EXHIBIT 10.34


 


TERM NOTE


 


1.             DEFINED TERMS.  As
used in this Term Note (the “Note”), the following terms shall have the
following meanings:


 


	
  1.1

  	
   

  	
  Borrower:

  	
  Chase
  Corporation

  
	
   

  	
   

  	
   

  	
  a Massachusetts
  corporation

  
	
   

  	
   

  	
   

  	
  26 Summer Street

  
	
   

  	
   

  	
   

  	
  Bridgewater,
  Massachusetts 02324

  
	
   

  	
   

  	
   

  	
   

  
	
  1.2

  	
   

  	
  Lender:

  	
  Citizens Bank of
  Massachusetts

  
	
   

  	
   

  	
   

  	
  28 State Street

  
	
   

  	
   

  	
   

  	
  Boston, MA 02109

  
	
   

  	
   

  	
   

  	
   

  
	
  1.3

  	
   

  	
  Loan
  Amount:

  	
  $7,800,000.00

  
	
   

  	
   

  	
   

  	
   

  
	
  1.4

  	
   

  	
  Interest
  Rate:

  	
  See
  Section 3 below.

  
	
   

  	
   

  	
   

  	
   

  
	
  1.5

  	
   

  	
  Maturity
  Date:

  	
  October 12,
  2010

  
	
   

  	
   

  	
   

  	
   

  
	
  1.6

  	
   

  	
  Loan
  Agreement:    a certain Term Loan Agreement of even date
  herewith by and between Borrower and Lender.

  
	
   

  	
   

  	
   

  
	
  1.7

  	
   

  	
  Loan,
  Loan Documents and Event of Default shall have the same
  meanings as in the Loan Agreement. The Loan Documents are incorporated herein
  by reference. All capitalized terms used herein and not otherwise defined
  herein shall have the meanings as set forth in the Loan Agreement.

  
	
   

  	
   

  	
   

  
	
  1.8

  	
   

  	
  Prepayment
  Period: At any time during the term of the Loan.

  



 


2.             DEBT: For value received, Borrower hereby promises to pay to
the order of Lender the Loan Amount, together with interest on all unpaid
balances from the date of such advances made under this Note at the interest
rate set forth in this Note, together with all other amounts due hereunder or
under the Loan Documents. 


 


3.             INTEREST: Interest on all amounts advanced under this Note
shall accrue interest at either (i) a floating per annum rate of interest
equal to the Prime Rate (as defined in the Loan Agreement) (the “Prime Rate
Option”), or (ii) an adjustable per annum rate equal to the LIBOR Rate
plus the Applicable Margin (as such terms are defined in Rider A
entitled “Provisions for Citizens LIBOR Rate Loans” attached hereto and made a
part hereof) ( the “LIBOR Rate Option”). 
Borrower may elect either interest rate option by written notice to
Lender upon the date of this Note and thereafter upon any interest payment date
during the term of this Note.  The
interest rate selected by Borrower shall continue during the term of the Note
until Lender receives written notice from Borrower of a requested change.  In the absence of any written election by
Borrower, this Note shall accrue interest at the Prime Rate option as set forth
above.  Interest shall be calculated on
the basis of the number of actual days elapsed and a 360-day year.  In the


 





















 


event
that Borrower elects to enter into a Hedging Contract (as defined in Rider A)
with respect to any portion of the outstanding principal of this Note, the
interest rate for such portion shall automatically accrue at the LIBOR Rate
Option as set forth above in order to accommodate the terms of the Hedging
Contract.  


 


4.             PAYMENTS: Borrower shall make payments of interest on the
amounts advanced by Lender under this Note monthly in arrears while any part of
the indebtedness evidenced hereby is unpaid with each monthly payment due as
follows:  (i) for any portion of the
Loan that is accruing interest pursuant to the Prime Rate Option, Borrower
shall make payments on the first day of the month after the date of such
advance (the “First Payment Date”) and thereafter on each monthly anniversary
of the First Payment Date, and (ii) for any portion of the Loan that is
accruing interest pursuant to the LIBOR Rate Option, Borrower shall make
payments on each Interest Payment Date as set forth in Rider A. In
addition to monthly payments of accrued interest, Borrower shall make quarterly
payments of principal in the amount of $390,000.00 on each quarterly
anniversary of the First Payment Date during the term of this Note.  Upon the Maturity Date, Borrower shall pay to
Lender the entire then unpaid balance of principal and interest due under this
Note.


 


Any
payments on this Note, whether such payment is of a regular installment or
represents a prepayment (if permitted hereunder), shall be made in coin and
currency of the United States of America which is legal tender for the payment
of public and private debts, in immediately available funds, to Lender at
Lender’s address set forth or at such other address as Lender may from time to
time designate in writing.


 


5.             DEFAULT INTEREST: If an Event of Default has occurred under
this Note, Borrower shall, in addition to any other payment due hereunder, pay
interest thereon from and after the date on which such Event of Default has
occurred at an annual interest rate equal to the then applicable interest rate
plus four percent (4%) and such interest shall be due and payable, on demand,
at such rate until the entire amount due is paid to Lender, whether or not any
action shall have been taken or proceeding commenced to recover the same.  Nothing in this Section 5 or in any
other provision of this Note shall constitute an extension of the time of
payment of the indebtedness hereunder.


 


6.             DELINQUENCY CHARGES:  If
Borrower fails to pay any amount of interest on this Note for ten (10) days
after such payment becomes due,  Lender
may, at its option, whether immediately or at the time of final payment of the
amounts evidenced by this Note impose a delinquency or “late” charge equal to
five percent (5%) of the amount of such past due payment notwithstanding the
date on which such payment is actually paid in full.  Borrower agrees that any such delinquency
charges shall not be deemed to be additional interest or penalty, but shall be
deemed to be liquidated damages because of the difficulty in computing the
actual amount of damages in advance.


 


7.             COSTS AND EXPENSES UPON DEFAULT: After default, in addition
to principal, interest and delinquency charges, Lender shall be entitled to
collect all costs of collection, including, but not limited to, reasonable
attorneys, fees and expenses, incurred in


 


2





















 


connection
with any of Lender’s collection efforts, whether or not suit on this Note is
filed, and all such costs and expenses shall be payable on demand.


 


8.             APPLICATION OF PAYMENTS: Unless an Event of Default has
occurred, all payments hereunder shall be applied first to delinquency charges,
costs of collection and enforcement and other similar amounts due, if any,
under this Note and under the other Loan Documents, then to interest which is
due and payable under this Note and the remainder, if any, to principal due and
payable under this Note.  If an Event of
Default has occurred, such payments may be applied to sums due under this Note
or under the other Loan Documents in any order and combination that Lender may,
in its sole and absolute discretion, determine. 


 


9.             PERMITTED PREPAYMENT:  The
Borrower shall have the right to prepay the Loan in whole, or in part, at any
time, together with all delinquency charges and any other amounts which may be
due hereunder or under any of the Loan Documents, provided that the Borrower
shall be liable at the time of any such prepayment for any LIBOR Rate Loan
Prepayment Fee or any fees in connection with any Hedging Obligations, as such
defined terms are set forth and defined in Rider A.  


 


10.           COSTS; ILLEGALITY OF LOAN: In addition to principal,
interest and delinquency charges, Borrower shall pay all costs and expenses,
including, without limitation, reasonable attorneys’ fees and all reasonable
expenses and disbursements of counsel, in connection with the protection,
realization or enforcement of any of Lender’s rights against Borrower or any
other liabilities of Borrower to Lender (whether or not suit or foreclosure is
instituted by or against Lender).


 


Borrower
hereby agrees to pay to Lender on demand (i) all costs and expenses of
Lender in connection with, and any stamp or other taxes or charges (including
filing fees) payable with respect to, this Note and the enforcement hereof; and
(ii) any amount necessary to compensate it for (a) any losses or
costs (including funding costs) sustained by it as a consequence of any default
by Borrower hereunder; and (b) any increased costs Lender may sustain in
maintaining the borrowing evidenced hereby due to the introduction of, or any
change in, law or applicable regulations (including the interpretation thereof)
or due to the compliance by Lender with any guideline or request from any
central bank or governmental authority. 
In addition, if it shall become unlawful, or any central bank or other
governmental authority shall assert it to be unlawful, for Lender (or any bank
which is directly or indirectly funding Lender with respect to the Loan) to
maintain the borrowing evidenced hereby, Borrower agrees to prepay this Note in
full together with accrued interest and other amounts payable hereunder on
demand.


 


11.           WAIVERS: THE BORROWER HEREBY IRREVOCABLY WAIVES ITS RIGHTS
TO NOTICE AND HEARING TO THE EXTENT PERMITTED BY LAW OF ANY STATE OR FEDERAL
LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH LENDER MAY DESIRE TO USE,
and, further, irrevocably waives presentment for payment, demand, notice of
nonpayment, notice of intention to accelerate


 


3





















 


the
maturity of this Note, diligence in collection, commencement of suit against
any obligor, notice of protest, and protest of this Note and all other notices
in connection with the delivery, acceptance, performance, default or
enforcement of the payment of this Note, before or after the maturity of this
Note, with or without notice to Borrower, and agrees that Borrower’s liability
shall not be in any manner affected by any indulgence, extension of time,
renewal, waiver or modification granted or consented to by Lender.  Borrower consents to any and all extensions
of time, renewals, waivers or modifications that may be granted by Lender with
respect to the payment or other provisions of this Note.  Any delay on the part of Lender in exercising
any right under this Note shall not operate as a waiver of any such right, and
any waiver granted or consented to on one occasion shall not operate as a
waiver in the event of any subsequent default.


 


12.           NO USURY: Lender and Borrower intend to comply at all times
with applicable usury laws.  If at any
time such laws would ever render usurious any amounts called for under this
Note or the other Loan Documents, then it is Borrower’s and Lender’s express
intention that Borrower shall not be required to pay interest on this Note at a
rate in excess of the maximum lawful rate, that the provisions of this Section 12
shall control over all other provisions of this Note and the Loan Documents
which may be in apparent conflict herewith, that such excess amount shall be
credited to the principal balance of this Note (or, if this Note has been fully
paid, refunded by Lender to Borrower), and the provisions hereof shall be
reformed and the amounts thereafter collectible under this Note reduced,
without the necessity of the execution of any further documents, so as to
comply with the then applicable law, but so as to permit the recovery by Lender
of the fullest amount otherwise called for under this Note.  Any such crediting or refund shall not cure
or waive any default by Borrower under this Note or the other Loan
Documents.  If at any time following any
reduction in the interest rate payable by Borrower there remains unpaid any
principal amount under this Note and the maximum interest rate allowed by
applicable law is increased or eliminated, then the interest rate payable under
this Note shall be readjusted, to the extent not prohibited by applicable law,
so that the dollar amount of interest payable hereunder shall be equal to the
dollar amount of interest which would have been paid by Borrower without giving
effect to the reduction in interest resulting from compliance with applicable
usury laws.  Borrower agrees that in
determining whether or not any interest payable under this Note or the other
Loan Documents exceeds the highest rate allowed by law, any non-principal
payment (except payments specifically stated in this Note or in the other Loan
Documents to be “interest”), including, without limitation, prepayment fees and
delinquency charges, shall, to the maximum extent allowed by law, be an
expense, fee or premium rather than interest. 
The term “applicable law”, as used in this Note shall mean the laws of
The Commonwealth of Massachusetts or the laws of the United States, whichever
laws allow the greater rate of interest, as such laws now exist or may be
changed or amended or come into effect in the future.


 


13.           ACCELERATION AND OTHER REMEDIES: If:


 


(a)           Borrower
fails to pay any sum within ten (10) days of when due under this Note; or


 


4





















 


(b)           an “Event
of Default”, as said term is defined in the Loan Agreement or any other Loan
Document, occurs;


 


then,
and in any such event, Lender may, at its option, declare the entire unpaid
balance of this Note together with interest accrued thereon, to be immediately
due and payable and Lender may proceed to exercise any rights or remedies that
it may have under this Note, the Loan Agreement, the other Loan Documents or
such other rights and remedies which Lender may have at law, equity or
otherwise.


 


14.           SUCCESSORS AND ASSIGNS: This Note shall be binding upon
Borrower and upon its respective heirs, successors, assigns and
representatives, and shall inure to the benefit of Lender and its successors,
endorsees, and assigns.


 


15.           DEPOSITS:  Any and all
deposits or other sums at any time credited by or due from Lender to Borrower
and any cash, securities, instruments, or other property of Borrower which now
or hereafter are at any time in the possession or control of Lender, constitute
additional security to Lender for the liabilities of Borrower to Lender
including, without limitation, the liability evidenced hereby, and may be
applied or set off by Lender against such liabilities at any time from and
after an Event of Default hereunder whether or not other collateral is
available to Lender.


 


16.           COLLECTION: Any check, draft, money order or other
instrument given in payment of all or any portion hereof may be accepted by
Lender and handled by collection in the customary manner, but the same shall
not constitute payment hereunder or diminish any rights of Lender except to the
extent that actual cash proceeds of such instrument are unconditionally
received by Lender and applied to this indebtedness in the manner elsewhere
herein provided.


 


17.           AMENDMENTS: This Note may be changed or amended only by an
agreement in writing signed by the party against whom enforcement is sought.


 


18.           GOVERNING LAW; SUBMISSION TO JURISDICTION: This Note is
given to evidence debt for business or commercial purposes, is being delivered
to Lender at one of its offices in The Commonwealth of Massachusetts and shall
be governed by and construed under the laws of said Commonwealth.  Borrower hereby submits to personal
jurisdiction in said Commonwealth for the enforcement of Borrower’s obligations
hereunder, under the Loan Agreement and under the other Loan Documents, and
waives any and all personal rights under the law of any other state to object
to jurisdiction within such Commonwealth for the purposes of litigation to
enforce such obligations of Borrower.  In
the event such litigation is commenced, Borrower agrees that service of process
may be made, and personal jurisdiction over Borrower obtained, by service of a
copy of the summons, complaint and other pleadings required to commence such
litigation upon Borrower at the address set forth in the preamble to this Note.


 


5





















 


19.           CAPTIONS: All paragraph and subparagraph captions are for
convenience of reference only and shall not affect the construction of any
provision herein.


 


IN WITNESS WHEREOF, this
Note has been executed and delivered under seal as of the 12th day
of October, 2005. 


 


 


	
   

  	
  CHASE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
  /s/ Paula M. Myers

  	
   

  	
  By:

  	
     /s/
  Everett Chadwick

  	
   

  
	
  Witness

  	
        Everett Chadwick, Treasurer and

  
	
   

  	
        Chief Financial Officer

  
					



 


6





















 


EXHIBIT A


 


INTEREST RATE ELECTION NOTICE


 


To:          Citizens
Bank of Massachusetts


 


Attn: William
E. Lingard, Senior Vice President


 


The
undersigned hereby elects, effective as of the date hereof (or the next
interest payment date if this election is not dated as of an interest payment
date under the Note), that such advance accrue interest at the following
checked interest rate:


 


o            Lender’s
Prime Rate (as announced from time to time).


 


o            one
(1) month LIBOR Rate plus the Applicable Margin as set forth in Rider A
to the Note.


 


o            three
(3) month LIBOR Rate plus the Applicable Margin as set forth in Rider A
to the Note.


 


o            six
(6) month LIBOR Rate plus the Applicable Margin as set forth in Rider A
to the Note.


 


o            nine
(9) month LIBOR Rate plus the Applicable Margin as set forth in Rider A
to the Note.


 


o            twelve
(12) month LIBOR Rate plus the Applicable Margin as set forth in Rider A
to the Note.


 


EXECUTED under seal as of
this       day of                    ,
20   .


 


	
   

  	
  CHASE
  CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Witness

  	
   

  
	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
						



 


7





















 


RIDER A


 


PROVISIONS FOR CITIZENS LIBOR
RATE LOANS


 


BORROWER:  Chase Corporation


 


1.             Certain
Definitions.  Any defined terms not
defined below shall have the definitions as set forth in the Loan Agreement or
Promissory Note to which this Rider A is attached and made a part
hereof.


 


“Applicable Margin” means one and one-half of
one percent (1.5%) per annum.


 


“Business Day”
means:


 


(i)            any day
which is neither a Saturday or Sunday nor a legal holiday on which commercial
banks are authorized or required to be closed in the Commonwealth of Massachusetts.


 


(ii)           when such
term is used to describe a day on which a payment or prepayment is to be made
in respect of a LIBOR Rate Loan, any day which is: (i) neither a Saturday
or Sunday nor a legal holiday on which commercial banks are authorized or
required to be closed in New York City; and (ii) a London Banking Day; and


 


(iii)          when
such term is used to describe a day on which an interest rate determination is
to be made in respect of a LIBOR Rate Loan, any day which is a London Banking
Day.


 


“Funding Date” means the date of the Note to
which this Rider A is attached.


 


“Hedging Contracts” means, interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements,
or any other agreements or arrangements entered into between the Borrower and
the Bank and designed to protect the Borrower against fluctuations in interest
rates or currency exchange rates.


 


“Hedging Obligations” means, with respect to
the Borrower, all liabilities of the Borrower to the Bank under Hedging
Contracts. 


 


“Interest Period” means:


 


(i)            initially, the period beginning on (and
including) the Funding Date and ending on (but excluding)             
(the “Stub Period”); and


 


(ii)           then, each
period commencing on the last day of the next preceding Interest Period and
ending on the day which numerically corresponds to the last day of the Stub
Period one, three, six, nine or twelve months
thereafter (or, if such month


 


8





















 


has no
numerically corresponding day, on the last Business Day of such month); and


 


(iii)          thereafter,
each period commencing on the last day of the next preceding Interest Period
and ending one, three, six, nine or twelve months
thereafter;


 


provided, however, that


 


(a)           if the
Borrower has or may incur Hedging Obligations with the Bank in connection with
the Loan, the Interest Period shall be of the same duration as the relevant
period set under the applicable Hedging Contract;


 


(b)           if such
Interest Period would otherwise end on a day which is not a Business Day, such
Interest Period shall end on the next following Business Day unless such day
falls in the next calendar month, in which case such Interest Period shall end
on the first preceding Business Day; and


 


(c)           no
Interest Period may end later than the termination of this agreement.


 


“Interest Payment Date” means the last Business
Day of each Interest Period.


 


“LIBOR Rate” means
relative to any Interest Period for a LIBOR Rate Loan, the offered rate for
deposits of U.S. Dollars in an amount approximately equal to the amount of the
LIBOR Rate Loan for a term coextensive with the Interest Period which the
British Bankers’ Association fixes as its LIBOR rate and which appears on the
Telerate Page 3750 as of 11:00 a.m. London time on the day which is
two London Banking Days prior to the beginning of such Interest Period.


 


“LIBOR Rate Loan” means the Loan for the
period(s) when the rate of interest applicable to the Loan is calculated by
reference to the LIBOR Rate.


 


“LIBOR Lending Rate” means, relative to a LIBOR
Rate Loan for any Interest Period, a rate per annum determined pursuant to the
following formula:


 


	
  LIBOR Lending Rate =

  	
   

  	
  LIBOR Rate

  	
   

  	
   

  
	
   

  	
   

  	
  (1.00 - LIBOR
  Reserve Percentage)

  	
   

  



 


“LIBOR Reserve Percentage” means, relative to
any day of any Interest Period for the LIBOR Rate Loan, the maximum aggregate
(without duplication) of the rates (expressed as a decimal fraction) of reserve
requirements (including all basic, emergency, supplemental, marginal and other
reserves and taking into account any transitional adjustments or other
scheduled changes in reserve requirements) under any regulations of the Board
of Governors of the Federal Reserve System (the “Board”) or other governmental
authority having jurisdiction with respect thereto as issued from time to time
and then applicable to assets or liabilities consisting of “Eurocurrency
Liabilities”, as currently defined in Regulation D of the Board, having a term
approximately equal or comparable to such Interest Period.


 


“Loan” means all
amounts outstanding under the Note and/or advanced pursuant to this agreement.


 


9





















 


“London Banking Day”
means a day on which dealings in US dollar deposits are transacted in the
London interbank market.


 


“Maturity Date” -
as defined in the Loan Agreement and/or the Note to which this Rider A is
attached.


 


“Prime Rate” means
the rate of interest announced by Bank in from time to time as its “Prime Rate.”  The Borrower acknowledges that the Bank may
make loans to its customers above, at or below the Prime Rate.  Interest accruing by reference to the Prime
Rate shall be calculated on the basis of actual days elapsed and a 360-day
year.


 


“Prime Rate Loan”
means the Loan for the period(s) when the rate of interest applicable to the
Loan is calculated by reference to the Prime Rate


 


2.             Borrowing
Procedures.


 


2.1           Funding
of the Loan.  On the Funding Date and
on terms and subject to the conditions of this agreement, the Loan shall be
made available to the Borrower no later than 11:00 a.m. New York time by a
deposit to the Account (or as otherwise instructed by the Borrower in writing)
in the full principal amount of the Loan. 
Unless otherwise prohibited by this agreement, the Loan shall initially
be classified as a LIBOR Rate Loan and interest shall accrue by reference to
the LIBOR Rate.


 


3.             Repayments, Prepayments, and Interest.


 


3.1           Repayment
of Loan; Automatic Rollover of LIBOR Rate Loan.  During the period(s) the Loan is classified
as a LIBOR Rate Loan, it shall mature and become payable in full on the last
day of each Interest Period.  Upon
maturity the Loan shall automatically be continued as a LIBOR Rate Loan with an
equal Interest Period in an amount equal to the expiring LIBOR Rate Loan LESS
the applicable Principal Repayment Amount, provided, however, that no portion
of the outstanding principal amount of a LIBOR Rate Loan may be continued as a
LIBOR Rate Loan when any default or Event of Default has occurred and is
continuing.  If any default or Event of
Default has occurred and is continuing (if the Bank does not otherwise elect to
exercise any right to accelerate the Loan it is granted hereunder), the
maturing LIBOR Rate Loan shall automatically be continued as a Prime Rate
Loan.  During the period(s) that the Loan
is classified as a Prime Rate Loan, the Borrower shall make regular payments of
principal in amounts equal to the applicable Principal Repayment Amount on the
last day of each Interest Period. 
Notwithstanding the foregoing, the Loan shall mature and become payable
in full upon the Maturity Date.


 


3.2           Voluntary
Prepayment of the LIBOR Rate Loan. 
When classified as a LIBOR Rate Loan, the Loan may be prepaid upon the
terms and conditions set forth herein. 
The Borrower acknowledges that additional obligations may be associated
with prepayment, in accordance with the terms and conditions of any applicable
Hedging Contracts.  The Borrower shall
give the Bank, no later than 10:00 a.m., New York City time, at least four
(4) Business Days notice of any proposed prepayment of the LIBOR Rate
Loan, specifying the proposed date of payment and the principal amount to be
paid.  Each partial prepayment of the
principal amount of the LIBOR Rate Loan shall be in an integral multiple of
$100,000.00 and accompanied by the payment of all charges outstanding on the
LIBOR Rate Loan and of all accrued interest on the principal repaid to the date
of payment.  Borrower acknowledges that
prepayment or acceleration of the LIBOR Rate Loan during an Interest Period
shall result in the Bank incurring additional costs, expenses and/or
liabilities and that it is extremely difficult and impractical to ascertain the
extent of such


 


10





















 


costs, expenses and/or
liabilities.  Therefore, all full or
partial prepayments of the LIBOR Rate Loan shall be accompanied by, and the
Borrower hereby promises to pay, on each date the LIBOR Rate Loan is prepaid or
the date all sums payable hereunder become due and payable, by acceleration or
otherwise, in addition to all other sums then owing, an amount (“LIBOR Rate
Loan Prepayment Fee”) determined by the Bank pursuant to the following formula:


 


(a)           the then
current rate for United States Treasury securities (bills on a discounted basis
shall be converted to a bond equivalent) with a maturity date closest to the
end of the Interest Period as to which prepayment is made, subtracted from:


 


(b)           the LIBOR
Lending Rate plus the Applicable Margin then applicable to the LIBOR Rate Loan.


 


If the result of this calculation is zero or a
negative number, then there shall be no LIBOR Rate Loan Prepayment Fee.  If the result of this calculation is a
positive number, then the resulting percentage shall be multiplied by:


 


(c)           the amount
of the LIBOR Rate Loan being prepaid.


 


The resulting amount shall be divided by:


 


(d)           360


 


and multiplied by:


 


(e)           the number
of days remaining in the Interest Period as to which the prepayment is being
made.


 


Said
amount shall be reduced to present value calculated by using the referenced
United States Treasury securities rate and the number of days remaining on the
Interest Period for the LIBOR Rate Loan. 
The resulting amount of these calculations shall be the LIBOR Rate Loan
Prepayment Fee.


 


3.3           Interest
Provisions.  Interest on the
outstanding principal amount of the Loan when classified as a: (i) LIBOR
Rate Loan shall accrue during each Interest Period at a rate equal to the sum
of the LIBOR Lending Rate for such Interest Period plus the Applicable Margin
thereto and be payable on each Interest Payment Date, and (ii) Prime Rate
Loan shall accrue during each Interest Period at a rate equal to the Prime Rate
and be payable on each Interest Payment Date. 


 


4.             Miscellaneous
LIBOR Rate Loan Terms. 


 


4.1           LIBOR
Rate Lending Unlawful.  If the Bank
shall determine (which determination shall, upon notice thereof to the Borrower
be conclusive and binding on the Borrower) that the introduction of or any
change in or in the interpretation of any law, rule, regulation or guideline,
(whether or not having the force of law) makes it unlawful, or any central bank
or other governmental authority asserts that it is unlawful, for the Bank to
make, continue or maintain the Loan as, or to convert the Loan into, a LIBOR
Rate Loan, the obligations of the Bank to make, continue, maintain or convert
the Loan into a LIBOR Rate Loan shall, upon such determination, forthwith be
suspended until the Bank shall notify the Borrower that the circumstances
causing such suspension no longer exist, and if the Loan is then presently a
LIBOR Rate Loan, it shall automatically convert into Prime Rate Loan at the end
of the then current Interest Period or sooner, if required by such law or
assertion.


 


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4.2           Substitute
Rate.  If the Bank shall have
determined that


 


(a)           US dollar
deposits in the relevant amount and for the relevant Interest Period are not
available to the Bank in the London interbank market; 


 


(b)           by reason
of circumstances affecting the Bank in the London interbank market, adequate
means do not exist for ascertaining the LIBOR Rate applicable hereunder to the
LIBOR Rate Loan, or


 


(c)           the LIBOR
Rate no longer adequately reflects the Bank’s cost of funding the Loan,


 


then, upon notice from
the Bank to the Borrower, the obligations of the Bank under Loan Agreement or
the Note (as applicable) to make or continue the Loan as, or to convert the
Loan into, a LIBOR Rate Loan shall forthwith be suspended until the Bank shall
notify the Borrower that the circumstances causing such suspension no longer
exist.  During any such suspension, the
Loan shall be classified as a Prime Rate Loan.


 


4.3           Indemnities.  In addition to the LIBOR Rate Loan Prepayment
Fee, the Borrower agrees to reimburse the Bank (without duplication) for any
increase in the cost to the Bank, or reduction in the amount of any sum
receivable by the Bank, in respect, or as a result of:


 


(a)           any
conversion or repayment or prepayment of the principal amount of the LIBOR Rate
Loan on a date other than the scheduled last day of the Interest Period applicable
thereto, whether pursuant to the Loan Agreement, the Note (as applicable) or
otherwise;


 


(b)           any costs
associated with marking to market any Hedging Obligations that (in the
reasonable determination of the Bank) are required to be terminated as a result
of any conversion, repayment or prepayment of the principal amount of the LIBOR
Rate Loan on a date other than the scheduled last day of the Interest Period
applicable thereto, whether pursuant to the Loan Agreement, the Note (as
applicable) or otherwise;


 


The Bank shall promptly
notify the Borrower in writing of the occurrence of any such event, such notice
to state, in reasonable detail, the reasons therefor and the additional amount
required fully to compensate the Bank for such increased cost or reduced
amount.  Such additional amounts shall be
payable by the Borrower to the Bank within five days of its receipt of such
notice, and such notice shall, in the absence of manifest error, be conclusive
and binding on the Borrower.  The
Borrower understands, agrees and acknowledges the following: (i) the Bank
does not have any obligation to purchase, sell and/or match funds in connection
with the use of the LIBOR Rate as a basis for calculating the rate of interest
on the LIBOR Rate Loan, (ii) the LIBOR Rate may be used merely as a
reference in determining such rate, and (iii) the Borrower has accepted
the LIBOR Rate as a reasonable and fair basis for calculating such rate, the
LIBOR Rate Prepayment Fee, and other funding losses incurred by the Bank.  Borrower further agrees to pay the LIBOR Rate
Prepayment Fee and other funding losses, if any, whether or not the Bank elects
to purchase, sell and/or match funds.


 


4.4           Increased
Costs.  If on or after the date
hereof the adoption of any applicable law, rule or regulation or guideline
(whether or not having the force of law), or any change therein, or any change
in the interpretation or administration thereof by any governmental authority,
central bank or comparable agency charged with the interpretation or administration
thereof, or


 


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compliance by the Bank
with any request or directive (whether or not having the force of law) of any
such authority, central bank or comparable agency:


 


(a)           shall
subject the Bank to any tax, duty or other charge with respect to the LIBOR
Rate Loan or its obligation to make the LIBOR Rate Loan, or shall change the
basis of taxation of payments to the Bank of the principal of or interest on
the LIBOR Rate Loan or any other amounts due under this agreement in respect of
the LIBOR Rate Loan or its obligation to make the LIBOR Rate Loan (except for
the introduction of, or change in the rate of, tax on the overall net income of
the Bank or franchise taxes, imposed by the jurisdiction (or any political
subdivision or taxing authority thereof) under the laws of which the Bank is
organized or in which the Bank’s principal executive office is located); or


 


(b)           shall
impose, modify or deem applicable any reserve, special deposit or similar requirement
(including, without limitation, any such requirement imposed by the Board of
Governors of the Federal Reserve System of the United States) against assets
of, deposits with or for the account of, or credit extended by, the Bank or
shall impose on the Bank or on the London interbank market any other condition
affecting the LIBOR Rate Loan or its obligation to make the LIBOR Rate Loan;


 


and the result of any of
the foregoing is to increase the cost to the Bank of making or maintaining the
Loan as a LIBOR Rate Loan, or to reduce the amount of any sum received or
receivable by the Bank under this agreement with respect thereto, by an amount
deemed by the Bank to be material, then, within 15 days after demand by the
Bank, the Borrower shall pay to the Bank such additional amount or amounts as
will compensate the Bank for such increased cost or reduction.


 


4.5           Increased
Capital Costs.  If any change in, or
the introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority affects or would affect the amount of capital
required or expected to be maintained by the Bank, or person controlling the
Bank, and the Bank determines (in its sole and absolute discretion) that the
rate of return on its or such controlling person’s capital as a consequence of
its commitments or the Loan made by the Bank is reduced to a level below that
which the Bank or such controlling person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by the Bank to the Borrower, the Borrower shall immediately pay
directly to the Bank additional amounts sufficient to compensate the Bank or
such controlling person for such reduction in rate of return.  A statement of the Bank as to any such
additional amount or amounts (including calculations thereof in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower.  In determining such
amount, the Bank may use any method of averaging and attribution that it (in
its sole and absolute discretion) shall deem applicable.


 


4.6           Taxes.  All payments by the Borrower of principal of,
and interest on, the LIBOR Rate Loan and all other amounts payable hereunder
shall be made free and clear of and without deduction for any present or future
income, excise, stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority, but excluding franchise taxes and taxes imposed on or measured by
the Bank’s net income or


 


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receipts (such non-excluded
items being called “Taxes”).  In the
event that any withholding or deduction from any payment to be made by the
Borrower hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then the Borrower will


 


(a)          pay
directly to the relevant authority the full amount required to be so withheld
or deducted;


 


(b)         promptly
forward to the Bank an official receipt or other documentation satisfactory to
the Bank evidencing such payment to such authority; and


 


(c)          pay
to the Bank such additional amount or amounts as is necessary to ensure that
the net amount actually received by the Bank will equal the full amount the
Bank would have received had no such withholding or deduction been required.


 


Moreover, if any Taxes
are directly asserted against the Bank with respect to any payment received by
the Bank hereunder, the Bank may pay such Taxes and the Borrower will promptly
pay such additional amount (including any penalties, interest or expenses) as
is necessary in order that the net amount received by the Bank after the
payment of such Taxes (including any Taxes on such additional amount) shall
equal the amount the Bank would have received had not such Taxes been asserted.


 


If the
Borrower fails to pay any Taxes when due to the appropriate taxing authority or
fails to remit to the Bank the required receipts or other required documentary
evidence, the Borrower shall indemnify the Bank for any incremental Taxes,
interest or penalties that may become payable by the Bank as a result of any
such failure.  


 


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