policies are described below.

Accounts Receivable

        We evaluate the collectability of accounts receivable balances based on a combination of factors. In cases where we are aware of circumstances that may impair a specific customer's ability to meet its financial obligations to us, a specific allowance against amounts due to us is recorded, and thereby reduces the net recognized receivable to the amount we reasonably believe will be collected. For all other customers, we recognize allowances for doubtful accounts based on the length of time the receivables are past due, industry and geographic concentrations, the current business environment and our historical experience. If the financial condition of our customers deteriorates or if economic conditions worsen, additional allowances may be required in the future, which could have an adverse impact on our future operating results.

Inventories

        We value inventory at the lower of cost or market using the first-in, first-out (FIFO) method. Management assesses the recoverability of inventory based on types and levels of inventory held, forecasted demand and changes in technology. These assessments require management judgments and estimates, and valuation adjustments for excess and obsolete inventory may be recorded based on these assessments. We estimate excess and obsolescence exposures based upon assumptions about future demand, product transitions, and market conditions and record reserves to reduce inventories to their estimated net realizable value. The failure to accurately forecast demand may lead to additional excess and obsolete inventory and future charges.

Business Combinations

        We assign the value of the consideration transferred to acquire a business to the tangible assets and identifiable intangible assets acquired and liabilities assumed on the basis of their fair values at the date of acquisition. We assess the fair value of assets, including intangible assets, using a variety of methods and each asset is measured at fair value from the perspective of a market participant. The method used to estimate the fair values of intangible assets incorporates significant assumptions regarding the estimates a market participant would make in order to evaluate an asset, including a market participant's use of the asset and the appropriate discount rates for a market participant. Assets recorded from the perspective of a market participant that are determined to not have economic use for us are expensed immediately. Any excess purchase price over the fair value of the net tangible and intangible assets acquired is allocated to goodwill. Transaction costs and restructuring costs associated with a transaction to acquire a business are expensed as incurred.

Goodwill, Intangible Assets, and Other Long-Lived Assets

        Long-lived assets consist of goodwill, identifiable intangible assets, trademarks, patents and agreements and property, plant, and equipment. Intangible assets and property, plant, and equipment, excluding goodwill, are amortized using the straight-line method over their estimated useful life. We review long-lived assets and all

21

intangible assets for impairment whenever events or changes in circumstances indicate the carrying amount of such assets may not be recoverable. Goodwill is also reviewed at least annually for impairment. Factors which we consider important and that could trigger an impairment review include significant underperformance relative to expected historical or projected future operating results and significant negative industry or economic trends. We determine whether an impairment has occurred based on gross expected future cash flows and measure the amount of the impairment based on the related future discounted cash flows. The cash flow estimates used to determine impairment, if any, contain management's best estimates, using appropriate and customary assumptions and projections at the time. (See notes to consolidated financial statements.)

        The estimates of expected cash flows require us to make significant judgments regarding future periods that are subject to some factors outside of our control. Changes in these estimates can result in significant revisions to the carrying value of these assets and may result in material charges to the results of operations.

Revenue Recognition

        We recognize revenue when persuasive evidence of an arrangement exists, performance of our obligation is complete, our price to the buyer is fixed or determinable, and we are reasonably assured of collecting. This is typically at the time of shipment. If a loss is anticipated on any contract, a provision for the entire loss is made immediately. Revenue recognition involves judgments and assessments of expected returns, and the likelihood of nonpayment due to insolvent customers. We analyze various factors, including a review of specific customer contracts and shipment terms, historical experience, creditworthiness of customers and current market and economic conditions in determining when to recognize revenue. Changes in judgments on these factors could impact the timing and amount of revenue recognized with a resulting impact on the timing and amount of associated income. Commissions are recognized when earned and payments are received from the manufacturers represented. Royalty revenue is recognized based on licensee production statements received from the authorized manufacturers. Billed shipping and handling fees are recorded as sales revenue with the associated costs recorded as costs of products and services sold.

Contingent Income Tax Liabilities

        We are subject to routine income tax audits that occur periodically in the normal course of business. Our contingent income tax liabilities are estimated based on the methodology prescribed in the guidance for accounting for uncertain tax positions, which we adopted as of the beginning of fiscal 2008. The guidance prescribes a minimum recognition threshold a tax position is required to meet before being recognized in the financial statements. Our liabilities related to uncertain tax positions require an assessment of the probability of the income-tax-related exposures and settlements and are influenced by our historical audit experiences with various state and federal taxing authorities as well as by current income tax trends. If circumstances change, we may be required to record adjustments that could be material to our reported financial condition and results of operations. See Note 7 to the Consolidated Financial Statements included in this Report for more information on our accounting for uncertain tax positions.

Deferred Income Taxes

        We evaluate the need for a valuation allowance to reduce our deferred tax assets to the amount that is more likely than not to be realized. We have considered future taxable income and ongoing prudent and feasible tax planning strategies in assessing the need for a valuation allowance. Should we determine that we would not be able to realize all or part of our net deferred tax asset in the future, an adjustment to the deferred tax asset would be charged to income in the period such determination was made.

Stock Based Compensation

        We measure compensation cost for share-based compensation at fair value, including estimated forfeitures, and recognize the expense over the period that the recipient is required to provide service in exchange for the award, which generally is the vesting period. We use the Black-Scholes option pricing model to measure the fair value of stock options. This model requires significant estimates related to the award's expected life and future stock price volatility of the underlying equity security. In determining the amount of expense to be recorded, we are also required to estimate forfeiture rates for awards, based on the probability that employees will complete the

22

required service period. We estimate the forfeiture rate based on historical experience. If actual forfeitures differ significantly from our estimates, additional adjustments to compensation expense may be required in future periods.

Pension Benefits

        We sponsor a non-contributory defined benefit pension plan covering substantially all employees of certain divisions of the Company. In calculating our retirement plan obligations and related expense, we make various assumptions and estimates. These assumptions include discount rates, benefits earned, expected return on plan assets, mortality rates, and other factors. While we believe that the assumptions used are appropriate, differences in actual experience or changes in assumptions may affect our pension obligations and future expense.

        Effective December 1, 2008, the defined benefit pension plan was amended to include a soft freeze whereby any employee hired after the effective date of December 1, 2008 will not be admitted to the plan. The only exception relates to employees of the International Association of Machinists and Aerospace Workers Union. All participants who were previously admitted to the plan prior to the December 1, 2008 soft freeze will continue to accrue benefits as detailed in the plan agreements.

        We account for our pension plan following the requirements of ASC Topic 715, "Compensation—Retirement Benefits" ("ASC 715"). ASC 715 requires an employer to: (a) recognize in its statement of financial position the funded status of a benefit plan; (b) measure defined benefit plan assets and obligations as of the end of the employer's fiscal year (with limited exceptions); and (c) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise but are not recognized as components of net periodic benefit costs pursuant to prior existing guidance.

Impact of Inflation

        Inflation has not had a significant long-term impact on our earnings. In the event of significant inflation, our efforts to recover cost increases would be hampered as a result of the competitive nature of the industries in which we operate.

Forward-Looking Information

        From time to time, we may publish, verbally or in written form, forward-looking statements relating to such matters as anticipated financial performance, business prospects, technological developments, new products, acquisition or consolidation strategies, anticipated sources of capital, research and development activities and similar matters. In fact, this Form 10-K (or any other periodic reporting documents required by the Securities Exchange Act of 1934, as amended) may contain forward-looking statements reflecting our current views concerning potential or anticipated future events or developments, including our strategic goals for future fiscal periods. The Private Securities Litigation Reform Act of 1995 (the "Act") provides a "safe harbor" for forward-looking statements. We caution investors that any forward-looking statements made by us are not guarantees of future performance and that a variety of factors could cause our actual results and experience to differ materially from the anticipated results or other expectations expressed in our forward-looking statements. The risks and uncertainties which may affect the operations, performance, development and results of our business include, but are not limited to, the following: uncertainties relating to economic conditions; uncertainties relating to customer plans and commitments; the pricing and availability of equipment, materials and inventories; the impact of acquisitions on our business and results of operations; technological developments; performance issues with suppliers and subcontractors; our ability to renew existing credit facilities or to obtain new or additional financing as needed; economic growth; delays in testing of new products; rapid technology changes and the highly competitive environment in which we operate. These risks and uncertainties also include those risks outlined under Item 1A (Risk Factors) of this Annual Report on Form 10-K. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date the statement was made.

ITEM 7A—QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

        We limit the amount of credit exposure to any one issuer. At August 31, 2010, 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.

23

        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 reduce this exposure while maintaining the benefit from these operations and sales to other European customers. As of August 31, 2010, we had cash balances in the United Kingdom for our UK operations denominated primarily in pounds sterling and equal to US $4,884,000 and cash balances in France for our HumiSeal Europe SARL division denominated primarily in euros and equal to US $414,000. We will continue to review our current cash balances denominated in foreign currency in light of current tax guidelines and potential acquisitions.

        We incurred a foreign currency translation loss for the year ended August 31, 2010 in the amount of $1,049,000 related to our European operations which is recorded in other comprehensive income (loss) within our Statement of Stockholders' Equity. We do not have or utilize any derivative financial instruments.

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ITEM 8—FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

        The following Consolidated Financial Statements of Chase Corporation are filed as part of this Annual Report on Form 10-K:

        Index to Consolidated Financial Statements:

	Page No.
Report of Independent Registered Public Accounting Firm—PricewaterhouseCoopers LLP		26
Consolidated Balance Sheets as of August 31, 2010 and 2009		27
Consolidated Statements of Operations for each of the three fiscal years in the period ended August 31, 2010		28
Consolidated Statements of Stockholders' Equity for each of the three fiscal years in the period ended August 31, 2010		29
Consolidated Statements of Cash Flows for each of the three fiscal years in the period ended August 31, 2010		30
Notes to Consolidated Financial Statements		31

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Report of Independent Registered Public Accounting Firm

To the Board of Directors and Shareholders of Chase Corporation:

        In our opinion, the accompanying consolidated balance sheets and the related consolidated statements of operations, stockholders' equity and cash flows present fairly, in all material respects, the financial position of Chase Corporation and its subsidiaries at August 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended August 31, 2010 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of August 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in Item 9A, "Management's Report on Internal Control over Financial Reporting." Our responsibility is to express opinions on these financial statements and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

        A company's internal control over financial reporting is a process designed 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. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        As described in "Management's Report on Internal Control over Financial Reporting," management has excluded C.I.M. Industries, Inc. and the ServiWrap product lines from its assessment of internal control over financial reporting as of August 31, 2010, because they were acquired by the Company in purchase business combinations during the fiscal year ended August 31, 2010. Total assets and revenues excluded represents 9% and 15%, respectively, of the related consolidated financial statement amounts as of and for the year ended August 31, 2010. Our audit of internal control over financial reporting of Chase Corporation also excluded an evaluation of the internal control over financial reporting of C.I.M Industries, Inc. and the ServiWrap product lines.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP (signed)
Boston, MA
November 15, 2010

26

CHASE CORPORATION

CONSOLIDATED BALANCE SHEETS

In thousands, except share and per share amounts

			August 31,
			2010			2009
ASSETS
Current Assets:
	Cash & cash equivalents		$	17,340		$	11,643
	Accounts receivable, less allowance for doubtful accounts of $347 and $350			18,655			14,536
	Inventories			14,678			13,941
	Prepaid expenses and other current assets			2,465			607
	Deferred income taxes			258			471
		Total current assets		53,396			41,198
Property, plant and equipment, net				27,414			23,219
Other Assets
	Goodwill			17,437			14,606
	Intangible assets, less accumulated amortization of $7,777 and $4,869			17,942			4,497
	Cash surrender value of life insurance			6,203			5,684
	Restricted investments			611			573
	Deferred income taxes			120			1,264
	Other assets			78			25
			$	123,201		$	91,066
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
	Accounts payable		$	6,627		$	6,319
	Accrued payroll and other compensation			3,546			2,863
	Accrued expenses			3,514			2,555
	Accrued income taxes			2,849			1,346
	Current portion of long-term debt			4,400			—
		Total current liabilities		20,936			13,083
Long-term debt, less current portion				12,667			—
Deferred compensation				1,520			1,525
Accumulated pension obligation				6,022			5,690
Other liabilities (Notes 8 and 16)				525			555
Commitments and Contingencies (Notes 6, 8 and 20)
Stockholders' 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; 8,780,988 shares at August 31, 2010 and 8,714,431 shares at August 31, 2009 issued and outstanding			878			871
	Additional paid-in capital			9,210			7,489
	Accumulated other comprehensive loss			(4,730	)		(3,563	)
	Retained earnings			76,173			65,416
		Total stockholders' equity		81,531			70,213
		Total liabilities and stockholders' equity	$	123,201		$	91,066

See accompanying notes to the consolidated financial statements.

27

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

In thousands, except share and per share amounts

			Years Ended August 31,
			2010			2009			2008
Revenues
	Sales		$	117,079		$	90,159		$	111,402
	Royalties and commissions			1,664			1,077			1,775
				118,743			91,236			113,177
Costs and Expenses
	Cost of products and services sold			74,828			62,261			73,768
	Selling, general and administrative expenses			27,151			20,814			22,701
	Loss on impairment of fixed assets			—			262			—
	Loss on impairment of goodwill			—			237			—
Operating income				16,764			7,662			16,708
	Interest expense			(360	)		(17	)		(40	)
	Other income			52			458			477
Income from continuing operations before income taxes				16,456			8,103			17,145
Income taxes				5,730			2,788			6,084
Income from continuing operations, net of taxes				10,726			5,315			11,061
Income from discontinued operations, net of taxes of $900, $648 and $826, respectively				1,361			1,070			1,313
Gain on sale of discontinued operations, net of taxes of $283				429			—			—
Net income			$	12,516		$	6,385		$	12,374
Net income available to common shareholders, per common and common equivalent share
	Basic
		Continuing operations	$	1.19		$	0.62		$	1.32
		Discontinued operations		0.20			0.12			0.16
		Net income per common and common equivalent share	$	1.39		$	0.74		$	1.48
	Diluted
		Continuing operations	$	1.18		$	0.60		$	1.27
		Discontinued operations		0.20			0.12			0.15
		Net income per common and common equivalent share	$	1.38		$	0.72		$	1.42
Weighted average shares outstanding
	Basic			8,730,928			8,408,614			8,248,296
	Diluted			8,814,635			8,693,695			8,619,243

See accompanying notes to the consolidated financial statements.

28

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

In thousands, except share and per share amounts

		Common Stock									Accumulated Other Comprehensive Income (loss)
								Additional Paid-In Capital						Retained Earnings			Total Stockholders' Equity			Comprehensive Income
		Shares			Amount
Balance at August 31, 2007			8,219,350		$	822		$	2,680		$	584		$	52,126		$	56,212
	Adoption of accounting for uncertain tax positions														(230	)		(230	)
	Restricted stock grants		53,227			5			(5	)								—
	Amortization of restricted stock grants								341									341
	Stock grants		400						8									8
	Exercise of stock options		41,500			4			220									224
	Common stock received for payment of stock option exercises		(1,091	)		—			(21	)								(21	)
	Excess tax benefit (expense) from stock based compensation								815									815
	Common stock issuance pursuant to fully vested restricted stock units		130,603			13			1,062									1,075
	Common stock retained to pay statutory minimum withholding taxes on common stock		(47,827	)		(5	)		(823	)								(828	)
	Cash dividend paid , $0.25 per share														(2,068	)		(2,068	)
	Change in funded status of pension plan, net of tax of $171											(269	)					(269	)	$	(269	)
	Foreign currency translation adjustment											(1,357	)					(1,357	)		(1,357	)
	Net unrealized loss on restricted investments, net of tax of $57											(90	)					(90	)		(90	)
	Net income														12,374			12,374			12,374
	Comprehensive income																	—		$	10,658
Balance at August 31, 2008			8,396,162		$	839		$	4,277		$	(1,132	)	$	62,202		$	66,186
	Adoption of accounting for split dollar life insurance arrangements (Note 16)														(185	)		(185	)
	Reclass of previously accrued stock based compensation related to restricted stock and stock options from accrued liabilities to equity								443									443
	Restricted stock grants		145,210			15			(15	)								—
	Amortization of restricted stock grants								1,133									1,133
	Amortization of stock option grants								249									249
	Exercise of stock options		3,000			—			16									16
	Excess tax benefit (expense) from stock based compensation								265									265
	Common stock issuance pursuant to fully vested restricted stock units		273,327			27			2,262									2,289
	Common stock retained to pay statutory minimum withholding taxes on common stock		(103,268	)		(10	)		(1,141	)								(1,151	)
	Cash dividend paid, $0.35 per share														(2,986	)		(2,986	)
	Change in funded status of pension plan, net of tax of $920											(1,506	)					(1,506	)	$	(1,506	)
	Foreign currency translation adjustment											(948	)					(948	)		(948	)
	Net unrealized loss on restricted investments, net of tax of $14											23						23			23
	Net income														6,385			6,385			6,385
	Comprehensive income																	—		$	3,954
Balance at August 31, 2009			8,714,431		$	871		$	7,489		$	(3,563	)	$	65,416		$	70,213
	Restricted stock grants, net of forfeitures		61,224			6			(6	)								—
	Amortization of restricted stock grants								1,646									1,646
	Amortization of stock option grants								529									529
	Exercise of stock options		45,000			5			240									245
	Excess tax benefit (expense) from stock based compensation								(196	)								(196	)
	Common stock issuance pursuant to fully vested restricted stock units		14,200			1			196									197
	Common stock retained to pay statutory minimum withholding taxes on common stock		(53,867	)		(5	)		(688	)								(693	)
	Cash dividend paid, $0.20 per share														(1,759	)		(1,759	)
	Change in funded status of pension plan, net of tax of $80											(127	)					(127	)		(127	)
	Foreign currency translation adjustment											(1,049	)					(1,049	)		(1,049	)
	Net unrealized gain on restricted investments, net of tax of $6											9						9			9
	Net income														12,516			12,516			12,516
	Comprehensive Income																			$	11,349
Balance at August 31, 2010			8,780,988		$	878		$	9,210		$	(4,730	)	$	76,173		$	81,531

See accompanying notes to the consolidated financial statements.

29

CHASE CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOW

Dollars in thousands

					Years Ended August 31,
					2010			2009			2008
CASH FLOWS FROM OPERATING ACTIVITIES
	Net income				$	12,516		$	6,385		$	12,374
	Adjustments to reconcile net income to net cash provided by operating activities
		Loss (gain) on sale of assets				(10	)		1			4
		Loss on impairment of fixed assets				—			262			—
		Loss on impairment of goodwill				—			237			—
		Gain on sale of discontinued operations				(712	)		—			—
		Depreciation				3,084			2,739			2,668
		Amortization				3,039			921			1,145
		Provision for losses on accounts receivable				178			(41	)		53
		Stock based compensation				2,220			2,210			2,078
		Realized loss (gain) on restricted investments				(7	)		211			(41	)
		Excess tax (benefit) expense from stock based compensation				196			(265	)		(815	)
		Deferred taxes				(655	)		(853	)		(345	)
		Increase (decrease) from changes in assets and liabilities
			Accounts receivable			(5,455	)		4,201			(1,445	)
			Inventories			(4,563	)		2,334			(1,075	)
			Prepaid expenses & other assets			(1,862	)		143			(28	)
			Accounts payable			1,765			(1,534	)		192
			Accrued expenses			1,825			(561	)		1,661
			Accrued income taxes			(228	)		809			555
			Deferred compensation			(9	)		(292	)		(1,419	)
				Net cash provided by operating activities		11,322			16,907			15,562
CASH FLOWS FROM INVESTING ACTIVITIES
	Purchases of property, plant and equipment					(3,572	)		(5,641	)		(3,063	)
	Contingent purchase price for acquisition					(295	)		(327	)		(1,041	)
	Payments for acquisitions, net of cash acquired					(25,592	)		(335	)		(1,490	)
	Net proceeds from sale of fixed assets					—			1,378			17
	Proceeds from sale of NEQP business					—			185			—
	Net proceeds from sale of discontinued operations					12,689			—			—
	Withdrawals from restricted investments, net of contributions					(16	)		78			255
	Distributions from cost based investment					—			1			48
	Payments for cash surrender value life insurance, including valuation (increase)/decrease					(519	)		(573	)		(522	)
				Net cash used in investing activities		(17,305	)		(5,234	)		(5,796	)
CASH FLOWS FROM FINANCING ACTIVITIES
	Borrowings on long-term debt					31,894			13,284			25,040
	Payments of principal on debt					(17,827	)		(13,284	)		(31,072	)
	Dividend paid					(1,759	)		(2,986	)		(2,068	)
	Proceeds from exercise of common stock options					245			16			203
	Payments of statutory minimum taxes on stock options and restricted stock					(693	)		(1,151	)		(827	)
	Excess tax benefit (expense) from stock based compensation					(196	)		265			815
				Net cash used in financing activities		11,664			(3,856	)		(7,909	)
INCREASE IN CASH						5,681			7,817			1,857
Effect of foreign exchange rates on cash						16			(91	)		(384	)
CASH, BEGINNING OF PERIOD						11,643			3,917			2,444
CASH, END OF PERIOD					$	17,340		$	11,643		$	3,917

See accompanying notes to the consolidated financial statements.

30

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

In thousands, except share and per share amounts

Note 1—Summary of Significant Accounting Policies

        The principal accounting policies of Chase Corporation (the "Company") and its subsidiaries are as follows:

Products and Markets

        The Company's principal products are specialty tapes, laminates, sealants and coatings that are sold by Company salespeople, manufacturers' representatives and distributors. These products consist of:

(i)

insulating and conducting materials for the manufacture of electrical and telephone wire and cable, electrical splicing, and terminating and repair tapes, which are marketed to wire and cable manufacturers;



(ii)

protective pipe coating tapes and other protectants for valves, regulators, casings, joints, metals, concrete and wood, which are sold to oil companies, gas utilities and pipeline companies;



(iii)

protectants for highway bridge deck metal supported surfaces, which are sold to municipal transportation authorities;



(iv)

fluid applied coating and lining systems for use in the water and wastewater industry;



(v)

moisture protective coatings, which are sold to the electronics industry including circuitry used in automobiles and home appliances;



(vi)

laminated durable papers, including laminated paper with an inner security barrier used in personal and mail-stream privacy protection, which are sold primarily to the envelope converting and commercial printing industries;



(vii)

flexible composites and laminates for the wire & cable, aerospace, packaging and industrial laminate markets; and



(viii)

expansion and control joint systems designed for roads, bridges, stadiums and airport runways.

Basis of Presentation

        The financial statements include the accounts of the Company and its wholly-owned subsidiaries. Investments in unconsolidated companies which are at least 20% owned are carried under the equity method since acquisition or investment. All intercompany transactions and balances have been eliminated in consolidation. The Company uses the U.S. dollar as the functional currency for financial reporting.

        On June 30, 2010, the Company completed the sale of its Electronic Manufacturing Services business for $13,000 (subject to certain working capital adjustments), pursuant to an Asset Purchase Agreement dated June 28, 2010. The Company has reflected the results of this business as discontinued operations in the consolidated statement of operations for all periods presented. See Note 15 for additional information on the sale of this business.

        Certain amounts reported in prior fiscal years have been reclassified to conform with the presentation adopted in the current fiscal year.

        The Company has evaluated events and transactions subsequent to the balance sheet date. Based on this evaluation, and other than the cash dividend announced on October 14, 2010 of $0.35 per share to shareholders of record on October 31, 2010 payable on December 3, 2010, the Company is not aware of any other events or transactions that occurred subsequent to the balance sheet date but prior to filing that would require recognition or disclosure in its consolidated financial statements.

Use of Estimates

        The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial

31

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

        Cash and cash equivalents consist primarily of demand deposits accounts or investment instruments that meet high credit quality standards such as money market funds, government securities, or commercial paper. The Company considers all highly liquid debt instruments purchased with a maturity of three months or less from date of purchase to be cash equivalents. As of August 31, 2010, the Company had cash balances in the United Kingdom for its UK operations denominated primarily in pounds sterling and equal to US $4,884 and cash balances in France for its HumiSeal Europe SARL division denominated primarily in euros and equal to US $414.

Accounts Receivable

        The Company evaluates the collectability of accounts receivable balances based on a combination of factors. In cases where the Company is aware of circumstances that may impair a specific customer's ability to meet its financial obligations to it, a specific allowance against amounts due to the Company is recorded, and thereby reduces the net recognized receivable to the amount the Company reasonably believes will be collected. For all other customers, the Company recognizes allowances for doubtful accounts based on the length of time the receivables are past due, industry and geographic concentrations, the current business environment and its historical experience. Receivables are written off against these reserves in the period they are determined to be uncollectible.

Inventories

        The Company values inventory at the lower of cost or market using the first-in, first-out (FIFO) method. Management assesses the recoverability of inventory based on types and levels of inventory held, forecasted demand and changes in technology. These assessments require management judgments and estimates, and valuation adjustments for excess and obsolete inventory may be recorded based on these assessments. The Company estimates excess and obsolescence exposures based upon assumptions about future demand, product transitions, and market conditions and records reserves to reduce inventories to their estimated net realizable value. The failure to accurately forecast demand may lead to additional excess and obsolete inventory and future charges.

Goodwill

        The Company accounts for goodwill in accordance with ASC Topic 350, "Intangibles—Goodwill and Other." The Company evaluates the possible impairment of goodwill annually each fourth quarter, and whenever events or circumstances indicate the carrying value of the goodwill may not be recoverable. The Company evaluates the potential impairment of goodwill by comparing the fair value of the reporting unit to its carrying value, including goodwill. If the fair value is less than the carrying value, the Company measures the amount of such impairment by comparing the implied fair value of the goodwill to its carrying value.

Intangible Assets

        Intangible assets consist of patents, agreements, formulas, trade names, customer relationships and trademarks. The Company capitalizes costs related to patent applications and technology agreements. The costs of these assets are amortized using the straight-line method over the lesser of the useful life of the asset or its statutory life. Capitalized costs are periodically reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable.

Property, Plant and Equipment

        Property, plant and equipment are stated at cost and depreciated using the straight-line method over the assets' estimated useful lives. Expenditures for maintenance repairs and minor renewals are charged to expense as

32

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

incurred. Betterments and major renewals are capitalized. Upon retirement or other disposition of assets, related allowances for depreciation and amortization are eliminated from the accounts and any resulting gain or loss is included in the determination of income or loss. The estimated useful lives of property, plant and equipment are as follows:

Buildings	20 to 40 years
Machinery and equipment	3 to 10 years

        Leasehold improvements are depreciated over the lesser of the useful life or the term of the lease.

Restricted Investments and Deferred Compensation

        The Company has a non-qualified deferred savings plan which covers its Board of Directors and selected employees. Participants may elect to defer a portion of their compensation for payment in a future tax year. The plan is funded by trusteed assets that are restricted to the payment of deferred compensation or satisfaction of the Company's general creditors. The Company's restricted investments and corresponding deferred compensation liability under the plan were $611 and $573 at August 31, 2010 and 2009, respectively. The Company accounts for the restricted investments as available for sale by recording unrealized gains or losses in other comprehensive income as a component of stockholders' equity.

Revenue Recognition

        The Company recognizes revenue when persuasive evidence of an arrangement exists, performance of its obligation is complete, its price to the buyer is fixed or determinable, and the Company is reasonably assured of collecting. This is typically at the time of shipment. If a loss is anticipated on any contract, a provision for the entire loss is made immediately. Revenue recognition involves judgments and assessments of expected returns, and the likelihood of nonpayment due to insolvent customers. The Company analyzes various factors, including a review of specific customer contracts and shipment terms, historical experience, creditworthiness of customers and current market and economic conditions in determining when to recognize revenue. Changes in judgments on these factors could impact the timing and amount of revenue recognized with a resulting impact on the timing and amount of associated income.

        Commissions are recognized when earned and payments are received from the manufacturers represented. Royalty revenue is recognized based on licensee production statements received from the authorized manufacturers. Billed shipping and handling fees are recorded as sales revenue with the associated costs recorded as costs of products and services sold.

        The Company's warranty policy provides that the products (or materials) delivered will meet its standard specifications for the products or any other specifications as may be expressly agreed to at time of purchase. All warranty claims must be received within 90 days from the date of delivery, unless some other period has been expressly agreed to within the terms of the sales agreement. The Company's warranty costs have historically been insignificant. The Company records a current liability for estimated warranty claims with a corresponding debit to cost of products and services sold based upon current and historical experience and upon specific claims issues as they arise.

Research and Product Development Costs

        Research and product development costs are expensed as incurred and include primarily engineering salaries, overhead and materials used in connection with research and development projects. Research and development expense amounted to $1,748, $1,632 and $1,698 for the years ended August 31, 2010, 2009 and 2008, respectively.

33

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

Pension Plan

        The Company accounts for its pension plan following the requirements of ASC Topic 715, "Compensation—Retirement Benefits" ("ASC 715"). ASC 715 requires an employer to: (a) recognize in its statement of financial position the funded status of a benefit plan; (b) measure defined benefit plan assets and obligations as of the end of the employer's fiscal year (with limited exceptions); and (c) recognize as a component of other comprehensive income, net of tax, the gains or losses and prior service costs or credits that arise but are not recognized as components of net periodic benefit costs pursuant to prior existing guidance.

Stock Based Compensation

        In accordance with the accounting for stock based compensation guidance, the Company measures and recognizes compensation expense for all share-based payment awards made to employees and directors based on estimated fair values. This includes restricted stock, restricted stock units and stock options. The guidance allows for the continued use of the simplified method, as the Company has concluded that its historical share option exercise experience does not provide a reasonable basis for estimating expected term. The Company uses the short cut method to calculate the historical windfall tax pool.

        Stock-based compensation expense recognized in fiscal years 2010, 2009 and 2008 was $2,220, $2,210 and $2,078 respectively.

        The fair value of options granted was estimated on the date of grant using the Black-Scholes option pricing model with the following weighted average assumptions for the years ending August 31, 2009 and 2008. There were no options granted during the fiscal year ended August 31, 2010.

	2009			2008
Expected Dividend yield		2.0	%		2.0	%
Expected life		6.5 years			7.5 years
Expected volatility		34.0	%		28.0	%
Risk-free interest rate		3.4	%		3.9	%

        Expected volatility is determined by looking at a combination of historical volatility over the past seven years as well as implied volatility going forward.

Translation of Foreign Currency

        The financial position and results of operations of the Company's HumiSeal Europe Ltd and Chase Protective Coatings Ltd divisions are measured using the UK pound sterling as the functional currency and the financial position and results of operations of the Company's HumiSeal Europe SARL division in France are measured using euros as the functional currency. Revenues and expenses of these divisions have been translated at average exchange rates. Assets and liabilities have been translated at the year-end exchange rates. Translation gains and losses are being recorded as a separate component of shareholders' equity. 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.

Income Taxes

        The Company accounts for income taxes under the asset and liability method. Under this method, a deferred tax asset or liability is determined based upon the differences between the financial statement and tax bases of assets and liabilities as measured by the enacted tax rates that will be in effect when these differences reverse. Tax credits are recorded as a reduction in income taxes. Valuation allowances are provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

34

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        The Company estimates contingent income tax liabilities based on the guidance for accounting for uncertain tax positions as prescribed in ASC Topic 740, "Income Taxes." See Note 7 for more information on the Company's income taxes.

Net Income Per Share

        In June 2008, the FASB issued authoritative guidance within ASC Topic 260, "Earnings Per Share" ("ASC 260"), to clarify that unvested share-based payment awards with a right to receive nonforfeitable dividends are participating securities. The standard provides guidance on how to allocate earnings to participating securities and compute earnings per share using the two-class method. Upon adoption, a company is required to retrospectively adjust its earnings per share data (including any amounts related to interim periods, summaries of earnings and selected financial data) to conform with the new provisions. The Company adopted the provisions of this standard on September 1, 2009, and the presentation of earnings per share for previously reported periods has been adjusted to reflect the retrospective adoption of this standard. See Note 19 for more information on the additional disclosures required for the Company's adoption of ASC 260.

Comprehensive Income

        Comprehensive income is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources, including foreign currency translation adjustments, unrealized gains and losses on marketable securities and adjustments related to the change in the funded status of the pension plan.

Segments

        The Segment Reporting topic of the FASB codification establishes standards for reporting information about operating segments. As further detailed in Note 15, the Electronic Manufacturing Services business was sold in June 2010 and the financial results of this previously reported segment are now classified as discontinued operations. Accordingly, the Company now has one reportable segment. The Company currently views its operations and manages its business as one operating segment. The aggregation criteria used as part of the assessment of the operating segments includes the following characteristics: key products and services, nature of the manufacturing processes, methods used for product distribution, customer market or industry, and consistency in long-term gross margins.

        The Specialized Manufacturing segment consists of specialty tapes, laminates, sealants and coatings, and products include insulating and conducting materials for wire and cable manufacturers, coating and lining systems for use in liquid storage and containment applications, protective coatings for pipeline applications, moisture protective coatings for electronics and printing services, high performance polymeric asphalt additives, and expansion and control joint systems for use in the transportation and architectural markets.

Recently Issued Accounting Standards

        In June 2009, the Financial Accounting Standards Board's (FASB) approved the "FASB Accounting Standards Codification" ("ASC" or the "Codification") as the single source of authoritative nongovernmental U.S. GAAP. The Codification does not change current U.S. GAAP, but is intended to simplify user access to all authoritative U.S. GAAP by providing all the authoritative literature related to a particular topic in one place. All existing accounting standard documents will be superseded and all other accounting literature not included in the Codification will be considered nonauthoritative. The Codification became effective for the Company in the quarter ending November 30, 2009 and the adoption did not have any effect on the Company's consolidated financial position, results of operations or cash flows.

        In December 2007, the FASB issued new guidance under ASC Topic 805, "Business Combinations" ("ASC 805"). The new guidance under ASC 805 establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial statements the identifiable assets acquired, the liabilities

35

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

assumed and any noncontrolling interest in the acquiree; recognizes and measures the goodwill acquired in the business combination or a gain from a bargain purchase; expenses acquisition related costs as incurred; and determines what information to disclose to enable users of the financial statements to evaluate the nature and financial effects of the business combination. The Company adopted the new guidance under ASC 805 as of September 1, 2009, and its recent acquisitions of CIM Industries, Inc. and the ServiWrap product lines were both accounted for under this standard.

        In June 2008, the FASB issued guidance within ASC Topic 260, "Earnings Per Share" ("ASC 260"), to clarify that unvested share-based payment awards with a right to receive nonforfeitable dividends are participating securities. The standard provides guidance on how to allocate earnings to participating securities and compute earnings per share using the two-class method. The Company adopted the provisions of this standard on September 1, 2009, and the presentation of earnings per share for previously reported periods has been adjusted to reflect the retrospective adoption of this standard. See Note 19 for more information on the additional disclosures required for the Company's adoption of ASC 260.

        In December 2008, the FASB issued ASC Topic 715, "Compensation—Retirement Benefits" ("ASC 715"). ASC 715 provides additional guidance on an employer's disclosures about plan assets of a defined benefit pension or other post-retirement plan enabling users of the financial statements to assess the inputs and valuation techniques used to develop fair value measurements of plan assets at the annual reporting date. The required disclosures include a description of how investment allocation decisions are made, major categories of plan assets, valuation techniques used to measure the fair value of plan assets, the impact of measurements using significant unobservable inputs and concentrations of risk within plan assets. The disclosures about plan assets required by this additional guidance must be provided for fiscal years ending after December 15, 2009. See Note 9 for more information on the additional disclosures required for the Company's adoption of ASC 715.

        In January 2010, the FASB issued Accounting Standards Update ("ASU") No. 2010-06, "Fair Value Measurements and Disclosures (ASC Topic 820)—Improving Disclosures about Fair Value Measurements" ("ASU 2010-06"). The updated standard requires new disclosures around transfers into and out of Levels 1 and 2 in the fair value hierarchy and separate disclosures about purchases, sales, issuances, and settlements related to Level 3 measurements. ASU 2010-06 is effective for interim and annual reporting periods beginning after December 15, 2009 with early adoption permitted, except for the disclosures about purchases, sales, issuances, and settlements in the rollforward of Level 3 activity. Those disclosures are effective for fiscal years beginning after December 15, 2010 and for interim periods within those fiscal years with early adoption permitted. The Company adopted the provisions of ASU 2010-06 effective March 1, 2010 and the adoption did not have any effect on the Company's consolidated financial position, results of operations or cash flows.

Note 2—Inventories

        Inventories consist of the following as of August 31, 2010 and 2009:

	2010		2009
Raw materials	$	8,497	$	7,973
Finished and in process		6,181		5,968
Total Inventories	$	14,678	$	13,941

36

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

Note 3—Property, Plant and Equipment

        Property, plant and equipment consist of the following as of August 31, 2010 and 2009:

		2010			2009
Property, Plant and Equipment
	Land and improvements	$	4,295		$	2,898
	Buildings		11,405			8,815
	Machinery and equipment		30,270			30,950
	Leasehold improvements		1,976			1,779
	Construction in progress		4,993			4,957
			52,939			49,399
	Accumulated depreciation		(25,525	)		(26,180	)
	Property, plant and equipment, net	$	27,414		$	23,219

        The majority of construction in progress relates to the following on-going projects: (1) renovation of the facility (land and building) in Oxford, MA, purchased in December 2008, to provide capacity for inventory storage needs and future growth, and (2) the continued renovation of the facility in O'Hara Township, PA in order to increase production capacity and improve efficiencies for existing product lines as well as provide space to integrate future acquisitions.

Note 4—Goodwill and Intangible Assets

        The changes in the carrying value of goodwill, by reportable segment, are as follows:

		Specialized Manufacturing			Electronic Manufacturing Services			Consolidated
Balance at August 31, 2008		$	9,132		$	5,999		$	15,131
	Acquisition of Capital Services—working capital adjustment		32			—			32
	Acquisition of Paper Tyger—additional earnout		65			—			65
	Acquisition of Metronelec assets—additional earnout		112			—			112
	Acquisition of E-poxy Engineered Materials—additional earnout		150			—			150
	Loss on impairment of NEQP		(237	)		—			(237	)
	Sale of NEQP business—remaining goodwill		(112	)		—			(112	)
	FX translation adjustment		(535	)		—			(535	)
Balance at August 31, 2009		$	8,607		$	5,999		$	14,606
	Acquisition of C.I.M. Industries Inc.		8,573			—			8,573
	Acquisition of ServiWrap product lines		258			—			258
	Acquisition of Paper Tyger—additional earnout		44			—			44
	Acquisition of Metronelec assets—additional earnout		116			—			116
	Acquisition of Capital Services—additional earnout		135			—			135
	Sale of Electronic Manufacturing Services business		—			(5,999	)		(5,999	)
	FX translation adjustment		(296	)		—			(296	)
Balance at August 31, 2010		$	17,437		$	—		$	17,437

37

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        In June 2010, the goodwill related to Electronic Manufacturing Services was eliminated from the Company's consolidated balance sheet as part of the accounting for the sale of that business.

        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.

        In the quarter ended May 31, 2009, based on the decrease in sales activity in the fiscal year and the completion of the fiscal 2010 budget, management determined that the carrying value of goodwill associated with the Company's Northeast Quality Products (NEQP) division may not be recoverable. Accordingly, the Company performed a goodwill impairment analysis. Based on the present value of future cash flows utilizing projected results for the balance of fiscal year 2009 and projections for future years based on the fiscal 2010 budgeting process, the goodwill impairment analysis yielded results that did not support the current book value of the goodwill associated with this division. As a result, the Company concluded the carrying amount of goodwill for the NEQP division was not fully recoverable and an impairment charge of $237 was recorded as of May 31, 2009. Goodwill related to NEQP, having a pre-impairment book value of $349, was written down to its fair value of $112 in accordance with generally accepted accounting principles. The NEQP division was sold on August 14, 2009, and the adjusted fair value of $112 was realized upon the sale.

        As of August 31, 2010, the Company had a total goodwill balance of $17,437 related to its acquisitions, of which $1,922 remains deductible for income taxes.

        Intangible assets subject to amortization consist of the following as of August 31, 2010 and 2009:

		Weighted-Average Amortization Period	Gross Carrying Value		Accumulated Amortization		Net Carrying Value
August 31, 2010
	Patents and agreements	12.7 years	$	2,237	$	2,118	$	119
	Formulas	9.8 years		3,530		914		2,616
	Trade names	4.7 years		1,348		445		903
	Customer lists and relationships	10.4 years		18,604		4,300		14,304
			$	25,719	$	7,777	$	17,942
August 31, 2009
	Patents and agreements	12.6 years	$	2,258	$	2,059	$	199
	Formulas	9.3 years		1,191		552		639
	Trade names	3.8 years		277		255		22
	Customer lists and relationships	10.4 years		5,640		2,003		3,637
			$	9,366	$	4,869	$	4,497

        Aggregate amortization expense related to intangible assets for the years ended August 31, 2010, 2009 and 2008 was $3,039, $921 and $1,145, respectively. As of August 31, 2010 estimated amortization expense for each of the five succeeding fiscal years is as follows:

Years ending August 31,
2011	$	2,393
2012		2,373
2013		2,256
2014		2,199
2015		2,001
	$	11,222

38

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

Note 5—Cash Surrender Value of Life Insurance

        Life insurance is provided under split dollar life insurance agreements whereby the Company will recover the premiums paid from the proceeds of the policies. The Company recognizes an offset to expense for the growth in the cash surrender value of the policies.

        The Company recognized cash surrender value of life insurance policies, net of loans of $5 at August 31, 2010 and 2009, secured by the policies, with the following carriers as of August 31, 2010 and 2009:

	2010		2009
John Hancock	$	3,465	$	3,053
Manufacturers' Life Insurance Company		926		872
Metropolitan Life Insurance		1,732		1,679
Other life insurance carriers		80		80
	$	6,203	$	5,684

        Subject to periodic review, the Company intends to maintain these policies through the lives or retirement of the insureds.

Note 6—Long-Term Debt and Notes Payable

        Long-term debt consists of the following at August 31, 2010 and 2009:

	2010			2009
Term note payable to bank in 36 monthly payments of $167 through August 31, 2012 with interest payable monthly at LIBOR rate plus 175 basis points (effective interest rate of 2.01% at August 31, 2010). On August 31, 2012, Chase will repay the remaining principal balance plus any interest then due	$	8,000		$	—
Promissory notes payable to five CIM shareholders in 3 consecutive annual installments of $1,000 each, with the initial payment due on September 4, 2010. Interest on the unpaid principal balance of the promissory notes accrues at a rate per annum equal to the applicable Federal rate, and will be paid annually with each principal payment (effective interest rate of 0.84% at August 31, 2010)		3,000			—
Term note payable to bank in 36 monthly payments of $117 through December 15, 2012 with interest payable monthly at LIBOR rate plus 190 basis points (effective interest rate of 2.18% at August 31, 2010). On December 15, 2012, Chase will repay the remaining principal balance plus any interest then due		6,067			—
		17,067			—
Less portion payable within one year classified as current		(4,400	)		—
Long-term debt, less current portion	$	12,667		$	—

        The Company has a long-term unsecured revolving credit facility available up to a maximum amount of $10 million at the bank's base lending rate or, at the option of the Company, at the effective 30-Day London Interbank Offered Rate (LIBOR) plus 150 basis points. As of August 31, 2010 and 2009, the entire amount of $10 million was available for use. Any future outstanding balance on this long-term unsecured credit facility will be included in scheduled principal payments at its maturity. On June 8, 2010, the Company executed an amendment to this credit facility, extending the maturity to March 31, 2013. As part of this amendment, the interest rate was increased by 25 basis points, from its original rate of LIBOR plus 125 basis points. All other terms of the credit facility remain the same.

39

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        Under the terms of the Company's credit facility agreement, the Company must comply with certain debt covenants related to (a) the ratio of total liabilities to tangible net worth and (b) the ratio of operating cash flow to debt service on a rolling twelve month basis. The Company was in compliance with its debt covenants as of August 31, 2010 and 2009.

Note 7—Income Taxes

        The provision (benefit) for income taxes differs from the amount computed by applying the federal statutory income tax rate to income before income taxes. The provision (benefit) for income taxes on continuing operations is as follows:

		Year Ended August 31,
		2010			2009			2008
Current:
	Federal	$	6,033		$	1,552		$	4,730
	State		823			(81	)		747
	Foreign		953			927			977
Total current income tax provision			7,809			2,398			6,454
Deferred:
	Federal		(1,692	)		495			(131	)
	State		(238	)		106			20
	Foreign		(149	)		(211	)		(259	)
Total deferred income tax provision (benefit)			(2,079	)		390			(370	)
Total income tax provision		$	5,730		$	2,788		$	6,084

        The Company's combined federal, state and foreign effective tax rates on income from continuing operations for fiscal 2010, 2009 and 2008, net of offsets generated by federal, state and foreign tax benefits, were approximately 34.8%, 34.4% and 35.5%, respectively. The following is a reconciliation of the effective income tax rate on continuing operations with the U.S. federal statutory income tax rate for the years ended August 31, 2010, 2009 and 2008:

		Year Ended August 31,
		2010			2009			2008
Federal statutory rates			35.0	%		35.0	%		35.0	%
Adjustment resulting from the tax effect of:
	State and local taxes, net of federal benefit		2.2	%		2.0	%		2.6	%
	Domestic production deduction		(1.6	)%		(0.9	)%		(1.4	)%
	Foreign tax rate differential		(1.2	)%		(1.7	)%		(1.0	)%
	Adjustment to tax reserve		0.9	%		(0.1	)%		0.7	%
	Change in foreign tax rate		—			—			(0.5	)%
	Research credit generated		(0.1	)%		(0.7	)%		(0.1	)%
	Other		(0.4	)%		0.8	%		0.2	%
	Effective income tax rate		34.8	%		34.4	%		35.5	%

40

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        The following table summarizes the tax effect of temporary differences on the Company's income tax provision on income from continuing operations:

		Year Ended August 31,
		2010			2009			2008
Current income tax provision		$	7,809		$	2,398		$	6,454
Deferred provision (benefit):
	Allowance for doubtful accounts		27			35			59
	Inventories		(20	)		28			50
	Pension expense		(66	)		33			(9	)
	Deferred compensation		(4	)		78			177
	Accruals		103			34			(13	)
	Warranty reserve		18			68			(12	)
	Depreciation and amortization		(1,930	)		(546	)		102
	Restricted stock grant		(83	)		32			(371	)
	Capital loss carryforwards		—			651			—
	Unrepatriated earnings		1,070			902			1,629
	Foreign taxes net of unrepatriated earnings		(1,045	)		(742	)		(1,683	)
	Foreign amortization		(149	)		(131	)		(167	)
	Other accrued expenses		—			(52	)		(132	)
Total deferred income tax provision (benefit)			(2,079	)		390			(370	)
Total income tax provision		$	5,730		$	2,788		$	6,084

41

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        The following table summarizes the tax effects of temporary differences that give rise to significant portions of the deferred tax assets and liabilities:

			As of August 31,
			2010			2009
Current:
	Deferred tax assets:
		Allowance for doubtful accounts	$	103		$	120
		Inventories		187			294
		Accruals		1			92
		Warranty reserve		19			37
	Current deferred tax assets			310			543
	Deferred tax liabilities:
		Prepaid liabilities		(52	)		(72	)
	Current deferred tax liabilities			(52	)		(72	)
	Current deferred tax assets, net			258			471
Noncurrent:
	Deferred tax assets:
		Pension accrual		2,304			2,159
		Deferred compensation		639			635
		Unrealized gain/loss on restricted investments		38			43
		Restricted stock grants		636			782
		Non qualified stock options		16			16
		Foreign tax credits		4,313			3,268
		Foreign other		164			173
	Noncurrent deferred tax assets			8,110			7,076
	Deferred tax liabilities:
		Unrepatriated earnings		(3,883	)		(2,905	)
		Foreign intangibles		(587	)		(776	)
		Depreciation and amortization		(3,520	)		(2,131	)
	Noncurrent deferred tax liabilities			(7,990	)		(5,812	)
	Noncurrent deferred tax assets, net			120			1,264
Net deferred tax assets			$	378		$	1,735

        The Company entered into a sales-leaseback transaction with certain appreciated property located in Evanston, Illinois, triggering a capital gain for tax purposes in fiscal 2009. All of the capital loss carryovers generated in prior years were utilized as a result of this transaction.

        Effective September 1, 2007, the Company adopted the guidance for accounting for uncertain tax positions. This guidance clarified the accounting for uncertainty in income taxes recognized in the financial statements by prescribing a recognition threshold and measurement attribute for recognition and measurement of a tax position taken or expected to be taken in a tax return.

42

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        A summary of the Company's adjustments to its uncertain tax positions in fiscal years ended August 31, 2010, 2009 and 2008 are as follows:

		2010		2009			2008
Balance, at beginning of the year		$	747	$	752		$	639
	Increase for tax positions related to the current year		100		91			73
	Increase / (decrease) for tax positions related to prior years		40		(96	)		40
Balance, at end of year		$	887	$	747		$	752

        The unrecognized tax benefits mentioned above include an aggregate of $360 of accrued interest and penalty balances related to uncertain tax positions. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Total interest and penalty charges of approximately $40 were recorded to income during the current fiscal year. The Company anticipates that its reserve for uncertain tax positions may be reduced over the next twelve month period, to the extent it settles any potential disputed items with the appropriate taxing authorities. However, an estimated range of the impact on the unrecognized tax benefits cannot be quantified at this time.

        The Company is subject to U.S. federal income tax as well as to income tax of multiple state and foreign tax jurisdictions. The statute of limitations for all material federal, state, and local tax filings remains open for fiscal years subsequent to 2006. All fiscal years in foreign jurisdictions currently remain open, as the company's international operations did not commence until fiscal 2006.

Note 8—Operating Leases

        The following is a schedule for the next five years of future minimum payments required under operating leases that have initial or remaining noncancellable lease terms in excess of one year as of August 31, 2010:

Year ending August 31,	Future Minimum Lease Payments
2011	$	606
2012		533
2013		492
2014		468
2015		388
2016 and thereafter		2,350
Total future minimum lease payments	$	4,837

        Total rental expense for all operating leases amounted to $950, $889 and $943 for the years ended August 31, 2010, 2009 and 2008, respectively.

        In June 2009, the Company entered into a sale leaseback transaction pursuant to the sale of its real property (land and building) located in Evanston, IL. As part of this transaction, the Company agreed to provide financing to the purchaser, whereby the interest due on the financing is equal to the rental payments over the life of the lease. The Company received a $400 deposit at the closing, and an additional payment of $25 was received in December 2009. The remainder of the $4,250 sales price will be due at various dates over the term of the 49 month lease, of which $3,400 is due at the end of the lease term in July 2013. Accordingly, future rental payments on this property are not included in the schedule above. The Company is deferring the gain on this transaction until the end of the lease term and has recorded the $425 payments received to date as a non current liability as of August 31, 2010.

43

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

Note 9—Benefits and Pension Plans

401(k) Plan

        The Company has a defined contribution plan adopted pursuant to Section 401(k) of the Internal Revenue Code of 1986. Any qualified employee who has attained age 21 and has been employed by the Company for at least six months may contribute a portion of his or her salary to the plan and the Company will match 100% of the first percent of salary contributed and 50% thereafter, up to an amount equal to three and one half percent of such employee's annual salary. The Company's contribution expense was $330, $304 and $264 for the years ended August 31, 2010, 2009 and 2008, respectively.

Non-Qualified Deferred Savings Plan

        The Company has a non-qualified deferred savings plan covering the Board of Directors and a separate plan covering selected employees. Participants may elect to defer a portion of their compensation for future payment. The plans are funded by trusteed assets that are restricted to the payment of deferred compensation or satisfaction of the Company's general creditors. The Company's liability under the plan was $611 and $573 at August 31, 2010 and 2009, respectively.

Pension Plans

        The Company has non-contributory defined benefit pension plans covering employees of certain divisions of the Company. The Company has a funded, qualified plan ("Pension Plan") and an unfunded supplemental plan designed to maintain benefits for certain employees at the plan formula level. The plans provide for pension benefits determined by a participant's years of service and final average compensation. The Pension Plan assets consist of separate pooled investment accounts with a trust company. The measurement date for the plans is August 31, 2010.

        Effective December 1, 2008, a soft freeze in the Pension Plan was adopted whereby no new employees hired will be admitted to the Pension Plan, with the exception of the International Association of Machinists and Aerospace Workers Union. All participants admitted to the plans prior to the December 1, 2008 freeze will continue to accrue benefits as detailed in the plan agreements.

        The following tables reflect the status of the Company's pension plans for the years ended August 31, 2010, 2009 and 2008:

		Year Ended August 31,
		2010			2009			2008
Change in benefit obligation
	Projected benefit obligation at beginning of year	$	11,185		$	8,800		$	8,172
	Service cost		494			432			416
	Interest cost		490			547			512
	Amendments		—			—			85
	Actuarial (gain) loss		549			1,434			(323	)
	Settlements		—			—			—
	Benefits paid		(674	)		(28	)		(62	)
	Projected benefit obligation at end of year	$	12,044		$	11,185		$	8,800

44

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

		Year Ended August 31,
		2010			2009			2008
Change in plan assets
	Fair value of plan assets at beginning of year	$	5,495		$	5,449		$	4,900
	Actual return on plan assets		451			(706	)		(389	)
	Employer contribution		750			780			1,000
	Settlements		—			—			—
	Benefits paid		(674	)		(28	)		(62	)
	Fair value of plan assets at end of year	$	6,022		$	5,495		$	5,449
	Funded status at end of year	$	(6,022	)	$	(5,690	)	$	(3,351	)
Amounts recognized in consolidated balance sheets
	Non-current assets	$	—		$	—		$	—
	Current liabilities		—			—			—
	Non-current liabilities		(6,022	)		(5,690	)		(3,351	)
	Net amount recognized in Consolidated Balance Sheets	$	(6,022	)	$	(5,690	)	$	(3,351	)
Actuarial present value of benefit obligation and funded status
	Accumulated benefit obligations	$	10,355		$	9,646		$	7,603
	Projected benefit obligations	$	12,044		$	11,185		$	8,800
	Plan assets at fair value	$	6,022		$	5,495		$	5,449
Amounts recognized in accumulated other comprehensive Income
	Prior service cost	$	230		$	315		$	407
	Net actuarial loss		4,469			4,177			1,659
	Adjustment to pre-tax accumulated other comprehensive income	$	4,699		$	4,492		$	2,066
Other changes in plan assets and benefit obligations recognized in other comprehensive income
	Net (gain) or loss	$	505		$	2,572		$	484
	Amortization of loss		(212	)		(54	)		(41	)
	Prior service cost		—			—			85
	Amortization of prior service cost		(86	)		(92	)		(88	)
	Total recognized in other comprehensive income		207			2,426			440
	Net periodic pension cost		875			693			639
	Total recognized in net periodic pension cost and other comprehensive income	$	1,082		$	3,119		$	1,079
Estimated amounts that will be amortized from accumulated comprehensive income over the next fiscal year
	Prior service cost	$	74		$	86		$	92
	Net actuarial loss or (gain)		239			212			54

        Prior service cost arose from the amendment of the plan's benefit schedules to comply with the Tax Reform Act of 1986 (TRA) and adoption of the unfunded supplemental pension plan.

45

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        Components of net periodic pension cost for the fiscal years ended August 31, 2010, 2009, and 2008 included the following:

		Year Ended August 31,
		2010			2009			2008
Components of net periodic benefit cost
	Service cost	$	494		$	432		$	416
	Interest cost		490			547			512
	Expected return on plan assets		(407	)		(432	)		(418	)
	Amortization of prior service cost		86			92			88
	Amortization of accumulated (gain)/loss		212			54			41
	Settlement (gain)/loss		—			—			—
	Net periodic benefit cost	$	875		$	693		$	639

        Weighted-average assumptions used to determine benefit obligations as of August 31, 2010 and 2009 are as follows:

		2010			2009
Discount rate
	Qualified plan		4.45	%		5.29	%
	Supplemental plan		2.51	%		3.38	%
Rate of compensation increase
	Qualified and supplemental plan		3.50	%		3.50	%

        Weighted-average assumptions used to determine net periodic benefit cost for the years ended August 31, 2010, 2009 and 2008 are as follows:

		2010			2009			2008
Discount rate
	Qualified plan		5.29	%		6.66	%		6.25	%
	Supplemental plan		3.38	%		5.72	%		6.25	%
Expected long-term return on plan assets
	Qualified plan		8.00	%		8.00	%		8.50	%
	Supplemental plan		0.00	%		0.00	%		0.00	%
Rate of compensation increase
	Qualified and supplemental plan		3.50	%		3.50	%		3.50	%

        It is the Company's policy to evaluate, on an annual basis, the discount rate used to determine the projected benefit obligation to approximate rates on high-quality, long-term obligations. The Moody's Corporate Aa Bond index has generally been used as a benchmark for this purpose, with adjustments made if the duration of the index differed from that of the plan. Commencing with the August 31, 2008 disclosure, the discount rate was determined by matching the expected payouts from the respective plans to the spot rates inherent in the Citigroup Pension Discount Curve. A single rate was developed, that when applied to the expected cash flows, results in the same present value as determined using the various spot rates. The Company believes that this approach will produce a better approximation of the plan liability.

        The Company estimates that each 100 basis point reduction in the discount rate would result in additional net periodic pension cost, the Company's primary pension obligation, of approximately $60 for the qualified plan and $1 for the supplemental plan. The expected return on plan assets is derived from a periodic study of long-term historical rates of return on the various asset classes included in the Company's targeted pension plan asset allocation. The Company estimates that each 100 basis point reduction in the expected return on plan assets would result in additional net periodic pension cost of approximately $51 for the qualified plan. No rate of return is

46

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

assumed for the nonqualified plan since that plan is currently not funded. The rate of compensation increase is also evaluated and is adjusted by the Company, if necessary, periodically.

Plan Assets

        The investment policy for the Pension Plan for Employees of Chase Corporation is based on ERISA standards for prudent investing. The fundamental goal underlying the investment policy is to ensure that the assets of the plans are invested in a prudent manner to meet the obligations of the plans as these obligations come due. The primary investment objectives include providing a total return which will promote the goal of benefit security by attaining an appropriate ratio of plan assets to plan obligations, to provide for real asset growth while also tracking plan obligations, to diversify investments across and within asset classes, to reduce the impact of losses in single investments, and to follow investment practices that comply with applicable laws and regulations.

        The primary policy objectives will be met by investing assets to achieve a reasonable tradeoff between return and risk relative to the plans' obligations. This includes investing a portion of the assets in funds selected in part to hedge the interest rate sensitivity to plan obligations.

        The Pension Plan assets are invested in a diversified mix of United States equity and fixed income securities. Asset manager performance is reviewed at least annually and benchmarked against the peer universe for the given investment style. The Company's expected return for the Pension Plan is 8.0%. To determine the expected long-term rate of return on the assets for the Pension Plan, the Company considered the historical and expected return on the plan assets, as well as the current and expected allocation of the plan assets.

        Asset allocation is monitored on an ongoing basis relative to the established asset class targets. The interaction between plan assets and benefit obligations is periodically studied to assist in the establishment of strategic asset allocation targets. The investment policy permits variances from the targets within certain parameters. Asset rebalancing occurs when the underlying asset class allocations move outside these parameters at which time the asset allocation is rebalanced back to the policy target weight.

        The Pension Plan has the following target allocation and weighted-average asset allocations as of August 31, 2010, 2009 and 2008:

				Percentage of Plan Assets as of August 31,
	Target Allocation
Asset Category				2010			2009			2008
Equity securities		60	%		44	%		56	%		57	%
Debt securities		30	%		50	%		34	%		29	%
Real estate		10	%		5	%		6	%		9	%
Other		0	%		1	%		4	%		5	%
Total		100	%		100	%		100	%		100	%

        The Company is required to categorize pension plan assets using 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.

47

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        The following table presents the Company's pension plan assets at August 31, 2010 by asset category:

				Fair value measurements at August 31, 2010 using:
		August 31, 2010		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Asset Category
Equity securities		$	2,632	$	2,632	$	—	$	—
Debt securities			3,009		2,819		190		—
Real estate			319		—		319		—
Other			62		—		62		—
	Total	$	6,022	$	5,451	$	571	$	—

        Level 1 Assets: The fair values of the common stocks, corporate bonds and U.S. Government securities included in this tier are based on the closing price reported on the active market where the individual securities are traded.

        Level 2 Assets: The fair values of the common/collective trust funds included in this tier are not traded on active markets. These common/collective trust funds are valued based on the calculated unit values. The unit values are based on the fair value of the underlying assets of the common/collective trust funds derived from inputs principally based on quoted market prices in an active market or corroborated by observable market data by correlation or other means.

Estimated Future Benefit Payments

        The following pension benefit payments (which include expected future service) are expected to be paid in each of the following fiscal years:

Year ending August 31,	Pension Benefits
2011	$	953
2012		983
2013		5,947
2014		297
2015		379
2016-2020	$	2,292

        The Company contributed $750, $780 and $1,000 to fund its obligations under the pension plan for the years ended August 31, 2010, 2009 and 2008, respectively. The Company plans to make any necessary contributions during the upcoming fiscal 2011 year to ensure the qualified plan continues to be adequately funded given the current market conditions.

Note 10—Stockholders' Equity

2005 Incentive Plan

        In November 2005, the Company adopted and the stockholders subsequently approved the 2005 Incentive Plan (the "2005 Plan"). The 2005 Plan permits the grant of restricted stock, stock options, deferred stock, stock payments or other awards to employees, participating officers, directors, consultants and advisors that are linked directly to increases in shareholder value. The aggregate number of shares available under the 2005 Plan is 1,000,000. Additional shares may become available in connection with share splits, share dividends or similar transactions.

48

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

2001 Senior Management Stock Plan and 2001 Non-Employee Director Stock Option Plan

        In October 2002, the Company adopted, and the stockholders subsequently approved, the 2001 Senior Management Stock Plan and the 2001 Non-Employee Director Stock Option Plan (the "2001 Plans"). The 2001 Plans reserved 1,500,000 and 180,000 shares of the Company's common stock for grants related to the Senior Management Stock Plan and Non-Employee Director Stock Option Plan, respectively.

        Under the terms of the Senior Management Stock Plan, equity awards may be granted in the form of incentive stock options, non-qualified stock options and restricted stock. Options granted under the Non-Employee Director Stock Option Plan will be issued as non-qualified stock options. Options granted under the 2001 Plans generally vest over a period ranging from three to five years and expire after ten years.

Restricted Stock & Restricted Stock Units

Employees and Executive Management

        In February 2006, the Board of Directors of Chase Corporation approved a performance and service based restricted stock unit grant of 82,634 shares to key members of management subject to the fiscal year 2006 results. Based on the fiscal year 2006 financial results, 41,318 additional restricted stock units (for a total of 123,952 restricted stock units) were earned and granted subsequent to the end of fiscal year 2006 in accordance with the performance measurement criteria. These restricted stock units vested and were issued in the form of common stock on August 31, 2008. Compensation expense was recognized over the vesting period on a ratable basis.

        In February 2006, the Board of Directors of Chase Corporation also approved a plan for issuing a performance and service based restricted stock unit grant of approximately 88,630 shares to key members of management with an issue date of September 1, 2006 and a vesting date of August 31, 2009. Based on the fiscal year 2007 financial results, 184,697 additional restricted stock units (total of 273,327 restricted stock units) were earned and granted subsequent to the end of fiscal year 2007 in accordance with the performance measurement criteria. These restricted stock units vested and were issued in the form of common stock on August 31, 2009. Compensation expense was recognized on a ratable basis over the vesting period.

        In May 2007, pursuant to authorization by the Board of Directors, the Company's Chief Executive Officer granted a total of 17,600 restricted stock units ("RSUs") to approximately 40 non executive officer employees of the Company for service for the period May 2007 through May 2010. RSUs totaling 14,200 vested on May 15, 2010 and were issued in the form of common stock. The remaining 3,400 RSUs were forfeited in accordance with the RSU agreements Compensation expense was recognized on a ratable basis over the vesting period.

        In August 2007, the Board of Directors of Chase Corporation approved a plan for issuing a performance and service based restricted stock grant of 48,600 shares to key members of management with an issue date of September 1, 2007 and a vesting date of August 31, 2010. Based on the fiscal year 2008 financial results, 82,214 additional shares of restricted stock (total of 130,814 shares) were earned and granted subsequent to the end of fiscal year 2008 in accordance with the performance measurement criteria. These restricted stock vested and were issued in the form of common stock on August 31, 2010. Compensation expense was recognized on a ratable basis over the vesting period.

        In August 2008, the Board of Directors of Chase Corporation approved a plan for issuing a performance and service based restricted stock grant of 50,657 shares in the aggregate, subject to adjustment, to key members of management with an issue date of September 1, 2008 and a vesting date of August 31, 2011. Based on the fiscal year 2009 financial results, the aggregate size of the grant was reduced by 15,944 shares of restricted stock subsequent to the end of fiscal year 2009 in accordance with the performance measurement criteria. The adjusted restricted stock award of 34,713 shares was finalized in the quarter ended November 30, 2009 and no further performance-based measurements apply to this award. Compensation expense is being recognized on a ratable basis over the vesting period.

49

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        In August 2009, the Board of Directors of Chase Corporation approved a plan for issuing a performance and service based restricted stock grant of 76,874 shares in the aggregate, subject to adjustment, to key members of management with an issue date of September 1, 2009 and a vesting date of August 31, 2012.

        In December 2009, restricted stock in amounts of 2,377 and 8,421 shares related to the September 2008 and 2009 grants, respectively, were forfeited in conjunction with the retirement of an executive officer of the Company.

        Based on the fiscal year 2010 financial results, 68,453 additional shares of restricted stock (total of 136,906 shares) were earned and granted subsequent to the end of fiscal year 2010 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.

Non-Employee Board of Directors

        As part of their annual retainer, non-employee members of the Board of Directors received $15 of Chase Corporation common stock, in the form of Restricted Stock or Restricted Stock Units valued at the closing price of the day preceding the first day of the new year of Board service which generally coincides with the Company's annual shareholder meeting. The stock awards vest one year from the date of grant.

        In February 2007, the Compensation and Management Development Committee approved a grant of 6,648 restricted stock units to members of the Board of Directors for service for the period February 2007 through January 2008. These restricted stock units were issued in the form of common stock at the conclusion of this service period. Compensation was recognized on a ratable basis over the twelve month vesting period.

        In January 2008, non-employee members of the Board received a total grant of 4,569 shares of restricted stock for service for the period from February 1, 2008 through February 1, 2009. The shares of restricted stock vested at the conclusion of the service period. Compensation was recognized on a ratable basis over the twelve month vesting period.

        In April 2008, William H. Dykstra retired from the Company's Board of Directors. In accordance with the vesting provisions of his restricted stock agreement, he forfeited 634 of the restricted shares granted to him in January 2008. In April 2008, a total of 692 shares of restricted stock were issued to existing members of the Board for committee reassignments, as well as the appointment of new Board member Thomas Wroe, Jr., following Mr. Dykstra's retirement. These shares were for service on the Company's Board from April 1, 2008 through February 1, 2009 and vested at the conclusion of the service period.

        In January 2009, non-employee members of the Board of Directors received a total grant of 12,339 shares of restricted stock for service for the period from February 1, 2009 through February 1, 2010. This represented an increase in the Board of Directors annual stock compensation to $20 (previously $15). The shares of restricted stock vested at the conclusion of this service period. Compensation was recognized on a ratable basis over the twelve month vesting period.

        As part of their annual retainer, non-employee members of the Board of Directors receive a combined total of $135 of Chase Corporation common stock, in the form of restricted stock valued at the closing price of the day preceding the first day 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 January 2010, non-employee members of the Board received a total grant of 11,092 shares of restricted stock for service for the period from January 30, 2010 through January 30, 2011. 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.

Stock Options

        On July 8, 2008, the Company's Board of Directors authorized a grant of stock options to its President and its Chief Financial Officer to purchase 150,000 and 100,000 shares of common stock, respectively. Each of these

50

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

options has an exercise price of $16.53 per share, will vest in full on the fifth anniversary of the grant date, and will expire on the tenth anniversary of the grant date.

        On August 31, 2009, the Company's Board of Directors authorized a grant of stock options to its Chief Executive Officer, its President and its Chief Financial Officer to purchase 75,000, 50,000 and 25,000 shares of common stock, respectively. Each of these options has an exercise price of $11.15 per share, and will vest in four equal annual allotments beginning on August 31, 2010 and ending on August 31, 2013. All of these options will expire on the tenth anniversary of the grant date.

        The following table summarizes information about stock options outstanding as of August 31, 2010:

	Options Outstanding								Options Exercisable
Exercise Prices	Number Outstanding		Weighted Avg. Remaining Contractual Life		Weighted Average Exercise Price		Aggregate Intrinsic Value		Number Exercisable		Weighted Average Exercise Price		Aggregate Intrinsic Value
$5.25		73,500		2.1 years	$	5.25	$	548		73,500	$	5.25	$	548
$11.15		150,000		9.0 years	$	11.15		232		—	$	—		—
$16.53		250,000		7.9 years	$	16.53		—		—	$	—		—
		473,500		7.3 years	$	13.07	$	780		73,500	$	5.25	$	548

        The total fair value of options vested at year end based upon the closing price of $12.70 per share on August 31, 2010 is $933.

        A summary of the transactions of the Company's stock option plans for the years ended August 31, 2010, 2009 and 2008 is presented below:

		Non Employee Directors			Weighted Average Exercise Price		Officers and Employees			Weighted Average Exercise Price
Outstanding as of August 31, 2007			28,000		$	5.25		135,000		$	5.36
	Granted		—			—		250,000			16.53
	Exercised		(12,500	)		5.25		(29,000	)		5.47
	Forfeited or cancelled		—			—		—			—
Outstanding as of August 31, 2008			15,500		$	5.25		356,000		$	13.20
	Granted		—			—		150,000			11.15
	Exercised		(3,000	)		5.25		—			—
	Forfeited or cancelled		—					—			—
Options outstanding as of August 31, 2009			12,500		$	5.25		506,000		$	12.59
	Granted		—			—		—			—
	Exercised		(10,000	)		5.25		(35,000	)		5.48
	Forfeited or cancelled		—								—
Options outstanding at August 31, 2010			2,500		$	5.25		471,000		$	13.12
Options exercisable at August 31, 2010			2,500		$	5.25		71,000		$	5.25

        There were no options granted in the year ended August 31, 2010. The weighted average grant date fair value of options granted in the years ended August 31, 2009 and 2008 was $3.58 and $4.98 per share, respectively. All stock option plans have been approved by the Company's stockholders.

        The total pretax intrinsic value of stock options exercised was $275, $16, and $956 for the years ended August 31, 2010, 2009 and 2008, respectively.

51

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        Excluding the common stock currently reserved for issuance upon exercise of the 473,500 outstanding options, there are 498,673 shares of common stock available for future issuance under the Company's equity compensation plans.

        The tax (expense) / benefit realized from stock options exercised, vesting of restricted stock and issuance of stock pursuant to grants of restricted stock units was ($196), $265, and $815 for the years ended August 31, 2010, 2009 and 2008, respectively.

        As of August 31, 2010, unrecognized expense related to all stock based compensation described above, is $2,291.

Note 11—Segment Data

        As further detailed in Note 15, the Electronic Manufacturing Services business was sold in June 2010 and the financial results of this previously reported segment are classified as discontinued operations. Accordingly, the Company currently operates in one segment.

        The Specialized Manufacturing segment consists of specialty tapes, laminates, sealants and coatings. Specialized Manufacturing products include insulating and conducting materials for wire and cable manufacturers, coating and lining systems for use in liquid storage and containment applications, protective coatings for pipeline applications, moisture protective coatings for electronics and printing services, high performance polymeric asphalt additives, and expansion and control joint systems for use in the transportation and architectural markets. In fiscal year 2010, the Company had sales of $47,024, $40,043 and $19,322 from its Specialty Coatings, Coating & Laminating and European reporting divisions, respectively. European sales include $4,991 from ServiWrap, which was acquired in December 2009. Additionally, the Company had sales of $12,354 from CIM, which was acquired in September 2009. In fiscal year 2009, the Company had sales of $36,613, $43,546 and $11,077 from its Specialty Coatings, Coating & Laminating and European reporting divisions, respectively. In fiscal year 2008, the Company had sales of $44,243, $56,105 and $12,829 from its Specialty Coatings, Coating & Laminating and European reporting divisions, respectively.

Note 12—Export Sales and Foreign Operations

        Export sales from continuing domestic operations to unaffiliated third parties were $18,069, $14,611 and $15,818 for the years ended August 31, 2010, 2009 and 2008, respectively. The growth in our export sales in the current fiscal year was primarily due to the CIM acquisition that was completed in September 2009.

        The Company's products are sold world-wide. For the years ended August 31, 2010, 2009 and 2008, sales from its operations located in the United Kingdom accounted for 13%, 9% and 8% of total Company revenues from continuing operations, respectively. No other foreign geographic area accounted for more than 10% of consolidated revenues for the years ended August 31, 2010, 2009 and 2008.

        As of August 31, 2010 and 2009, the Company had long-lived assets (defined as tangible assets providing the Company with a future economic benefit beyond the current year or operating period, including buildings, equipment and leasehold improvements) of $2,020 and $1,770, respectively, located in the United Kingdom. These balances exclude goodwill and intangibles of $13,757 and $7,199, as of August 31, 2010 and 2009, respectively. No other foreign geographic area accounted for more than 10% of the Company's total assets as of August 31, 2010 and 2009.

52

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

Note 13—Supplemental Cash Flow Data

        Supplemental cash flow information for the years ended August 31, 2010, 2009 and 2008 is as follows:

		2010			2009		2008
Income taxes paid		$	8,038		$	2,481	$	6,605
Interest paid		$	314		$	30	$	243
Non-cash Investing and Financing Activities
Issuance of stock based compensation previously accrued for		$	152		$	1,526	$	1,075
Common stock received for payment of stock option exercises		$	—		$	—	$	21
Accrued contingent payments related to acquisitions		$	—		$	327	$	—
Acquisition holdback payments, previously accrued for		$	—		$	303	$	—
Property, plant & equipment additions included in accounts payable		$	66		$	280	$	152
Notes payable to CIM shareholders related to acquisition		$	3,000		$	—	$	—
Accrual of additional proceeds on sale of business		$	1,146		$	—	$	—
Sale of Electronic Manufacturing Services business
	Current assets (excluding cash)	$	(6,867	)
	Property and equipment		(857	)
	Goodwill		(5,999	)
	Accounts payable and accrued liabilities		193
	Deferred tax liabilities		1,553
	Gain on sale of business		(712	)
	Cash received from sale of business, net of transaction costs	$	12,689
Acquisition of certain assets for ServiWrap product line
	Property, plant & equipment	$	460
	Goodwill		258
	Intangible assets		8,981
	Cash provided through operating cash and increase in debt	$	(9,699	)
Acquisition of CIM Industries
	Current assets (net of cash acquired)	$	1,991
	Property, plant & equipment		4,262
	Goodwill		8,573
	Intangible assets		8,100
	Accounts payable and accrued liabilities		(439	)
	Deferred tax liabilities		(3,593	)
	Cash provided through operating cash and increase in debt	$	(18,894	)
Acquisition of certain assets for Chase Protective Coatings
	Current assets (net of cash acquired)						$	374
	Property and equipment							1,842
	Intangible assets							297
	Deferred tax assets							169
	Accounts payable and accrued liabilities							(950	)
	Acquisition costs							(242	)
	Cash provided through operating cash						$	(1,490	)

53

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

Note 14—Acquisitions

Chase Protective Coatings Limited

        On September 1, 2007, Chase Corporation purchased certain product lines and a related manufacturing facility in Rye, East Sussex, England through its wholly owned subsidiary, Chase Protective Coatings Ltd. For over 35 years, this business has been a leading manufacturer of waterproofing and corrosion protection systems for oil, gas and water pipelines and has been a major supplier to Europe, the Middle East and Southeast Asia.

        The purchase price for this acquisition was £739 (US $1,490 at the time of the acquisition) and was financed out of cash flow from the Company's operations. The effective date for this acquisition was September 1, 2007 and the results of this acquisition have been included in the Company's financial statements since then.

        The allocation of the purchase price, including direct costs of the acquisition, was based on the fair values of the acquired assets and liabilities assumed as follows:

Assets & Liabilities	Amounts
Inventory	$	374
Fixed Assets		1,842
Intangible assets		297
Deferred tax asset		169
Accrued expenses		(1,192	)
Total purchase price	$	1,490

        All assets acquired as part of this acquisition are included in the Specialized Manufacturing segment. Identifiable intangible assets purchased with this transaction are as follows:

Intangible Asset	Amount		Useful life
Customer lists and relationships	$	260	3 years
Trademarks / Trade Names		37	2 years
Total intangible assets	$	297

C.I.M. Industries, Inc. ("CIM")

        In September 2009, Chase Corporation acquired all of the outstanding capital stock of CIM which is based in Peterborough, NH and has a manufacturing facility in Texas. CIM is a specialized manufacturer of high performance coating and lining systems used worldwide in the liquid storage and containment applications.

        The total purchase price for this acquisition, net of cash received, was $18,894. The Company funded this acquisition partly through its available cash on hand and funded the balance through a loan in the amount of $10.0 million from Bank of America and the $3.0 million note payable to the five CIM shareholders. The effective date for this acquisition was September 1, 2009 and the results of this acquisition have been included in the Company's financial statements since then. The acquisition was accounted for as a business combination under ASC Topic 805, "Business Combinations." In accordance with this accounting standard, the Company expensed $130 of acquisition related costs.

54

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        The purchase price has been allocated to the acquired tangible and identifiable intangible assets and liabilities assumed based on their fair values as of the date of the acquisition:

Assets & Liabilities		Amount
Current assets (net of cash acquired)		$	1,991
Property, plant & equipment			4,262
Goodwill			8,573
Intangible assets			8,100
Accounts payable and accrued expenses			(439	)
Deferred tax liabilities			(3,593	)
	Total purchase price	$	18,894

        The excess of the purchase price over the net tangible and intangible assets acquired resulted in goodwill of $8,573 that is largely attributable to the synergies and economies of scale from combining the operations and technologies of Chase and CIM, particularly as it pertains to the global expansion of the Company's product and service offerings, and marketing efforts. This goodwill is not deductible for income tax purposes.

        All assets, including goodwill, acquired as part of CIM are included in the Specialized Manufacturing segment. Identifiable intangible assets purchased with this transaction are as follows:

Intangible Asset		Amount		Useful life
Formulas and technology		$	1,880	10 years
Trade names			260	5 years
Customer lists and relationships			5,960	10 years
	Total intangible assets	$	8,100

ServiWrap Product Lines

        In December 2009, the Company acquired the full range of ServiWrap pipeline protection products ("ServiWrap") from Grace Construction Products Limited, a UK based unit of W.R. Grace & Co. (the "Seller"). ServiWrap / ServiShield anti-corrosion systems provide protection for new and refurbished oil, gas and water pipelines in projects around the world.

        The total purchase price for this acquisition was £5,983 (US $9,699 at the time of acquisition) and the assets acquired by the Company include product lines, manufacturing equipment and certain intellectual property rights. The purchase was funded through a combination of cash on hand and a term loan in the amount of $7.0 million from RBS Citizens. The effective date for this acquisition was December 18, 2009 and the results of this acquisition have been included in the Company's financial statements since then. The acquisition was accounted for as a business combination under ASC Topic 805, "Business Combinations." In accordance with this accounting standard, the Company expensed $304 of acquisition related costs.

        Beginning on the date of the acquisition through September 30, 2010, the Seller manufactured the ServiWrap products for exclusive supply to the Company, while the Company transitioned production to both its own facility in the UK and another third party location.

55

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

        The purchase price has been allocated to the acquired tangible and identifiable intangible assets and liabilities assumed based on their fair values as of the date of the acquisition:

Assets & Liabilities		Amount
Property, plant & equipment		$	460
Goodwill			258
Intangible assets			8,981
	Total purchase price	$	9,699

        The excess of the purchase price over the net tangible and intangible assets acquired resulted in goodwill of $258 that is primarily attributable to the potential synergies from the integration of the ServiWrap product lines into the Company's current product offerings. This goodwill is deductible for income tax purposes.

        All assets, including goodwill, acquired as part of the ServiWrap product line acquisition are included in the Specialized Manufacturing segment. Identifiable intangible assets purchased with this transaction are as follows:

Intangible Asset		Amount		Useful life
Backlog		$	924	9 months
Formulas and technology			486	10 years
Trade names			876	5 years
Customer lists and relationships			6,695	12 years
	Total intangible assets	$	8,981

Supplemental Pro Forma Data

        The following table presents the pro forma results of the Company for the three and twelve month periods ended August 31, 2010 and 2009, as though the CIM and ServiWrap acquisitions described above occurred on September 1, 2008. The actual revenues and expenses for the CIM and ServiWrap acquisitions are included in the Company's fiscal 2010 consolidated results beginning on September 4, 2009 and December 18, 2009, respectively. Revenues for CIM and ServiWrap since the acquisition dates included in the consolidated statement of operations were $12,354 and $4,991, respectively. Adjustments have been made for the estimated amortization of intangibles, estimated interest expense in connection with debt financing of the acquisition, and the income tax impact of the pro forma adjustments at the statutory rate of 38%. The following pro forma information is not necessarily indicative of the results that would have been achieved if the acquisitions had been effective on September 1, 2008.

		Three Months Ended August 31,				Year Ended August 31,
		2010		2009		2010		2009
Revenues from continuing operations		$	35,436	$	29,311	$	123,573	$	112,873
Net income from continuing operations			3,849		2,878		11,191		7,498
Net income from continuing operations available to common shareholders, per common and common equivalent share
	Basic	$	0.42	$	0.33	$	1.25	$	0.87
	Diluted	$	0.42	$	0.32	$	1.23	$	0.84

        All acquisitions have been accounted for as purchase transactions and the operations of the acquired entity or assets are included in consolidated operations from the effective date.

56

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

Note 15—Discontinued Operations

        On June 30, 2010 the Company divested its contract manufacturing services business to MC Assembly in an all cash transaction, structured as a sale of substantially all of the assets of the Chase Electronic Manufacturing Services business. The purchase price of $13,000 was subject to certain post-closing adjustments, which will result in additional gross proceeds of approximately $1,481 based on the final net working capital of the business. Total gross proceeds were offset by transactions costs of $646. The net proceeds from the sale are available for debt reduction and continued investment in the Company's core tapes and coatings businesses within its specialized manufacturing segment.

        The Company has reflected the results of this business as discontinued operations in the consolidated statements of operations for all years presented. This business was historically reported by the Company as a separate reporting segment called Electronic Manufacturing Services.

        The results of the Electronic Manufacturing Services business were as follows for the years ended August 31, 2010, 2009 and 2008:

	Year Ended August 31,
	2010			2009			2008
Revenues	$	18,352		$	16,370		$	19,301
Income before income taxes	$	2,973		$	1,718		$	2,139
Income taxes		(1,183	)		(648	)		(826	)
Net income from discontinued operations	$	1,790		$	1,070		$	1,313

        The fiscal year 2010 results include a $429 after-tax gain on the sale of the Electronic Manufacturing Services business.

        The following table summarizes information about the Electronic Manufacturing Services business as of August 31, 2009:

	August 31, 2009
Accounts Receivable	$	2,113
Inventory		3,491
Property & equipment		1,089
Goodwill		5,999
Other Assets		103
Accounts payable		(1,118	)
Accrued expenses		(394	)
Deferred tax liability		1,481
	$	12,764

Note 16—Split-Dollar Life Insurance Arrangements

        The Company adopted the guidance for accounting for split dollar life insurance arrangements on September 1, 2008. The net liability related to these postretirement benefits was calculated as the difference between the present value of future premiums to be paid by the Company reduced by the present value of the expected proceeds to be returned to the Company upon the insured's death. The Company prepared its calculation by using mortality assumptions which were based on the 2008 Combined Static Mortality Table, and an appropriate discount rate. Upon the adoption of this accounting guidance on September 1, 2008, the Company recorded a decrease of $184 to stockholders' equity which represents the Company's net liability related to these postretirement obligations. Ongoing expenses in subsequent years are being recognized through operations. As of August 31, 2010, the Company's net liability related to these postretirement obligations was $100.

57

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

Note 17—Fair Value Measurements

        The Company adopted the guidance of FASB ASC Topic 820, "Fair Value Measurements and Disclosures" ("ASC 820") as of September 1, 2008, as it related to all financial assets and financial liabilities. ASC 820 provided for a one-year deferral of the effective date as it related to non-financial assets and non-financial liabilities that are recognized or disclosed at fair value in the financial statements on a non-recurring basis.

        Effective September 1, 2009, the Company adopted ASC 820 for all non-financial assets and non-financial liabilities that are recognized or disclosed at fair value in the financial statements on a non-recurring basis. Other than the assets acquired from CIM and the assets acquired as part of the ServiWrap acquisition, the Company has not valued any non-financial assets at fair value. Accordingly, there was no cumulative effect of adoption and the adoption did not have an impact on the Company's financial position, results of operations, or cash flows. The adoption may impact future evaluations of impairment of goodwill and long-lived assets.

        The Company generally defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date (exit price). 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 endeavors to utilize the best available information in measuring fair value. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The Company has determined that it does not have any financial liabilities measured at fair value and that its financial assets are currently all classified within Level 1 in the fair value hierarchy.

        The following table sets forth the Company's financial assets that were accounted for at fair value on a recurring basis as of August 31, 2010 and 2009:

				Fair value measurements at August 31, 2010 using:
		August 31, 2010		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Restricted investments		$	611	$	611	$	—	$	—
	Total	$	611	$	611	$	—	$	—

				Fair value measurements at August 31, 2009 using:
		August 31, 2009		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
Restricted investments		$	573	$	239	$	334	$	—
	Total	$	573	$	239	$	334	$	—

Note 18—Related Party Transactions

        In June 2009, the Company sold real property (building and land) to ChaseBay Real Estate Holdings, Inc. ("ChaseBay") for a purchase price of $1,370. The property is located in West Bridgewater, MA and was being leased by the Company to Sunburst Electronics Manufacturing Solutions, Inc. ("Sunburst") for a monthly base rent of $15. Andrew Chase, President of Sunburst and partner of ChaseBay, is the son of Edward L. Chase (deceased), and a Trustee of the Edward L. Chase Revocable Trust (the "Trust"), the brother of Peter R. Chase (the Chairman and CEO of the Company) and the uncle of Adam P. Chase (the President and COO of the Company). The Trust is

58

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

the sole owner of Sunburst and is a significant shareholder of Chase Corporation, holding 1,157,902 shares of the Company's common stock as of the date of the transaction.

        The terms and conditions of the sale transaction were reviewed and approved by an independent committee of the Company's Board of Directors which concluded that the sale price was appropriate given a recent market appraisal of the land and building performed by an independent third party valuation firm.

        The sale of the property resulted in an accounting charge of $262 in the third quarter ending May 31, 2009, which represented the write down of the property to its current market value, as required by generally accepted accounting principles.

        Additionally, a voting agreement between Chase and the Trust expires in 2013. Pursuant to the voting agreement, the Trustees have agreed to vote for the nominees for director of the Company, as approved from time to time by the Company's Nominating and Governance Committee, through the annual meeting in January 2013. The voting agreement requires that a designated representative of the Trust be elected a director of the Company. The voting agreement which had an original book value of $200, has been capitalized as an intangible asset and is being amortized over its ten year useful life. As of August 31, 2010, this intangible asset has a net book value of $65.

Note 19—Net Income Per Share

        In June 2008, the FASB issued guidance within ASC Topic 260, Earnings Per Share ("ASC 260"), to clarify that unvested share-based payment awards with a right to receive nonforfeitable dividends are participating securities. The standard provides guidance on how to allocate earnings to participating securities and compute earnings per share using the two-class method. The Company adopted the provisions of this standard on September 1, 2009.

59

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

The presentation of earnings per share for previously reported periods has been adjusted due to retrospective adoption of this standard. The calculation of earnings per share under ASC 260 is as follows:

		Years Ended August 31,
		2010		2009		2008
	Income from continuing operations	$	10,726	$	5,315	$	11,061
	Less: Allocated to participating securities		295		112		157
	Available to common shareholders	$	10,431	$	5,203	$	10,904
	Income from discontinued operations	$	1,790	$	1,070	$	1,313
	Less: Allocated to participating securities		50		23		18
	Available to common shareholders	$	1,740	$	1,047	$	1,295
	Net income	$	12,516	$	6,385	$	12,374
	Less: Allocated to participating securities		345		135		175
	Available to common shareholders	$	12,171	$	6,250	$	12,199
	Basic weighted averages shares outstanding		8,730,928		8,408,614		8,248,296
	Additional dilutive common stock equivalents		83,707		285,081		370,947
	Diluted weighted averages shares outstanding		8,814,635		8,693,695		8,619,243
Basic Earnings per Share
	Income from continuing operations per share	$	1.19	$	0.62	$	1.32
	Income from discontinued operations per share		0.20		0.12		0.16
	Net income per common and common equivalent share	$	1.39	$	0.74	$	1.48
Diluted Earnings per Share
	Income from continuing operations per share	$	1.18	$	0.60	$	1.27
	Income from discontinued operations per share		0.20		0.12		0.15
	Net income per common and common equivalent share	$	1.38	$	0.72	$	1.42

        For the years ended August 31, 2010 and 2009, stock options to purchase 250,000 shares of common stock were outstanding, but were not included in the calculation of diluted net income per share because the options' exercise prices were greater than the average market price of the common stock and thus would be anti-dilutive. Included in the calculation of dilutive common stock equivalents are the unvested portion of restricted stock, restricted stock units and stock options.

        The following table compares earnings per share as originally reported and earnings per share under the two class method, to quantify the impact of ASC 260 on earnings per share for the years ended August 31, 2009 and 2008:

		Years Ended August 31,
		2009			2008
Earnings per Share
	Basic—as originally reported	$	0.76		$	1.50
	Basic—pursuant to the two-class method		0.74			1.48
	Impact of new accounting standard on Basic Earnings per Share	$	(0.02	)	$	(0.02	)
	Diluted—as originally reported	$	0.73		$	1.43
	Diluted—pursuant to the two-class method		0.72			1.42
	Impact of new accounting standard on Diluted Earnings per Share	$	(0.01	)	$	(0.01	)

60

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

Note 20—Contingencies

        The Company is one of over 100 defendants in a lawsuit pending in Ohio which alleges personal injury from exposure to asbestos contained in certain Chase products. The case is captioned Marie Lou Scott, Executrix of the Estate of James T. Scott v. A-Best Products, et al., No. 312901 in the Court of Common Pleas for Cuyahoga County, Ohio. The plaintiff in the case issued discovery requests to Chase in August 2005, to which Chase timely responded in September 2005. The trial had initially been scheduled to begin on April 30, 2007. However, that date had been postponed and no new trial date has been set. As of October 2010, there have been no new developments as this Ohio lawsuit has been inactive with respect to Chase.

        The Company was named as one of the defendants in a complaint filed on June 25, 2009, in a lawsuit captioned Lois Jansen, Individually and as Special Administrator of the Estate of Thomas Jansen v. Beazer East, Inc., et al., No: 09-CV-6248 in the Milwaukee County (Wisconsin) Circuit Court. The plaintiff alleges that her husband suffered and died from malignant mesothelioma resulting from exposure to asbestos in his workplace. The plaintiff has sued seven alleged manufacturers or distributors of asbestos-containing products, including Royston Laboratories (formerly an independent company and now a division of Chase Corporation). Chase has filed an answer to the claim denying the material allegations in the complaint. The parties are currently engaged in discovery.

        In addition to the matters described above, 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 or results of operations, 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 21—Selected Quarterly Financial Data (Unaudited)

        The following table presents unaudited operating results for each of the Company's quarters in the years ended August 31, 2010 and 2009:

		Fiscal Year 2010 Quarters
		First		Second		Third		Fourth		Year
Net Sales from continuing operations		$	23,861	$	25,417	$	32,854	$	34,947	$	117,079
Gross Profit on Sales from continuing operations			8,821		8,315		12,535		12,580		42,251
Income from continuing operations		$	1,849	$	1,193	$	3,835	$	3,849	$	10,726
Income from discontinued operations(1)			274		433		565		518		1,790
Net income		$	2,123	$	1,626	$	4,400	$	4,367	$	12,516
Net income available to common shareholders, per common and common equivalent share:
Basic:
	Continuing operations	$	0.21	$	0.13	$	0.42	$	0.42	$	1.19
	Discontinued operations		0.03		0.05		0.06		0.06		0.20
	Net income per common and common equivalent share	$	0.24	$	0.18	$	0.49	$	0.48	$	1.39
Diluted:
	Continuing operations	$	0.20	$	0.13	$	0.42	$	0.42	$	1.18
	Discontinued operations		0.03		0.05		0.06		0.06		0.20
	Net income per common and common equivalent share	$	0.24	$	0.18	$	0.48	$	0.48	$	1.38

        The sum of individual share amounts may not equal due to rounding.

61

CHASE CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

In thousands, except share and per share amounts

		Fiscal Year 2009 Quarters
		First		Second		Third		Fourth		Year
Net Sales from continuing operations		$	26,246	$	18,711	$	21,088	$	24,114	$	90,159
Gross Profit on Sales from continuing operations			8,408		4,432		6,651		8,407		27,898
Income from continuing operations		$	2,057	$	207	$	586	$	2,465	$	5,315
Income from discontinued operations			203		247		276		344		1,070
Net income		$	2,260	$	454	$	862	$	2,809	$	6,385
Net income available to common shareholders, per common and common equivalent share:
Basic:
	Continuing operations	$	0.24	$	0.02	$	0.07	$	0.28	$	0.62
	Discontinued operations		0.02		0.03		0.03		0.04		0.12
	Net income per common and common equivalent share	$	0.26	$	0.05	$	0.10	$	0.32	$	0.74
Diluted:
	Continuing operations	$	0.23	$	0.02	$	0.06	$	0.27	$	0.60
	Discontinued operations		0.02		0.03		0.03		0.04		0.12
	Net income per common and common equivalent share	$	0.26	$	0.05	$	0.10	$	0.31	$	0.72

        The sum of individual share amounts may not equal due to rounding.

(1)

In the fourth quarter of fiscal 2010, income from discontinued operations included a $429 after-tax gain on the sale of the Electronic Manufacturing Services business.

Note 22—Valuation and Qualifying Accounts

        The following table sets forth activity in the Company's accounts receivable reserve:

Year ended	Balance at Beginning of Year		Charges to Operations		Deductions to Reserves			Balance at End of Year
August 31, 2010	$	350	$	206	$	(209	)	$	347
August 31, 2009	$	447	$	89	$	(186	)	$	350
August 31, 2008	$	580	$	128		(261	)	$	447

        The following table sets forth activity in the Company's warranty reserve:

Year ended	Balance at Beginning of Year		Charges to Operations		Deductions to Reserves			Balance at End of Year
August 31, 2010	$	131	$	250	$	(102	)	$	279
August 31, 2009	$	315	$	22	$	(206	)	$	131
August 31, 2008	$	268	$	166		(119	)	$	315

62

ITEM 9—CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

        None.

ITEM 9A—CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

        The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in the Company's reports under the Securities Exchange Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Commission's rules and forms and that such information is accumulated and communicated to the Company's management, including its 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.

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

MANAGEMENT'S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING

        Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, our principal executive and principal financial officers, or persons performing similar functions, and effected by our board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP.

        Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

        C.I.M. Industries Inc. and the ServiWrap pipeline protection products were acquired by the Company in business combinations during the year ended August 31, 2010. Subsequent to the acquisitions, the Company applied certain corporate-level controls to elements of the acquired companies' internal controls over financial reporting. Management has excluded from its assessment of internal controls over financial reporting those elements that were not subject to those corporate-level internal controls, as permitted by the Sarbanes-Oxley Act of 2002 and the applicable SEC rules and regulations concerning business combinations. The excluded elements represent controls over accounts that are 9% and 15% of consolidated total assets and consolidated revenues from continuing operations, respectively, as of and for the fiscal year ended August 31, 2010. The Company will report on management's assessment of its combined operations in the Company's next annual report on internal controls over financial reporting.

        Under the supervision and with the participation of management, including the Chief Executive Officer and Chief Financial Officer, the Company conducted an evaluation of the effectiveness of the Company's internal control over financial reporting based on the framework in "Internal Control—Integrated Framework" issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this assessment, management has concluded that the internal control over financial reporting was effective as of August 31, 2010.

        PricewaterhouseCoopers LLP, the independent registered public accounting firm that audited and reported on our consolidated financial statements contained herein, has audited the effectiveness of our internal control over financial reporting as of August 31, 2010, and has issued an attestation report on the effectiveness of our internal control over financial reporting included herein.

63

CHANGES IN INTERNAL CONTROL OVER FINANCIAL REPORTING

        There has been no change in the Company's internal control over financial reporting during the Company's most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal control over financial reporting.

ITEM 9B—OTHER INFORMATION

        Not applicable.

64

PART III

ITEM 10—DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

        The information required by Item 10 of Form 10-K, relating to Directors of the Company, compliance with the reporting obligations under Section 16(a) of the Exchange Act, the Company's code of ethics applicable to senior management, procedures for shareholder nominations to the Company's Board of Directors, and the Company's Audit Committee is incorporated by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after the Company's fiscal year ended August 31, 2010. Information regarding the Company's executive officers found in the section captioned "Executive Officers of the Registrant" in Item 4A of Part I hereof is also incorporated by reference into this Item 10.

ITEM 11—EXECUTIVE COMPENSATION

        The information required by Item 11 of Form 10-K, relating to executive and director compensation and certain matters relating to the Company's Compensation and Management Development Committee, is incorporated by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after the Company's fiscal year ended August 31, 2010.

ITEM 12—SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

        The information required by Item 12 of Form 10-K, relating to the stock ownership of certain beneficial owners and management, is incorporated by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after the Company's fiscal year ended August 31, 2010.

        The following table summarizes the Company's equity compensation plans as of August 31, 2010. Further details on the Company's equity compensation plans are discussed in the notes to the consolidated financial statements. The adoption of each of the Company's equity compensation plans was approved by its shareholders.

	Number of shares of Chase common stock to be issued upon the exercise of outstanding options		Weighted average exercise price of outstanding options		Number of shares of Chase common stock remaining available for future issuance
2001 Senior Management Stock Plan		446,000	$	13.23		14,136
2001 Non-Employee Director Stock Plan		2,500		5.25		10,000
2005 Incentive Plan		25,000		11.15		474,537
Total		473,500	$	13.07		498,673

ITEM 13—CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

        The information required by Item 13 of Form 10-K, relating to transactions with related persons and the independence of members of the Company's Board of Directors, is incorporated by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after the Company's fiscal year ended August 31, 2010.

ITEM 14—PRINCIPAL ACCOUNTANT FEES AND SERVICES

        The information required by Item 14 of Form 10-K, relating to fees paid to the Company's independent registered public accounting firm and pre-approval policies of the Company's Audit Committee, is incorporated by reference from the information contained in the Definitive Proxy Statement for the Annual Meeting of Stockholders, which is expected to be filed within 120 days after the Company's fiscal year ended August 31, 2010.

65

PART IV

ITEM 15—EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a)(1) and (2) Financial Statements and Schedules:

        The financial statements are set forth under Item 8 of this Annual Report on Form 10-K. Financial statement schedules have been omitted since they are either not required, not applicable, or the information is otherwise included.

(a)(3)    Exhibit Index:

Exhibit Number		Description
	3.1.1	Articles of Organization of Chase Corporation (incorporated by reference from Exhibit 3.1 to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2004, filed on November 24, 2004 (the "2004 Form 10-K")).
	3.1.2	Articles of Amendment to Articles of Organization of Chase Corporation (incorporated by reference from Exhibit 3.1 to the Company's Quarterly Report on Form 10-Q for the fiscal quarter ended February 29, 2008, filed on April 9, 2008).
	3.2	By-Laws (incorporated by reference from Exhibit 3.2 to the Company's 2004 Form 10-K).
	10.1.1	Voting Agreement between the Trustees of The Edward L. Chase Revocable Trust and the Company dated December 26, 2002 (incorporated by reference from Exhibit 10.30 to the Company's 2004 Form 10-K).
	10.1.2	Voting Agreement Amendment between the Trustees of The Edward L. Chase Revocable Trust and the Company dated December 10, 2003 (incorporated by reference from Exhibit 10.2 to the Company's current report on Form 8-K filed December 29, 2003).
	10.2	Amended and Restated Stock Agreement dated as of August 31, 2004, between the Company and Peter R. Chase (incorporated by reference to Exhibit 10 to the Company's current report on Form 8-K filed on September 2, 2004).*
	10.3	Chase Corporation Employee's Supplemental Pension Plan effective January 1, 2008 (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2008, filed on July 10, 2008).*
	10.4	Chase Corporation Employee's Supplemental Savings Plan effective January 1, 2008 (incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2008, filed on July 10, 2008).*
	10.5	Chase Corporation Non-Qualified Retirement Savings Plan for the Board of Directors, amended and restated effective January 1, 2009 (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 2009, filed on April 9, 2009).*
	10.6.1	Severance Agreement between the Company and Peter R. Chase dated July 10, 2006 (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2006, filed on July 17, 2006).*
	10.6.2	Severance Agreement between the Company and Terry M. Jones dated July 10, 2006 (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 2007, filed on April 16, 2007).*
	10.6.3	Severance Agreement between the Company and Adam P. Chase dated October 1, 2008 (incorporated by reference from Exhibit 10.6.3 to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 2009, filed on November 13, 2009 (the "2009 Form 10-K").*
	10.6.4	Severance Agreement between the Company and Kenneth L. Dumas dated July 10, 2006 (incorporated by reference from Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 2007, filed on April 16, 2007).*

66

Exhibit Number		Description
	10.7.1	Chase Corporation 2001 Senior Management Stock Plan (incorporated by reference from Exhibit 10.44 to the Company's 2004 Form 10-K).*
	10.7.2	Form of award issued under Chase Corporation 2001 Senior Management Stock Plan (incorporated by reference from Exhibit 10.45 to the Company's 2004 Form 10-K).*
	10.8.1	Chase Corporation 2001 Non-Employee Director Stock Option Plan (incorporated by reference from Exhibit 10.46 to the Company's 2004 Form 10-K).*
	10.8.2	Form of award issued under Chase Corporation 2001 Non-Employee Director Stock Option Plan (incorporated by reference from Exhibit 10.47 to the Company's 2004 Form 10-K).*
	10.9.1	Second Amended and Restated Loan Agreement, dated September 4, 2009, between Chase Corporation and Bank of America, N.A. (incorporated by reference to Exhibit 10.9 to the Company's 2009 Form 10-K).
	10.9.2	First Amendment to Second Amended and Restated Loan Agreement, dated June 8, 2010, between Chase Corporation and Bank of America, N.A. (incorporated by reference to Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended May 31, 2010, filed on July 12, 2010).
	10.10.1	Life Insurance Reimbursement Agreement between Chase Corporation and Peter R. Chase dated January 10, 2005 (incorporated by reference from Exhibit 10.1 to the Company's current report on Form 8-K filed January 14, 2005).*
	10.10.2	Split Dollar Agreement between Chase Corporation and Peter R. Chase dated January 10, 2005 (incorporated by reference from Exhibit 10.2 to the Company's current report on Form 8-K filed January 14, 2005).*
	10.10.3	Split Dollar Endorsement dated January 10, 2005 (incorporated by reference from Exhibit 10.3 to the Company's current report on Form 8-K filed January 14, 2005).*
	10.11.1	2005 Incentive Plan of Chase Corporation (incorporated by reference from Exhibit 10.1 to the Company's current report on Form 8-K filed February 9, 2006).*
	10.11.2	Form of restricted stock unit award issued under the Chase Corporation 2005 Incentive Plan for non-executive members of the Board of Directors (incorporated by reference from Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q for the period ended February 28, 2007, filed on April 16, 2007).*
	10.11.3	Form of restricted stock unit award issued under the Chase Corporation 2005 Incentive Plan for members of Executive Management (incorporated by reference from Exhibit 10.5 to the Company's Quarterly Report on Form 10-Q for the period ended February 28, 2007, filed on April 16, 2007).*
	10.11.4	Form of restricted stock agreement issued under the Chase Corporation 2005 Incentive Plan for non-executive members of the Board of Directors (incorporated by reference from Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q for the period ended February 29, 2008, filed on April 9, 2008).*
	10.11.5	Form of restricted stock agreement issued under the Chase Corporation 2005 Incentive Plan for members of Executive Management (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the period ended November 30, 2007, filed on January 9, 2008).*
	10.11.6	Form of stock option award issued under the Chase Corporation 2005 Incentive Plan (incorporated by reference from Exhibit 10.11.6 to the Company's 2009 Form 10-K).*
	10.12.1	FY 2010 Chase Corporation Annual Incentive Plan.*
	10.12.2	FY 2010 Chase Corporation Long Term Incentive Plan*
	10.12.3	FY 2011 Chase Corporation Annual Incentive Plan.*
	10.12.4	FY 2011 Chase Corporation Long Term Incentive Plan*

67

Exhibit Number		Description
	10.13.1	Endorsement Split-Dollar Agreement among the Company, Edward L. Chase, and Sarah Chase as trustee of the ELC Irrevocable Life Insurance Trust (incorporated by reference from Exhibit 10.25 to the Company's Annual Report on Form 10-K for the fiscal year ended August 31, 1998, filed on November 27, 1998).
	10.13.2	Amendment to Endorsement Split-Dollar Agreement between the Company and Sarah Chase as trustee of the ELC Irrevocable Life Insurance Trust (incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the period ended February 28, 2009, filed on April 9, 2009).
	10.14	Purchase and Sale Agreement dated May 21, 2009, between Chase Corporation and ChaseBay Real Estate Holdings, Inc. (incorporated by reference from Exhibit 10.14 to the Company's 2009 Form 10-K).
	10.15.1	Stock Purchase Agreement dated September 4, 2009, among Chase Corporation and the shareholders of C.I.M. Industries Inc. (incorporated by reference from Exhibit 10.15.1 to the Company's 2009 Form 10-K).
	10.15.2	Promissory Notes dated September 4, 2009, among Chase Corporation and the shareholders of C.I.M. Industries Inc. (incorporated by reference from Exhibit 10.15.2 to the Company's 2009 Form 10-K).
	10.16.1	Asset Purchase Agreement dated December 18, 2009 between Chase Corporation and Grace Construction Products Limited (incorporated by reference from Exhibit 10.1 to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 2010, filed in April 9, 2010).
	10.16.2	Term Loan Agreement, dated December 15, 2009, between Chase Corporation and RBS Citizens, National Association (incorporated by reference from Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q for the quarter ended February 28, 2010, filed in April 9, 2010).
	10.17	Asset Purchase Agreement, dated June 28, 2010, among RWA, Inc. (d/b/a Chase EMS), Chase Corporation and MC Assembly LLC.
	21	Subsidiaries of the Registrant
	23.1	Consent of Independent Registered Public Accounting Firm—PricewaterhouseCoopers LLP
	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

*

Identifies management plan or compensatory plan or arrangement.

(b)

See (a)(3) above.

(c)

None.

68

SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) 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
By:	/s/ PETER R. CHASE Peter R. Chase, Chairman and Chief Executive Officer November 15, 2010
By:	/s/ KENNETH L. DUMAS Kenneth L. Dumas Chief Financial Officer and Treasurer November 15, 2010

        Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Signature	Title	Date
/s/ PETER R. CHASE Peter R. Chase	Chairman and Chief Executive Officer (Principal executive officer)	November 15, 2010
/s/ KENNETH L. DUMAS Kenneth L. Dumas	Chief Financial Officer and Treasurer (Principal financial officer and principal accounting officer)	November 15, 2010
/s/ ADAM P. CHASE Adam P. Chase	Director, President & Chief Operating Officer	November 15, 2010
/s/ MARY CLAIRE CHASE Mary Claire Chase	Director	November 15, 2010
/s/ J. BROOKS FENNO J. Brooks Fenno	Director	November 15, 2010
/s/ LEWIS P. GACK Lewis P. Gack	Director	November 15, 2010
/s/ GEORGE M. HUGHES George M. Hughes	Director	November 15, 2010
/s/ RONALD LEVY Ronald Levy	Director	November 15, 2010
/s/ THOMAS WROE, JR. Thomas Wroe, Jr	Director	November 15, 2010

69

EX-10.12.1

Exhibit 10.12.1

CHASE CORPORATION

ANNUAL INCENTIVE PLAN

FY 2010

The Company, in addition to salary and benefits provides further cash compensation to key employees based on achieving preset annual goals.

The plan is maintained and paid at the sole discretion of the Board of Directors and may be modified or suspended at any time by the board.

Upon approval by the Board of Directors, the CFO will administer the plan.

It is the intent of the Board of Directors to exclude the effect of unusual events and expenses from the calculation.  The Compensation and Management Development Committee is given the authority by the Board to use its discretion in determining relevant exclusions.

Targets, awards, opportunities and associated performance award methodology and eligibility requirements will be established by the Compensation and Management Development Committee for the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer and approved by the Board of Directors.  For senior management, the CEO will make recommendations to be approved by the Compensation and Management Development Committee.  For all other employees the CEO will be the approval authority.  See schedule below for award opportunities for the executive officers:

Budgeted EBITDA is the target.  Payment threshold is 90% which yields 50% of individual award opportunity.  From 90% to 100% performance — award increases proportionately between 50 and 100%.  Between 100 and 120% of target award is proportionate between 100% and 200%.

Actual v. Target		Award Earned
90	%	50	%
95	%	75	%
100	%	100	%
105	%	125	%
110	%	150	%
115	%	175	%
120	%	200	%

In order for any amounts to be payable under this Annual Incentive Plan, actual results must meet a threshold level of 90% of the target.  There is a cap on the incentive payments of 200% achieved at 120% of target.

Award Opportunity

Chief Executive Officer	50% of base salary for 100% achievement of target. At 90% of target award is 25% of base salary. For results in excess of target, award increases to 100% of base salary at 120% of target.
Chief Operating Officer	40% of base salary for 100% achievement of target. At 90% of target award is 20% of base salary. For results in excess of target, award increases to 80% of base salary at 120% of target.
Chief Financial Officer	30% of base salary for 100% achievement of target. At 90% of target award is 15% of base salary. For results in excess of target, award increases to 60% of base salary at 120% of target.

In addition to the financial targets the Compensation and Management Development Committee may choose to establish qualitative measurement criteria.  Together with the financial measures these are referred to as critical success factors (CSF).  When utilized, the CEO’s CSF and appropriate weighting is approved by the board.  The CEO will approve all others.

Other management and non-union bonus participants will have opportunities established by the CEO.

To be eligible an employee must be on the active payroll when the bonus is paid and for at least 6 months prior to the end of the fiscal year.

Payment is made in cash no later than 75 days from the close of the fiscal year.

EX-10.12.2

Exhibit 10.12.2

CHASE CORPORATION

Long Term Incentive Plan

Award Design and Grant Process

Fiscal Year Ending August 31, 2010

Key Provisions

1.There are three reward vehicles:  1) Performance-based restricted stock, 2) Time-vested restricted stock and 3) Stock Options.  The C+MDC will decide which will be used each year.  For FYE 2010 performance shares will be 100%.

2.Time-vested restricted stock is fixed and not subject to performance measures and will vest 3 years after granted subject to grant date, pricing, and termination provisions listed below.

3.Stock options will be fixed based on a Black-Sholes calculation, will vest over 3 years and be exercisable for 10 years.

4.Performance shares will be in the form of restricted stock subject to performance and other criteria as follows.

·Performance measures:  Target is earnings per share (EPS) based on current year’s budget determined by dividing net income by the number of diluted shares outstanding as of September 1, 2009 (the beginning of the fiscal year). Actual is net income for the measurement period divided by the number of diluted shares outstanding at the beginning of the fiscal year.

·Performance measurement period:  September 1, 2009 through August 31, 2010

·Vesting:  2 years after performance measurement period (August 31, 2012)

·Grant date:  first day of measurement period

·Stock price for award:  closing price for last trading day prior to grant date

·Threshold:  the point at which an award is earned (90% of target).  Between threshold and target the award increases on a linear basis.

·Stretch area:  performance in excess of target awarded at a higher rate (200% for 120% achievement) with a cap of 200%.  Between target and cap award increases on a linear basis.

Example:

Total opportunity is $50,000 at target; performance share opportunity is $50,000 at target

Stock price (8/31/2009) is $10.00

Threshold is 90% of target

Performance	Payout % of Target		Vesting Shares	Reward Value
Threshold 90%	50	%	2500	$	25,000
Target	100	%	5000	$	50,000
Stretch at 120%	200	%	10,000	$	100,000

Plan metrics:  standard performance measures are 90% threshold, 100% target and 120% maximum.

Standard award measures are 50% at threshold, 100% at target and 200% at maximum.

5.Termination provisions:

Termination Event	Year	Payment in Shares
Retirement	Pro-rated	Paid as scheduled
Voluntary	All shares forfeit	No payment
Without cause	Pro-rated	Paid as scheduled
With cause	All shares forfeit	No payment
Upon change of control	Acceleration at target	Paid at change of control
Death or disability	Pro-rated	Paid as scheduled

6.Eligibility:  key executives and others

Participant	Target % of Base Salary
Peter R. Chase	100	%
Adam P. Chase	80	%
Kenneth L. Dumas	60	%

Award opportunities are set annually and the plan is subject to the approval of the Compensation and Management Development (C&MD) Committee and may be modified from time to time.

FY 2010 SCHEDULE

·Q4/09  Board approves continuance of plan and sets grant date

·Q4/09  Goals and awards proposed by management for 2010

·Q4/09  C&MD Committee reviews and approves 2010 plan

·Q1/11  C&MD Committee approves 2010 results

·Q4/12  Vested 2011 shares are released to participant

EX-10.12.3

Exhibit 10.12.3

CHASE CORPORATION

ANNUAL INCENTIVE PLAN

FY 2011

The Company, in addition to salary and benefits provides further cash compensation to key employees based on achieving preset annual goals.

The plan is maintained and paid at the sole discretion of the Board of Directors and may be modified or suspended at any time by the board.

Upon approval by the Board of Directors, the CFO will administer the plan.

It is the intent of the Board of Directors to exclude the effect of unusual events and expenses from the calculation.  The Compensation and Management Development Committee is given the authority by the Board to use its discretion in determining relevant exclusions.

Targets, awards, opportunities and associated performance award methodology and eligibility requirements will be established by the Compensation and Management Development Committee for the Chief Executive Officer, Chief Operating Officer and Chief Financial Officer and approved by the Board of Directors.  For senior management, the CEO will make recommendations to be approved by the Compensation and Management Development Committee.  For all other employees the CEO will be the approval authority.  See schedule below for award opportunities for the executive officers:

Budgeted EBITDA is the target.  Payment threshold is 90% which yields 50% of individual award opportunity.  From 90% to 100% performance — award increases proportionately between 50 and 100%.  Between 100 and 120% of target award is proportionate between 100% and 200%.

Actual v. Target		Award Earned
90	%	50	%
95	%	75	%
100	%	100	%
105	%	125	%
110	%	150	%
115	%	175	%
120	%	200	%

In order for any amounts to be payable under this Annual Incentive Plan, actual results must meet a threshold level of 90% of the target.  There is a cap on the incentive payments of 200% achieved at 120% of target.

Payment is made in cash no later than 75 days from the close of the fiscal year.

Award Opportunity

Chief Executive Officer	50% of base salary for 100% achievement of target. At 90% of target award is 25% of base salary. For results in excess of target, award increases to 100% of base salary at 120% of target.
Chief Operating Officer	40% of base salary for 100% achievement of target. At 90% of target award is 20% of base salary. For results in excess of target, award increases to 80% of base salary at 120% of target.
Chief Financial Officer	30% of base salary for 100% achievement of target. At 90% of target award is 15% of base salary. For results in excess of target, award increases to 60% of base salary at 120% of target.

In addition to the financial targets the Compensation and Management Development Committee may choose to establish qualitative measurement criteria.  Together with the financial measures these are referred to as critical success factors (CSF).  When utilized, the CEO’s CSF and appropriate weighting is approved by the board.  The CEO will approve all others.

Other management and non-union bonus participants will have opportunities established by the CEO.

To be eligible an employee must be on the active payroll when the bonus is paid and for at least 6 months prior to the end of the fiscal year.

EX-10.12.4

Exhibit 10.12.4

CHASE CORPORATION

Long Term Incentive Plan

Award Design and Grant Process

Fiscal Year Ending August 31, 2011

Key Provisions

1.There are three reward vehicles:  1) Performance-based restricted stock, 2) Time-vested restricted stock and 3) Stock Options.  At least two will be used each year.  For FYE 2011 performance shares will be 50%, time-vested restricted stock will be 25% and stock options will be 25%.

2.Time-vested restricted stock is fixed and not subject to performance measures and will vest 3 years after granted subject to grant date, pricing, and termination provisions listed below.

3.Stock options will be fixed based on a Black-Scholes calculation, will vest over 3 years and be exercisable for 10 years.

4.Performance shares will be in the form of restricted stock subject to performance and other criteria as follows.

·Performance measures:  Target is earnings per share (EPS) based on current year’s budget determined by dividing net income by the number of diluted shares outstanding at September 1, 2010 (the beginning of the fiscal year). Actual is net income for the measurement period divided by the number of diluted shares outstanding at the beginning of the fiscal year.

·Performance measurement period:  September 1, 2010 through August 31, 2011

·Vesting:  2 years after performance measurement period (August 31, 2013)

·Grant date:  first day of measurement period

·Stock price for award:  closing price for last trading day prior to grant date

·Threshold:  the point at which an award is earned (90% of target).  Between threshold and target the award increases on a linear basis.

·Stretch area:  performance in excess of target awarded at a higher rate (200% for 120% achievement) with a cap of 200%.  Between target and cap award increases on a linear basis.

Example:

Individual opportunity is $50,000 at target; performance share opportunity (50%) is $25,000 at target

Stock price (8/31/2010) is $10.00

Threshold is 90% of target

Performance	Payout % of Target		Vesting Shares	Reward Value
Threshold 90%	50	%	1250	$	12,500
Target	100	%	2500	$	25,000
Stretch at 120%	200	%	5000	$	50,000

Plan metrics:  standard performance measures are 90% threshold, 100% target and 120% maximum.

Standard award measures are 50% at threshold, 100% at target and 200% at maximum.

5.Termination provisions:

Termination Event	Year	Payment in Shares
Retirement	Pro-rated	Paid as scheduled
Voluntary	All shares forfeit	No payment
Without cause	Pro-rated	Paid as scheduled
With cause	All shares forfeit	No payment
Upon change of control	Acceleration at target	Paid at change of control
Death or disability	Pro-rated	Paid as scheduled

6.Eligibility:  key executives and others

Participant	Target % of Base Salary
Peter R. Chase	100	%
Adam P. Chase	80	%
Kenneth L. Dumas	60	%

Award opportunities are set annually and the plan is subject to the approval of the Compensation and Management Development (C&MD) Committee and may be modified from time to time.

FY 2011 SCHEDULE

·Q4/10Board approves continuance of plan and sets grant date

·Q4/10Goals and awards proposed by management for 2011

·Q4/10C&MD Committee reviews and approves 2011 plan

·Q1/11Mgmt presents 2010 plan achievement

·Q1/11C&MD Committee approves 2010 results

·Q1/12Management presents assessment of goal achievement

·Q1/12C&MD Committee approves 2011

·Q4/13Vested 2011 shares are released to participant

EX-10.17

Exhibit 10.17

Execution Version

ASSET PURCHASE AGREEMENT

among

RWA, INC.,

d/b/a CHASE EMS,

CHASE CORPORATION,

MC ASSEMBLY LLC

and

M C TEST SERVICE, INC.,

but only with respect to Section 6.14

Effective Date:  June 28, 2010

TABLE OF CONTENTS

			Page
ARTICLE I.		DEFINITIONS	1
1.1	Defined Terms		1
ARTICLE II.		PURCHASE AND SALE	6
2.1	Agreement to Purchase and Sell		6
2.2	Excluded Assets		7
2.3	Non-Assignable Contracts		8
2.4	Assumption of Certain Liabilities		8
2.5	Liabilities Not Assumed		9
ARTICLE III.		PURCHASE PRICE; ADJUSTMENTS; ALLOCATIONS	10
3.1	Consideration		10
3.2	Purchase Price Adjustment		11
3.3	Purchase Price Allocation		12
ARTICLE IV.		REPRESENTATIONS AND WARRANTIES OF THE SELLER PARTIES	12
4.1	Organization		12
4.2	Authorization		12
4.3	Absence of Restrictions and Conflicts		13
4.4	Financial Statements		13
4.5	Undisclosed Liabilities		13
4.6	Absence of Certain Changes		13
4.7	Legal Proceedings		14
4.8	Compliance with Law; Licenses and Permits		14
4.9	Taxes		15
4.10	Real Property		15
4.11	Title and Condition of Purchased Assets		16
4.12	Material Agreements		16
4.13	Intellectual Property; Software		17
4.14	Customer and Supplier Relations		19
4.15	Products; Warranties		19
4.16	Inventory; Accounts Receivable; Accounts Payable		20
4.17	Insurance		20

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TABLE OF CONTENTS

(continued)

			Page
4.18	Employee Benefits		21
4.19	Employees		21
4.20	Labor Matters		22
4.21	Environmental Matters		22
4.22	Transactions with Affiliates		23
4.23	Books of Account; Records		24
4.24	Brokers, Finders and Investment Bankers		24
4.25	Copies of Documents		24
ARTICLE V.		REPRESENTATIONS AND WARRANTIES OF BUYER	24
5.1	Organization		24
5.2	Authorization		24
5.3	Absence of Restrictions and Conflicts		25
5.4	Key Accounts		25
5.5	Brokers, Finders and Investment Bankers		25
ARTICLE VI.		CERTAIN COVENANTS AND AGREEMENTS	25
6.1	Conduct of the Business		25
6.2	Inspection and Access to Information		26
6.3	Notices of Certain Events		26
6.4	No Solicitation of Transactions		27
6.5	Reasonable Efforts; Further Assurances; Cooperation		27
6.6	Public Announcements		28
6.7	Risk of Loss		28
6.8	Tax Cooperation; Allocation of Taxes		28
6.9	Restrictive Covenants		29
6.10	Business Employees		30
6.11	Use of Name		31
6.12	Payments and Property Received		31
6.13	[Intentionally Deleted.]		31
6.14	MC Test Guaranty		31

ii

TABLE OF CONTENTS

(continued)

			Page
ARTICLE VII.		CLOSING	31
7.1	The Closing		31
7.2	Deliveries by the Seller Parties		32
7.3	Deliveries by Buyer		32
7.4	Conditions to Each Party’s Obligations		32
7.5	Conditions to Obligations of Buyer		33
7.6	Conditions to Obligations of the Seller Parties		34
ARTICLE VIII.		TERMINATION	34
8.1	Termination		34
8.2	Specific Performance and Other Remedies		35
8.3	Effect of Termination		35
ARTICLE IX.		INDEMNIFICATION	36
9.1	Survival of Representations, Warranties and Agreements		36
9.2	Indemnification Obligations of the Seller Parties		36
9.3	Indemnification Obligations of Buyer		37
9.4	Determination of Breaches and Calculation of Damages		37
9.5	Indemnification Procedure		38
9.6	Claims Period		39
9.7	Liability Limits		40
ARTICLE X.		MISCELLANEOUS	40
10.1	Notices		40
10.2	Schedules and Exhibits		42
10.3	Assignment; Successors in Interest; Amendment		42
10.4	Number; Gender		42
10.5	Captions		42
10.6	Severability		42
10.7	Counterparts		42
10.8	No Third Party Beneficiaries		42
10.9	Waiver		42
10.10	Integration		43

iii

TABLE OF CONTENTS

(continued)

		Page
10.11	Cooperation Following the Closing	43
10.12	Transaction Costs	43
10.13	Governing Law	43

iv

ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of June 28, 2010, is made and entered into by and among RWA, Inc., d/b/a Chase EMS, a Massachusetts corporation (“Seller”), Chase Corporation, a Massachusetts corporation (“Parent” and together with Seller, the “Seller Parties”), MC Assembly LLC, a Delaware limited liability company (“Buyer”), and, for purposes of Section 6.14 only, M C Test Service, Inc., a Florida corporation (“MC Test”).  The Seller Parties and Buyer are sometimes individually referred to herein as a “Party” and collectively as the “Parties.”

A.Seller is in the business of procurement, assembly, test, repair (including warranty) and direct fulfillment of printed circuit board assemblies (PCBA’s), electronic sale assemblies and complete electronic products (box build) (the “Business”).

B.Parent owns all of the issued and outstanding shares of common stock of Seller.

C.The Seller Parties desire to sell and Buyer desires to purchase all of the Seller Parties’ right, title and interest in and to substantially all of the assets related to the conduct of the Business, and Buyer proposes to assume certain of the liabilities and obligations of the Seller Parties related to the Business, all on the terms and subject to the conditions set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants, agreements and conditions hereinafter set forth, and intending to be legally bound hereby, the Parties agree as follows:

ARTICLE I. DEFINITIONS

1.1Defined Terms.  Capitalized terms not defined when first used in this Agreement are used in this Agreement with the meanings given them in this Section 1.1:

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by or under common control with such other Person.  For purposes of this definition, “control,” “controlled” and “controlling” when used with respect to any specified Person means the power to direct the management and policies of such Person, directly or indirectly, whether through the ownership of voting securities, by contract or otherwise.

“Applicable Law” means all United States, foreign, federal, provincial, state or local laws (including, without limitation, common law), statutes, treaties, judicial decisions, regulations, rules, judgments, orders, decrees, injunctions and agreements with any Governmental Entity.

“Benefit Plan Controlled Liability” means any and all liabilities under (i) Title IV of ERISA, (ii) Section 302 of ERISA, (iii) Sections 412 and 4971 of the Code, (iv) the continuation coverage requirements of Sections 601 et. seq. of ERISA and Section 4980B of the Code and the portability and nondiscrimination requirements of Section 701 et seq. of ERISA and Section 9801 et seq. of the Code or (v) Section 4975 of the Code.

“Business Day” shall mean a day on which banks are authorized to conduct business in the State of Florida, but not including any Saturday or Sunday.

“Closing Date Balance Sheet” means a balance sheet of the Business, as of 11:59 p.m., Eastern Standard Time, on the Closing Date, prepared in accordance with GAAP.

“Code” means the Internal Revenue Code of 1986, as amended.

“Confidential Information” means any data or information of the Business which is valuable to the operation of the Business and not generally known to the public.

“Contract” means any contract, agreement, contract right, license agreement, franchise right or agreement, policies, purchase or sale order, or quotations or executory commitment, arrangement or understanding, whether written or oral.

“Delinquent Payable” means any account payable that remains unpaid more than 30 days from its due date.

“Employee Benefit Plan” means with respect to any Person, each plan, fund, program, agreement, arrangement or scheme, including, but not limited to each plan, fund, program, agreement, arrangement or scheme maintained or required to be maintained under Applicable Law that is at any time sponsored or maintained or required to be sponsored or maintained by such Person or to which such Person makes or has made contributions, or has or has had an obligation or liability providing for employee benefits or for the remuneration, direct or indirect, of the employees, former employees, directors, officers, consultants, independent contractors, contingent workers or leased employees of such Person or the dependents of any of them (whether written or oral), including, without limitation: each pension, retirement, deferred compensation, bonus, incentive compensation, stock purchase, stock option, phantom stock and other equity compensation plan (whether or not tax qualified) including, without limitation, multiemployer pension and welfare plans within the meaning of ERISA §3(37); each “welfare” plan (within the meaning of Section 3(1) of ERISA determined without regard to whether such plan is subject to ERISA); each “pension” plan (within the meaning of Section 3(2) of ERISA, determined without regard to whether such plan is subject to ERISA); and each severance plan or agreement, health, supplemental unemployment benefit, hospitalization insurance, medical, dental, vision, disability, life, legal and each other employee benefit plan, fund, program, agreement or arrangement.

“Environment” means any surface or ground water, drinking water supply, soil, surface or subsurface strata or medium, and the ambient air.

“Environmental Health and Safety Law” means any and all past, present and future local, municipal, state, provincial, national or federal law, statute, decision, judgment, award, regulation, ordinance, decree, rule, code of practice, guidance, order, direction, consent, authorization, permit, or similar requirement, approval or standard in the United States, including common law, concerning environmental, health or safety matters (including, but not limited to, the clean-up standards and practices for Hazardous

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Materials) relating to buildings, equipment, or the Environment, whether set forth in Applicable Law or applied in practice to operations such as those of the Business in the jurisdictions in which the Business is or has been located and/or operated.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

“ERISA Affiliate” means with respect to any Seller Party, any entity which is or has ever been a member of a “controlled group” with, or under “common control” with, such Seller Party (within the meaning of Section 414(b) or (c) of the Code) or which is or has ever been a member of an “affiliated service group” with such Seller Party (within the meaning of Section 414(m) of the Code or any entity which is or has ever been required to be aggregated with such Seller Party under Section 4001(b) of ERISA.

“GAAP” means generally accepted accounting principles as in effect in the United States, consistently applied.

“Governmental Entity” means any U.S., foreign, federal, state, regional, municipal or local governmental or administrative authority, including any court, tribunal, agency, bureau, committee, board, commission or instrumentality constituted or appointed by any such authority.

“Hazardous Materials” means any waste, pollutant, contaminant, hazardous substance, toxic, ignitable, reactive or corrosive substance, radioactive substance, hazardous waste, special waste, industrial waste or substance, by-product, process intermediate product or waste, petroleum or petroleum-derived substance or waste, chemical liquids or solids, liquid or gaseous products, or any constituent of any such substance, or any other material that may be harmful to human health or the Environment and that is controlled under Environmental Health and Safety Laws in any of the jurisdictions in which the Business has been or is being operated.

 “Intellectual Property” means (i) all domestic or foreign patents, patent applications, inventions (whether or not patentable), processes, products, technologies, discoveries, copyrightable and copyrighted works, apparatus, Trade Secrets, trademarks, service marks, trade names, trade dress, symbols, logos, domain names, design rights, customer lists, marketing and customer information, mask works rights, know-how, formulas, licenses, manufacturing data, blueprints, drawings, technical information (whether confidential or otherwise), software, systems, databases, models, methodologies and all other intellectual property and other proprietary rights of every kind; (ii) all licenses, sublicenses or agreements with respect to any of the foregoing; and (iii) all filings, registrations and applications for or issuances of any of the foregoing with or by any Governmental Entity.

“Key Accounts” means such customers identified with an asterisk (“*”) as Key Accounts on Schedule 4.14(b).

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“Knowledge” with respect to the Seller Parties means (i) all facts known by all officers, directors and management employees of the Business after due inquiry and diligence with respect to the matters at hand and (ii) all facts that such persons should have known with respect to the matters at hand if they had made due inquiry and exercised diligence.

“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest, encumbrance, restriction, tenancy or other possessory interest, conditional sale or other title retention agreement, assessment, easement, right of way, covenant, right of first refusal, defect in title or any other claim of any kind in respect of such property or asset.  For the purposes of this Agreement, a Person shall be deemed to own a property or asset that is subject to a Lien if it has acquired or holds such property or asset subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement relating to such property or asset.

“Material Adverse Effect” means any change, event, occurrence, effect or development that is or is reasonably likely to be materially adverse to the business, financial condition, results of operations, properties, assets or liabilities (including contingent liabilities) of the Business, in each case taken either individually or as a whole, or that does or is reasonably likely to prevent or materially delay the consummation of the transactions contemplated by this Agreement; provided, however, that none of the following, nor any change, event, occurrence, effect or development resulting or arising from the following, will constitute (or shall be considered in determining whether there has occurred) a Material Adverse Effect:  (A) changes in interest rates, the U.S. economy in general, U.S. or global securities markets in general, the industries or market segments in which the Business operates in general, or acts of war (whether or not declared) or terrorism that, in each case, do not affect the Business in a materially and disproportionately adverse manner compared to the businesses and entities operating in the same industries in which the Business operates, (B) changes in GAAP that do not affect the Business in a materially and disproportionately adverse manner compared to the businesses and entities operating in the same industries in which the Business operates, (C) the negotiation, execution, pendency, announcement or performance of this Agreement or the transactions contemplated hereby (including, in any such case, the impact thereof on relationships, contractual or otherwise, with customers, suppliers, vendors, lenders, or employees), (D) changes in Applicable Law that affect in general the industries in which the Business operates that do not affect the Business in a materially and disproportionately adverse manner compared to the businesses and entities operating in the same industries in which the Business operates, (E) actions required to be taken by the Selling Parties or Buyer pursuant to the terms of this Agreement, (F) actions taken or omitted to be taken with Buyer’s prior written consent, or (G) actions taken by Buyer or its Affiliates.

“Net Working Capital” means the difference between (i) the current assets included in the Purchased Assets and acquired by Buyer hereunder and (ii) the current liabilities included in the Assumed Liabilities and assumed by Buyer hereunder, as of 11:59 p.m., Eastern Standard Time, on the Closing Date, which amount shall be determined in accordance with GAAP and as set forth on Schedule 2.5; provided,

4

however, that notwithstanding anything contained herein, all of the accounts payable listed on Schedule 2.5 shall be included as current liabilities for purposes of calculating Net Working Capital under this Agreement regardless of whether such accounts payable are Assumed Liabilities and even if such accounts payable are no longer on the books and records of the Seller Parties as of the Closing Date.

“Ordinary Course” means the ordinary course of the Business consistent with past custom and practice (including with respect to quantity and frequency).

 “Permits” means all permits (including, without limitation, environmental, construction and operation permits), notifications, licenses, franchises, certificates, approvals, exemptions, classifications, registrations and other similar documents and authorizations, and applications therefor issued by, or submitted to, any Governmental Entity.

“Permitted Liens” means (i) Liens for Taxes not yet due and payable and (ii) statutory Liens of landlords and Liens of carriers, warehousemen, mechanics, materialmen and repairmen incurred in the Ordinary Course.

“Person” means an individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a Governmental Entity.

“Pre-Closing Tax Period” means (i) any Tax period ending on or before the Closing Date and (ii) with respect to a Tax period that commences before but ends after the Closing Date, the portion of such period up to and including the Closing Date.

“Real Property Lease” means that certain Commercial Lease, dated June 16, 2004, between 21 East Street, LLC, as successor in interest to Bay Street Realty, LLC, and Parent, as may be amended, modified or restated from time to time.

“Related to the Business,” “Relating to the Business,” “in Relation to the Business” or similar words means used in, arising from, or connected to the Business.

“Seller Ancillary Documents” means all certificates, agreements, documents and other instruments (other than this Agreement) to be executed and delivered by any Seller Party in connection with the transactions contemplated by this Agreement.

“Seller Benefit Plan” means each Employee Benefit Plan that is sponsored or maintained or required to be sponsored or maintained at any time by any Seller Party or to which any Seller Party makes or has made, or has or has had an obligation to make, contributions at any time.

“Tax” and “Taxes” means all taxes, assessments, charges, duties, fees, levies or other governmental charges (including interest, penalties or additions associated therewith), including income, franchise, capital stock, real property, personal property, tangible, withholding, employment, payroll, social security, social contribution, unemployment compensation, disability, transfer, sales, use, excise, gross receipts, value-added and all other taxes of any kind for which any Seller Party may have any liability

5

imposed by any Governmental Entity, whether disputed or not, and any charges, interest or penalties imposed by any Governmental Entity and including any obligation to indemnify or otherwise assume or succeed to the Tax liability of any other Person.

“Tax Return” means any report, return, declaration or other information required to be supplied to a Governmental Entity in connection with Taxes, including estimated returns and reports of every kind with respect to Taxes.

“Trade Secrets” means information, including, without limitation, technical or non-technical data, a formula, pattern, compilation, program, including, without limitation, computer software and related source codes, device, method, technique, drawing, process, financial data, financial plan, product plan, list of actual or potential customers or suppliers, or other information similar to any of the foregoing, which derives independent economic value, actual or potential, from not being generally known to, and not being readily ascertainable by proper means by, other persons who can derive economic value from its disclosure or use.

ARTICLE II. PURCHASE AND SALE

2.1Agreement to Purchase and Sell.  Subject to the terms and conditions of this Agreement and except as otherwise specifically provided in Section 2.2, at the Closing the Seller Parties will, or will cause their respective Affiliates to, grant, sell, assign, transfer and deliver to Buyer or its nominee, and Buyer or such nominee will purchase and acquire, free and clear of all Liens other than Permitted Liens, all right, title and interest of, in and to all of the assets, properties, rights (contractual or otherwise) and interests owned, used, occupied or held by or for the benefit of any Seller Party Relating to the Business, wherever located (all such assets, properties and rights collectively referred to herein as the “Purchased Assets”), including, without limitation, all of the following:

(a)all machinery, equipment (including, without limitation, computer hardware), tooling, parts, furniture, data and telephone equipment supplies and other tangible personal property of any Seller Party used in Relation to the Business including, without limitation, the personal property listed on Schedule 2.1(a);

(b)all raw materials, component parts, production and non-production supplies, work-in-process and finished goods inventory and other inventory of any Seller Party Related to the Business (the “Inventory”);

(c)all Permits held by or issued to any Seller Party in Relation to the Business (to the extent the same are transferable) including, without limitation, the Permits listed on Schedule 2.1(c);

(d)all Intellectual Property that any Seller Party owns or has the right to use in Relation to the Business (collectively, the “Purchased Intellectual Property”) including, without limitation, the Intellectual Property listed on Schedule 2.1(d);

6

(e)all claims and rights under all Contracts to which any Seller Party is a party that Relate to the Business (the “Purchased Agreements”) including, without limitation, the Contracts listed on Schedule 2.1(e);

(f)all accounts receivable and notes receivable, deposits, prepaid expenses and other miscellaneous tangible and intangible assets of any Seller Party Relating to the Business, including, without limitation, the items listed on Schedule 2.1(f) (subject to increases or decreases therein in the Ordinary Course);

(g)all causes of action, judgments, claims or demands of whatever kind or description Relating to the Business that any Seller Party has or may have against any Person;

(h)all information, files, correspondence, records, data, plans, reports and recorded knowledge Relating to the Business, including all customer, supplier and price and mailing lists; all accounting or other books and records; and all information and records related to the operation and maintenance of the Purchased Assets, in whatever media retained or stored, including, without limitation, computer programs and disks; provided, however, that the Seller Parties shall be permitted to keep and utilize one copy of all such information and records for the limited purpose of concluding their involvement in the Business and for complying with Applicable Law as long as such use, or any other use or disclosure of such information and records by the Seller Parties and their Affiliates, does not constitute a violation of the restrictive covenants set forth in Section 6.9;

(i)all telephone numbers of the Seller Parties Related to the Business, including the telephone numbers set forth on Schedule 2.1(i); and

(j)all goodwill Relating to the Business.

2.2Excluded Assets.  Notwithstanding anything to the contrary set forth in this Agreement, Buyer shall not purchase or acquire any assets, properties or rights of any Seller Party other than the Purchased Assets, and the Purchased Assets do not include the following assets, properties and rights of any Seller Party (collectively, the “Excluded Assets”):

(a)any cash, cash equivalents (other than accounts receivable) or marketable securities and all rights to any bank accounts;

(b)any Permit that by its terms is not transferable to Buyer;

(c)the charter documents, minute books, stock ledgers, Tax Returns, books of account and other constituent records relating to the corporate organization of any Seller Party;

(d)the rights that accrue to the Seller Parties under this Agreement;

(e)any equity interests in any Person;

(f)all Employee Benefit Plans and Employee Benefit Plans’ assets and all ownership and other rights with respect to the Seller Benefit Plans;

7

(g)the Contracts listed on Schedule 2.2(g) and all rights and obligations arising thereunder; and

(h)those assets, properties and rights set forth on Schedule 2.2(h).

2.3Non-Assignable Contracts.  To the extent that third party consents relating to the assignment or transfer to Buyer of any Purchased Agreements have not been obtained by the Seller Parties as of the Closing, the Seller Parties shall, during the remaining term of such Purchased Agreements (the “Non-Assignable Contracts”), use all commercially available efforts to (a) obtain the consent of the applicable third party or parties thereto, (b) make the benefit of such Non-Assignable Contracts available to Buyer, and (c) enforce at the request of Buyer and at the expense and for the account of Buyer, any rights of the applicable Seller Party arising from such Non-Assignable Contracts against the other party or parties thereto (including the right to elect to terminate any such Non-Assignable Contract in accordance with the terms thereof).  No Seller Party will take any action or suffer any omission that would limit or restrict or terminate in any material respect the benefits to Buyer of such Non-Assignable Contracts unless, in good faith and after consultation with and prior written notice to Buyer, such Seller Party is ordered orally or in writing to do so by a Governmental Entity of competent jurisdiction or such Seller Party is otherwise required to do so by law; provided that if any such order is appealable, such Seller Party will take such actions as are requested by Buyer to file and pursue such appeal and to obtain a stay of such order.  With respect to any Non-Assignable Contract as to which the necessary approval or consent for the assignment or transfer to Buyer is obtained following the Closing, the applicable Seller Party shall transfer such Non-Assignable Contract to Buyer, for no additional consideration, by execution and delivery of an instrument of conveyance reasonably satisfactory to Buyer and such Seller Party within three Business Days following receipt of such approval or consent.

2.4Assumption of Certain Liabilities.  Buyer shall only assume and agree to pay, discharge or perform, as appropriate, the following liabilities and obligations of the Seller Parties existing as of the Closing and arising out of the conduct of the Business prior to or as of the Closing (collectively, the “Assumed Liabilities”):

(a)liabilities and obligations that arise under the Purchased Agreements listed on Schedule 2.1(e), to the extent (i) such liabilities and obligations Relate to the Business, (ii) such Purchased Agreements are assigned to Buyer (or Buyer is provided the benefits thereof), (iii) such liabilities and obligations arise and are first required to be performed after the Closing, and (iv) such liabilities and obligations are not Retained Liabilities under Section 2.5(a);

(b)liabilities for accounts payable to the extent such liabilities (i) Relate to the Business, (ii) were incurred in the Ordinary Course, (iii) are not yet due and payable as of the Closing Date, and (iv) are not Retained Liabilities under Section 2.5(a);

(c)accrued liabilities to the extent such liabilities (i) Relate to the Business, and (ii) were accrued in the Ordinary Course, and (iv) are not Retained Liabilities under Section 2.5(a); or

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(d)liabilities for accrued vacation days with respect to Business Employees hired and employed by Buyer.

2.5Liabilities Not Assumed.

(a)With the exception of the Assumed Liabilities, Buyer shall not, by the execution and performance of this Agreement, or otherwise, assume or otherwise be responsible for any liability or obligation of any Seller Party of any nature, or claims of such liability or obligation, matured or unmatured, liquidated or unliquidated, fixed or contingent, or known or unknown, whether arising out of occurrences prior to, at or after the date hereof, including, without limitation, any liability or obligation of any Seller Party:

(i)for any indebtedness for borrowed money, including any interest or penalties accrued thereon;

(ii)for any Taxes incurred by any Seller Party or any Taxes arising as a result of any Seller Party’s operation of the Business or ownership of the Purchased Assets prior to the Closing Date or for any Transfer Taxes;

(iii)relating to or resulting from a violation of any Applicable Law that occurs or exists prior to the Closing Date or a violation of any Applicable Law by any Seller Party at any time;

(iv)to any former or current member, director, consultant, employee, or Affiliate of any Seller Party, including, without limitation, the payment of all wages, benefits, bonuses, overtime, paid time off, sick and personal days, severance pay, if any, and all other amounts legally owing to such Persons through the Closing Date, together with all amounts due for payroll, employment and other taxes in respect thereto, other than liabilities assumed by Buyer under Section 2.4(d);

(v)relating to, resulting from or arising out of any former operation of any Seller Party that has been discontinued or disposed of prior to the Closing;

(vi)relating to any Excluded Asset;

(vii)relating to any product manufactured, sold or distributed on or prior to the Closing Date (including liabilities arising out of or related to any product liability claim or product recall);

(viii)relating to, resulting from or arising under any Seller Benefit Plan or otherwise relating to any current or former employee of any Seller Party or dependent thereof, including, without limitation, severance, retention or termination payments, any pension, retirement or deferred compensation obligations or any group health plan continuation coverage obligations arising under Part 6 of Title I of ERISA or other similar state law prior to, on or after the Closing, including any such obligations that arise after the termination of any Seller Party’s group health plans (whether or not triggered by the transactions contemplated by this Agreement) or any Benefit Plan Controlled Group Liability;

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(ix)relating to or resulting from any conditions or circumstances, whether known or unknown, existing or having occurred, at any location owned, leased or operated by any Seller Party or its respective predecessors on or prior to the Closing Date where such conditions or circumstances are in violation of, or require remediation, investigation or payment of costs or damages pursuant to, any Environmental Health and Safety Law or common law; claims of third parties (including any Governmental Authority) arising from conditions or circumstances, whether known or unknown, existing or having occurred at any real property formerly owned, leased or operated by any Seller Party or its respective predecessors that are in violation of, or require remediation, investigation or payment of costs or damages pursuant to, any Environmental Health and Safety Law or common law; and any conditions, whether known or unknown, related to Hazardous Materials or other contaminants, wherever located, that were used, generated, transported, stored, treated, released or otherwise handled by any Seller Party or its respective predecessors or by any other Person for whose conduct the Seller Parties or any of their respective predecessors are or may be held responsible at any time on or before the Closing Date;

(x)incurred in connection with the negotiation, preparation and execution of this Agreement and the transactions contemplated hereby and any fees and expenses of counsel, accountants, brokers, financial advisors or other experts of such Seller Party or any member of such Seller Party, if applicable; or

(xi)any intercompany obligations between any Seller Party, on the one hand, and any other Seller Party or Affiliate of any Seller Party, on the other hand.

 (All such liabilities and obligations, or claims of such liabilities or obligations, are referred to herein collectively as the “Retained Liabilities”.)

(b)The Seller Parties shall pay or otherwise satisfy in full, promptly when due, all Retained Liabilities.

ARTICLE III. PURCHASE PRICE;
ADJUSTMENTS; ALLOCATIONS

3.1Consideration.  Upon the terms and subject to the conditions set forth in this Agreement, in consideration for the sale by the Seller Parties to Buyer of the Purchased Assets and the representations, warranties and covenants made by the Seller Parties to Buyer, at the Closing:

(a)Buyer shall assume or caused to be paid at the Closing the Assumed Liabilities; and

(b)Buyer shall pay to the Seller Parties an amount equal to $13,000,000 (the “Purchase Price”).  The Purchase Price shall be paid by Buyer to the Seller Parties by wire transfer of immediately available funds to an account designated by the Seller Parties.

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3.2Purchase Price Adjustment.

(a)As promptly as practicable after Closing, but in no event later than 60  days following the Closing Date, Buyer shall deliver to the Seller Parties a statement (the “Closing Statement”) setting forth a calculation, with supporting detail, of the Net Working Capital and the Purchase Price, together with Buyer’s determination of the Closing Date Balance Sheet.  Buyer and its accountants shall be permitted to discuss with the Seller Parties and their accountants the proposed Closing Date Balance Sheet and Closing Statement, and shall have access upon reasonable notice at all reasonable times during normal business hours to the work papers and supporting records of the Seller Parties.  If the Seller Parties have any objections to the Closing Statement or Closing Date Balance Sheet as prepared by Buyer, the Seller Parties must, within 20 days after the Seller Parties’ receipt thereof, give written notice (the “Notice”) to Buyer specifying in reasonable detail such objections.  During such 20-day period after the Seller Parties’ receipt of the Closing Statement, the Seller Parties and their accountants shall be permitted to discuss with Buyer and its accountants the proposed Closing Date Balance Sheet and Closing Statement, and shall have access upon reasonable notice at all reasonable times during normal business hours to the work papers and supporting records of Buyer.  If the Seller Parties do not deliver the Notice within such 20-day period, Buyer’s determination of the amounts set forth on the Closing Statement and the Closing Date Balance Sheet shall be final, binding and conclusive on the Seller Parties and Buyer.  With respect to any disputed amounts, the Seller Parties and Buyer shall negotiate in good faith during the 30-day period (the “Resolution Period”) after the date of Buyer’s receipt of the Notice to resolve any such disputes.

(b)If the Seller Parties and Buyer are unable to resolve all such disputes within the Resolution Period, then, within five Business Days after the expiration of the Resolution Period, all disputes shall be submitted to a nationally recognized, independent public accounting firm selected by mutual agreement of the Seller Parties and Buyer (or if they cannot agree, selected by mutual agreement of the independent public accounting firms regularly used by the Seller Parties and Buyer in the conduct of their respective businesses); provided, however, that in no event shall any such dispute be submitted to Ernst & Young LLP or PricewaterhouseCoopers LLP (the “Accountant”), who shall be engaged to provide a final and conclusive resolution of all unresolved disputes within 60 Business Days after such engagement.  In selecting such firm as may be selected in accordance with the foregoing sentence as the Accountant for purposes of this Agreement, the parties hereby waive any conflict or potential conflict arising from any services performed by such firm for the Seller Parties, Buyer or any of their respective affiliates.  The Accountant shall act as an arbitrator to determine only those issues that remain in dispute and such determination shall be based solely on a review of the factual materials presented by the Seller Parties and Buyer.  The Accountant shall have no authority to determine that any such disputed amount is outside the applicable range presented by Buyer in its Closing Statement and the Seller Parties in its Notice.  The Seller Parties and Buyer shall make their presentations within 30 days after the dispute is submitted to the Accountant.  The Accountant’s determination shall be made within 30 days of such presentations, shall be set forth in a written statement delivered to the Seller Parties and Buyer and shall be final, binding and conclusive on the parties.  The fees and expenses of the Accountant shall be allocated by the Accountant between the Seller Parties, on the one hand, and Buyer, on the other hand, based on the aggregate percentage that the portions of the contested amounts not awarded to each party

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bear to the aggregate amounts contested by such party, and each party shall bear its own other expenses in connection therewith, including its attorneys’ and accountants’ fees.

(c)Upon the final determination pursuant to Section 3.2(a) of the actual Closing Date Balance Sheet (the “Final Closing Date Balance Sheet”) and the actual Net Working Capital (the “Actual Net Working Capital Amount”), if the Actual Net Working Capital Amount exceeds $4,500,000.00, then the Purchase Price shall be increased by the amount of such excess and Buyer shall pay to the Seller Parties an amount equal to such excess.

(d)Any payment required to be made pursuant to Section 3.2(c) shall be made by the Seller Parties or Buyer, as the case may be, within three Business Days after final determination of the Actual Net Working Capital Amount, by wire transfer of immediately available funds to a bank account designated by the other Party.

3.3Purchase Price Allocation.  The Parties hereby agree that the Purchase Price shall be allocated for purposes of this Agreement and for federal, state, local and foreign Tax purposes as set forth on Schedule 3.3.  The Parties shall file all federal, state, local and foreign Tax Returns, including Internal Revenue Form 8594, in accordance with the allocation set forth on Schedule 3.3.

ARTICLE IV. REPRESENTATIONS AND WARRANTIES
OF THE SELLER PARTIES

The Seller Parties jointly and severally represent and warrant to Buyer as follows:

4.1Organization.  Each Seller Party is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it was formed and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted.  Seller is duly qualified or registered to transact business under the Applicable Law of each jurisdiction where the character of its activities or the location of the properties owned or leased by it requires such qualification or registration, which jurisdictions are listed on Schedule 4.1.  Seller has no subsidiaries, nor does Seller hold any direct or indirect beneficial interest in any other Person.  Parent owns 100% of the issued and outstanding capital stock of Seller.

4.2Authorization.  Each Seller Party has full corporate power and authority to execute and deliver this Agreement and any Seller Ancillary Document to which it is a party and to perform its obligations under this Agreement and the Seller Ancillary Documents and to consummate the transactions contemplated hereby and thereby.  The execution and delivery of this Agreement and the Seller Ancillary Documents to which a Seller Party is a party by such Seller Party, the performance by each Seller Party of its obligations hereunder and thereunder and the consummation of the transactions provided for herein and therein have been duly and validly authorized by all necessary corporate action on the part of each Seller Party.  This Agreement has been, and the applicable Seller Ancillary Documents will be as of the Closing, duly executed and delivered by each Seller Party and do (and will) constitute the valid and binding agreements of each Seller Party, enforceable against it in accordance with their respective terms.

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4.3Absence of Restrictions and Conflicts.  Except as set forth on Schedule 4.3, the execution, delivery and performance of this Agreement and the Seller Ancillary Documents, the consummation of the transactions provided for herein and therein and the fulfillment of and compliance with the terms and conditions hereof and thereof do not (or will not), with the passing of time or the giving of notice or both, violate or conflict with, constitute a breach of or default under, result in the loss of any benefit under, permit the acceleration of any obligation under or create in any party the right to terminate, modify or cancel (a) any term or provision of the charter documents of any Seller Party, (b) any Purchased Agreement, or any other Contract applicable to any Seller Party, the Business or the Purchased Assets, (c) any judgment, decree or order of any Governmental Entity to which any Seller Party is a party or by which any Seller Party or the Purchased Assets is bound, or (d) any Permit or Applicable Law applicable to any Seller Party or the Purchased Assets.  No consent, approval, order or authorization of, or registration, declaration or filing with, any Governmental Entity is required with respect to any Seller Party in connection with the execution, delivery or performance of this Agreement and the Seller Ancillary Documents or the consummation of the transactions provided for herein and therein.

4.4Financial Statements.  The Seller Parties have furnished to Buyer (a) an unaudited balance sheet, statement of income and retained earnings and statement of cash flows of the Business as of and for each of the fiscal years ended on August 31, 2009, 2008 and 2007 and (b) the unaudited balance sheet, statement of income and retained earnings and statement of cash flows of the Business as of and for the seven-month period ended on May 31, 2010 (collectively, the “Financial Statements”).  The Financial Statements (i) have been prepared from and are in accordance with the books and records of the Seller Parties, (ii) have been prepared in conformity with GAAP and, to the extent not inconsistent with GAAP, pursuant to the standard accounting procedures of the Seller Parties, consistently applied, which the Seller Parties have made available to Buyer, (iii) are true, correct and complete, and (iv) fairly present the financial condition of the Business as of the dates stated and the related results of its operations and changes in cash flows for the years or the seven-month period, as applicable, then ended.

4.5Undisclosed Liabilities.  Except (a) as and to the extent disclosed or reserved against the most recent balance sheet included in the Financial Statements (the “Most Recent Balance Sheet”), (b) as incurred after the date of the Most Recent Balance Sheet in the Ordinary Course and that in any event are not material, or (c) as set forth in Schedule 4.5, no Seller Party has any liabilities or obligations Relating to the Business of any nature, absolute, accrued, contingent or otherwise and whether due or to become due.

4.6Absence of Certain Changes.  Since August 31, 2009, and except as set forth in Schedule 4.6, the Seller Parties have operated the Business only in the Ordinary Course and there has not been any event, occurrence, development or state of circumstances or facts which, individually or in the aggregate, has had or could reasonably be expected to have a Material Adverse Effect.  Without limiting the generality of the foregoing, since August 31, 2009, in connection with the Business:

(a)there has not been any damage, destruction, loss or casualty to property or assets used in the Business with a value in excess of $20,000, whether or not covered by insurance.

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(b)no Seller Party has sold, leased, transferred or assigned any assets used or held for use in the Business (other than sales of Inventory in the Ordinary Course);

(c)no Seller Party has entered into any Contract Related to the Business outside the Ordinary Course;

(d)no Person (including the Seller Parties) has accelerated, terminated, modified or cancelled any Contract that is or would otherwise be a Purchased Agreement;

(e)no Seller Party has imposed any Lien on any Purchased Asset;

(f)no Seller Party has made any investment in or loan to any other Person;

(g)no Seller Party has delayed or postponed the payment of any account payable or other liabilities;

(h)there has not been any other occurrence, event or circumstance outside the Ordinary Course; and

(i)no Seller Party has entered into any Contract with respect to or committed to engage in any of the foregoing.

4.7Legal Proceedings.  Except as set forth in Schedule 4.7, there is no suit, claim, action, proceeding or investigation (an “Action”) pending or, to the Knowledge of the Seller Parties, threatened against any Seller Party or any of its respective officers or directors Relating to the Business or relating to or affecting the Purchased Assets.  No Seller Party is subject to, a party to or bound by any outstanding order, writ, injunction, decree or award Relating to the Business or relating to or affecting the Purchased Assets.  None of the Actions set forth on Schedule 4.7, if finally determined adversely to any Seller Party, will constitute, individually or in the aggregate, a Material Adverse Effect.  Except as set forth Schedule 4.7, since January 1, 2005, (a) there has not been any Action asserted, or to the Knowledge of the Seller Parties, threatened against any Seller Party relating to such Seller Party’s relationship with past, existing or future customers, lessees, users, purchasers or licensees of any Intellectual Property, goods or services in Relation to the Business and (b) no Seller Party has been subject to any outstanding order, writ, injunction or decree relating to such Seller Party’s relationship with past, existing or future customers, lessees, users, purchasers or licensees of any Intellectual Property, goods or services in Relation to the Business.

4.8Compliance with Law; Licenses and Permits.

(a)Each Seller Party is (and has been at all times during the past five years) in compliance in all material respects with all Applicable Laws Relating to the Business or relating to or affecting the Purchased Assets.  Except as set forth in Schedule 4.8(a), (i) no Seller Party has been charged with and, to the Knowledge of the Seller Parties, is not now under investigation with respect to, a violation of any Applicable Law Relating to the Business or relating to or affecting the Purchased Assets and (ii) each Seller Party has filed all reports and has all Permits required to be filed with any Governmental Entity Relating to the Business or relating to or affecting the Purchased Assets.

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(b)No Seller Party, nor any director, officer, agent, employee or Person acting on behalf of any Seller Party has at any time within the past six years, in Relation to the Business, directly or indirectly, given or agreed to give anything of value or provide any benefit to any official of any Governmental Entity, foreign or domestic political party or official thereof, supplier, customer or other Person who was, is or may be in a position to help or hinder the Business or assist in connection with any actual or proposed transaction in order to (i) assist the Business in obtaining or retaining business; or (ii) under circumstances that involve a violation of any Applicable Law, including the Foreign Corrupt Practices Act.

(c)Schedule 4.8(c) is a true and complete list of all Permits Relating to the Business (including, without limitation, construction and operation permits and environmental permits relating to any Purchased Assets).  All such Permits are valid, binding and in full force and effect.  The execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby will not adversely affect any such Permit.  The Seller Parties have taken all necessary action to maintain each such Permit, except where the failure to so act is not likely to have a Material Adverse Effect.  No Seller Party is in default and no condition exists that with notice or lapse of time or both could constitute default under any such Permit.  No loss, revocation or expiration of any such Permit is threatened, pending, or reasonably foreseeable (other than expiration upon the end of any term for which timely renewal applications have been filed during the applicable time period).

4.9Taxes.

(a)Seller has prepared and timely filed all Tax Returns that it was required to file (taking into account any extension of time to file).  Seller has timely paid all Taxes that it owes.  Seller is not a party to or bound by any, and there are no, closing agreements, Tax sharing agreements, Tax Return extensions or waivers, extensions of statutes of limitations and rulings or similar agreements with any Tax authority or other party involving Taxes due by Seller that could reasonably be expected to impact the Business or the Purchased Assets.

(b)Seller has withheld and paid all Taxes required to have been withheld and paid in connection with any amounts paid or owing to any employee, independent contractor, creditor, stockholder, or other third parry, and all Forms W-2 and 1099 required with respect thereto have been properly completed and timely filed.

(c)No Seller Party and no director or officer (or employee responsible for Tax matters) of Seller expects any authority to assess any additional Taxes for any period for which Tax Returns have been filed. There is no dispute or claim concerning any Tax Liability of Seller either (i) claimed or raised by any authority in writing or (ii) as to which any of Seller Parties and the directors and officers (and employees responsible for Tax matters) of Seller Parties has Knowledge based upon personal contact with any agent of such authority.

4.10Real Property.  Except as set forth on Schedule 4.10, no Seller Party currently owns, nor has any Seller Party ever owned, any real property in Relation to the Business during the past five years.  During the past five years, no Seller Party has ever leased or operated any real property in Relation to the Business other than the real property leased pursuant to the Real Property Lease (the “Leased Real Property”). The Leased Real Property constitutes the only real

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property used by any Seller Party in the conduct and operation of the Business.  Except for Seller and the fee owner of the Leased Real Property, no Person has any contractual right to use or occupy, or is using or occupying, any portion of the Leased Real Property.

4.11Title and Condition of Purchased Assets.  Except as set forth in Schedule 4.11, the Seller Parties own and have, and will convey at Closing, good and marketable title to all of the Purchased Assets, free and clear of any Liens except for Permitted Liens.  The Purchased Assets are (a) in good operating condition and in a state of good maintenance and repair, ordinary wear and tear excepted, (b) are usable in the regular and Ordinary Course, (c) constitute all of the assets and property now used in or necessary for the conduct of the Business as presently conducted by the Seller Parties and their Affiliates, and (d) conform to all Applicable Law.  No Person other than the Seller Parties owns any equipment, computer hardware, machinery, vehicles or other tangible personal property or assets situated on the Leased Real Property, except for such assets that are leased by the Seller Parties and disclosed on Schedule 4.11.

4.12Material Agreements.

(a)Schedule 4.12(a) sets forth a true, correct and complete list of all Contracts to which any Seller Party or any Affiliate of any Seller Party is a party that Relate to the Business or relate to the Purchased Assets and that fall within any of the following categories:

(i)all leases (as lessor or lessee) of any personal or mixed, tangible or intangible, property or assets (but excluding any real property leases) involving an annual commitment or payment of more than $20,000 individually;

(ii)any Contract that, after the Closing, would have the effect of limiting the freedom of Buyer to compete in any line of business in any geographic area or to hire any individual or group of individuals, including any Contracts with distributors granting any exclusive rights;

(iii)joint venture, partnership, operating and similar Contracts;

(iv)all franchising (as franchisor or franchisee) Contracts;

(v)any Contract for capital expenditures or the acquisition or construction of fixed assets requiring the payment by any Seller Party of an amount in excess of $20,000;

(vi)any Contract that provides for an increased payment or benefit, or accelerated vesting of rights, upon the execution of this Agreement or in connection with the transactions contemplated hereby;

(vii)any Contract granting any Person a Lien on all or any part of any of the Purchased Assets;

(viii)any Contract regarding the cleanup, abatement or other actions in connection with, or indemnification with respect to, any Hazardous Materials, the

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remediation of any existing environmental condition or relating to the performance of any environmental audit or study;

(ix)any Contract granting to any Person an option or a first refusal, first offer or similar preferential right to purchase or acquire any assets;

(x)any Contract that is a fixed price or other risk sharing agreement for an amount greater than $20,000 with a customer not cancelable by any Seller Party (without premium or penalty) upon no more than 30 days notice;

(xi)any Contract with any agent, distributor or representative;

(xii)any Contract for the granting or receiving of a license or sublicense or under which any Person is obligated to pay or has the right to receive a royalty, license fee or similar payment;

(xiii)any Contract providing for the indemnification or holding harmless of any officer, director, employee or any other Person;

(xiv)any Contract providing for “earn-outs” or other contingent payments;

(xv)any Contract with or for the benefit of any Affiliate of any Seller Party;

(xvi)any Contract that contains minimum purchase conditions or requirements or other terms that restrict or limit the purchasing relationships of any Seller Party or any customer, licensee or lessee thereof; and

(xvii)any Contract with any customer for the provision of goods or services by any Seller Party involving payments of more than $100,000 over its term.

(b)Each Purchased Agreement is legal, valid, binding and enforceable in accordance with its respective terms with respect to the applicable Seller Party and, to the Knowledge of the Seller Parties, each other party thereto.  There are no existing material defaults or breaches of any Seller Party under any Purchased Agreement (or events or conditions which, with notice or lapse of time or both would constitute a default or breach) and, to the Knowledge of the Seller Parties, there are no existing material defaults or breaches (or events or conditions which, with any notice or lapse of time or both, would constitute a default or breach) with respect to any other party to any such Purchased Agreement.

4.13Intellectual Property; Software.

(a)Set forth on Schedule 2.1(d) is a true and correct list of all patents, internet domain names, URL addresses, registered trademarks, registered copyrights and all applications therefor that are owned by any Seller Party in Relation to the Business and all unregistered trademarks and copyrights and Intellectual Property, including, without limitation, any trade names or logos, that are material to the Business that are owned by any Seller Party.

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(b)Except as set forth in Schedule 4.13(b): (i) the applicable Seller Party owns the entire right, title and interest in and to, and has the right to use, free and clear of any Liens, the Purchased Intellectual Property that is not owned by a third party and licensed to Seller (the “Owned Intellectual Property”); and such Seller Party has the exclusive right to bring Actions for the infringement thereof; (ii) all of the patents, trademark registrations, service mark registrations, trade name registrations, domain name registrations, design right registrations and copyright registrations included in the Owned Intellectual Property are valid; (iii) no Person has asserted in writing that, with respect to the Owned Intellectual Property, any Seller Party or a licensee of any Seller Party is infringing or has infringed any domestic or foreign patent, trademark, service mark, tradename, copyright, domain name right or design right, or has misappropriated or improperly used or disclosed any Trade Secret, Confidential Information or know-how; (iv) the Owned Intellectual Property, and its use or operation, does not infringe, and has not infringed, on any Intellectual Property of any Person, and has not involved the misappropriation or improper use or disclosure of any Trade Secrets, Confidential Information or know-how of any Person; (v) all working requirements and all fees, annuities and other payments that are due on or before the Closing Date for any of the Owned Intellectual Property, including, without limitation, all foreign or domestic patents, patent applications, trademark registrations, service mark registrations, tradename registrations, domain name registrations, copyright registrations and any applications for any of the preceding, have been met or paid; (vi) the making, using, presenting, selling, manufacturing, marketing, licensing, reproduction, distribution or publishing of any process, service, machine, manufacture, article, composition of matter or material pursuant to any part of the Owned Intellectual Property does not infringe any domestic or foreign patent, trademark, service mark, tradename, copyright or other Intellectual Property right; (vii) the Owned Intellectual Property is not the subject of any pending Action; and (viii) to the Knowledge of the Seller Parties, no Person is infringing on any of Intellectual Property rights of any Seller Party related to or included in the Purchased Assets.

(c)The Seller Parties have taken reasonable and appropriate measures to safeguard and maintain (i) the secrecy and confidentiality of all Trade Secrets contained in the Purchased Intellectual Property; (ii) all copyrights, inventions and patents contained in the Purchased Intellectual Property; and (iii) all trademarks, service marks, domain names and trade names contained in the Purchased Intellectual Property.

(d)Schedule 4.13(d) sets forth a true and complete list of: (i) all software Relating to the Business that is owned by any Seller Party (the “Seller Proprietary Software”); (ii) all software other than Seller Proprietary Software used by any Seller Party in Relation to the Business other than “off-the-shelf” software (the “Seller Licensed Software” and, together with the Seller Proprietary Software, the “Seller Software”); and (iii) all technical and restricted materials in any Seller Party’s possession relating to the acquisition, design, development, use or maintenance of computer code program documentation and materials used in Relation to the Business.

(e)The applicable Seller Party has all right, title and interest in and to all intellectual property rights in the Seller Proprietary Software free and clear of all Liens except for Permitted Liens.  The use of the Seller Software does not breach any terms of any license or other agreement between any Seller Party and any other Person.  The Seller Parties are in compliance with the terms and conditions of all license agreements in favor of the Seller Parties

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relating to the Seller Licensed Software.  The Seller Proprietary Software was: (i) developed by employees of the Seller Parties working within the scope of their employment at the time of such development; (ii) developed by agents, consultants, contractors or others who have executed appropriate instruments of assignment in favor of the Seller Parties as assignee that have conveyed to the Seller Parties ownership of its Intellectual Property rights in the Seller Proprietary Software; or (iii) acquired by the Seller Parties.  No Seller Party has received notice from any other Person claiming any right, title or interest in the Seller Proprietary Software.  No Seller Party has granted rights in the Seller Proprietary Software to any Person.

4.14Customer and Supplier Relations.

(a)Schedule 4.14(a) sets forth a list of each supplier of goods or services to the Business to whom any Seller Party paid in the aggregate more than $50,000 during the 12-month period ended April 30, 2010 (each, a “Major Supplier”), together with the amount paid during such period.  No Seller Party is engaged in any material dispute with any Major Supplier and, to the Knowledge of the Seller Parties, no Major Supplier intends to terminate, limit or reduce its business relations with the Business.  No Seller Party has reason to believe that the consummation of the transactions contemplated by this Agreement will have an adverse effect on the business relationship of the Business with any Major Supplier.  Except as set forth in Schedule 4.14(a), no Affiliate of any Seller Party and, to the Knowledge of the Seller Parties, none of the officers, directors or employees of any Seller Party has any financial interest in any supplier of the Business.

(b)Schedule 4.14(b) sets forth a list of each customer of the Business that accounted for net revenue to the Business in the aggregate of more than $50,000 during the 12-month period ended April 30, 2010 (each a “Major Customer”), together with the amount of net revenue produced during such period.  No Seller Party is engaged in any material dispute with any Major Customer and, to the Knowledge of the Seller Parties (provided that for purposes of this Section 4.14(b) the Seller Parties shall not be deemed to have Knowledge of any discussions, information or developments that occur or are first disclosed during, or arise out of, the customer visits contemplated by Section 7.5(f)), no Major Customer intends to terminate, limit or reduce its business relations with the Business.  No Seller Party has Knowledge (provided that for purposes of this Section 4.14(b) the Seller Parties shall not be deemed to have Knowledge of any discussions, information or developments that occur or are first disclosed during the customer visits contemplated by Section 7.5(f)) that the consummation of the transactions contemplated by this Agreement will have an adverse effect on the business relationship of the Business with any Major Customer.  Except as set forth in Schedule 4.14(b), no Affiliate of any Seller Party and, to the Knowledge of the Seller Parties, none of the officers, directors or employees of the Seller Parties has any financial interest in any customer of the Business.  All outstanding bids Relating to the Business are listed on Schedule 4.14(b).

4.15Products; Warranties.

(a)Except as set forth in Schedule 4.15, no Seller Party has made any express warranties or guaranties on its own behalf as to goods sold or services provided in Relation to the Business, and there is no pending or, to the Knowledge of the Seller Parties, threatened claim alleging any breach of any such warranty or guaranty.  Except as set forth in Schedule 4.15,

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attached to which are copies of all such warranties, no Seller Party has exposure to liability under any such warranty beyond that which would not have a Material Adverse Effect.

(b)Each of the products produced or sold by the Seller Parties in Relation to the Business is (each, a “Business Product”), and at all times up to and including the sale thereof, has been in conformity in all material respects to any promises or affirmations of fact made on the container or label for such product or in connection with its sale.  There is no design defect with respect to any Business Products and each Business Product contains adequate warnings, presented in a reasonably prominent manner, in accordance with Applicable Laws and current industry practice with respect to its contents and use.  Since January 1, 2005, (i) there has been no Action pending, or, to the Knowledge of the Seller Parties, threatened against any Seller Party with respect to any product liability claim, including any claim of injury to or death of persons, damage to or destruction of property, relating to any Business Product, and (ii) there has been no pending or, to the Knowledge of the Seller Parties, threatened, recall or investigation of any Business Product.

4.16Inventory; Accounts Receivable; Accounts Payable.

(a)Except as set forth on Schedule 4.16(a), the inventories reflected on the Most Recent Balance Sheet have been valued in accordance with GAAP.  Physical adjustments since the date of the Most Recent Balance Sheet have been correctly recorded in the Ordinary Course.  All inventories of the Business as of the Closing: (i) are carried at an amount not in excess of the lower of cost or net realizable value; (ii) do not include any inventory that is obsolete, surplus or not usable or salable in the Ordinary Course; and (iii) such inventories consist of items of quality and quantity that are adequate for the conduct of the Business in the Ordinary Course and inventory levels are not in excess of normal operating requirements of the Business.

(b)Schedule 2.1(f) contains a list of the accounts receivable Relating to the Business as of the date of the Most Recent Balance Sheet, showing the amount of each such receivable and an aging of amounts due thereunder, which schedule is true and complete as of that date.  To the Knowledge of the Seller Parties, the debtors to which such receivables relate are not in or subject to a bankruptcy or insolvency proceeding, and none of the receivables have been made subject to an assignment for the benefit of creditors.  Except as set forth in Schedule 4.16(b), all accounts receivable reflected on the Most Recent Balance Sheet are current, and there are no disputes regarding the collectibility of any such receivables.  All such accounts receivable outstanding as of the Closing will be collected in full (subject only to the allowance for doubtful accounts set forth in the Most Recent Balance Sheet) within 90 days of the Closing Date.

(c)The accounts payable of the Business as of the Closing Date and those reflected on the Most Recent Balance Sheet, in each case, to the extent included as Assumed Liabilities hereunder, are not Delinquent Payables and arose from bona fide transactions in the Ordinary Course.

4.17Insurance.  The Business is insured by financially sound and reputable insurers, unaffiliated with the Seller Parties, with respect to the Purchased Assets in such amounts and

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against such risks as are customary, adequate and suitable to protect the Purchased Assets.  Such policies are described in Schedule 4.17, which Schedule discloses (a) any and all policies covering general liability, excess liability, product liability, auto liability, foreign liability, all-risk property or environmental liability of the Business or the Purchased Assets and (b) for each such policy the risks insured against, insurer name, policy number, policy dates, occurrence and aggregate coverage limits, retentions and deductible amounts, premium, broker name and whether the terms of such policy provide for retrospective premium adjustments.  Seller is the insured or named insured under each such policy.  All such policies are in full force and effect in accordance with their terms, no notice of cancellation has been received and there is no existing default or event that, with the giving of notice or lapse of time or both, would constitute a default thereunder.  Schedule 4.17 also contains a true and complete description of all outstanding bonds and other surety arrangements issued or entered into by any Seller Party related to the Purchased Assets.

4.18Employee Benefits.  A list of the Seller Benefit Plans and any ERISA Affiliate’s Employee Benefit Plans is set forth on Schedule 4.18.  None of the Seller Benefit Plans or ERISA Affiliate Employee Benefit Plans are Multiemployer Plans or defined benefit pension plans subject to Title IV of ERISA.  No event has occurred and no condition exists that would subject Buyer or the Purchased Assets, either directly or by reason of Seller’s affiliation with any affiliate, to any tax, fine, lien, penalty or other liability imposed by the terms of any Employee Benefit Plan, ERISA, the Internal Revenue Code or other applicable laws with respect to any Employee Benefit Plan.

4.19Employees.

(a)Schedule 4.19(a) sets forth a complete and accurate list of all employees or independent contractors employed by or on behalf of any Seller Party and engaged in the Business and, for each such person, his or her position, rate of all regular and bonus or other special compensation payable in any and all capacities, and the date on which he or she became employed (or has been deemed by the applicable Seller Party to have become employed) by any Seller Party.  Schedule 4.19(a) also lists any employee of any Seller Party engaged in the Business who is not at work as of the Closing Date due to leave of absence, disability or workers’ compensation leave or military leave and specifies for each such employee the category of leave and the date on which such leave commenced.  Except as set forth in Schedule 4.19(a), each employee of any Seller Party engaged in the Business can be dismissed immediately and without notice to the employee or liability to such person, other than any accrued benefits, vacation time and salary or wages.

(b)No Seller Party is delinquent in payments to any of its employees or independent contractors engaged in the Business for any wages, salaries, commissions, bonuses or other compensation or benefits for any services performed for any Seller Party or for amounts required to be reimbursed to such employees or contractors.  The Seller Parties are in compliance with all Applicable Laws and Contracts respecting labor, employment, fair employment practices, terms and conditions or employment, workers’ compensation, occupational safety, plant closings and wages and hours in Relation to the Business.  The Seller Parties have duly and timely withheld from salaries, wages and other compensation paid to employees engaged in the

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Business, and paid over to the appropriate Governmental Entities, all amounts required to be so withheld and paid over under all Applicable Laws.

4.20Labor Matters.  No Seller Party is party to or bound by any union contract or collective bargaining agreement or similar contract in Relation to the Business, and no Seller Party has agreed to recognize any union or other collective unit in Relation to the Business.  No union or collective bargaining unit has been certified as representing any employees of any Seller Party engaged in the Business and no organizational attempt has been made or threatened by or on behalf of any labor union or collective bargaining unit with respect to such employees.  No Seller Party has experienced any labor strike, picketing, dispute, slowdown or stoppage or any other material labor difficulty during the past five years nor are any such actions pending or, to the Knowledge of the Seller Parties, threatened against any Seller Party in Relation to the Business.  Each Seller Party has complied in all material respects with all Applicable Laws relating to the employment of labor in Relation to the Business.  There are no pending labor grievances, arbitration cases or pending civil rights or equal employment opportunity charges against any Seller Party, or any settlements, consent orders or prior decrees of any Governmental Entity requiring any continued observance by Seller in Relation to the Business.  No Action has been filed with the National Mediation Board or the National Labor Relations Board with respect to any alleged unfair labor practices in Relation to the Business.

4.21Environmental Matters.  Except as set forth on Schedule 4.21:

(a)All operations of the Business are and have been in compliance with all applicable Environmental Health and Safety Laws, including the possession of all Permits required under applicable Environmental Health and Safety Laws.

(b)There is no pending or threatened Action against any Seller Party under any Environmental Health and Safety Law in connection with the Business, and no Seller Party has received any notice alleging that it is in violation of applicable Environmental Health and Safety Law in connection with the Business, nor has any Governmental Entity made any request for information with respect to any investigation or any alleged or possible violation of any Environmental Health and Safety Law with respect to the Business or the Purchased Assets or any real property currently or formerly owned, leased or otherwise used or operated by any Seller Party in connection with the Business.

(c)There has been no unpermitted release, spill, emission, discharge, leaking, pumping, injection, deposit, disposal, dispersal, leaching, escape or migration into the indoor or outdoor environment (including ambient air, surface water, groundwater and surface or subsurface strata) or into or out of any property, including the movement of Hazardous Materials through or in the air (including indoor air), surface water, groundwater or property (each, a “Release”) of Hazardous Materials from, on or under any of the real property that is or has been associated with ownership or operation of the Business.  There has been no disposal or Release of any Hazardous Material on any site or facility currently or formerly owned, leased, or otherwise used or operated by any Seller Party or its Affiliates in connection with the Business that would reasonably be expected to result in material liability under Environmental Health and Safety Law to any Seller Party or its Affiliates.  No Seller Party has stored, disposed of, arranged for or permitted the disposal of, transported, handled or released any Hazardous Materials in

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connection with the Business, or owned, leased or otherwise used or operated any facility or property in connection with the Business in a fashion not otherwise in compliance with applicable Environmental Health and Safety Law.

(d)There is and has been no asbestos, silica, refractory ceramic fibers, polychlorinated biphenyls (PCBs) or other substance that is alleged to be harmful to human health present at any location at which the operations of the Business are or have been conducted, in any of the Purchased Assets or used in the Business.  No products that are or have been manufactured, distributed, sold or marketed by any Seller Party or its predecessors in connection with the Business include any asbestos or any components that contain asbestos or any other substance that could be hazardous to human health, and no Seller Party has received any written notice of any Action relating to exposure to asbestos or asbestos-containing materials or any other substance that could be hazardous to human health in connection with the Business.

(e)True, accurate and complete copies of all written reports, audits or assessments in the possession or control of any Seller Party relating to environmental conditions or compliance with Environmental Health and Safety Laws at, in, on, under or about any current or former real property owned, leased, or otherwise used or operated by any Seller Party in connection with the Business have been provided to Buyer prior to the date hereof.

(f)In connection with the Business, no Seller Party has:  (i) been subject to investigation by the U.S. Department of Labor or similar governmental agencies over failure to comply with the Occupational Safety and Health Act, or any similar statutes or laws or any rules and regulations promulgated thereunder (collectively, “Safety Laws”); (ii) received or paid any fine, penalty or citation relating to or arising out of a violation or alleged violation of any Safety Laws; or (iii) violated any Safety Laws.

(g)No real property owned or operated by any Seller Party in connection with the Business was operated by any former owner or operator of such real property as a treatment, storage, or disposal site for Hazardous Materials.  No real property currently or formerly owned, leased, or otherwise used or operated by any Seller Party in connection with the Business is listed or proposed for listing on the National Priorities List (“NPL”) or any similar state listing and no Hazardous Materials handled by or on behalf of any Seller Party in connection with the Business or any real property currently or formerly owned, leased, or otherwise used or operated by any Seller Party in connection with the Business has come to be located at (i) any site which is listed or proposed for listing on the NPL or any similar state listing, or (ii) to the Knowledge of any Seller Party, any other location that may lead to liabilities against any Seller Party or Buyer for response costs or actions for damages to natural resources, including without limitation, claims under CERCLA or any similar state statute.

4.22Transactions with Affiliates.  There are no liabilities or obligations of any nature, whether known or unknown, absolute, accrued, contingent or otherwise and whether due or to become due (arising under a Contract or otherwise) between Seller, on the one hand, and Parent or any Affiliate of Seller, on the other.  Neither Parent, nor any officer, director or Affiliate of Seller has any interest in any contract, loan, arrangement or understanding with, or relating to, Seller or the Business or Purchased Assets.  Neither Parent nor any such Affiliate provides any assets or services to Seller or the Business other than services as an officer, director or employee. 

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Seller does not provide any assets or services to any such Affiliate.  Since January 1, 2005, all settlements and liabilities between Seller, on the one hand, and Parent or any Affiliate of Seller, on the other, have been made in the Ordinary Course.

4.23Books of Account; Records.  The Seller Parties’ general ledgers, stock record books, minute books and other material records relating to the assets, properties and contracts of the Business and outstanding legal obligations of the Seller Parties in connection with the Business are, in all material respects, complete and correct, and have been maintained in accordance with good business practices and the matters contained therein are, to the extent required by GAAP, appropriately and accurately reflected in the Financial Statements.

4.24Brokers, Finders and Investment Bankers.  Except as set forth on Schedule 4.24, no Seller Party nor any of its respective officers, directors, employees or Affiliates has employed any broker, finder or investment banker or incurred any liability for any investment banking fees, financial advisory fees, brokerage fees or finders’ fees in connection with the transactions contemplated by this Agreement.

4.25Copies of Documents.  The Seller Parties have made available to Buyer true, correct and complete copies of: (a) the charter documents, bylaws, minute books and stock books of Seller; (b) each of the Purchased Agreements that are in writing and included in the Purchased Assets; (c) each trademark and service mark registration or application therefor, patent or patent application or other item listed in the Schedules and included in the Purchased Assets and each assignment or license with respect to any thereof; (d) the pleadings and briefs filed in each pending Action listed in the Schedules and any judgments, orders, injunctions, decrees, stipulations and awards listed therein; and (e) all written Permits listed in Schedules and included in the Purchased Assets.

ARTICLE V. REPRESENTATIONS AND WARRANTIES
OF BUYER

Buyer hereby represents and warrants to the Seller Parties as follows:

5.1Organization.  Buyer is a limited liability company duly formed and validly existing under the laws of the jurisdiction set forth in the introductory paragraph of this Agreement and has all requisite power and authority to own, lease and operate its properties and to carry on its business as now being conducted.  MC Test is a corporation duly formed and validly existing under the laws of the jurisdiction set forth in the introductory paragraph of this Agreement.

5.2Authorization.  Buyer has full power and authority to execute and deliver this Agreement and any other certificate, agreement, document or other instrument to be executed and delivered by it in connection with the transactions contemplated by this Agreement (collectively, the “Buyer Ancillary Documents”), to perform its obligations under this Agreement and the Buyer Ancillary Documents and to consummate the transactions contemplated by this Agreement and the Buyer Ancillary Documents.  The execution and delivery of this Agreement and the Buyer Ancillary Documents by Buyer, the performance by Buyer of its obligations under this Agreement and the Buyer Ancillary Documents, and the

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consummation of the transactions provided for in this Agreement and the Buyer Ancillary Documents have been duly and validly authorized by all necessary action on the part of Buyer.  This Agreement has been and, as of the Closing, the Buyer Ancillary Documents will be, duly executed and delivered by Buyer and do or will, as the case may be, constitute the valid and binding agreements of Buyer, enforceable against Buyer in accordance with their respective terms.  MC Test has full power and authority to execute and deliver this Agreement, to perform its obligations hereunder and to consummate the transactions contemplated hereby.  The execution and delivery of this Agreement by MC Test, the performance by MC Test of its obligations hereunder and the consummation of the transactions provided for herein have been duly and validly authorized by all necessary action on the part of MC Test.  This Agreement has been duly executed and delivered by MC Test and does constitute the valid and binding agreements of MC Test, enforceable against MC Test in accordance with its terms.

5.3Absence of Restrictions and Conflicts.  The execution, delivery and performance of this Agreement and the Buyer Ancillary Documents, the consummation of the transactions contemplated by this Agreement and the Buyer Ancillary Documents and the fulfillment of and compliance with the terms and conditions of this Agreement and the Buyer Ancillary Documents do not or will not, as the case may be, with the passing of time or the giving of notice or both, violate or conflict with, constitute a breach of or default under, result in the loss of any benefit under, or permit the acceleration of any obligation under, (a) any term or provision of the organizational documents of Buyer, (b) any material Contract to which Buyer is a party, (c) any judgment, decree or order of any Governmental Entity to which Buyer is a party or by which Buyer or any of its properties is bound or (d) any Applicable Law.

5.4Key Accounts.  Neither George Moore nor Mark McReynolds has actual knowledge, and a reasonable person in either of their positions would not have knowledge, that (a) a Key Account is unwilling to conduct business with Buyer or its Affiliates or (b) any such Key Account will terminate, limit or reduce its business relations with the Business in either case as a result of Buyer acquiring the Business.  For purposes of the foregoing sentence of this Section 5.4, knowledge shall not include information derived from any discussions, information or developments that occur or are first disclosed during, or arise out of, the customer visits contemplated by Section 7.5(f).

5.5Brokers, Finders and Investment Bankers.  Neither Buyer, nor any its officers, directors, employees or Affiliates, has employed any broker, finder or investment banker or incurred any liability for any investment banking fees, financial advisory fees, brokerage fees or finders’ fees in connection with the transactions contemplated by this Agreement.

ARTICLE VI. CERTAIN COVENANTS
AND AGREEMENTS

6.1Conduct of the Business.  From the date hereof until the Closing Date, the Seller Parties shall, except as required in connection with the transactions contemplated by this Agreement and except as otherwise consented to in writing by Buyer, conduct the Business in the Ordinary Course, and use their respective best efforts to preserve intact its current business organizations and goodwill of the Business, keep available the services of the officers and employees of the Business, keep accounts receivable, accounts payable and inventory of the

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Business at normal operating levels consistent with past practice and preserve its relationships with customers and suppliers of, and others having business dealings with, the Business, and not enter into any Contract, transaction or activity or make any commitment with respect to the Business or the Purchased Assets except those in the Ordinary Course and not otherwise prohibited under this Section 6.1.  Without limiting the generality of the foregoing, without the prior written consent of Buyer, from the date hereof until the Closing Date, no Seller Party shall, except as otherwise expressly contemplated by this Agreement or as set forth on Schedule 6.1, take any action, omit to take any action or enter into any transaction that, if the same had occurred prior to the date hereof, would be required to be disclosed on Schedule 4.6 pursuant to Section 4.6 hereof or that would otherwise result in a breach of any of the representations, warranties or covenants made by any Seller Party in this Agreement.

6.2Inspection and Access to Information.

(a)From the date of this Agreement to the Closing Date, each Seller Party shall (i) provide Buyer and its designees with such information as Buyer may from time to time reasonably request with respect to the Business, the Purchased Assets and the Assumed Liabilities and the transactions contemplated by this Agreement, (ii) provide Buyer and its designees, officers, counsel, accountants, facilities and other authorized representatives access during regular business hours and upon reasonable notice to the books, records, offices, personnel, counsel, accountants and facilities of the Business as Buyer or its designees may from time to time reasonably request and (iii) permit Buyer and its designees to make such inspections of the foregoing as Buyer may reasonably request.  Any investigation shall be conducted in such a manner so as not to interfere unreasonably with the operation of the business of the Seller Parties.  No such investigation (or any disclosure made at any time by any Seller Party to Buyer) shall limit or modify in any way, or act or result in a waiver of, any Seller Party’s obligations with respect to any breach of its representations, warranties, covenants or agreements contained herein (including, without limitation, conditions to Closing or indemnification obligations).

(b)On and after the Closing Date, each Seller Party will afford promptly to Buyer and its agents reasonable access to its books of account, financial and other records (including, without limitation, accountant’s work papers), information, employees and auditors to the extent necessary or useful for Buyer in connection with any audit, investigation, dispute or litigation or any other reasonable business purpose Relating to the Business; provided that any such access by Buyer shall not unreasonably interfere with the conduct of the business of the Seller Parties.

6.3Notices of Certain Events.  The Seller Parties shall promptly notify Buyer of:

(a)any notice or other 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;

(b)any notice or other communication from any Governmental Entity in connection with the transactions contemplated by this Agreement; and

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(c)any Actions commenced or, to the Knowledge of the Seller Parties, threatened against, relating to or involving or otherwise affecting Seller or the Business that, if pending on the date of this Agreement, would have been required to have been disclosed pursuant to Section 4.7 or that relate to the consummation of the transactions contemplated by this Agreement; and the damage or destruction by fire or other casualty of any of the Purchased Assets or part thereof or in the event that any of the Purchased Assets or part thereof becomes the subject of any Action or, to the Knowledge of the Seller Parties, threatened Action for the taking thereof or any part thereof or of any right relating thereto by condemnation, eminent domain or other similar governmental action.

6.4No Solicitation of Transactions.   No Seller Party nor any of its respective Affiliates will, directly or indirectly, through any officer, director or agent of any of them or otherwise, initiate, solicit or encourage (including by way of furnishing non-public information or assistance), or enter into negotiations of any type, directly or indirectly, or enter into a confidentiality agreement, letter of intent or purchase agreement, merger agreement or other similar agreement with any Person, firm or corporation other than Buyer with respect to a sale of any substantial portion of the Purchased Assets (other than sales of Inventory in the Ordinary Course), or a merger, consolidation, business combination, sale of all or any substantial portion of the capital stock of Seller, or the liquidation or similar extraordinary transaction with respect to Seller that may prevent or materially delay the performance by the Seller Parties of any of their respective obligations under this Agreement or the consummation of the transactions contemplated hereby.  The Seller Parties will notify Buyer orally (within one Business Day) and in writing (as promptly as practicable) of all relevant terms of any proposals by a third party to do any of the foregoing that any Seller Party or any of its respective Affiliates or any of their respective officers, directors, partners, employees, investment bankers, financial advisors, attorneys, accountants or other representatives may receive relating to any of such matters and, if such proposal is in writing, such Seller Party will deliver to Buyer a copy of such inquiry or proposal.

6.5Reasonable Efforts; Further Assurances; Cooperation.  Subject to the other provisions of this Agreement, the Parties will each use their reasonable, good faith efforts to perform their obligations in this Agreement and to take, or cause to be taken, and do, or cause to be done, all things necessary, proper or advisable under Applicable Law to obtain all regulatory approvals and to satisfy all conditions to their respective obligations under this Agreement and to cause the transactions contemplated in this Agreement to be effected, in accordance with the terms of this Agreement and will cooperate fully with each other and their respective officers, directors, employees, agents, counsel, accountants and other designees in connection with any steps required to be taken as a part of their respective obligations under this Agreement, including, without limitation:

(a)In the event any Action or other proceeding by any Governmental Entity or other Person is commenced that questions the validity or legality of the transactions contemplated by this Agreement or seeks damages in connection therewith, the Parties agree to cooperate and use all reasonable efforts to defend against such Action or other proceeding and, if an injunction or other order is issued in any such Action or other proceeding, to use all reasonable efforts to have such injunction or other order lifted and to cooperate reasonably

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regarding any other impediment to the consummation of the transactions contemplated by this Agreement.

(b)The Seller Parties will give any notices to third parties and use their best efforts (in consultation with Buyer) to obtain any third party consents (i) necessary, proper or advisable to consummate the transactions contemplated by this Agreement, (ii) disclosed or required to be disclosed in the Schedules to this Agreement, including, without limitation, the consents described in Schedule 4.3, (iii) required to avoid a breach of or default under any Purchased Agreements in connection with the consummation of the transactions contemplated by this Agreement or (iv) required to prevent a Material Adverse Effect.

(c)Each Party will give prompt notice to the other Party of (i) the occurrence, or failure to occur, of any event which occurrence or failure would be likely to cause any representation or warranty of any Seller Party or Buyer, as the case may be, contained in this Agreement to be untrue or inaccurate at any time from the date hereof to the Closing Date or that will or may result in the failure to satisfy any of the conditions specified in Article VII of this Agreement and (ii) any failure of any Seller Party or Buyer, as the case may be, to comply with or satisfy any covenant, condition or agreement to be complied with or satisfied by any of them under this Agreement.

6.6Public Announcements.  Subject to their respective legal obligations, the Parties shall consult with each other regarding the timing and content of all announcements regarding any aspect of this Agreement or the transactions contemplated hereby to the financial community, government agencies, employees, customers or the general public and shall use reasonable efforts to agree upon the text of any such announcement prior to its release.

6.7Risk of Loss.  The risk of loss with respect to the Purchased Assets shall remain with Seller until the Closing.  Until the Closing, the Seller Parties shall maintain in force all the policies of property damage insurance under which any of the Purchased Assets is insured.  If before the Closing any of the Purchased Assets is lost, damaged or destroyed and the loss, damage or destruction would likely result in a Material Adverse Effect, then:

(a)Buyer may terminate this Agreement in accordance with the provisions of Section 8.1; or

(b)Buyer may require the Seller Parties to assign to Buyer the proceeds of any insurance payable as a result of the occurrence of such loss, damage or destruction and to reduce the Purchase Price by the amount of the replacement cost of the Purchased Assets that were lost, damaged or destroyed less the amount of any proceeds of insurance payable as a result of the occurrence.

6.8Tax Cooperation; Allocation of Taxes.

(a)The Parties agree to furnish or cause to be furnished to each other, upon request, as promptly as practicable, such information and assistance Relating to the Business and relating to the Purchased Assets (including, without limitation, access to books and records) as is reasonably necessary for the filing of all Tax Returns Related to the Business, the making of any election relating to Taxes Related to the Business, the preparation for any audit by any Taxing

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authority and the prosecution or defense of any claim, suit or proceeding relating to any Tax Related to the Business.

(b)All excise, sales, use, value added, registration, stamp, recording, documentary, conveyancing, franchise, property, transfer, gains and similar Taxes, levies, charges and fees (collectively, “Transfer Taxes”) incurred in connection with the transactions contemplated by this Agreement shall be borne by Seller.  Buyer and Seller shall cooperate in providing each other with any appropriate resale exemption certifications and other similar documentation.  The Party that is required by Applicable Law to make the filings, reports or returns with respect to any applicable Transfer Taxes shall do so, and the other Party shall cooperate with respect thereto as necessary.

6.9Restrictive Covenants.

(a)Trade Secrets and Confidential Information.  The Seller Parties and their Affiliates shall hold in confidence at all times after the Closing Date all Trade Secrets of the Business, and shall not disclose, publish or make use of such Trade Secrets at any time after the Closing Date without the prior written consent of Buyer.  Nothing in this Agreement shall diminish the rights of Buyer regarding the protection of such Trade Secrets and other intellectual property pursuant to Applicable Law.  From and after the Closing, the Seller Parties and their Affiliates shall hold in confidence all Confidential Information and not disclose, publish or make use of Confidential Information without the prior written consent of Buyer.

(b)Non-competition; Non-solicitation and Non-disparagement. The Seller Parties acknowledge that to protect adequately the interest of Buyer in the Purchased Assets, it is essential that any noncompete covenant with respect thereto cover Seller Parties and their Affiliates with respect to the Business or any other business that competes with the Business conducted anywhere in the world (collectively, “Competitive Activities”).  In consideration of the foregoing, and of the Purchase Price payable by Buyer pursuant to Article II, the Seller Parties and their Affiliates shall not, during the five-year period beginning as of the Closing Date:

(i)directly or indirectly, whether as an owner, shareholder, member, investor, partner, joint venturer, licensor, financier, operator, consultant, employee, agent, distributor, independent contractor, participant, creditor or otherwise, invest in (other than ownership as a passive investor of less than two percent of the voting stock of a company listed on a national stock exchange), own, manage, operate, finance, control or participate in the ownership, management, operation, financing, control of, or act as a consultant to, be associated with, lend its or their name or any trade name to, any of its or their credit to, or otherwise render services or advice to or on behalf of, any business that engages or is reasonably likely to engage in any Competitive Activity;

(ii)directly or indirectly induce or attempt to induce any customer of Buyer in Relation to the Business to reduce such customer’s purchases of products of the Business from Buyer or its Affiliates after the Closing Date or induce or attempt to induce any supplier of Buyer in Relation to the Business to reduce such supplier’s deliveries of materials of the Business to Buyer or its Affiliates after the Closing Date;

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(iii)directly or indirectly, except as expressly permitted by Buyer or its successors or assigns in advance in writing, solicit any protected employee to leave the employ of Buyer or its successors and assigns; or

(iv)directly or indirectly take any action that would impair the value of the Business or the Purchased Assets, including, without limitation, (x) take any action intended to interfere with the contractual relationships of Buyer in Relation to the Business with customers, suppliers, employees or others or (y) make any statement (whether oral, written or electronic, such as by means of electronic mail or internet forums or message boards) to any Person or to the public or any third party criticizing or disparaging the Business or commenting on the operations or business reputation of the Business.

(c)The Seller Parties, and their successors and assigns, shall use their best efforts to cause all of their Affiliates not a party to this Agreement to comply with the restrictions of this Section 6.9.  The Seller Parties acknowledge and agree that Buyer’s remedies at law for any violation or attempted violation of the Seller Parties’ obligations under this Section 6.9 would be inadequate and incomplete, and agrees that in the event of any such violation or attempted violation, Buyer shall be entitled to a temporary restraining order, temporary and permanent injunctions, and other equitable relief, without the necessity of posting any bond or proving any actual damage, in addition to all other rights and remedies that may be available to Buyer from time to time.

(d)If a judicial or arbitral determination is made that any of the provisions of this Section 6.9 constitutes an unreasonable or otherwise unenforceable restriction against Seller Parties or their Affiliates, the provisions of this Section 6.9 shall be rendered void only to the extent that such judicial or arbitral determination finds such provisions to be unreasonable or otherwise unenforceable with respect to any Seller Party or such Affiliate.  In this regard, the Parties hereby agree that any judicial authority construing this Agreement shall be empowered to sever any territory or portion thereof, any prohibited business activity or any time period from the coverage of this Section 6.9 and to apply the provisions of this Section 6.9 to the remaining portion of the covered territory, the remaining business activities and the remaining time period not so severed by such judicial or arbitral authority.  Moreover, notwithstanding the fact that any provision of this Section 6.9 is determined not to be specifically enforceable, Buyer shall nevertheless be entitled to recover monetary damages as a result of the breach of such provision by Seller Party or such Affiliate.  The time period during which the prohibitions set forth in this Section 6.9 shall apply shall be tolled and suspended for a period equal to the aggregate time during which Seller Party or any Affiliate violates such prohibitions in any respect.

6.10Business Employees.  Upon the Closing and effective as of the Closing Date, the Seller Parties agree to terminate the employment of all employees employed by or on behalf of any Seller Party and engaged in the Business (collectively, the “Business Employees”) at the Seller Parties’ expense.  Effective as of the Closing Date, the Seller Parties agree to fully vest all Business Employees in their interests in each 401(k) plan maintained by any Seller Party.  The Seller Parties acknowledge that Buyer (or Buyer’s Affiliate) may offer employment on an at-will basis effective as of the Closing Date, to such of the Business Employees as Buyer deems advisable (the “Selected Business Employees”).  Buyer’s (or such Buyer’s Affiliate’s)

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employment offered to the Business Employees pursuant to this Section 6.10 shall be subject to Buyer’s standard polices and procedures applicable to new hires.  The Seller Parties will not take any action that could impede, hinder, interfere, or otherwise compete with Buyer’s (or Buyer’s Affiliated Company’s) efforts to hire any Business Employee, and the Seller Parties shall undertake such efforts as may be reasonably requested by Buyer to facilitate such efforts.  In no event shall Buyer (or such Buyer’s Affiliate) be considered a successor employer.  To the extent permitted by applicable law, the Seller Parties shall promptly furnish to Buyer all information relating to each Business Employee as Buyer may reasonably require in connection with its (or such Buyer’s Affiliate’s) potential employment or employment of such persons, which information shall be true and correct in all respects.  The Seller Parties shall be solely responsible for compliance with the Workers Adjustment and Retraining Notification Act, 29 U.S. Stat. § 2101 et seq. (the “WARN Act”) as it relates to any employment loss up to Closing.  Buyer shall not assume or have any obligations or liabilities with respect to such employees or terminations made on or prior to the Closing Date.

6.11Use of Name.  Neither Parent, Seller nor any of their respective Affiliates shall do business under or utilize any trademark or service mark of the Business, including the name “Chase EMS” from and after the Closing, and Seller and Parent shall file the instruments necessary to terminate their respective rights to do business under or utilize a trademark or service mark of the Business as promptly as practicable following the Closing.

6.12Payments and Property Received.  The Seller Parties agree that after the Closing they will hold and will promptly transfer and deliver to Buyer, from time to time as and when received by them, any cash, checks with appropriate endorsements (using their best efforts not to convert such checks into cash), or other property that they may receive on or after the Closing which properly belongs to Buyer and will account to Buyer for all such receipts.

6.13[Intentionally Deleted.]

6.14MC Test Guaranty.  MC Test hereby unconditionally and irrevocably guarantees the due and punctual performance by Buyer of each and every obligation of Buyer arising under this Agreement, including, without limitation, the full payment of the Purchase Price at the Closing and any claims for indemnity by the Seller Indemnified Parties.  MC Test’s obligations under this Agreement shall be joint and several with the Buyer.

ARTICLE VII. CLOSING

7.1The Closing.  The consummation of the transactions contemplated by this Agreement (the “Closing”) shall take place at a time and on a date to be specified by Buyer and the Seller Parties (the “Closing Date”), which shall be no later than the second Business Day after satisfaction or waiver of the conditions set forth in Section 7.4, 7.5 and 7.6 (other than those conditions that by their nature are to be satisfied at the Closing, but subject to the fulfillment or waiver of those conditions), at the offices of Baker & Hostetler LLP, 3200 National City Center, 1900 E. Ninth Street, Cleveland, Ohio 44114, or remotely by electronic exchange of documents and signatures.

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7.2Deliveries by the Seller Parties.  At or prior to the Closing, the Seller Parties shall deliver, or cause to be delivered, to Buyer the following unless waived by Buyer:

(a)A good and sufficient General Conveyance, Assignment and Bill of Sale, substantially in the form attached hereto as Exhibit A, duly executed by the Seller Parties;

(b)An Assignment and Assumption Agreement, substantially in the form attached hereto as Exhibit B, duly executed by the Seller Parties (the “Assignment and Assumption Agreement”);

(c)A Transition Services Agreement, substantially in the form attached hereto as Exhibit C, duly executed by the Seller Parties (the “Transition Services Agreement”);

(d)An Assignment, Assumption and Consent Agreement with Lockbox, in the form provided by Buyer’s lender, duly executed by the applicable Seller Parties;

(e)Appropriate termination statements under the Uniform Commercial Code and evidence satisfactory to Buyer of release of all Liens affecting any of the Purchased Assets other than Permitted Liens;

(f)A certified copy of the resolutions authorizing the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby; and

(g)Such other separate instruments of sale, assignment or transfer that Buyer may reasonably deem necessary or appropriate in order to perfect, confirm or evidence title to all or any part of the Purchased Assets.

7.3Deliveries by Buyer.  At or prior to the Closing, Buyer shall deliver, or cause to be delivered, to the Seller Parties the following unless waiver by the Seller Parties:

(a)The Purchase Price, payable to the Seller Parties in accordance with Section 3.1;

(b)The Assignment and Assumption Agreement, duly executed by Buyer;

(c)The Transition Services Agreement, duly executed by Buyer;

(d)An Assignment, Assumption and Consent Agreement with Lockbox, in the form provided by Buyer’s lender, duly executed by Buyer; and

(e)Such other separate instruments of assumption that the Seller Parties may reasonably deem necessary or appropriate in order to perfect, confirm or evidence assumption by Buyer of all or any part of the Assumed Liabilities.

7.4Conditions to Each Party’s Obligations.  The respective obligations of each Party to effect the transactions contemplated by this Agreement will be subject to the fulfillment at or prior to the Closing of each of the following conditions:

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(a)Laws, Regulations and Injunction.  No provision of any Applicable Law shall restrain, prevent, materially delay or restructure the transactions contemplated by this Agreement.  There will be no effective injunction, writ or preliminary restraining order or any order of any nature issued by a Governmental Entity of competent jurisdiction to the effect that the purchase and sale of the Purchased Assets may not be consummated as provided in this Agreement, no proceeding or lawsuit will have been commenced by any Governmental Entity for the purpose of obtaining any such injunction, writ or preliminary restraining order and no written notice will have been received from any Governmental Entity indicating an intent to restrain, prevent, materially delay or restructure the transactions contemplated by this Agreement.

(b)Governmental Consents.  All consents, approvals, orders or authorizations of, or registrations, declarations or filings with, any Governmental Entity required in connection with the execution, delivery or performance of this Agreement will have been obtained or made, except where the failure to have obtained or made any such consent, approval, order, authorization, declaration or filing would not have a Material Adverse Effect.

(c)Amendment to Real Property Lease.  The Real Property Lease shall have been amended on terms acceptable to each of Buyer and Seller in each Party’s sole discretion.

7.5Conditions to Obligations of Buyer.  The obligations of Buyer to consummate the transactions contemplated by this Agreement will be subject to the fulfillment at or prior to the Closing of each of the following additional conditions:

(a)Representations and Warranties.  Each of the representations and warranties of the Seller Parties set forth herein shall be true and correct in all material respects on the date hereof and on and as of the Closing Date as though made on and as of the Closing Date, except that (i) representations and warranties made as of a specified date need be true and correct only as of the specified date and (ii) representations and warranties that are subject to Materiality Qualifiers (as defined in Section 9.4) shall be true and correct in all respects on the date hereof and on and as of the Closing Date.

(b)Performance of Obligations.  Each Seller Party shall have performed in all material respects all covenants and agreements required to be performed by it under this Agreement on or prior to the Closing Date, including the delivery of all of the agreements, documents and other instruments required by Section 7.2.

(c)No Material Adverse Change.  Since August 31, 2009, there shall not have been any change in the assets, liabilities, business, prospects, results of operations or financial condition of the Business that would constitute a Material Adverse Effect.

(d)Seller Party Certificates.  Each Seller Party shall have furnished Buyer with a certificate dated the Closing Date and signed on its behalf by its Chief Executive Officer or President, to the effect that the conditions set forth in Sections 7.5(a), (b) and (c) have been satisfied.

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(e)Consents.  The Seller Parties shall have obtained and delivered to Buyer the written consents (or waivers with respect to thereto) as described on Schedule 4.3 (all such consents and waivers shall be in full force and effect).

(f)Customer Relationships.  Buyer shall have no reasonable good faith belief that the sale of the Business to Buyer and the consummation of the other transactions contemplated by this Agreement will have a material effect on the business relationship of the Business with any of the Key Accounts.  This condition shall be deemed to have been satisfied unless Buyer notifies the Selling Parties, in writing within 24 hours after the conclusion of the final customer visit conducted with the Key Accounts, that the condition set forth in this Section 7.5(f) has not been satisfied.  The Buyer and Selling Parties acknowledge that the customer visits with the Key Accounts will be conducted in accordance with the guidelines set out in the Letter Agreement between Buyer and Selling Parties of even date herewith.

7.6Conditions to Obligations of the Seller Parties.  The obligations of each Seller Party to consummate the transactions contemplated by this Agreement will be subject to the fulfillment at or prior to the Closing of each of the following additional conditions:

(a)Representations and Warranties.  Each of the representations and warranties of Buyer set forth herein shall be true and correct in all material respects on the date hereof and on and as of the Closing Date as though made on and as of the Closing Date, except that (i) representations and warranties made as of a specified date need be true and correct only as of the specified date and (ii) representations and warranties that are subject to Materiality Qualifiers shall be true and correct in all respects on the date hereof and on and as of the Closing Date.

(b)Performance of Obligations by Buyer.  Buyer shall have performed in all material respects all covenants and agreements required to be performed by it under this Agreement on or prior to the Closing Date, including the delivery of all of the agreements, documents and other instruments required by Section 7.3.

(c)Buyer Certificate.  Buyer shall have furnished the Seller Parties with a certificate dated the Closing Date and signed on its behalf, to the effect that the conditions set forth in Sections 7.6(a) and (b) have been satisfied.

ARTICLE VIII.
TERMINATION

8.1Termination.  This Agreement may be terminated at any time at or prior to the Closing:

(a)in writing by mutual consent of the Parties;

(b)by written notice from Seller to Buyer, if Buyer (i) fails to perform in any material respect any of its agreements contained in this Agreement required to be performed by it on or prior to the Closing Date or (ii) materially breaches any of its representations and warranties contained in this Agreement, which failure or breach is not cured within ten days after

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Seller has notified Buyer of its intent to terminate this Agreement pursuant to this subparagraph (b);

(c)by written notice from Buyer to Seller, if any Seller Party (i) fails to perform in any material respect any of its agreements contained in this Agreement required to be performed by it on or prior to the Closing Date or (ii) materially breaches any of its representations and warranties contained in this Agreement, which failure or breach is not cured within ten days after Buyer has notified Seller of its intent to terminate this Agreement pursuant to this subparagraph (c);

(d)by written notice from Buyer to Seller under the circumstances described in Section 6.7;

(e)by written notice by Seller to Buyer or Buyer to Seller, as the case may be, if the Closing has not occurred on or prior to July 30, 2010 for any reason other than delay or nonperformance of the Party seeking such termination;

(f)by written notice by Buyer to Seller if the Closing has not occurred, for any reason other than delay or nonperformance of Buyer, within two Business Days after the earlier of: (i) the expiration of the 24-hour period contemplated by Section 7.5(f) and (ii) the receipt by the Seller Parties of written notice from Buyer that the condition set forth in Section 7.5(f) has been satisfied; or

(g)by either Buyer or Seller if there shall be any law or regulation that makes the consummation of the transactions contemplated hereby illegal or otherwise prohibited or if consummation of the transactions contemplated hereby would violate any nonappealable final order, decree or judgment of any court or governmental body having competent jurisdiction.

8.2Specific Performance and Other Remedies.  The Parties each acknowledge that the rights of each Party to consummate the transactions contemplated by this Agreement are special, unique and of extraordinary character and that, in the event that any Party violates or fails or refuses to perform any covenant or agreement made by it in this Agreement, the non-breaching Party may be without an adequate remedy at law.  The Parties agree, therefore, that in the event that any Party violates or fails or refuses to perform any covenant or agreement made by such Party in this Agreement, the non-breaching Party or Parties may, subject to the terms of this Agreement and in addition to any remedies at law for damages or other relief, institute and prosecute an action in any court of competent jurisdiction to enforce specific performance of such covenant or agreement or seek any other equitable relief.

8.3Effect of Termination.

(a)If this Agreement is terminated as permitted by Section 8.1, such termination shall be without liability of either Party (or any owner, stockholder, director, officer, employee, agent, consultant or representative of such Party) to the other Party to this Agreement; provided that if such termination shall result from the (a) willful failure of either Party to fulfill a condition to the performance of the obligations of the other Party, (b) failure to perform a covenant of this Agreement or (c) breach by either Party hereto of any representation or warranty or agreement contained herein, such Party shall be fully liable for any and all liabilities,

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obligations, losses, costs, expenses, and damages incurred or suffered by the other Party as a result of such failure or breach.  The provisions of Sections 6.6, 6.7, 6.14, 9.2 and 9.3 and Article X shall survive any termination hereof pursuant to Section 8.1.

(b)If this Agreement is terminated as permitted by Section 8.1 (i) Buyer agrees that all Confidential Information (for purposes of this Section 8.3(b), as defined in that certain Non-Disclosure Agreement, dated September 18, 2009, between Parent and MC Test (the “Non-Disclosure Agreement”)) regarding or relating to any of the Key Accounts shall remain subject to, and Buyer shall treat such Confidential Information in accordance with, the terms and conditions of the Non-Disclosure Agreement until the second anniversary of the date on which this Agreement is terminated and (ii) Buyer shall not, and shall cause its Affiliates to not, initiate contact, communication or correspondence with any of the Key Accounts or solicit any of the Key Accounts to conduct business or purchase products or services of Buyer or its Affiliates; provided, however, that nothing contained in this Section 8.3(b) shall prevent, prohibit, restrict or restrain Buyer or any of its Affiliates from (x) responding to any communications initiated by a Key Account, or communicating or entering into discussions with a Key Account, or conducting business with a Key Account, directly in response to any communications initiated by such Key Account, at any time before or after the second anniversary of the date on which this Agreement is terminated or (y) taking any action with respect to, including initiating contact or communications with or soliciting, any Key Account at any time after the second anniversary of the date on which this Agreement is terminated.

ARTICLE IX. INDEMNIFICATION

9.1Survival of Representations, Warranties and Agreements.  Subject to the limitations set forth in Section 9.7 below, and notwithstanding any investigation conducted at any time by or on behalf of any Party, all representations, warranties, covenants and agreements of the Parties in this Agreement and in any other agreements, documents or certificates executed or delivered by Parties pursuant to this Agreement or in connection with the transactions contemplated by this Agreement (the “Additional Documents”) shall survive the execution, delivery and performance of this Agreement and the Additional Documents for the applicable Claims Period.  This Section 9.1 shall not limit any covenant or agreement of the Parties that by its terms contemplates performance after the Closing or after the termination of this Agreement.

9.2Indemnification Obligations of the Seller Parties.  Each Seller Party will jointly and severally indemnify, defend and hold harmless Buyer and its Affiliates, each of their respective officers, directors, employees, agents and representatives and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Buyer Indemnified Parties”) from, against and in respect of any and all losses, liabilities, damages, demands, lost profits, claims, suits, actions, judgments or causes of action, assessments, costs and expenses (including interest, penalties, attorneys’ fees and any and all expenses incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim), and any and all amounts paid in settlement of any claim or litigation (collectively, “Damages”), asserted against, resulting to, imposed upon or incurred or suffered by any Buyer Indemnified Party, directly or indirectly, as a result of or arising from any of the following:

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(a)any inaccuracy in or breach or nonfulfillment of, or any alleged inaccuracy in or breach or nonfulfillment of, any of the representations or warranties made by the Seller Parties in this Agreement or in the Additional Documents;

(b)any breach or non-performance of, or any alleged breach or non-performance of, any covenant, agreement or undertaking made by any Seller Party in this Agreement or in the Additional Documents;

(c)any Retained Liability; or

(d)any of the matters described in Schedule 9.2(d).

The Damages of the Buyer Indemnified Parties described in this Section 9.2 as to which the Buyer Indemnified Parties are entitled to indemnification are collectively referred to herein as the “Buyer Losses.”

9.3Indemnification Obligations of Buyer.  Buyer will indemnify, defend and hold harmless each Seller Party and its respective Affiliates and each of their officers, directors, employees, agents and representatives and each of the heirs, executors, successors and assigns of any of the foregoing (collectively, the “Seller Indemnified Parties”) from, against and in respect of any and all Damages asserted against, resulting to, imposed upon or incurred or suffered by any Seller Indemnified Party, directly or indirectly, as a result of or arising from any of the following:

(a)any inaccuracy in or breach or nonfulfillment of, or any alleged inaccuracy in or breach or nonfulfillment of, any of the representations or warranties made by Buyer in this Agreement or in the Additional Documents;

(b)any breach or non-performance of, or any alleged breach or non-performance of, any covenant, agreement or undertaking made by Buyer in this Agreement or in the Additional Documents; or

(c)the failure of Buyer to perform, discharge or satisfy the Assumed Liabilities.

The Damages of the Seller Indemnified Parties described in this Section 9.3 as to which the Seller Indemnified Parties are entitled to indemnification are hereinafter collectively referred to as “Seller Losses.”

9.4Determination of Breaches and Calculation of Damages.  The Parties hereby acknowledge and agree that certain representations and warranties contained herein are qualified by references to materiality, in all material respects or by matters having or not having a Material Adverse Effect (collectively, “Materiality Qualifiers”).  The Parties agree that, for purposes of determining whether a representation or warranty is inaccurate and a breach has occurred, the Materiality Qualifiers shall be fully considered and taken into account, but for purposes of determining the amount of Buyer Losses or Seller Losses (as applicable) sustained as a result of such breach, the Materiality Qualifiers shall be ignored so that all such Buyer Losses or Seller

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Losses may be recovered, subject to the provisions of this Article IX.  The Parties acknowledge that performance of due diligence shall not limit the indemnification obligations of any Party.

9.5Indemnification Procedure.

(a)Promptly after receipt by a Buyer Indemnified Party or a Seller Indemnified Party (hereinafter collectively referred to as an “Indemnified Party”) of notice by a third party (including any Governmental Entity) of any complaint or the commencement of any audit, investigation, action or proceeding with respect to which such Indemnified Party may be entitled to receive payment from the other Party for any Buyer Losses or Seller Losses (as the case may be), such Indemnified Party will notify Buyer or the Seller’s Representative, as the case may be (the “Indemnifying Party”), promptly following the Indemnified Party’s receipt of such complaint or of notice of the commencement of such audit, investigation, action or proceeding; provided, however, that the failure to so notify the Indemnifying Party will relieve the Indemnifying Party from liability under this Agreement with respect to such claim only if, and only to the extent that, such failure to notify the Indemnifying Party results in the forfeiture by the Indemnifying Party of rights and defenses otherwise available to the Indemnifying Party with respect to such claim.  The Indemnifying Party will have the right, upon written notice delivered to the Indemnified Party within ten days thereafter assuming full responsibility for any Buyer Losses or Seller Losses (as the case may be) resulting from such audit, investigation, action or proceeding, to assume the defense of such audit, investigation, action or proceeding, including the employment of counsel reasonably satisfactory to the Indemnified Party and the payment of the fees and disbursements of such counsel.  If, however, the Indemnifying Party declines or fails to assume the defense of the audit, investigation, action or proceeding on the terms provided above or to employ counsel reasonably satisfactory to the Indemnified Party, in either case within such ten-day period, then such Indemnified Party may employ counsel to represent or defend it in any such audit, investigation, action or proceeding and the Indemnifying Party will pay the reasonable fees and disbursements of such counsel as incurred.  In any audit, investigation, action or proceeding with respect to which indemnification is being sought hereunder, the Indemnified Party or the Indemnifying Party, whichever is not assuming the defense of such action, will have the right to participate in such matter and to retain its own counsel at such Party’s own expense.  The Indemnifying Party or the Indemnified Party, as the case may be, will at all times use reasonable efforts to keep the Indemnifying Party or the Indemnified Party, as the case may be, reasonably apprised of the status of the defense of any matter the defense of which they are maintaining and to cooperate in good faith with each other with respect to the defense of any such matter.

(b)No Indemnified Party may settle or compromise any claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder without the prior written consent of the Indemnifying Party, unless (i) the Indemnifying Party fails to assume and maintain the defense of such claim pursuant to this Section or (ii) such settlement, compromise or consent includes an unconditional release of the Indemnifying Party from all liability arising out of such claim.  An Indemnifying Party may not, without the prior written consent of the Indemnified Party, settle or compromise any claim or consent to the entry of any judgment with respect to which indemnification is being sought hereunder unless (i) such settlement, compromise or consent includes an unconditional release of the Indemnified Party from all liability arising out of such claim, (ii) does not contain any admission or statement

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suggesting any wrongdoing or liability on behalf of the Indemnified Party and (iii) does not contain any equitable order, judgment or term which in any manner affects, restrains or interferes with the business of the Indemnified Party or any of the Indemnified Party’s Affiliates.

(c)In the event any Indemnified Party should have a claim for indemnity against any Indemnifying Party that does not involve a third party claim, the Indemnified Party shall deliver notice of such claim with reasonable promptness to the Indemnifying Party.  Such notice shall specify the basis for such claim.  The failure by any Indemnified Party so to notify the Indemnifying Party shall not relieve the Indemnifying Party from any liability that it may have to such Indemnified Party with respect to any claim made pursuant to this Section, it being understood that notices for claims in respect of a breach of a representation or warranty must be delivered prior to the expiration of the applicable Claims Period for such representation or warranty under Section 9.6.

(d)If the Indemnifying Party does not notify the Indemnified Party within 30 calendar days following its receipt of such notice that the Indemnifying Party disputes its liability to the Indemnified Party under this Article, or the amount thereof, the claim specified by the Indemnified Party in such notice shall be conclusively deemed a liability of the Indemnifying Party under this Article, and the Indemnifying Party shall pay the amount of such liability to the Indemnified Party on demand or, in the case of any notice in which the amount of the claim (or any portion of the claim) is estimated, on such later date when the amount of such claim (or such portion of such claim) becomes finally determined.  If the Indemnifying Party has timely disputed its liability with respect to such claim as provided above, as promptly as possible, such Indemnifying Party and the Indemnified Party will establish the merits and amount of such claim (by mutual agreement, litigation, arbitration or otherwise) and, within five Business Days of the final determination of the merits and amount of such claim, the Indemnifying Party will pay to the Indemnified Party immediately available funds in an amount equal to such claim as determined hereunder.

9.6Claims Period.  For purposes of this Agreement, a “Claims Period” shall be the period during which a claim for indemnification may be asserted under this Agreement by an Indemnified Party.  The Claims Periods under this Agreement shall begin on the date hereof and terminate as follows:

(a)with respect to any indemnification claim of any Buyer Indemnified Party arising under Section 9.2(a) with respect to any breach or inaccuracy of any representation or warranty of the Seller Parties in Section 4.1 (Organization), Section 4.2 (Authorization), Section 4.11 (Title and Condition of Purchased Assets), Section 4.12(b) (Intellectual Property), Section 4.22 (Brokers, Finders and Investment Bankers), but in the case of Sections 4.11 and 4.12(b), only as they relate to title, the Claims Period shall continue indefinitely;

(b)with respect to any indemnification claim of any Buyer Indemnified Party arising under Section 9.2(a) with respect to any breach or inaccuracy of any representation or warranty in Section 4.9 (Taxes), the Claims Period shall continue until six months following expiration of the applicable statutes of limitation relating to such matters;

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(c)with respect to all other indemnification claims of any Buyer Indemnified Party arising under Section 9.2(a) and all claims of any Seller Indemnified Party arising under Section 9.3(a) with respect to any breach or inaccuracy of any representation or warranty of Buyer under this Agreement, the Claims Period shall terminate on the second anniversary of the Closing Date; and

(d)with respect to all other indemnification claims of any Buyer Indemnified Party arising under Section 9.2 or of any Seller Indemnified Party arising under Section 9.3, the Claims Period shall continue indefinitely.

Notwithstanding the foregoing, if, prior to the close of business on the last day of the applicable Claims Period, an Indemnifying Party shall have been properly notified of a claim for indemnity hereunder and such claim shall not have been finally resolved or disposed of at such date, such claim shall continue to survive and shall remain a basis for indemnity hereunder until such claim is finally resolved or disposed of in accordance with the terms hereof.

9.7Liability Limits.  Notwithstanding anything to the contrary set forth herein:

(a)The Buyer Indemnified Parties shall not make a claim against the Seller Parties for indemnification pursuant to Section 9.2(a) for Buyer Losses unless and until the aggregate amount of such Buyer Losses exceeds $130,000, in which event the Buyer Indemnified Parties may claim indemnification for all such Buyer Losses, including the initial $130,000; and

(b)The maximum aggregate liability of the Seller Parties for Buyer Losses with respect to claims for indemnification pursuant to Section 9.2(a) shall be the Purchase Price.

ARTICLE X. MISCELLANEOUS

10.1Notices.  All notices, communications and deliveries under this Agreement will be made in writing signed by or on behalf of the Party making the same, will specify the Section under this Agreement pursuant to which it is given or being made, and will be delivered personally or by telecopy transmission or sent by registered or certified mail (return receipt requested) or by next day courier (with evidence of delivery and postage and other fees prepaid) as follows:

To Buyer:

MC Assembly LLC

c/o MC Test Service, Inc.

2755 Kirby Circle

Palm Bay, Florida 32905

Fax:  (321) 953-4649

Attention:  Chief Financial Officer

And to:

Key Principal Partners

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9 Greenwich Office Park, 3rd Floor

Greenwich, Connecticut 06830

Attention:  Leland Lewis

And to:

Key Principal Partners III LLC

800 Superior Avenue, 10th Floor

Cleveland, Ohio 44114

Fax:  (216) 282-8135

Attention:  Daniel Kessler and Dennis Wagner

And to:

Baker & Hostetler LLP

PNC Center

1900 East 9th Street, Suite 3200

Cleveland, OH 44114

Fax: (216) 696-0740

Attention: John Allotta

To any Seller Party:

Chase Corporation

26 Summer Street

Bridgewater, MA 02324

Fax: 508 697-6419

Attention: Chief Financial Officer

And to:

George M. Hughes

PO Box 590321

Newton Center, MA 02459

or to such other representative or at such other address of a Party as such Party may furnish to the other Parties in writing.  Any notice which is delivered personally or by telecopy transmission in the manner provided herein shall be deemed to have been duly given to the Party to whom it is directed upon actual receipt by such Party or its agent.  Any notice which is addressed and mailed in the manner herein provided shall be conclusively presumed to have been duly given to the Party to which it is addressed at the close of business, local time of the recipient, on the fourth Business Day after the day it is so placed in the mail (or on the first Business Day after placed in the mail if sent by overnight courier) or, if earlier, the time of actual receipt.

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10.2Schedules and Exhibits.  The Schedules and Exhibits to this Agreement are hereby incorporated into this Agreement and are hereby made a part of this Agreement as if set out in full in this Agreement.

10.3Assignment; Successors in Interest; Amendment.  No assignment or transfer by any Party of such Party’s rights and obligations under this Agreement will be made except with the prior written consent of the other Parties to this Agreement; provided, however, that Buyer shall, without the obligation to obtain the prior written consent of any other Party to this Agreement, be entitled to assign this Agreement or all or any part of its rights or obligations hereunder to (a) any one or more of its Affiliates or as collateral to secure any financing or (b) to any non-Affiliate Person who subsequently purchases all or substantially all of the stock or assets of Buyer.  This Agreement will be binding upon and will inure to the benefit of the Parties and their successors and permitted assigns, and any reference to a Party will also be a reference to a successor or permitted assign.  This Agreement may not be amended, modified or supplemented except by written agreement of the Parties.

10.4Number; Gender.  Whenever the context so requires, the singular number will include the plural and the plural will include the singular, and the gender of any pronoun will include the other genders.

10.5Captions.  The titles, captions and table of contents contained in this Agreement are inserted in this Agreement only as a matter of convenience and for reference and in no way define, limit, extend or describe the scope of this Agreement or the intent of any provision of this Agreement.  Unless otherwise specified to the contrary, all references to Articles and Sections are references to Articles and Sections of this Agreement and all references to Schedules or Exhibits are references to Schedules and Exhibits, respectively, to this Agreement.

10.6Severability.  Any provision of this Agreement that is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions of this Agreement, and any such prohibition or unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction.  To the extent permitted by law, the Parties waive any provision of law which renders any such provision prohibited or unenforceable in any respect.

10.7Counterparts.  This Agreement may be executed in two or more counterparts, each of which will be deemed an original, and it will not be necessary in making proof of this Agreement or the terms of this Agreement to produce or account for more than one of such counterparts.

10.8No Third Party Beneficiaries.  Nothing expressed or implied in this Agreement is intended, or will be construed, to confer upon or give any Person other than the Parties, and their successors or permitted assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement, or result in such Person being deemed a third party beneficiary of this Agreement.

10.9Waiver.  Any agreement on the part of a Party to any extension or waiver of any provision of this Agreement will be valid only if set forth in an instrument in writing signed on

42

behalf of such Party.  A waiver by a Party of the performance of any covenant, agreement, obligation, condition, representation or warranty will not be construed as a waiver of any other covenant, agreement, obligation, condition, representation or warranty.  A waiver by any Party of the performance of any act will not constitute a waiver of the performance of any other act or an identical act required to be performed at a later time.

10.10Integration.  This Agreement and the documents executed pursuant to this Agreement supersede all negotiations, agreements and understandings (both written and oral) among the Parties with respect to the subject matter of this Agreement, and constitutes the entire agreement between the Parties.

10.11Cooperation Following the Closing.  Following the Closing, each of the Parties shall deliver to the others such further information and documents and shall execute and deliver to the others such further instruments and agreements as the other Party shall reasonably request to consummate or confirm the transactions provided for in this Agreement, to accomplish the purpose of this Agreement or to assure to the other Party the benefits of this Agreement.

10.12Transaction Costs.  Except as provided above or as otherwise expressly provided herein, (a) Buyer will pay its own fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement, including the fees, costs and expenses of its financial advisors, accountants and counsel and (b) each Seller Party will pay its own fees, costs and expenses incurred in connection with this Agreement and the transactions contemplated by this Agreement, including the fees, costs and expenses of its financial advisors, accountants and counsel.

10.13Governing Law.  This Agreement shall in all respects be construed in accordance with and governed by the laws of the State of Delaware.  The Parties agree that any action arising out of this Agreement shall be venued in the federal, state or local courts located in, or otherwise, having jurisdiction over Cuyahoga County, Ohio, and the Parties hereby consent to personal jurisdiction in such courts and waive any objection based on the defense of an inconvenient forum and any objection to jurisdiction or venue of any action instituted hereunder.

[Signature page follows.]

43

IN WITNESS WHEREOF, the Parties have caused this Agreement to be duly executed, as of the date first above written.

BUYER:

MC ASSEMBLY LLC

By:

Name:

Title:

MC TEST:

M C TEST SERVICE, INC., only with respect to Section 6.14

By:

Name:

Title:

SELLER PARTIES:

RWA, INC. d/b/a CHASE EMS

By:

Name:

Title:

CHASE CORPORATION

By:

Name:

Title:

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EX-21

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Exhibit 21

SUBSIDIARIES OF THE REGISTRANT

        Subsidiaries of Chase Corporation as of August 31, 2010 are as follows:

Name	Jurisdiction of Incorporation
RWA, Inc.	Massachusetts
C.I.M. Industries, Inc.	New Hampshire
Chase Facile, Inc.	Massachusetts
Capital Services of New York, Inc.	New York
Chase & Sons Limited	United Kingdom
HumiSeal Europe SARL	France
HumiSeal Europe Limited	United Kingdom
Chase Protective Coatings Limited	United Kingdom

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Exhibit 21

EX-23.1

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Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

        We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (No. 333-131929 and No. 333-100101) of Chase Corporation of our report dated November 15, 2010 relating to the financial statements and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP

PricewaterhouseCoopers LLP
Boston, Massachusetts
November 15, 2010

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Exhibit 23.1

EX-31.1

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Exhibit 31.1

CERTIFICATION

I, Peter R. Chase, certify that:

1.

I have reviewed this Annual Report on Form 10-K 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;



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: November 15, 2010

/s/ PETER R. CHASE
Peter R. Chase
Chairman and Chief Executive Officer
(Principal Executive Officer)

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Exhibit 31.1

EX-31.2

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Exhibit 31.2

CERTIFICATION

I, Kenneth L. Dumas, certify that:

1.

I have reviewed this Annual Report on Form 10-K 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;



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: November 15, 2010

/s/ KENNETH L. DUMAS
Kenneth L. Dumas
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

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Exhibit 31.2

EX-32.1

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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 Annual Report on Form 10-K for the year ended August 31, 2010 (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: November 15, 2010

/s/ PETER R. CHASE
Peter R. Chase
Chairman and Chief Executive Officer
(Principal Executive Officer)

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Exhibit 32.1

EX-32.2

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Exhibit 32.2

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 Annual Report on Form 10-K for the year ended August 31, 2010 (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: November 15, 2010

/s/ KENNETH L. DUMAS
Kenneth L. Dumas
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)

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Exhibit 32.2