Exhibit 10.16

ASSET PURCHASE AGREEMENT

between

GEL INDUSTRIES, INC. DBA QUALITY ALUMINUM FORGE

(“Seller”)

and

FORGE ACQUISITION, LLC

(“Purchaser”)

Dated as of October 28, 2011

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Table of Contents

 

      Page  

Article 1 DEFINITIONS

     1   

Article 2 PURCHASE AND SALE OF ASSETS

     1   

Section 2.1 Purchase and Sale of Assets

     1   

Section 2.2 Excluded Assets

     3   

Section 2.3 Assumption of Liabilities

     3   

Article 3 PURCHASE PRICE AND PRORATIONS OF CERTAIN LIABILITIES

     5   

Section 3.1 Purchase Price

     5   

Section 3.2 Working Capital Adjustment

     6   

Section 3.3 Prorations

     9   

Section 3.4 Allocation of Purchase Price

     10   

Section 3.5 Sales and Transfer Taxes

     10   

Article 4 CLOSING

     10   

Section 4.1 Closing

     10   

Article 5 REPRESENTATIONS, WARRANTIES, AND AGREEMENTS OF SELLER

     10   

Section 5.1 Organization and Standing

     10   

Section 5.2 Authority; Consents

     10   

Section 5.3 Investments in Other Entities

     11   

Section 5.4 Real Property

     11   

Section 5.5 Environmental Matters

     12   

Section 5.6 Title to and Condition of Purchased Assets

     13   

Section 5.7 Taxes

     14   

Section 5.8 Litigation

     15   

Section 5.9 Financial Statements

     16   

Section 5.10 Accounts Payable; Accrued Expenses; Indebtedness

     16   

Section 5.11 Transactions with Affiliates

     16   

Section 5.12 Capital Expenditure Plans

     16   

Section 5.13 Absence of Undisclosed Liabilities

     16   

Section 5.14 Customers

     17   

Section 5.15 Suppliers

     17   

Section 5.16 Business Relations

     17   

Section 5.17 Material Contracts

     17   

Section 5.18 Purchase Orders

     19   

Section 5.19 Receivables

     19   

Section 5.20 Inventory

     19   

Section 5.21 Products and Warranties

     20   

Section 5.22 Employment Matters

     20   

Section 5.23 Employees

     20   

Section 5.24 Employee Benefit Plans and Other Plans

     21   

 

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Section 5.25 Licenses and Permits

     21   

Section 5.26 Governmental Reports

     21   

Section 5.27 Compliance with Laws

     22   

Section 5.28 Intellectual Property

     22   

Section 5.29 Powers of Attorney

     23   

Section 5.30 Insurance

     23   

Section 5.31 Brokerage and Finder’s Fees

     24   

Section 5.32 Governing Documents

     24   

Section 5.33 No Changes

     24   

Section 5.34 Disclaimer

     25   

Article 6 REPRESENTATIONS AND WARRANTIES OF PURCHASER

     26   

Section 6.1 Organization and Standing

     26   

Section 6.2 Authority; Consents

     26   

Section 6.3 Brokerage and Finder’s Fees

     26   

Article 7 CONDITIONS TO PURCHASER’S OBLIGATIONS TO CLOSE

     26   

Section 7.1 Consents

     26   

Section 7.2 Legal Proceeding

     26   

Section 7.3 Permits

     27   

Section 7.4 Offer Letter

     27   

Section 7.5 Damage to Purchased Assets

     27   

Section 7.6 [Reserved]

     27   

Section 7.7 Environmental Insurance Policy

     27   

Section 7.8 Closing Deliveries of Seller

     27   

Article 8 CONDITIONS TO SELLER’S OBLIGATIONS TO CLOSE

     29   

Section 8.1 Legal Proceeding

     29   

Section 8.2 Closing Deliveries of Purchaser

     29   

Article 9 REMEDIES

     30   

Section 9.1 General Indemnification Obligation

     30   

Section 9.2 Notice and Opportunity to Defend

     31   

Section 9.3 Survivability / Limitations on Indemnification

     32   

Section 9.4 Manner of Satisfying Losses

     34   

Section 9.5 Treatment of Indemnification Payments

     35   

Article 10 POST CLOSING COVENANTS

     35   

Section 10.1 Further Information

     35   

Section 10.2 Record Retention

     35   

Section 10.3 Tax Assistance

     35   

Section 10.4 Name Change of Seller

     36   

Section 10.5 No Assignment Causing Breach

     36   

Section 10.6 Employee Matters and Employee Benefits

     36   

Section 10.7 Further Assurances

     37   

Section 10.8 Mail, Bank Accounts and Other Receipts

     37   

Section 10.9 Dissolution of Seller

     38   

Section 10.10 Transitional Availability

     38   

 

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Article 11 MISCELLANEOUS

     38   

Section 11.1 Assignment; Third Parties; Binding Effect

     38   

Section 11.2 Expenses

     39   

Section 11.3 Notices

     39   

Section 11.4 Counterparts

     40   

Section 11.5 Captions and Section Headings

     40   

Section 11.6 Possession of Purchased Assets

     40   

Section 11.7 Waivers

     40   

Section 11.8 Entire Agreement

     40   

Section 11.9 Governing Laws

     40   

Appendix A Definitions

  

 

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Index of Schedules

 

Schedule 2.1(a)

   Tangible Personal Property

Schedule 2.1(c)

   Equipment and Other Personal Property Leases

Schedule 2.1(e)

   Intellectual Property

Schedule 2.1(f)

   Permits

Schedule 2.2(h)

   Personal Assets

Schedule 2.3(a)(i)

   Assumed Trade Payables

Schedule 2.3(a)(ii)

   Assumed Accrued Expenses

Schedule 2.3(a)(iii)

   Assumed Contracts

Schedule 2.3(b)(i)

   Excluded Accrued Expenses

Schedule 3.2(c)

   Working Capital Determination

Schedule 3.4

   Allocation of Purchase Price

Schedule 5.2

   Authority; Consents

Schedule 5.4

   Real Property

Schedule 5.5

   Environmental Matters

Schedule 5.6(a)

   Title to Purchased Assets

Schedule 5.6(b)

   Die Ownership

Schedule 5.7

   Taxes

Schedule 5.8

   Litigation

Schedule 5.9

   Financial Statement Exceptions

Schedule 5.10(a)

   Accounts Payable and Accrued Expenses

Schedule 5.10(b)

   Indebtedness

Schedule 5.11

   Transactions with Affiliates

Schedule 5.13

   Absence of Undisclosed Liabilities

Schedule 5.14

   Customers

Schedule 5.15

   Suppliers

Schedule 5.16

   Business Relations

Schedule 5.17

   Material Contracts

Schedule 5.18

   Purchase Orders

Schedule 5.19

   Receivables

Schedule 5.20

   Inventory

Schedule 5.21

   Products and Warranties

Schedule 5.22

   Employment Matters

Schedule 5.23

   Employees

Schedule 5.24

   Employee Benefit Plans and Other Plans

Schedule 5.25

   Licenses and Permits

Schedule 5.26

   Governmental Reports

Schedule 5.27

   Compliance With Laws

Schedule 5.28

   Intellectual Property

Schedule 5.29

   Powers of Attorney

Schedule 5.30

   Insurance

Schedule 5.31

   Brokerage & Finder’s Fees

Schedule 5.33

   No Changes

Schedule 9.1(a)

   Specific Indemnity Matters

Schedule 10.6(b)

   Inactive Employees

Schedule 10.6(d)

   COBRA Eligible Persons

 

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ASSET PURCHASE AGREEMENT

THIS ASSET PURCHASE AGREEMENT (this “Agreement”) is entered into as of
October 28, 2011, between GEL INDUSTRIES, INC. DBA QUALITY ALUMINUM FORGE, a
California corporation (“Seller”) and FORGE ACQUISITION, LLC, an Ohio limited
liability company (“Purchaser”).

A. Seller is engaged in the business of providing aluminum forgings to
manufacturers in the aerospace and defense industries (the “Business”);

B. Seller desires to sell to Purchaser, and Purchaser desires to purchase from
Seller, on the terms and subject to the conditions contained herein,
substantially all of the operations and assets of the Business (the
“Transaction”); and

C. The Tristano Caracciolo Trust, the Anna Caracciolo Trust, Sergio Piva, and
the Gerardo E. Licciardi Jr. Subtrust (collectively, the “Shareholders,” and
each a “Shareholder”) directly own all of the equity interests of Seller.

NOW, THEREFORE, in consideration of the mutual promises, warranties, and
covenants made herein and for other good and valuable consideration, the receipt
and sufficiency of which is acknowledged by all the parties hereto, Seller and
Purchaser agree as follows:

ARTICLE 1 DEFINITIONS

Unless otherwise defined herein, capitalized terms used in this Agreement shall
have the meanings ascribed to them in Appendix A attached hereto.

ARTICLE 2 PURCHASE AND SALE OF ASSETS

Section 2.1 Purchase and Sale of Assets. Upon the terms and conditions herein
set forth, at the Closing, Seller shall sell, convey, transfer, assign, grant,
and deliver to Purchaser, and Purchaser hereby agrees to purchase, acquire, and
accept from Seller at the Closing, all of Seller’s right, title, and interest in
and to all of the Purchased Assets (as defined below) free and clear of all
Encumbrances other than Permitted Liens. For purposes of this Agreement and the
Ancillary Agreements, “Purchased Assets” means all of the business, assets, and
goodwill owned by Seller on the Closing Date of every kind and description,
wherever located, known or unknown, tangible or intangible, whether reflected on
Seller’s books and records or not, which are not Excluded Assets, including,
without limitation, the following:

(a) Tangible Personal Property. All machinery, equipment, furniture, computer
hardware and software, fixtures, motor vehicles, tooling, dies, leasehold
improvements, spare parts, shop and production supplies, and other tangible
personal property owned or employed in the operation of the Business, including,
without limitation, the depreciable furniture, fixtures and equipment described
in Schedule 2.1(a) and all assignable rights to the warranties received from the
manufacturers and distributors of all such personal property and fixtures and
any related claims, credits, rights of recovery and setoffs with respect to such
personal property and fixtures;

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(b) Accounts Receivable. All accounts receivable, both trade and non-trade, of
the Business;

(c) Equipment and Other Personal Property Leases. The leases and rental
agreements in respect of equipment or other tangible personal property employed
in the Business, including, without limitation, those leases and agreements
described in Schedule 2.1(c);

(d) Inventory. All Inventory, wherever located, including raw materials,
work-in-process, packaging, and finished goods, owned or produced by the
Business;

(e) Intellectual Property and Third Party Software. All Intellectual Property
and Third Party Software and other software used to operate the Business,
including, without limitation, the items set forth on Schedule 2.1(e);

(f) Permits and Governmental Authorizations. All permits and Governmental
Authorizations relating to the Business as of the close of business on the
Closing Date, including, without limitation, the items set forth on
Schedule 2.1(f), to the extent actually assignable or transferable;

(g) Contract Rights and Other Intangible Assets. All rights arising under or in
connection with all Assumed Contracts, claims against third parties, rights to
indemnification, purchase orders, sales orders, sale and distribution
agreements, supply and processing agreements and other instruments and
agreements relating to the Business, and all goodwill and going concern value
associated with the Business to the extent actually assignable or transferable;

(h) Deposits and Expenses. All deposits and prepaid expenses of the Business to
the extent they relate to any Purchased Assets or Assumed Liabilities;

(i) Books and Records. All books and records (including all discs, tapes, and
other media-storage data and information) relating to the Business;

(j) Other Records, Manuals, and Documents. Seller’s right, title, and interest
in and to all of the following to the extent that they relate to the Business:
mailing lists, customer lists, supplier lists, vendor data, marketing
information, and procedures, sales and customer files, advertising and
promotional materials, current product material, equipment maintenance records,
warranty information, records of plant operations and the source and disposition
of materials used and produced in such plants, standard forms of documents,
manuals of operations or business procedures and other similar procedures, and
all other information of Seller relating to the Business; and

(k) Insurance Claims. The amount of any proceeds received by Seller under any
policy of insurance covering the Purchased Assets or the Business as a result of
any claim made against such policies of insurance due to damage to the Purchased
Assets or the Business prior to the Closing Date that is paid after the date of
this Agreement.

 

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Section 2.2 Excluded Assets. Notwithstanding anything to the contrary contained
in Section 2.1, the following assets and rights are not Purchased Assets and
will be retained by Seller (collectively, the “Excluded Assets”):

(a) Consideration. The consideration delivered by Purchaser to Seller pursuant
to this Agreement;

(b) Entity Franchise. Seller’s franchise to be a corporation, its registration
documents, minute books, if any, and other records having exclusively to do with
such Seller’s incorporation and capitalization; provided, however, that
Purchaser shall have reasonable access to such books and records and may make
excerpts therefrom and copies thereof;

(c) Insurance Policies. All property, casualty, and individual life insurance
policies owned or obtained by Seller on behalf of the Business;

(d) Tax Records and Refunds. All Tax Returns and Tax records of Seller and all
Tax deposits, Tax refunds or prepaid Taxes of Seller; provided, however, that
Seller shall provide copies of such Tax Returns and Tax records to Purchaser
prior to the Closing (or, in the case of any Tax Return filed after the Closing,
as soon as practical after the filing of such Tax Return);

(e) Equity Interests. Any and all equity interests issued by Seller;

(f) Cash and Cash Equivalents. All cash and cash equivalents of Seller as of the
Closing Date, the accounts of Seller with any bank, savings and loan or other
financial institution; and

(g) Real Property. All real property owned directly or indirectly by Seller or
any Seller Affiliate.

(h) Personal Assets. All of Seller’s rights to those certain assets set forth on
Schedule 2.2(h);

(i) Prepaid Insurance. All prepaid insurance of Seller, including all related
rights to the refund of unearned premiums as of the Closing Date;

(j) Indemnification or Contribution Rights. All claims and rights of Seller
relating exclusively to any of the Excluded Assets or Excluded Liabilities
including, without limitation, rights of indemnification or contribution from
third parties and insurance claims related thereto; and

Section 2.3 Assumption of Liabilities.

(a) At the closing, Purchaser shall assume and become responsible for, and shall
thereafter pay, perform, and discharge as and when due, only the following
liabilities (collectively, the “Assumed Liabilities”):

 

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(i) Seller’s trade payables related to the Business set forth on Schedule
2.3(a)(i) as of October 25, 2011 plus those incurred in the Ordinary Course of
Business by the Business since such date;

(ii) those certain accrued expenses (other than expenses that are Retained
Liabilities) of Seller related directly to the operation of the Business set
forth in the accounts listed on Schedule 2.3(a)(ii); and

(iii) all liabilities and obligations of Seller arising on or after the Closing
Date under the Contracts listed on Schedule 2.3(a)(iii) (the “Assumed
Contracts”), other than Retained Liabilities under Section 2.3(b)(vi) and
(xiii).

(b) Notwithstanding anything to the contrary contained in Section 2.3(a),
Purchaser shall not assume, and shall have no liability under or by reason of
this Agreement for any obligations, duties, or liabilities relating to Seller’s
operation of the Business other than the Assumed Liabilities, including, without
limitation, any of the following (collectively, the “Retained Liabilities”):

(i) all accrued expenses of Seller not included in Section 2.3(a)(ii), including
the accounts set forth on Schedule 2.3(b)(i);

(ii) any liability related to Benefit Plans of Seller;

(iii) any product liability or warranty claims (express or implied) of third
parties (including any Affiliate of Seller) arising out of or relating to
products manufactured, provided, or sold by Seller prior to the Closing Date;

(iv) any liability under any Assumed Contract that arises out of or relates to
any breach or violation that occurred prior to the Closing Date;

(v) any liability that arises out of or relates to obligations for the repayment
of Debt by Seller or any Affiliate;

(vi) any liability under any Contract that is not an Assumed Contract;

(vii) any liability for COBRA continuation for any employee of Seller with a
qualifying event prior to the Closing Date except as provided in
Section 10.6(d).

(viii) any liability for workers’ compensation claims incurred prior to the
Closing Date;

(ix) any liability of Seller arising from or relating to any claim or proceeding
against Seller pending on or incurred prior to the Closing Date, including,
without limitation, those proceedings set forth on Schedule 5.8;

 

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(x) except as provided in Section 3.5, any liability of Seller or any
shareholder of Seller for the payment of any Tax, including, without limitation,
for the Taxes (A) of any other Person, whether as transferee, successor, by
contract or otherwise, and (B) resulting from, or arising in connection with,
the transactions contemplated by this Agreement, and (C) Taxes with respect to
the Purchased Assets arising on or prior to the Closing Date or with respect to
any Tax periods (or portions thereof) ending on or prior to the Closing Date;

(xi) any liability or obligation of any Person relating to an Environmental
Condition relating to the Business, the Leased Real Property, or any Former
Property that arises out of or relates to any action that occurred prior to the
Closing Date;

(xii) any liability of Seller to any Affiliate of Seller or any Affiliate of any
Shareholder, including but not limited to any liability arising out of or
related to any loans, management fees, and any accrued interest related thereto,
from or owed to any Affiliate of Seller or any Affiliate of any Shareholder; or

(xiii) any liability under any Assumed Contract, other than a customer or
supplier open purchaser order entered into in the Ordinary Course of Business,
if either (A) Seller shall not have obtained or (B) Purchaser shall not have
waived in writing Seller’s obligation hereunder to obtain, on or prior to the
Closing Date, any consent required to be obtained by the terms of such Assumed
Contract from any Person with respect to the assignment or delegation to
Purchaser of any rights or obligations under such Assumed Contract.

ARTICLE 3 PURCHASE PRICE AND PRORATIONS OF CERTAIN LIABILITIES

Section 3.1 Purchase Price.

(a) In full consideration for the Purchased Assets, assumption of Assumed
Liabilities as of the Closing Date, and for the other promises and covenants
contained herein and in the other agreements to be delivered by Seller
hereunder, subject to adjustment as provided in Section 3.2, at the Closing,
Purchaser shall pay to Seller an aggregate amount in cash equal to
(i) twenty-four million dollars ($24,000,000) (the “Purchase Price”); minus
(ii) the amount of the Holdback Funds; minus (iii) the aggregate amount of the
Creditor Payments; and plus or minus, as the case may be, (iv) the Initial
Working Capital Adjustment (the resulting amount is referred to as the “Closing
Date Payment”).

(b) Seller shall have obtained from (i) each obligee to the Debt of Seller,
including any secured party set forth on Schedule 5.10(b), and (ii) any creditor
of Seller to receive funds at Closing from Seller, a payoff letter and/or lien
release letter (the “Payoff Letters”). To the extent applicable, such letter
shall include (A) the total obligation owing by Seller to such creditor as of
the Closing Date, (B) the total amount of Debt (including all principal,
interest, premium, prepayment penalties, and other fees owing on such amounts)
owed by Seller to such obligee as of the date of the letter and a per diem
amount through the Closing Date, (C) payment instructions for wire transfer of
such amount on the Closing Date, and (D) if applicable, confirmation that the
obligee shall terminate any lien filings relating to such Debt of Seller upon
payment of the amount specified in such letter.

 

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(c) On the Closing Date, Purchaser will:

(i) remit, on behalf of Seller, the aggregate amounts specified in the Payoff
Letters directly to each obligee thereof in accordance with the terms of each
such letter (such amounts, in the aggregate, the “Creditor Payments”);

(ii) remit to Seller the Closing Date Payment by wire transfer of immediately
available funds, to an account or accounts designated by Seller not less than
five (5) days prior to the Closing Date; and

(iii) deliver an unsecured promissory note to Seller in the amount of two
million, four hundred thousand dollars ($2,400,000) (the “Holdback Funds”) in a
form and substance reasonably satisfactory to Purchaser and Seller (the
“Promissory Note”).

Section 3.2 Working Capital Adjustment.

(a) Physical Inventory. Prior to the Closing Date, the parties shall establish
an agreed-upon estimated value for the Inventory measured as of the close of
business on October 25, 2011 reflecting estimated adjustments for non-demand,
obsolete and slow moving Inventory, as such adjustments have been applied to all
Inventories of Seller in accordance with past practice and agreed to by the
parties. Such estimate shall be based on the Inventory amounts reflected in
Seller’s September 30, 2011 balance sheet and Seller’s completion, to the
reasonable satisfaction of Purchaser, of (i) an inventory valuation to include
raw materials, work-in progress, and finished goods, with such valuation
utilizing direct labor and factory overhead costs, as historically applied,
based on Seller’s fiscal year ended December 31, 2010 final accounts and (ii) a
roll-forward of such inventory valuation from the September 30, 2011
calculations to the date of such estimate. Such estimate shall include an
adjustment to reflect excess/slow-moving and obsolete inventory, which
adjustment shall be based on the “no demand” methodology currently applied by
Seller to its inventory on hand at Closing in accordance with the analysis and
information provided by Seller and set forth on Schedule 3.2. Beginning on or
about October 24, 2011, Seller shall commence the process of conducting a joint
physical count of all Inventory owned by Seller and transferred to Purchaser as
of the Closing Date (the “Physical Inventory”). The Physical Inventory shall be
observed by Grant Thornton, LLC and Purchaser, with the final Physical Inventory
count to be concluded within two (2) days following the Closing. The same
valuation methodologies applied to the estimated Inventory valuation shall be
applied to the Physical Inventory to determine the final Inventory valuation to
be used for determining the Closing Date Working Capital.

(b) Estimated Net Working Capital Calculation. On the Closing Date, Seller shall
prepare and deliver to Purchaser an estimated balance sheet as of the end of the
day on October 25, 2011 (the “Estimated Working Capital Statement”) setting
forth Seller’s

 

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good faith estimation of the Net Working Capital of Seller as of such date (the
“Estimated Closing Working Capital”). In determining the Estimated Closing
Working Capital, the parties agree that the Inventory value estimate shall be
determined as provided in Section 3.2(a) above and both parties will exercise
their reasonable best efforts to ensure that such Inventory estimate is as close
to a final valuation as is practical under the circumstances. In no event,
however, will the methodology used to calculate labor and overhead be subject to
any post-Closing revision. In the event the Estimated Closing Working Capital is
less than $5,800,000 (the “Target Working Capital”), the Purchase Price will be
decreased, on a dollar for dollar basis, by the amount of such shortfall. In the
event the Estimated Closing Working Capital exceeds the Target Working Capital,
the Purchase Price will be increased, on a dollar for dollar basis, by the
amount of such excess. The resulting shortfall or excess is referred to as the
“Initial Working Capital Adjustment”.

(c) Closing Date Working Capital Schedule. On or before sixty (60) days
following the Closing Date, Purchaser will prepare and deliver to Seller a
statement (the “Closing Date Working Capital Statement”) setting forth
Purchaser’s computation of the Net Working Capital of Seller as of the end of
the day on the Closing Date (the “Closing Date Working Capital”), using a final
Inventory value as determined in accordance with Section 3.2(a) above based on
the Physical Inventory. The Closing Date Working Capital will be determined in a
manner consistent with determination of the Estimated Working Capital as set
forth on Schedule 3.2(c). During such period, Seller will provide Purchaser and
its representatives with access to all records necessary to prepare the Closing
Date Working Capital Statement and the computations therein retained by Seller,
if any.

(d) Review of Closing Date Working Capital Statement; Disputes.

(i) Upon receipt of the Closing Date Working Capital Statement, Seller (together
with Seller’s professional advisors) will have the right during the succeeding
thirty (30) day period (the “Review Period”) to examine all information
contained in the books and records used to prepare the Closing Date Working
Capital Statement. Purchaser will provide to Seller and its professional
advisors reasonable access to materials (including accountants’ work papers)
used to prepare the Closing Date Working Capital Statement during normal
business hours.

(ii) If Seller disagrees with the calculation of the Closing Date Working
Capital set forth in the Closing Date Working Capital Statement, it must notify
Purchaser in writing on or before the last day of the Review Period, setting
forth a specific description of Seller’s objection(s), the amount of the
adjustment which Seller believes should be made to each item to which it
objects, and a detailed description of the basis for Seller’s disagreement
therewith (such notice, a “Notice of Disagreement”). In the event that Seller
does not provide a Notice of Disagreement in accordance with the terms above on
or before the last day of the Review Period or Seller affirmatively notifies
Purchaser in writing that Seller agrees with the calculation of the Closing Date
Working Capital set forth on the

 

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Closing Date Working Capital Statement, Seller will be deemed to have accepted
the Closing Date Working Capital Statement delivered by Purchaser and the
calculation of the Closing Date Working Capital set forth therein will be final,
binding, and conclusive for all purposes hereunder.

(e) Determination of Final Net Working Capital.

(i) If Seller does provide a Notice of Disagreement in accordance with the terms
above on a timely basis, Purchaser and Seller will use their respective best
efforts for a period of fifteen (15) days (or such longer period as they may
mutually agree in writing, the “Private Resolution Period”) to resolve any
disagreements with respect to the calculation of Closing Date Working Capital.
The objections set forth in the Notice of Disagreement that are resolved by
Seller and Purchaser in accordance with this Section 3.2(e)(i) will collectively
be referred to herein as the “Resolved Objections” and the Closing Date Working
Capital Statement will be adjusted to reflect any Resolved Objections.

(ii) If, at the end of the Private Resolution Period, Seller and Purchaser are
unable to resolve all of the objections set forth in the Notice of Disagreement,
Seller and Purchaser will jointly engage RSM McGladrey or another local
accounting firm mutually acceptable to Purchaser and Seller (the “Independent
Auditors”) within five (5) days of the end of the Private Resolution Period to
resolve any remaining disagreements. Seller and Purchaser must jointly submit a
listing of the objections set forth in the Notice of Disagreement that remain
outstanding (collectively, the “Differences”), together with a statement of the
facts submitted by Seller and Purchaser, respectively, and such arguments as
either of them chooses to make in connection therewith (each such a “Statement
of Claims”), in writing to the Independent Auditors within ten (10) days after
the Independent Auditors’ engagement.

(iii) The Independent Auditors, acting as experts and not as arbitrators, will
review the Differences and the Statement of Claims. The Independent Auditors
will determine, within fifteen (15) days of the date on which such dispute is
referred, based on the requirements set forth in this Article 3 and only with
respect to the Differences and Statement of Claims timely submitted to the
Independent Auditors, what adjustments (if any) to the Closing Date Working
Capital Statement are required in order for it to accurately set forth the Net
Working Capital of Seller as of the Closing Date. For purposes of this
Section 3.2(e), the parties will share ratably the fees and expenses of the
Independent Auditors as follows: (A) if the Independent Auditors resolve all of
the remaining Differences in favor of Seller, Purchaser will be responsible for
all of the fees and expenses of the Independent Auditors, (B) if the Independent
Auditors resolve all of the remaining Differences in favor of Purchaser, Seller
will be responsible for all of the fees and expenses of the Independent
Auditors, or (C) if the Independent Auditors resolve some of the Differences in
favor of Seller and the rest of the Differences in favor of Purchaser, each of
Purchaser and Seller will share the fees and expenses of the Independent
Auditors equally. The determination of the

 

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Independent Auditors, solely as it relates to the Closing Date Working Capital
Statement, will be final, conclusive, and binding on the parties. The accepted
or finally determined Closing Date Working Capital Schedule (whether determined
pursuant to Section 3.2(d)(ii) or this Section 3.2(e)) is referred to as the
“Final Working Capital Schedule.” The date on which the Closing Date Working
Capital of Seller is finally determined in accordance with this Section 3.2 is
hereinafter referred to as the “Settlement Date.”

(f) If the Final Working Capital Statement shows the Closing Date Working
Capital is less than the Estimated Closing Working Capital, the Purchase Price
will be decreased, on a dollar for dollar basis, by the amount of such
shortfall. If the Final Working Capital Statement shows the Closing Date Working
Capital exceeds the Estimated Closing Working Capital, the Purchase Price will
be increased, on a dollar for dollar basis, by the amount of such excess. All
such payments required to be made pursuant to this Section 3.2(f) shall be
satisfied, in the case of amounts owed by Seller through a reduction in the
amount payable to Seller pursuant to the Promissory Note, or in the case of
amounts owed by Purchaser, through wire transfer of immediately available funds.
Any such payment by Purchaser shall be made no later than two (2) Business Days
following the Settlement Date. The Purchase Price after final adjustment for the
changes, if any, provided for in Section 3.2(b) and this Section 3.2(f) shall be
referred to as the “Final Purchase Price.”

(g) No Basis for Other Claims. Any matter taken into account in the
determination of the Closing Date Working Capital shall not also be the basis
for any claim against Seller for any misrepresentation or the breach of any
representation or warranty made by Seller contained in this Agreement or any
Transaction Document or any certificate delivered by Seller in connection with
the transactions contemplated hereby (i) solely to the extent of the amount
taken into account in the determination of the Closing Date Working Capital and
(ii) except to the extent new or additional information becomes known to
Purchaser after the Settlement Date.

Section 3.3 Prorations. The following prorations relating to the Purchased
Assets will be made as of the Closing Date, with Seller liable to the extent
such items relate to any time period up to and including the Closing Date and
Purchaser liable to the extent such items relate to periods subsequent to the
Closing Date.

(a) The amount of charges for sewer, water, fuel, telephone, electricity,
natural gas, and other utilities for the Leased Real Property to the extent that
Purchaser is not able to establish its own account directly with such utility
provider as of the Closing Date; provided that if practicable, meter readings
will be taken at the Closing Date and the respective obligations of the parties
determined in accordance with such readings.

(b) If any item described in this Section 3.3 cannot be prorated, adjusted or
determined as of the Closing Date, then it shall be separately prorated,
adjusted, determined, and paid by the responsible party as soon as practicable
following the Closing Date.

 

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(c) If any of the foregoing proration amounts cannot be determined as of the
Closing Date due to final bills therefore not being issued as of the Closing
Date, the parties will prorate such items as and when the actual bills therefore
are issued to the appropriate party. The party owing amounts to the other by
means of such prorations shall pay the same within thirty (30) days following
such proration.

Section 3.4 Allocation of Purchase Price. The parties agree that the aggregate
Final Purchase Price (including the assumption by Purchaser of the Assumed
Liabilities and all other capitalized costs) will be allocated among the
Purchased Assets for Tax purposes in accordance with Schedule 3.4 attached
hereto. Purchaser and Seller will follow and use such allocation in all Tax
Returns, filings, or other related reports made by any of them to any
governmental agencies. To the extent that disclosures of this allocation are
required to be made by the parties to the IRS under the provisions of
Section 1060 of the Code, or any regulations thereunder, Purchaser and Seller
will disclose such reports to the other party prior to filing them with the IRS.

Section 3.5 Sales and Transfer Taxes. Seller and Purchaser agree that the cost
of any sales tax to be paid to the State of California on the sale of furniture,
fixtures, and equipment that are part of the Purchased Assets shall be paid by
Purchaser. All other sales, use, stamp, registration, transfer or other Taxes or
recording fees and charges imposed on Seller or Purchaser by any Governmental
Authority as a result of the sale of the Purchased Assets or the consummation of
the transactions contemplated by this Agreement shall be paid by the party
incurring such Tax, recording fee or charge.

ARTICLE 4 CLOSING

Section 4.1 Closing. The consummation of the transactions provided for in this
Agreement (the “Closing”) shall take place remotely via the exchange of
documents and signatures on the date hereof (the “Closing Date”).

ARTICLE 5 REPRESENTATIONS, WARRANTIES, AND AGREEMENTS OF SELLER

Seller represents and warrants to Purchaser as follows:

Section 5.1 Organization and Standing. Seller is a corporation duly
incorporated, validly existing, and in good standing under the laws of the State
of California, with full power and authority to conduct its business as and
where now conducted, to own or use its properties at and where now owned or used
by it, and to perform all its obligations under the Contracts to which Seller is
a party. Seller is not qualified to do business as a foreign entity in any
jurisdiction other than the State of California, which is the only jurisdiction
in which the property owned or used by it, or the nature of the Business
conducted by it, requires such qualification. The Shareholders are the only
shareholders of Seller.

Section 5.2 Authority; Consents.

(a) The execution, delivery, and consummation of this Agreement by Seller has
been duly authorized by its directors and shareholders in accordance with all
applicable Legal Requirements and the organizational documents of Seller, and at
the

 

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Closing Date no further action will be necessary on the part of Seller to make
this Agreement valid and binding on Seller and enforceable against Seller in
accordance with its terms, except to the extent that enforcement of the rights
and remedies created hereby may be affected by bankruptcy, reorganization,
moratorium, insolvency, public policy, and similar laws of general application
affecting the rights and remedies of creditors and by general equity principles.

(b) Except as set forth on Schedule 5.2, the execution, delivery, and
consummation of this Agreement by Seller (i) is not contrary to the Articles of
Incorporation or the Bylaws of Seller, (ii) does not now and will not, with the
passage of time, the giving of notice or otherwise, result in a violation or
breach of, or constitute a default under, any term or provision of any material
indenture, mortgage, deed of trust, lease, instrument, order, judgment, decree,
rule, regulation, law, contract, agreement, or any other material restriction to
which Seller is a party or to which any of the Purchased Assets is subject or
bound, (iii) will not result in the creation of any Encumbrance on any of the
Purchased Assets, and (iv) will not result in any acceleration or termination of
any material loan or security interest agreement to which Seller is a party or
to which Seller or any of the Purchased Assets is subject or bound. Except as
may be listed on Schedule 5.2, no approval or consent of any Person is or was
required to be obtained by Seller for the authorization of this Agreement or the
consummation by Seller of the transactions contemplated in this Agreement.

Section 5.3 Investments in Other Entities. Seller does not have any direct or
indirect equity interest, or Debt convertible into any equity interest, in any
entity, corporation, or otherwise, or any right, warrant, or option to acquire
any such interest.

Section 5.4 Real Property.

(a) Seller does not own any Real Property. The leased Real Property set forth on
Schedule 5.4(a) is the only Real Property occupied or used by Seller (the
“Leased Real Property”). Seller has delivered to Purchaser complete and correct
copies of the existing leases for the Leased Real Property (“Leases”).

(b) Except as set forth on Schedule 5.4(b):

(i) to the knowledge of Seller, Seller has obtained all licenses, permits,
building permits and occupancy permits that are required to be obtained by
Seller (and not by any landlord) by the Legal Requirements to permit the use and
occupancy of the Leased Real Property as presently used by Seller in connection
with the Business;

(ii) Seller has no Knowledge (limited to actual knowledge without any additional
reasonable inquiry) of any outstanding variances or special use permits
affecting the Leased Real Property or its uses;

(iii) no written notice of a violation of any Legal Requirements, or of any
covenant, condition, easement, or restriction affecting the Leased Real Property
or relating to its use or occupancy has been received by Seller;

 

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(iv) utility service or systems for the Leased Real Property are currently
operational and sufficient for the operation of Seller’s business as currently
conducted thereon;

(v) Seller has not received any written notice since January 1, 2010, that there
are any present assessments for improvements made or contemplated to be made by
any public or private authority, the costs of which are to be assessed as
special taxes or charges against the Leased Real Property; and

(vi) Seller has not received written notice of any outstanding requirements or
recommendations by the insurance companies who issued the insurance policies
insuring the Leased Real Property, or by any board of fire underwriters or other
body exercising similar functions requiring or recommending any repairs or work
to be done on the Leased Real Property.

Section 5.5 Environmental Matters.

(a) Except as set forth on Schedule 5.5(a):

(i) to the Knowledge of Seller, Seller and the Leased Real Property are, and
since December 17, 2004 have been, in material compliance with all Environmental
Laws;

(ii) to the Knowledge of Seller, neither Seller, any Affiliate of Seller, nor
any predecessors, agents, licensees, tenants, or subtenants of Seller have
caused or allowed any Contaminant to be used, manufactured, handled, generated,
treated, stored, accumulated, placed, processed, or Released (other than in
accordance with Environmental Laws) in its operations, on or off-site of the
Leased Real Property or any other Real Property used at any time by Seller or
any Person for whose conduct Seller is or may be held responsible in violation
of Environmental Laws (“Former Property”); and

(iii) neither Seller nor the Leased Real Property or, to the Knowledge of
Seller, any Former Property is the subject of any written claim, demand, notice,
order, decree or agreement regarding any Environmental Condition.

(b) To the Knowledge of Seller, except as set forth on Schedule 5.5(b):

(i) Seller has obtained all environmental, health and safety licenses, permits,
authorizations, consents, approvals, exemptions, registrations, and certificates
required under all applicable Environmental Laws (“Environmental Licenses”) and
made all notifications and filings necessary for these applicable Environmental
Licenses for the current use of the Leased Real Property and for full operation
of the Business as currently conducted;

(ii) all such Environmental Licenses are in full force and effect, in good
standing and Seller has made all notifications, filings and applications for
renewal of such Environmental Licenses on a timely basis, where necessary;

 

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(iii) Seller, the Leased Real Property and the Former Property are, and at all
times have been, in material compliance with the terms and conditions of all
Environmental Licenses; and

(iv) No fact or facts exist which would render invalid or require an alteration
in any Environmental License currently in effect with respect to Seller, the
Leased Real Property, or the operation of the Business.

(c) Schedule 5.5(c) identifies, and Seller has provided Purchaser true and
complete copies of, all environmental assessments, audits, reports, studies,
analyses, correspondence, summaries, maps, photographs, tests and monitoring
results (completed or uncompleted) and all material written communications filed
by Seller or between Seller and any Governmental Authority or third parties that
are in Seller’s possession or control or were initiated by Seller or any
Affiliate of Seller with respect to Seller, the Leased Real Property, or, to the
Knowledge of Seller, any Former Property, arising under or relative to
Environmental Laws, including any orders, notices of violation, warning letters,
or requests for information with respect to Seller, all Environmental Licenses,
the Leased Real Property, or, to the Knowledge of Seller, any Former Property.

(d) Except as set forth on Schedule 5.5(d), to the Knowledge of Seller, there
are no past or present events, conditions, circumstances, activities, practices,
incidents, actions, or plans which have given rise to any liability or otherwise
form the basis of any claim, suit, action, demand, proceeding, penalty, fine,
hearing, notice of violation, directive or requirement to undertake any Remedial
Action under any Environmental Law, common law, contract or otherwise, in each
case relating to Seller or any Affiliate or predecessor of Seller or any Person
for whose conduct Seller is or may be held responsible.

(e) To the Knowledge of Seller, all Contaminants that have been removed from the
Leased Real Property or any Former Property have been handled, transported,
transferred, stored, treated, recycled, received, or disposed of in full
compliance with all Environmental Laws.

(f) Schedule 5.5 identifies all waste disposal, treatment and storage facilities
and transporters and Persons which, in the five (5) years preceding the date of
this Agreement, have arranged for the disposal of Contaminants which are
presently used by or which previously have been used by or arranged for use by
Seller or any Person for whose conduct Seller is or may be held responsible at
any time in the operation of the business of Seller or otherwise for disposal of
Contaminants.

Section 5.6 Title to and Condition of Purchased Assets.

(a) Except as set forth on Schedule 5.6(a), Seller owns and possesses all right,
title, and interest in and to the Purchased Assets, including, without
limitation, good and merchantable title to all Purchased Assets, in each case
free and clear of all Encumbrances except for Permitted Liens. Seller has and
will have as of the Closing Date the right, power, and capacity to convey,
transfer, assign, and deliver the Purchased

 

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Assets free and clear of all Encumbrances except for Permitted Liens. Seller
enjoys peaceful and quiet possession of the Purchased Assets pursuant to or by
all of the deeds, bills of sale, leases, licenses, and other agreements under
which it is operating the Business. The Purchased Assets, together with the
Excluded Assets, comprise all of the assets reasonably necessary for the
operation of the Business as presently conducted. All obligations of Seller for
payment for work performed on the Purchased Assets prior to the date of this
Agreement that were due on or prior to such date have been paid in full, and any
obligations of Seller incurred for work scheduled to be performed on the
Purchased Assets prior to the Closing Date will be promptly paid by Seller when
due except for those that are not yet due and payable on or prior to the Closing
Date.

(b) Schedule 5.6(b) describes the ownership of each die maintained by Seller or
employed in the operation of the Business, and identifies those dies that have
been in service since January 1, 2005.

Section 5.7 Taxes.

(a) Seller has filed, and will file, on a timely basis, all Tax Returns required
to be filed by it accurately reflecting all Taxes owing to the United States or
any other government or any government subdivision, state, local, or foreign, or
any other Taxing authority. Seller has paid in full all Taxes for which it has
or may have liability, regardless of whether shown on a Tax Return. All such Tax
Returns are true, correct, and complete in all material respects and all
positions taken by Seller therein are supported by a reasonable basis. Seller
has no Knowledge of any unassessed Tax deficiency proposed or threatened against
Seller as a result of the operation of the Business. Seller is not currently the
beneficiary of any extension of time within which to file any Tax Return
required to be filed by Seller in respect to the Business or the Purchased
Assets.

(b) Seller (i) has been a validly electing qualified subchapter S corporation
(within the meaning of Sections 1361 and 1362 of the Code) at all times since
its formation, (ii) does not have any potential liability for any Tax under
Section 1374 of the Code, and (iii) has not acquired assets from another
corporation in a transaction in which Seller’s Tax basis was determined, in
whole or in part, by reference to the Tax basis of the acquired assets (or any
other property) in the hands of the transferor or acquired stock of any
corporation that is a qualified subchapter S subsidiary.

(c) There are no Encumbrances on any Purchased Assets as a result of any Tax
liabilities except for Taxes not yet due and payable. To the Knowledge of
Seller, there are, and after the date of this Agreement will be, no Tax
deficiencies of any kind assessed against or relating to Seller with respect to
any Taxable period ending on or before the Closing Date.

(d) Seller has complied in all material respects with all Legal Requirements
relating to the payment and withholding of Taxes, and Seller has, within the
time and in the manner prescribed by law, withheld and paid over to the proper
governmental authorities all amounts required to be so withheld and paid over
under applicable Legal Requirements.

 

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(e) Seller is not a party to any action, audit or proceeding by any Taxing or
other Governmental Authority for the assessment or collection of Taxes and, to
the Knowledge of Seller, no such action has been proposed, threatened, or
asserted. Seller is not and will not, be liable for the Taxes of any other
Person as transferee or successor, by contract or otherwise. Seller is not a
“foreign person” pursuant to Section 1445 of the Code.

(f) There are no outstanding agreements or waivers extending the statutory
period of limitations applicable to any Tax Return of Seller for any Period and
Seller has not agreed to an extension of time with respect to a Tax assessment
or deficiency. Neither the IRS nor any state, local, or foreign Taxing authority
has audited any Tax Return filed by Seller within the past six (6) years.

(g) Seller is not a party to any Tax rulings or closing agreements. Schedule 5.7
sets forth all jurisdictions in which Seller has filed or will file Tax Returns
with respect to the Purchased Assets or the Business for each Taxable period, or
portion thereof, ending on or before the Closing Date. Seller has provided the
Purchaser with true and complete copies of Seller’s Tax Returns for all Taxable
periods beginning after December 31, 2005.

(h) There are no Tax sharing arrangements or similar arrangements (whether
written or oral) in effect that include Seller, and Seller has no liability to
any person with respect to any previously terminated Tax sharing agreement or
similar arrangement.

(i) No claim has ever been received by Seller from any Governmental Authority in
any jurisdiction where Seller does not file a Tax Return that Seller is, or may
be, subject to Taxation in that jurisdiction with respect to the Purchased
Assets or the Business.

(j) The unpaid Taxes of Seller with respect to the Purchased Assets and the
Business do not exceed the amount accrued for such Tax liability on the most
recent balance sheet contained in the Financial Statements, as adjusted for
Seller’s Ordinary Course of Business through the Closing Date in accordance with
the past practice and custom of Seller in filing its Tax Returns.

Section 5.8 Litigation. Except as set forth on Schedule 5.8, there is no action,
suit, claim, demand, arbitration, or other proceeding or investigation,
administrative or judicial, pending or, to the Knowledge of Seller, threatened
against or affecting Seller or any of the Purchased Assets, including, without
limitation, any relating to so-called product liability. Except as set forth on
Schedule 5.8, Seller has not received notice that it is the subject of any
investigation of any Governmental Authority, and Seller is not subject to, nor
is it or has it been in default with respect to, any order, writ, injunction, or
decree of any Governmental Authority. Schedule 5.8 indicates which of the
matters listed are covered by valid insurance and the extent of such coverage.

 

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Section 5.9 Financial Statements. Except as set forth on Schedule 5.9, the
Financial Statements delivered to Purchaser prior to the Closing Date, (a) have
been prepared from the books and records of Seller; (b) are true, accurate, and
correct in all material respects; (c) present fairly the financial position of
Seller, results of its operations and changes in its financial position at and
for the periods therein specified in all material respects, (d) have been
prepared consistent with past practices and in accordance with GAAP applied on a
consistent basis, and (e) with respect to all of the unaudited Financial
Statements, include all adjustments, consisting only of normal recurring
adjustments, required for a fair presentation and are subject to normal year-end
adjustments (which adjustments have all been reflected in the Estimated Working
Capital Statement to the extent applicable thereto) and lack footnote and other
presentation items.

Section 5.10 Accounts Payable; Accrued Expenses; Indebtedness.

(a) Schedule 5.10(a) is a true and complete list of all trade accounts payable
and accrued expenses of Seller as of the close of business on October 25, 2011,
including a description of the terms of payment and whether such indebtedness is
secured.

(b) Schedule 5.10(b) is a true and complete list of all outstanding obligations
of Seller relating to Debt, including the amounts outstanding thereunder as of
the close of business on October 25, 2011.

Section 5.11 Transactions with Affiliates. Schedule 5.11 is a true and correct
list of any existing Contract or other business relationship between any
Affiliate of Seller and Seller (including the relationship of Seller with such
Affiliate). To the Knowledge of Seller, Schedule 5.11 also lists each interest
that any Seller Related Party owns, directly or indirectly, in any competitor of
the Business, or supplier, customer, lessor, lessee, or other third party with
whom Seller transacts business; provided, however, Schedule 5.11 shall not
include any interest owned, directly or indirectly, by a Seller Related Party in
securities of any Person that are listed on a national securities exchange or
are traded in the over-the-counter market if such securities owned comprise less
than five percent (5%) of the outstanding securities of such Person. Except as
set forth on Schedule 5.10(b), Seller has no Debt payable to any of its
Shareholders (or to a member of a Shareholder’s immediate family) in any amount
whatsoever other than for salaries payable to employees or for expenses incurred
by employees on behalf of Seller in the Ordinary Course of Business.

Section 5.12 Capital Expenditure Plans. Seller has no commitments for capital
expenditures.

Section 5.13 Absence of Undisclosed Liabilities. To the Knowledge of Seller,
Seller is not obligated for, nor are the Purchased Assets subject to, any
liabilities or adverse claims or obligations, absolute or contingent, except
(i) those liabilities set forth in the Financial Statements, (ii) those
liabilities which have arisen after the date of Seller’s August 31, 2011
Financial Statements in the Ordinary Course of Business, or (iii) as set forth
on Schedule 5.13. None of the liabilities which have arisen after the date of
Seller’s August 31, 2011 Financial Statements in the Ordinary Course of Business
is a liability for breach of contract, breach of warranty, tort or infringement
or a claim or lawsuit or an environmental liability.

 

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Section 5.14 Customers. Schedule 5.14 sets forth the ten (10) largest customers
by dollar volume of Seller for the twelve (12) month period ended December 31,
2010. Except as set forth on Schedule 5.14, to the Knowledge of Seller, none of
such customers has substantially reduced or threatened to substantially reduce
its relationship with Seller. Except as set forth on Schedule 5.14, no customer
that was under contract as of June 30, 2011 or is under contract as of the date
of this Agreement, for the delivery of a fixed amount of products, has notified
Seller that it is terminating said contract or refusing to take delivery of
products not yet delivered under said contract. To the Knowledge of Seller, all
historical customer information of the Business and historical sales data of the
Business provided to Purchaser is true, accurate and complete. The foregoing
representations, however, shall not operate as a guarantee that any of the
customers listed on Schedule 5.14 will continue to do business with Seller
beyond its obligations as contained in any agreement therewith in effect on the
Closing Date.

Section 5.15 Suppliers. Schedule 5.15 sets forth a true and complete list of all
material suppliers of Seller, indicating any suppliers that may be a sole or
primary source supplier of raw materials, significant goods, equipment, or
services to Seller. Except as set forth on Schedule 5.15, to the Knowledge of
Seller, no supplier has increased or threatened to increase to any material
extent the pricing terms given to Seller, other than in the Ordinary Course of
Business, and Seller does not have any Knowledge that any of the foregoing is
likely to occur. Additionally, except as set forth on Schedule 5.15, to the
Knowledge of Seller, no supplier has terminated or threatened to terminate any
contractual or other business relationship with Seller, changed or threatened to
change to any material extent its product mix, delivery schedule, terms or
during the past twelve (12) months decreased or delayed internally its supply of
materials to Seller. The foregoing representations, however, shall not operate
as a guarantee that any of the suppliers listed on Schedule 5.15 will continue
to do business with Seller beyond its obligations as contained in any agreement
therewith in effect on the Closing Date.

Section 5.16 Business Relations. Except as set forth on Schedule 5.16, Seller is
not required, in the Ordinary Course of Business, to provide any bonding or any
other financial security arrangements in connection with any transactions with
any customers or suppliers. Except as set forth on Schedule 5.16, (i) Seller has
not received written notice of any material disruption (including, without
limitation, delayed deliveries or allocations by suppliers) in the availability
of any materials, products, or services used in the Business and (ii) Seller has
no Knowledge that any such disruption is likely to occur.

Section 5.17 Material Contracts. Schedule 5.17 is a true, correct and complete
list of the following Contracts (the “Material Contracts”) to which Seller is a
party:

(a) any Contract (or group of related Contracts) that involves a commitment by
Seller in excess of $25,000 per annum or under which Seller could receive in
excess of $25,000 per annum, in each case which has a term in excess of one year
and is not terminable at the option of Seller upon no more than 30 days notice;

(b) any Contract concerning a partnership or joint venture or investment in or
loan to any Person;

(c) any Contract (or group of related Contracts) under which it has created,
incurred, assumed, or guaranteed any indebtedness for borrowed money, or any
capitalized lease obligation;

 

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(d) any Contract under which Seller has advanced or loaned any amount to any of
its current or former directors, officers, or employees;

(e) any Contract under which Seller has advanced or loaned any amount to any
other Person;

(f) any Contract under which Seller agreed to limit its ability to compete in
any line of business, to conduct business in any location, to solicit or conduct
business with any Person, or to hire any individual or group of individuals;

(g) any Contract obligating Seller to maintain the confidentiality of another
Person’s information;

(h) any Contract binding another Person to maintain the confidentiality of
Seller’s information; provided, however, that any confidentiality agreements
entered into by other Persons who expressed interest in acquiring Seller shall
not be disclosed or provided to Buyer;

(i) any Contract for the employment or independent contractor status of any
individual on a full-time, part-time, consulting, or other basis other than
agreements with the professional advisors advising Seller in this Transaction
for which Purchaser shall have no liability;

(j) any Contract providing for the acquisition or disposition of capital assets
of Seller in excess of $25,000;

(k) any Contract providing for rebates or other contingent payments by Seller in
excess of $25,000;

(l) any Contract containing material indemnification obligations of Seller to
any Person, other than standard product warranties issued to customers in the
ordinary course of business; and

(m) any Contract, amendment, or supplement that individually or in the
aggregate, amounts to a material change to the terms of payment or payment
practices with respect to existing Contracts relating to a non-de minimis
portion (by dollar value or number of customers or number of suppliers) of
Seller’s accounts receivable or accounts payable.

With respect to each such Material Contract that is an Assumed Contract:
(A) such Material Contract is in full force and effect and is legal, valid,
binding on, and enforceable in all material respects against Seller, and to the
Knowledge of Seller, all other parties thereto; and (B) neither Seller, nor, to
the Knowledge of Seller, any other party thereto, is in material breach or
default of such Material Contract, and no event has occurred that with notice or
lapse of time would constitute a material breach or default of such Material
Contract, or permit termination, modification, or acceleration under such
Material Contract. Schedule 5.2 includes a description of any consents or
approvals required of third parties under the terms of any of such Material
Contracts for the consummation of the transactions contemplated by this
Agreement. A true, correct, and complete copy of each written, and a description
of each oral, Material Contract that is an Assumed Contract so listed has been
delivered to Purchaser or its counsel.

 

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Section 5.18 Purchase Orders. Schedule 5.18 is a true and complete list of all
currently open purchase orders as of the close of business on October 25, 2011
under which (a) Seller is or will become obligated to pay any particular vendor
an aggregate sum in excess of $25,000, and (b) a customer of Seller is or will
become obligated to pay Seller an aggregate sum in excess of $25,000.

Section 5.19 Receivables.

(a) Schedule 5.19 contains a detailed aging schedule by customer for Seller as
of the close of business on October 25, 2011, which is a true, correct, and
complete list of the accounts receivable, both trade and non-trade, of Seller as
of that date. All accounts receivable (other than those that are Excluded
Assets) are in the aggregate (net of any reserve for bad debt allowance)
collectible in accordance with their terms at their recorded amounts, and such
accounts receivable represent valid claims that have arisen in the Ordinary
Course of Business. Except as set forth on Schedule 5.19, no set-offs exist
respecting any such accounts receivable. In the event that there are any
accounts receivable arising prior to the Closing Date that are not collected by
Purchaser on or before the 180-day period after the Closing Date (except in the
case of Alenia, for which the collection period shall be 360 days) (the
“Uncollected Receivables”), Purchaser shall have the right to reduce the
Purchase Price by the amount of Uncollected Receivables and shall assign the
Uncollected Receivables to Seller for collection by Seller; or Purchaser may
elect to retain the Uncollected Receivables and Seller shall not be subject to
any reduction in Purchase Price, claim or offset relating thereto arising from
an alleged breach of this Section 5.19(a). Any funds received after the Closing
by Purchaser as payment for accounts receivable of the Business shall be applied
first to the oldest invoices that are not subject to bona fide dispute and then
applied to such invoices as directed by the customer. Buyer shall cooperate with
Seller in collecting the Accounts Receivable by refusing to ship to any customer
that has a past due invoice (unless subject to a bona fide dispute) until any
past due invoices for Accounts Receivable of said customer are paid.

(b) Seller does not have any installment contracts receivable as of the date of
this Agreement, and to the Knowledge of Seller will not have any installment
contracts receivable as of the Closing Date.

Section 5.20 Inventory. Schedule 5.20 sets forth the amount and location of any
consignment or other Inventory of Seller that is located at a third party’s
facility. The analysis and information provided to Purchaser by Seller on
Schedule 3.2, pursuant to which information and analysis the parties determined
the value of the Inventory for purposes of calculating Net Working Capital, is
true, accurate and complete in all material respects.

 

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Section 5.21 Products and Warranties.

(a) The products sold by Seller conform to and meet or exceed the standards
required by all applicable customer specifications and Legal Requirements now in
effect and, to the Knowledge of Seller, there is no pending customer
specification revision or Legal Requirement which if adopted or enacted would
have a Material Adverse Effect on the Business.

(b) Seller does not have a standard product warranty that it offers to
customers. Except for any product warranty terms that may be contained in the
customer contracts listed on Schedule 5.17, Seller has not provided any warranty
to a customer or other third party. Schedule 5.21 contains a description of any
warranty or product liability claims against Seller made since January 1, 2006
that resulted in a price adjustment, refund, payment to a customer, or a return
of product to Seller. Except as may be listed on Schedule 5.21 or for product
warranty claims in the aggregate not in excess of $25,000, there have not been
since December 17, 2004, and there are no pending or, to the Knowledge of
Seller, threatened claims of customers based on an alleged or admitted defect of
material, workmanship, or design or otherwise in, or in respect of, Seller’s
products.

Section 5.22 Employment Matters.

(a) Except as set forth on Schedule 5.22, Seller is not a party to, participant
in, or bound by, any collective bargaining agreement, union contract or
employment, bonus, deferred compensation, insurance, profit sharing or similar
personnel arrangement, any equity purchase, option or other equity plans or
programs or any employee termination or severance arrangement.

(b) Except as set forth on Schedule 5.22, the employment by Seller of any Person
(whether or not there is a written employment agreement) may be terminated for
any reason whatsoever not inconsistent with current Legal Requirements, without
penalty or liability of any kind.

(c) Except as set forth on Schedule 5.22, there are no active, pending or, to
the Knowledge of Seller, threatened administrative, judicial, grievance or
arbitration proceedings under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, the Fair
Labor Standards Act, the Occupational Safety and Health Act, the National Labor
Relations Act, or any other Legal Requirement relating to employees of Seller.

(d) Except as set forth on Schedule 5.22, there is not pending or, to the
Knowledge of Seller, threatened, any strike, slowdown, picketing, work stoppage,
or other similar labor activity with respect to any employees of Seller.

Section 5.23 Employees. Schedule 5.23 is a true, correct and complete list of
all employees working in the Business, their title, their compensation, hire
date and current status classification. Seller has furnished to Purchaser or its
counsel an organizational chart of all employees of Seller with a description of
operational and reporting structure.

 

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Section 5.24 Employee Benefit Plans and Other Plans. Except as set forth on
Schedule 5.24, neither Seller nor any Controlled Group Member (as defined
below), directly or indirectly, maintains, sponsors, or has any obligation or
liability with respect to any “employee benefit pension plan” as defined in
Section 3(1) of ERISA, any “employee welfare benefit plan” as defined in
Section 3(2) of ERISA, or any bonus, incentive, deferred compensation, retiree
medical, severance, fringe benefit, or other benefit, plan, program, or
arrangement (hereinafter referred collectively to as the “Benefit Plans” and
each individually as a “Benefit Plan”). For purposes of this Agreement,
“Controlled Group Member” means Seller and any Person which is required to be
aggregated with Seller under Sections 414(b), (c), (m) or (o) of the Code.
Except as set forth on Schedule 5.24:

(a) Each Benefit Plan has been maintained in accordance with its terms and all
applicable Legal Requirements.

(b) Each Benefit Plan and any trust created thereunder: (i) is, and has been, in
compliance with all the applicable requirements of ERISA and (ii) has satisfied
all of the applicable provisions of the Code.

(c) None of the Benefit Plans: (i) is subject to Title IV of ERISA, (ii) is a
“multiemployer plan” as described in Section 3(37) of ERISA or
Section 4001(a)(3) of ERISA, or (iii) provides retiree medical or retiree life
coverage for any employee or any beneficiary of any employee after the
employee’s termination or employment with Seller other than continuation
coverage required by applicable law, the cost of which is fully paid by the
former employee or his dependent.

(d) Full payment has been made of all amounts that Seller, or any Controlled
Group Member, is required, under applicable law or under the Benefit Plan, to
have paid up through and including the month in which the Closing Date shall
occur as a contribution or a benefit for all the Benefit Plans. All
contributions required to be made by, and all other liability of, Seller with
respect to the Benefit Plan for the periods covered by the Financial Statements
shall have been set forth on the appropriate Financial Statement in accordance
with GAAP. Benefits under the Benefit Plan are as represented and have not been
increased subsequent to the date as of which documents have been provided.

Section 5.25 Licenses and Permits. Seller possesses all certificates of
occupancy, franchises, licenses, easements, permits, and other authorizations
from Governmental Authorities and from all other Persons that are necessary to
permit it to engage in the Business as presently conducted and to use and occupy
the Leased Real Property as such facilities are presently being used and
occupied. Such franchises, licenses, permits, and other authorizations are
listed on Schedule 5.25, and a true and correct copy of each such franchise,
license, permit, and other authorization has been furnished to Purchaser or its
counsel.

Section 5.26 Governmental Reports. Schedule 5.26 is a true and correct list of
all reports, if any, filed since January 1, 2008, by Seller with any
Governmental Authority, including, but not limited to, the Department of Labor,
Equal Employment Opportunity Commission, Federal Trade Commission, Department of
Justice, and the Internal Revenue Service (other than Tax returns). Seller has
provided Purchaser with complete copies of each item set forth on Schedule 5.26.

 

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Section 5.27 Compliance with Laws. Except as set forth on Schedule 5.27, Seller
is in compliance, in all material respects, with, and has at all times been in
compliance in all material respects, with all Legal Requirements affecting the
Business and Seller’s operations, including, without limitation, the Foreign
Corrupt Practices Act. Seller has received no notification or communication from
any Governmental Authority since January 1, 2006 asserting that Seller is not in
compliance with any Legal Requirement or threatening to revoke any license or
permit owned or held by Seller. Seller has not (a) directly or indirectly,
given, or agreed to give, any illegal gift, contribution, payment or similar
benefit to any supplier, customer, governmental official or employee or other
Person who was, is or may be in a position to help or hinder Seller (or assist
in connection with any actual or proposed transaction) or made, or agreed to
make, any illegal contribution, or reimbursed any illegal political gift or
contribution made by any other Person, to any candidate for federal, state,
local or foreign public office or (b) established or maintained any unrecorded
fund or asset or made any false entries on any books or records for any purpose.

Section 5.28 Intellectual Property.

(a) Except as set forth on Schedule 5.28, Seller owns all right, title, and
interest to (including, without limitation, the exclusive right to use and
license the same), or has the right to use pursuant to a valid and enforceable
license, all Intellectual Property used in or reasonably necessary for the
operation of the Business, as presently conducted, free and clear of any
Encumbrances (and without obligation to pay any royalty or other fees with
respect thereto other than Permitted Liens). The Intellectual Property set forth
on Schedule 2.1(e) (x) constitutes all of the Intellectual Property reasonably
necessary for operation of the Business as presently conducted, and (y) as
presently used by the Business does not infringe or violate any intellectual
property rights of third parties. No item constituting part of the Intellectual
Property included in the Purchased Assets has been registered with, filed in or
issued by, as the case may be, the United States Patent and Trademark Office,
United States Copyright Office, or any other Governmental Authority, domestic or
foreign, or a duly accredited and appropriate domain name registrar.
Schedule 5.28 sets forth all license agreements for the Third Party Software and
Intellectual Property included in the Purchased Assets that is used under
license in the Business; and no notice of any default has been received by
Seller under any such license of Intellectual Property which remains uncured and
the execution, delivery or performance of Seller’s obligations hereunder will
not result in such a default. Except as set forth on Schedule 5.28, each such
license agreement is (i) a legal, valid and binding obligation of Seller and, to
the Knowledge of Seller, each of the other parties thereto, enforceable in
accordance with the terms thereof and (ii) except as noted on Schedule 5.2, is
assignable to Purchaser at the Closing without the consent or approval of any
third party.

 

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(b) Except as set forth on Schedule 5.28, (i) there is no pending or, to the
Knowledge of Seller, threatened proceedings or litigation or other claims made
against Seller asserting the invalidity, misuse, or unenforceability of any of
such Intellectual Property included in the Purchased Assets, (ii) Seller has not
received any notice that the conduct of the Business has infringed,
misappropriated, or conflicted with, or infringes, misappropriates, or conflicts
with any intellectual property of another Person, (iii) to the Knowledge of
Seller, the Intellectual Property and Third Party Software or other software
owned by or licensed to Seller and included in the Purchased Assets has not been
infringed, misappropriated, or conflicted by any other Person, and (iv) none of
the Intellectual Property, Third Party Software, or other software owned by or
licensed to Seller and included in the Purchased Assets is, to the Knowledge of
Seller, subject to any outstanding order, decree, judgment, stipulation, or
agreement restricting the scope or use thereof.

(c) All Intellectual Property relating to the Business (including, without
limitation, modifications to software and processes) developed by any current or
former employees of Seller or any current or former independent contractors
engaged by Seller were either (i) developed by such employees in their capacity
as employees of Seller and are owned by Seller or (ii) developed by such
contractors as work for hire and are owned by Seller.

(d) Seller has the legal right to use all Third Party Software and other
software that is material to the conduct of the Business, and all such Third
Party Software and other software is being used by Seller in compliance, in all
material respects, with any applicable licenses.

Section 5.29 Powers of Attorney. Except as set forth on Schedule 5.29, Seller
has not given to any Person for any purpose any power of attorney (irrevocable
or otherwise) that is presently in effect.

Section 5.30 Insurance.

(a) Schedule 5.30 is a true and correct list of all the policies of insurance
covering the Business, Seller’s properties and/or the Purchased Assets that are
presently in force. All of such insurance policies are in full force and effect
and all premiums, retention amounts, and other related expenses due have been
paid, and Seller has not received any notice of cancellation with respect to any
of the policies. True and correct copies of such policies have been made
available to Purchaser or its counsel, along with any and all schedules,
historical exposure information, and loss information (including loss runs)
relating to such policies.

(b) Schedule 5.30 is a true and correct list of any material damage that has
occurred to the Purchased Assets or the Business since December 31, 2010,
indicating, in each case, whether such damage is covered by a policy of
insurance and the extent of any claim that has been made under such policy of
insurance. All proceeds received by Seller from such insurance policies as a
result of any claim set forth on Schedule 5.30 have been used solely for the
purpose of repairing or replacing such damaged Purchased Assets.

 

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Section 5.31 Brokerage and Finder’s Fees. Except as set forth on Schedule 5.31,
Seller has not incurred, or will not incur upon the closing of the transactions
described in this Agreement, any liability to any broker, finder, or agent for
any brokerage fees, finder’s fees, or commissions with respect to the
transactions contemplated by this Agreement.

Section 5.32 Governing Documents. True, accurate, and complete copies of the
Articles of Incorporation and Bylaws of Seller, as well as all similar
agreements governing the operation of Seller and/or its relationship with
Shareholders, together with all amendments thereto, have been delivered to
Purchaser or its counsel. Seller has furnished to Purchaser or its counsel the
record books of Seller and the same are accurate and complete, in all material
respects, and reflect all resolutions adopted and all actions taken, authorized,
or ratified by the shareholders or directors of Seller.

Section 5.33 No Changes. Except as set forth on Schedule 5.33, since July 31,
2011, Seller has conducted the Business only in the Ordinary Course of Business.
Without limiting the generality of the foregoing, except as disclosed on
Schedule 5.33, since July 31, 2011, there has not been:

(a) any material adverse change in the financial condition, assets, liabilities,
net worth, or business of Seller;

(b) any damage, destruction, or loss (whether or not covered by insurance) in
the operating condition of a material portion of the Purchased Assets;

(c) any sale, assignment, sublease, termination (excluding any expiration in the
Ordinary Course of Business), or material modification of any Assumed Contract
of the type required by Section 5.17 above to be listed on Schedule 5.17;

(d) any mortgage, pledge, or subjection to Encumbrance of any kind of any of the
Purchased Assets;

(e) any strike, walkout, or labor trouble nor, to the Knowledge of Seller, has
any strike, walkout, or labor trouble been threatened;

(f) any commitment or liability to or agreement with any union or other labor
organization;

(g) (i) any increase in the salaries or other compensation payable or to become
payable to, or any advance (excluding advances for ordinary business expenses)
or any increase in, or any addition to, other benefits (including without
limitation any bonus, profit-sharing, pension or other Benefit Plan) (A) to
which any of Seller’s officers or employees who earned in 2010, or are expected
to earn in 2011, in excess of $40,000 may be entitled, or (B) to which any other
employee may be entitled unless, in such case for (A) and (B), such increase was
given in the Ordinary Course of Business, or (ii) any payments to any pension,
retirement, profit-sharing, bonus or similar plan except payments in the
Ordinary Course of Business made pursuant to the Benefit Plans described on
Schedule 5.24;

(h) any making or authorization of any capital expenditures;

 

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(i) any sale, transfer, license, or other disposition of any assets of Seller
tangible or intangible, (in one or more transactions) with a net book value in
excess of $25,000 in the aggregate, except sales of Inventory in the Ordinary
Course of Business;

(j) any payment, discharge or satisfaction of any liability or obligation
(whether accrued, absolute, contingent or otherwise) by Seller, other than the
payment, discharge or satisfaction, in the Ordinary Course of Business, of
liabilities or obligations either (i) shown or reflected on the August 31, 2011
Financial Statement of Seller, or (ii) incurred in the Ordinary Course of
Business since the date of such Financial Statement;

(k) any declaration or payment of any dividend or other distribution of assets
to equity owners of Seller;

(l) any purchase or redemption of equity, notes, or other securities;

(m) any write-offs as uncollectible of any notes or accounts receivable of
Seller or write-downs of the value of any assets or Inventory by Seller other
than the write-off of any notes or account receivables or write-down of any
assets or item of Inventory with a value (before valuation or other reserves) of
less than $10,000 in the aggregate for all such write-offs and write-downs or as
part of the Physical Inventory;

(n) any change by Seller in any method of accounting or keeping its books of
account or accounting practices or policies or method of application thereof,
including, but not limited to, changes in estimates or valuation methods;

(o) any payment or distribution of any kind (however described), loan or advance
of any amount to or in respect of, or the sale, transfer, or lease of any
properties or assets (whether real, personal or mixed, tangible or intangible)
to, or entering into of any agreement, arrangement, or transaction with, any
Seller Related Party except for (i) compensation to the officers and employees
of Seller, in each case at rates not exceeding the rates of compensation
disclosed on Schedule 5.23; and (ii) reimbursement for reasonable business
expenses in the Ordinary Course of Business; or

(p) any election, revocation, or amendment of any Tax election, any settlement
or compromise of any claim or assessment with respect to Taxes, any execution of
any closing agreement, any execution or consent to any waivers extending the
statutory period of limitations with respect to the collection or assessment of
any Taxes, or any amendment of any Tax Return.

Section 5.34 Disclaimer. Seller has not made, and Seller shall not be deemed to
have made, any representation or warranty other than as expressly made by Seller
in this Agreement or in any Ancillary Agreement or in any schedule thereto or
hereto. Without limiting the generality of the foregoing, and notwithstanding
any representations and warranties made by Seller in this Agreement, Seller
makes no representation or warranty with respect to any projections, estimates
or budgets delivered or made available to Purchaser or its counsel at any time
with respect to future revenues, expenses or expenditures or future results of
operations.

 

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ARTICLE 6 REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser warrants and represents to Seller as of the date hereof and as of the
Closing Date, as follows:

Section 6.1 Organization and Standing. Purchaser is a limited liability company
duly formed, validly existing, and in good standing under the laws of the State
of Ohio. Purchaser was formed for the purpose of consummating the transactions
contemplated by this Agreement and has no business operations.

Section 6.2 Authority; Consents. The execution, delivery, and consummation of
this Agreement by Purchaser has been duly authorized by the sole member and
manager of Purchaser in accordance with all applicable Legal Requirements and
the organizational documents of Purchaser, and at the Closing Date no further
action will be necessary on the part of Purchaser to make this Agreement valid
and binding on Purchaser and enforceable against Purchaser in accordance with
its terms, except to the extent that enforcement of the rights and remedies
created hereby may be affected by bankruptcy, reorganization, moratorium,
insolvency, public policy, and similar laws of general application affecting the
rights and remedies of creditors and by general equity principles. The
execution, delivery, and consummation of this Agreement by Purchaser is not
contrary to the organizational documents of Purchaser. No approval or consent of
any Person is or was required to be obtained by Purchaser for the authorization
of this Agreement or the consummation by Purchaser of the transactions
contemplated in this Agreement.

Section 6.3 Brokerage and Finder’s Fees. Purchaser has not incurred, or will not
incur upon the closing of the transaction described in this Agreement, any
liability to any broker, finder, or agent for any brokerage fees, finder’s fees,
or commissions with respect to the transactions contemplated by this Agreement.

ARTICLE 7 CONDITIONS TO PURCHASER’S OBLIGATIONS TO CLOSE

The obligations of Purchaser to effect the purchase of the Purchased Assets and
to consummate the transactions contemplated hereby shall be subject to the
fulfillment, or waiver in writing by Purchaser, at or prior to the Closing Date,
of each of the following conditions:

Section 7.1 Consents. All corporate and governmental consents and approvals
necessary to permit the consummation of the transactions contemplated by this
Agreement, including, without limitation, all consents and approvals listed on
Schedule 5.2, Schedule 5.17, Schedule 5.25 and Schedule 5.28 shall have been
received by Purchaser on or before the Closing Date.

Section 7.2 Legal Proceeding. No action, suit, or other proceeding shall be
pending before any Governmental Authority seeking or threatening to restrain or
prohibit the consummation of the transactions contemplated by this Agreement, or
seeking to obtain substantial damages in respect thereof, or involving a claim
that consummation thereof would result in the violation of any Legal Requirement
of any Governmental Authority having appropriate jurisdiction.

 

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Section 7.3 Permits. To the extent any permits set forth on Schedule 2.1(f) are
not assignable or transferable from Seller to Purchaser, on or before the
Closing Date, Purchaser shall, after using commercially reasonable efforts to
secure, have received from each Governmental Authority requiring Purchaser to do
so any permits required or necessary for Purchaser to use the Purchased Assets
to engage in the Business in the manner the Business was historically conducted
by Seller prior to the Closing Date.

Section 7.4 Offer Letter. On the Closing Date, Purchaser shall have offered
employment to Sergio Piva as an at will employee of Purchaser, on terms
reasonably satisfactory to Purchaser and Mr. Piva (the “Employment Offer”).

Section 7.5 Damage to Purchased Assets. Neither a material portion of the
Purchased Assets are rendered unusable as a result of damage or destruction on
or prior to the Closing Date, nor a condemnation, eminent domain, or similar
proceeding is instituted and maintained with respect to the Leased Real Property
before the Closing, provided, however, that if Purchaser, in its sole
discretion, elects to proceed with the Closing after receiving written notice
from Seller of such damage or destruction or the institution of such
proceedings, then Purchaser shall be entitled to all insurance or condemnation
proceeds, including without limitation, business interruption and rental loss
proceeds collected by Seller or any Seller Related Party prior to the Closing
Date, together with an amount from Seller equal to all deductible amounts under
the insurance policies of Seller covering such damage or destruction.

Section 7.6 [Reserved] .

Section 7.7 Environmental Insurance Policy. On the Closing Date, Seller and
Purchaser shall obtain environmental pollution legal liability insurance
coverage from a reputable insurance carrier: (i) with an aggregate liability
coverage limit of not less than $5,000,000, (ii) with a coverage term to include
not less than the five (5) year period subsequent to the Closing Date,
(iii) listing Seller and Purchaser on the policy as co-insured parties, and
(iii) otherwise on terms mutually acceptable to Seller and Purchaser. All
premiums for such coverage shall be paid in full on the Closing Date, with
Seller paying fifty percent (50%) of such amount and Purchaser paying the
remainder of such amount.

Section 7.8 Closing Deliveries of Seller. On the Closing Date, Seller shall
deliver and Purchaser shall have received the following:

(a) a true and correct copy of Seller’s Articles of Incorporation, certified by
the Secretary of State of the State of California of a date not more than ten
(10) days prior to the Closing Date;

(b) a certificate as to the good standing of Seller certified by the State of
California and a certificate of foreign qualification issued by each
jurisdiction in which Seller is qualified to do business.

(c) a certificate of an authorized officer of Seller, dated the Closing Date,
(i) certifying that the document delivered pursuant to Section 7.8(a) is in
effect and has not been amended or modified, (ii) attaching a true and correct
copy of the Bylaws of Seller, and certifying that it is in effect and has not
been amended or modified, (iii) attaching

 

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copies of resolutions, duly adopted by the directors and shareholders of Seller
authorizing, as applicable, the execution and delivery of this Agreement and
each of the Ancillary Agreements and the performance of the transactions
contemplated hereby and thereby, and certifying that such resolutions are in
effect and have not been amended or modified, and (iv) certifying the incumbency
of the officers of Seller executing and delivering this Agreement and each of
the Ancillary Agreements;

(d) an assignment and assumption agreement relating to the Assumed Liabilities,
duly executed by Seller, in a form and substance reasonably satisfactory to
Purchaser and Seller (the “Assignment and Assumption Agreement”);

(e) a bill of sale relating to the Purchased Assets, duly executed by Seller, in
a form and substance reasonably satisfactory to Purchaser and Seller (the “Bill
of Sale”);

(f) a restrictive covenant agreement, duly executed by Seller and each
Shareholder, in a form and substance reasonably satisfactory to such parties
(the “Restrictive Covenant Agreement”);

(g) the Employment Offer, duly executed by Sergio Piva;

(h) a termination of the fictitious business name statement to be filed with the
Los Angeles County Clerk and the Orange County Clerk terminating Seller’s right
to use the trade names set forth on Schedule 2.1(e), duly executed by Seller;

(i) a FIRPTA certificate, duly executed by Seller;

(j) all certificates of title or origin (or similar documents), with respect to
any vehicles or other equipment included in the Purchased Assets duly endorsed
by Seller;

(k) a Creditor Payment Letter from each obligee of the Debt of Seller listed on
Schedule 5.10(b) or other party required pursuant to Section 3.1(b);

(l) a consent and estoppel certificate from each landlord or other party whose
consent thereto is required under the Leases, in form and substance satisfactory
to Purchaser and Purchaser’s lender;

(m) copies of the Verified Financial Statements, along with such consents or
authorizations from the accounting firm(s) that issued such statements as are
necessary in order to permit Purchaser’s parent to file such Verified Financial
Statements as exhibits to its filings with the Securities and Exchange
Commission;

(n) to the extent requested by Purchaser’s lender, a subordination agreement
evidencing the subordination of the amounts owed under the Promissory Note to
all amounts owed by Purchaser to such lender, in a form and substance reasonably
satisfactory to Purchaser, its lender, and Seller; and

 

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(o) all such other agreements, documents, instruments, and writings as are
required to be delivered by Seller at the Closing Date pursuant to this
Agreement or that are otherwise reasonably necessary to transfer to Purchaser
all of Seller’s right, title, and interest in, to and under the Purchased Assets
and the Assumed Liabilities or to exclude the Retained Liabilities, in
accordance with this Agreement.

ARTICLE 8 CONDITIONS TO SELLER’S OBLIGATIONS TO CLOSE

The obligations of Seller to effect the sale of the Purchased Assets and to
consummate the transactions contemplated hereby shall be subject to the
fulfillment, or waiver in writing by Seller, at or prior to the Closing Date, of
each of the following conditions:

Section 8.1 Legal Proceeding. No action, suit, or other proceeding shall be
pending before any Governmental Authority seeking or threatening to restrain or
prohibit the consummation of the transactions contemplated by this Agreement, or
seeking to obtain substantial damages in respect thereof, or involving a claim
that consummation thereof would result in the violation of any Legal Requirement
of any Governmental Authority having appropriate jurisdiction.

Section 8.2 Closing Deliveries of Purchaser. On the Closing Date, Purchaser
shall deliver and Seller shall have received the following:

(a) a true and correct copy of Purchaser’s Articles of Organization, certified
by the Secretary of State of the State of Ohio of a date not more than ten
(10) days prior to the Closing Date;

(b) a certificate as to the good standing of Purchaser certified by the State of
Ohio and a certificate of foreign qualification issued by the State of
California;

(c) a certificate of an authorized officer of Purchaser, dated the Closing Date,
(i) certifying that the document delivered pursuant to Section 8.2(a) is in
effect and has not been amended or modified, (ii) attaching a true and correct
copy of Purchaser’s Operating Agreement and certifying that it is in effect and
has not been amended or modified, (iii) attaching copies of resolutions, duly
adopted by the manager of Purchaser authorizing the execution and delivery of
this Agreement and each of the Ancillary Agreements and the performance of the
transactions contemplated hereby and thereby, and certifying that such
resolutions are in effect and have not been amended or modified, and
(iv) certifying the incumbency of the officers of Purchaser;

(d) evidence of payment of the Closing Date Payment and the Creditor Payments as
required by Section 3.1(c);

(e) the Promissory Note, duly executed by Purchaser;

(f) the Assignment and Assumption Agreement, duly executed by Purchaser;

(g) the Restrictive Covenant Agreement, duly executed by Purchaser;

(h) all such other agreements, documents, instruments, and writings as are
required to be delivered by Purchaser at or prior to the Closing Date pursuant
to this Agreement or that are otherwise reasonably necessary for Purchaser to
assume the Assumed Liabilities, in accordance with this Agreement.

 

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ARTICLE 9 REMEDIES

Section 9.1 General Indemnification Obligation.

(a) Subject to the limitations contained in Sections 9.2 and 9.3, Seller shall
indemnify and hold harmless Purchaser and its officers, managers, members,
employees, agents, and Affiliates (each a “Purchaser Indemnified Party”) from
and against any and all losses, liabilities, claims, damages, penalties, fines,
judgments, awards, settlements, Taxes, costs, fees, expenses (including but not
limited to reasonable attorneys’ fees) and disbursements (collectively “Losses”)
actually sustained by any of such Persons based upon, arising out of, or
otherwise in respect of:

(i) any inaccuracies in or any breach of any representation or warranty of
Seller contained in this Agreement or any Ancillary Agreement (including any
schedule or exhibit attached hereto or thereto);

(ii) any breach of any covenant or agreement of Seller contained in this
Agreement or any Ancillary Agreement (including any schedule or exhibit attached
hereto or thereto);

(iii) any of the Retained Liabilities;

(iv) Purchaser’s agreement to make available the COBRA continuation health
insurance pursuant to Section 10.6(d), except to the extent that such Loss
arises solely from (A) Purchaser’s failure to comply with applicable law
relating to COBRA continuation health insurance coverage or (B) additional
administrative burden;

(v) the failure of Purchaser to withhold a portion of the Final Purchase Price
until receipt of tax clearance certificates from the California State Board of
Equalization, the State of California Employment Development Department, and the
Franchise Tax Board, as required by applicable statutes of the State of
California;

(vi) any Loss originating from a Governmental Authority relating to a violation
of Legal Requirements by Seller prior to the Closing Date or any Loss
originating from a third party injured prior to the Closing Date by a violation
of Legal Requirements by Seller; provided, that to the extent such violation of
Legal Requirements existed prior to the Closing Date and continued after the
Closing Date, Seller shall only be liable for the portion of such Loss relating
to the period prior to the Closing Date;

(vii) any Loss originating from a Governmental Authority relating to a violation
of Legal Requirements by Seller prior to the Closing Date; provided, that to the
extent such violation of Legal Requirements existed prior to the Closing Date
and continued after the Closing Date, Seller shall only be liable for the
portion of such Loss relating to the period prior to the Closing Date;

 

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(viii) any Loss originating from a third party injured prior to the Closing Date
as a result of a violation of Legal Requirements by Seller; and

(ix) those specific matters set forth on Schedule 9.1(a).

(b) Purchaser shall indemnify and hold harmless Seller and its officers,
directors, employees, agents and Affiliates (each a “Seller Indemnified Party”)
from and against any and all Losses actually sustained by any of such Persons
based upon, arising out of or otherwise in respect of:

(i) any inaccuracies in or any breach of any representation or warranty of
Purchaser contained in this Agreement or any Ancillary Agreement (including any
schedule or exhibit attached hereto or thereto);

(ii) any breach of any warranty, covenant, or agreement of Purchaser contained
in this Agreement or any Ancillary Agreement (including any schedule or exhibit
attached hereto or thereto);

(iii) any of the Assumed Liabilities; and

(iv) any liability, loss, or obligation resulting from the operation of the
Business after the Closing Date or the condition of the Leased Real Property or
the portion of the Acquired Assets constituting equipment as of the Closing,
except to the extent arising from a Retained Liability.

Section 9.2 Notice and Opportunity to Defend

(a) As soon as is reasonably practicable after a Seller Indemnified Party or
Purchaser Indemnified Party, as the case may be, becomes aware of any claim that
it has under Section 9.1 that may result in a Loss (a “Liability Claim”), such
Person (the “Indemnified Party”) shall give notice thereof (a “Claims Notice”)
to the party hereto that is obligated to indemnify the Indemnified Party with
respect to such claim (the “Indemnifying Party”). A Claims Notice shall describe
the Liability Claim in reasonable detail, and shall indicate the amount
(estimated, if necessary and to the extent feasible) of the Loss that has been
or may be suffered by the Indemnified Party. No delay in or failure to give a
Claims Notice by the Indemnified Party to the Indemnifying Party pursuant to
this Section 9.2(a) shall adversely affect any of the other rights or remedies
which the Indemnified Party has under this Agreement, or alter or relieve the
Indemnifying Party of its obligation to indemnify the Indemnified Party to the
extent that such delay or failure has not materially prejudiced the Indemnifying
Party.

(b) To the extent that any Liability Claim relates to a third party proceeding,
the Indemnifying Party may elect, by providing written notice to the Indemnified
Party within thirty (30) days of receipt of a Claims Notice from the Indemnified
Party of the commencement or assertion of any Liability Claim in respect of
which indemnity may be

 

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sought hereunder, to assume and conduct the defense of such Liability Claim in
accordance with the limits set forth in this Agreement with counsel selected by
the Indemnifying Party and reasonably acceptable to the Indemnified Party. If
the Indemnifying Party does not assume the defense of a Liability Claim in
accordance with this Section 9.2(b), the Indemnified Party may continue to
defend the Liability Claim. If the Indemnifying Party has assumed the defense of
a Liability Claim as provided in this Section 9.2(b), the Indemnifying Party
will not be liable for any legal expenses subsequently incurred by the
Indemnified Party in connection with the defense thereof; provided, however,
that if (i) the Indemnifying Party fails to take reasonable steps necessary to
defend diligently such Liability Claim or (ii) a settlement of, or adverse
judgment with respect to the Liability Claim may be expected to have a material
adverse effect on, or is likely to establish a precedential custom or practice
materially adverse to the continuing business or Tax position of the Indemnified
Party (including, without limitation, any increase in the Tax liability of
Purchaser or any Affiliate thereof), the Indemnified Party may assume its own
defense, and the Indemnifying Party shall be liable for all reasonable costs or
expenses paid or incurred in connection therewith. The Indemnifying Party or the
Indemnified Party, as the case may be, shall have the right to participate in
(but not control), at its own expense, the defense of any Liability Claim which
the other is defending as provided in this Agreement. The Indemnifying Party, if
it shall have assumed the defense of any Liability Claim as provided in this
Agreement, shall not, without the prior written consent of the Indemnified
Party, consent to a settlement of, or the entry of any judgment arising from,
any such Liability Claim which (i) does not include as an unconditional term
thereof the giving by the claimant or the plaintiff to the Indemnified Party a
complete release from all liability in respect of such Liability Claim, or
(ii) grants any injunctive or equitable relief, or (iii) may reasonably be
expected to have a material adverse effect on, or is likely to establish a
precedential custom or practice material adverse to, the continuing business or
Tax position of the Indemnified Party (including, without limitation, any
increase in the Tax liability of Purchaser or any Affiliate thereof). The
Indemnified Party shall not settle any Liability Claim, without the prior
written consent of the Indemnifying Party, which consent shall not be
unreasonably withheld, conditioned, or delayed.

Section 9.3 Survivability / Limitations on Indemnification

(a) The representations and warranties of Seller contained in this Agreement or
in any Ancillary Agreement, and the right of Purchasers to seek indemnification
as a result of any breach of or inaccuracy in any representation or warranty,
shall survive for a period of twenty four (24) calendar months from the Closing
Date (the “Expiration Date”); provided, however, that:

(i) the Expiration Date will not apply for any Liability Claim relating to a
breach of or inaccuracy in the representations and warranties of Seller
contained in Section 5.1 (Organization and Standing), Section 5.2 (Authority),
Section 5.6 (Title), or Section 5.32 (Brokerage and Finders Fees);

(ii) the representations and warranties of Seller contained in Section 5.5
(Environmental Matters), Section 5.7 (Taxes) and Section 5.24(a) (Employee
Benefit Plans and Other Plans) shall survive for the duration of any applicable
statute of limitations, the duration of any suspension, waiver or extension
thereof, and for ninety (90) days thereafter;

 

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(iii) all of the covenants and agreements of Seller and any Shareholder
contained in this Agreement shall survive after the date of this Agreement and
be enforceable in accordance with their terms without expiration; and

(iv) any Liability Claim pending on any Expiration Date for which a Claims
Notice has been given in accordance with Section 9.2 on or before such
Expiration Date may continue to be asserted and indemnified against until
finally resolved.

The representations and warranties listed in clause (i) of this Section 9.3(a),
Section 5.7 and Section 5.24 are referred to as the “Fundamental
Representations”.

(b) Notwithstanding anything to the contrary contained in this Agreement, Seller
shall have no obligation to indemnify any Purchaser Indemnified Party for any
Loss under Section 9.1(a)(i) until the aggregate amount of all Losses sustained
by one or more Purchaser Indemnified Parties exceeds $100,000 in the aggregate
(the “Basket”), in which case each Purchaser Indemnified Party shall be entitled
to indemnification hereunder to the extent Losses exceed the Basket, only up to
but not exceeding, in the aggregate, twenty percent (20%) of the Final Purchase
Price (the “Cap”); provided, however, that Seller shall have no obligation to
indemnify any Purchaser Indemnified Party with respect to individual Losses
under Section 9.1(a)(i) of less than $10,000 each (the “Mini Basket”) and such
Losses shall not be counted toward the Basket. Notwithstanding anything to the
contrary contained in this Agreement, the Basket, Mini Basket, and Cap shall not
apply to Losses sustained by a Purchaser Indemnified Party as a result of
Seller’s breach of a Fundamental Representations or arising out of a fraud claim
brought by Purchaser against Seller.

(c) Further notwithstanding anything to the contrary contained in this
Agreement, Seller shall have no obligation to indemnify any Purchaser
Indemnified Party for any Loss under Section 9.1(a)(i) relating to any
inaccuracy in or breach of any representation or warranty of Seller to the
extent that Seller can prove that (i) Purchaser or any Purchaser Indemnified
Party had actual written knowledge of such inaccuracy or breach arising from
information provided in the period between August 2, 2011 and the Closing,
(ii) the CEO, CFO or COO of Purchaser or John Glover fully understood the scope
and significance of such knowledge prior to the Closing and (iii) such Losses
arose solely from the inaccuracy or breach to which Purchaser had Knowledge.

(d) Notwithstanding anything to the contrary contained in this Agreement,
Purchaser shall not have to indemnify any Seller Indemnified Party for any Loss
under Section 9.1(b)(i) until the aggregate amount of all Losses sustained by
one or more Seller Indemnified Parties exceeds the Basket, in which case each
Seller Indemnified Party shall be entitled to indemnification hereunder to the
extent Losses exceed the Basket, up to but not exceeding, in the aggregate, the
Cap; provided, however, that Purchaser shall not

 

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have to indemnify any Seller Indemnified Party with respect to individual Losses
under Section 9.1(b)(i) of less than the Mini Basket and such Losses shall not
be counted toward the Basket. Notwithstanding anything to the contrary contained
in this Agreement, the Basket, Mini Basket, and Cap shall not apply to Losses
sustained by a Seller Indemnified Party as a result of Purchaser’s breach of the
representations and warranties of Purchaser contained in Section 6.1
(Organization and Standing), Section 6.2 (Authority), and Section 6.3 (Brokerage
and Finders Fees) or arising out of a fraud claim brought by Seller against
Purchaser.

(e) Absent fraud, the indemnification provided for in Section 9.1 of this
Agreement shall be the sole and exclusive post-Closing remedy available to any
party against the other parties for any Losses arising under or based upon this
Agreement or the transactions contemplated hereby.

(f) Absent fraud, no party hereto will be entitled to receive from any other
party hereto punitive, incidental, special or consequential damages as a result
of Losses hereunder; provided, however that this limitation shall not apply with
respect to any Losses that arise from a Liability Claim involving a third party
proceeding if such punitive, incidental, special or consequential damages are
claimed by such third party.

(g) For the purposes of the indemnification provisions set forth in this Article
9, any Losses shall be determined on a net basis after giving effect to any
actual cash payments, setoffs, recoupment, or any other payments in each case
received, realized, or retained by the indemnified party (including any amounts
recovered or recoverable by the indemnified party from unaffiliated third party
insurance providers) as a result of any event giving rise to a claim for such
indemnification.

(h) Notwithstanding anything to the contrary contained in this Agreement,
Purchaser shall not be entitled to indemnification for a breach of the
representation set forth in the first sentence of Section 5.27 relating to any
modifications or changes made to (i) that portion of the Acquired Assets
constituting equipment or (ii) the Leased Real Property, including any systems
relating thereto, that may constitute a violation of Legal Requirements except
to the extent that any such violation gives rise to a Loss originating from a
Governmental Authority relating to a period prior to the Closing Date or a third
party injured prior to the Closing Date by such violation.

Section 9.4 Manner of Satisfying Losses.

(a) Payments owed by Seller in satisfaction of Seller’s indemnification
obligations pursuant to this Article 9 shall be (i) first offset against the
balance owing to Seller under the Promissory Note and, to the extent amounts
recovered by Purchaser Indemnified Party are not sufficient to satisfy all
Losses in full, (ii) then the balance of such Losses shall be paid directly by
Seller.

 

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(b) Upon Final Determination of the amount of a Liability Claim for which
indemnification is sought under this Article 9, the Indemnifying Party shall pay
the amount of such Liability Claim within ten (10) days of the date of such
Final Determination. For purposes of this Section 9.4(b), the “Final
Determination” of a Liability Claim shall be the earliest to occur of the
following: (i) a judgment of any court determining the validity of a disputed
Liability Claim, if no appeal is pending from such judgment or if the time to
appeal therefrom has elapsed (it being understood that the Indemnified Party
shall have no obligation to appeal); (ii) an award of any arbitrator or
arbitration panel determining the validity of a disputed Liability Claim, if
there is not pending any motion to set aside such award or if the time within
which to move to set such award aside has elapsed; (iii) a written
acknowledgement of the Indemnifying Party that it no longer disputes the
validity of such Liability Claim; (iv) the date on which an Indemnifying Party
fails to respond to a Claim Notice as specified in Section 9.2; or (v) such
other evidence of final determination of a disputed Liability Claim as shall be
reasonably acceptable to the parties.

Section 9.5 Treatment of Indemnification Payments. All indemnification payments
made by any party hereto will be treated as adjustments to the Final Purchase
Price.

ARTICLE 10 POST CLOSING COVENANTS

The parties covenant to take the following actions after the Closing Date:

Section 10.1 Further Information. Following the Closing, upon reasonable advance
notice, Seller, on the one hand, and Purchaser, on the other hand, will provide
each other and its counsel and its accountants, during normal business hours,
upon prior written notice, reasonable access to the books, records, and other
data of the other relating to the Business or the Purchased Assets with respect
to periods prior to the Closing and the right to make copies and extracts
therefrom, to the extent that such access may be reasonably required (a) to
facilitate the investigation, litigation, and final disposition of any claims
which may have been or may be made against any party or its Affiliates, (b) in
connection with any Tax Return, audit, examination, proceeding, or
determination, (c) to facilitate the purchase and implementation of any policies
of insurance covering the Purchased Assets or the Business, and (d) for any
other reasonable business purpose. All investigations by or on behalf of a party
shall be conducted in such manner as to not unreasonably interfere with the
business operations of the other party and at such requesting party’s sole
expense.

Section 10.2 Record Retention. Each party agrees that for a period of not less
than seven (7) years following the Closing Date, it shall not destroy or
otherwise dispose of any of the books and records relating to the Business or
the Purchased Assets in their possession with respect to periods prior to the
Closing. Upon thirty (30) days advance notice to the other party, each party
shall have the right to destroy all or part of such books and records after the
seventh (7th) anniversary of the Closing Date. If any party so desires, it shall
have the right, at its own expense, to take possession of any records that the
other party intends to destroy.

Section 10.3 Tax Assistance. Following the Closing, Seller, on the one hand, and
Purchaser, on the other hand, will provide each other with such assistance as
may reasonably be requested in connection with the preparation of any Tax
Return, any audit or other examination by any Taxing authority, or any judicial
or administrative proceedings relating to liability for Taxes.

 

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Section 10.4 Name Change of Seller. Within three (3) Business Days after the
Closing Date, Seller shall file terminations of the fictitious business name
statements with the Los Angeles County Clerk and the Orange County Clerk
terminating Seller’s right to use the trade names set forth on Schedule 2.1(e).

Section 10.5 No Assignment Causing Breach. Neither this Agreement nor any
document or instrument delivered pursuant hereto shall constitute an assignment
of any claim, Contract, lease, commitment or sales or purchase order or an
attempted assignment thereof without the consent of any other Person if such
assignment would be ineffective, constitute a breach thereof or in any way
adversely affect the rights thereunder. Until such consent is obtained, Seller
and Purchaser will cooperate with each other to provide for Purchaser the
benefits of, and to permit Purchaser to assume all liabilities under, any such
claim, Contract, lease, commitment or sales or purchase order, including
enforcement at the request and expense of Purchaser for the benefit of Purchaser
of any and all rights of Seller against a third party thereto; and any transfer
or assignment to Purchaser by Seller of any property or property rights or any
Contract which requires the consent or approval of any third party shall be made
subject to such consent or approval being obtained.

Section 10.6 Employee Matters and Employee Benefits.

(a) Non-Transferred Employees. Except as provided in Section 10.6(d) with
respect to COBRA, nothing in this Agreement shall be deemed to impose on
Purchaser any liabilities or responsibilities for periods prior to the Closing
regarding employees or former employees of Seller, including, without
limitation, liabilities or responsibilities for (i) pension, retirement,
profit-sharing, savings, pension, medical, dental, disability income, life
insurance, or accidental death benefits, whether insured or self-insured,
whether funded or unfunded, (ii) workers’ compensation (both long term and short
term) benefits, whether insured or self-insured, whether or not accruing or
based upon exposure to conditions prior to the date of this Agreement or for
claims incurred or for disabilities commencing prior to the Closing Date, or
(iii) severance benefits.

(b) Offers of Employment. Purchaser will offer, as of the Closing Date,
employment at-will to the active employees of Seller other than Tristano
Caracciolo; provided, however, that nothing herein shall require any employee to
accept such offer nor require Purchaser to continue any employment or any terms
of employment after the Closing Date. In the event that any of the inactive
employees of Seller set forth on Schedule 10.6(b) presents Purchaser a fitness
for duty certificate from their medical provider following the Closing Date,
Purchaser will offer such individual employment at-will at such time; provided,
however, that nothing herein shall require Purchaser to actively seek out such
individual nor require Purchaser to continue any employment or any terms of
employment for any specified period of time; provided, further that if any such
individual presents Purchaser with a fitness for duty certificate providing for
restricted duty and Purchaser has an available position that can accommodate the
restricted duty requirements, then Purchaser will such individual such
employment at-will at such time.

 

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(c) WARN. Seller shall be responsible for complying with all notice and coverage
requirements of the Workers Adjustment and Retraining Notification Act, to the
extent applicable, and any similar applicable California statutes, to the extent
each is applicable, arising as a result of the Closing.

(d) COBRA. Purchaser shall be responsible for making COBRA continuation health
insurance available to each former employee of Seller set forth on Schedule
10.6(d) with a qualifying event on or prior to the Closing Date to the extent a
proper COBRA election has been made by such individual and applicable premiums
have been paid by such individual, in each instance solely for the period
required by applicable law.

(e) Final Seller Payroll. Seller shall be responsible for calculation and
funding of a final payroll for all employees of the Business through and
including the Closing Date, which shall include payment for all accrued and
unused vacation time outstanding as of the Closing Date. On the Closing Date,
Seller shall (i) submit the final payroll to ADP for processing and payment no
later than three (3) days following the Closing Date and (ii) transfer all
amounts necessary to fund such payroll (including taxes, withholdings and other
amounts normally and customarily funded at the time of processing payroll) to
Seller’s payroll account. Purchaser shall be reasonably satisfied with such
calculations and the amount transferred.

Section 10.7 Further Assurances. From and after the Closing, Purchaser and
Seller will, and each will cause their respective Affiliates to execute and
deliver such further instruments of sale, conveyance, transfer, assignment, and
delivery and such consents, assurances, powers of attorney, and other
instruments and take such other action as reasonably may be necessary to in
order to vest in Purchaser (and record and perfect) all right, title, and
interest in and to the Purchased Assets, to put Purchaser in actual possession
and control of the Business and to otherwise fully effectuate and carry out the
transactions contemplated by this Agreement and the Ancillary Agreements.

Section 10.8 Mail, Bank Accounts and Other Receipts.

(a) After the Closing, Seller agrees to hold in trust and deliver to Purchaser
promptly following receipt thereof any mail, checks, electronic cash deposits,
or documents that it receives pertaining to the Business or the Purchased
Assets. Seller agrees to maintain, for a reasonable period of time (not to
exceed 24 months), the bank account(s) and lockbox(es) that were used,
immediately prior to the Closing Date, to receive customer payments relating to
the Business and to promptly cause Seller’s bank to forward all amounts received
in such account(s) and lockbox(es) pertaining to the Business or the Purchased
Assets directly to Purchaser. Purchaser agrees to hold in trust and deliver to
Seller promptly following receipt thereof any mail, checks, electronic cash
deposits, or documents that it receives pertaining to matters other than the
Business or the Purchased Assets.

(b) From and after the Closing, Seller agrees to maintain for as long as
necessary amounts of cash in the bank accounts used for the operation of the
Business prior to Closing sufficient to cover any and all checks, drafts, and
other draws that are outstanding against such accounts as of the Closing Date.

 

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(c) From and after the Closing, Seller and Purchaser shall use their reasonable
good faith efforts to reconcile, on or about forty five (45) days following the
Closing or at such mutually agreeable later date, (i) the amount, if any, of the
trade payables and/or accrued expenses being assumed by Purchaser pursuant to
this Agreement that are drawn from the bank accounts of Seller after the Closing
Date, and (ii) the amount, if any, of the accounts receivable and other customer
and/or supplier payments relating to the Purchased Assets that are remitted to
and/or deposited by such customers and/or suppliers into the bank accounts of
Seller after the Closing Date. Any amounts due from Seller to Purchaser, or from
Purchaser to Seller, as a result of such reconciliation shall be promptly paid
by the owing party.

Section 10.9 Dissolution of Seller. For a period of no less than two (2) years
following the Closing Date, Seller covenants and agrees to maintain its
corporate existence and not to take any action to merge with or into another
entity nor to liquidate or dissolve under state law. Seller further agrees that,
during such period, Seller will maintain not less than $200,000 of liquid cash
or cash equivalents in an unrestricted bank account in the name of Seller.

Section 10.10 Transitional Availability. For a period not to exceed six
(6) months following the Closing, Seller agrees to cause Tristano Caracciolo to
make himself available as a resource to Purchaser for the purpose of providing
transitional guidance to Purchaser regarding the Business, to the extent
requested by Purchaser. Notwithstanding the forgoing, Mr. Caracciolo may provide
such services remotely via teleconference to the extent appropriate in the
circumstances and shall not be required to travel to any locations other than
the Business facilities in Orange and Long Beach, California without
reimbursement from Purchaser of his reasonable travel expenses. Mr. Caracciolo
is being requested to provide such guidance based on his knowledge and
experience, and Purchaser agrees that Mr. Caracciolo’s insight and counsel can
be provided in a limited amount of time by him. He shall provide such services
at such times as it does not interfere with his other business and personal
activities. In no event shall Mr. Caracciolo be required to be available more
than twenty (20) hours per month on a noncumulative basis during said six
(6) month period.

ARTICLE 11 MISCELLANEOUS

Section 11.1 Assignment; Third Parties; Binding Effect. The rights under this
Agreement are not assignable nor are the duties delegable by (a) Seller without
the prior written consent of Purchaser; and (c) Purchaser without the prior
written consent of Seller; except that Purchaser may, without the consent of any
other party, assign this Agreement (x) to a wholly owned subsidiary of
Purchaser, (y) an entity under common control with Purchaser, or (z) Purchaser’s
principal creditor; provided, however, that no such transfer or assignment shall
relieve Purchaser of its obligations hereunder. Any attempted assignment or
delegation in contravention of the previous sentence shall be null and void.
Nothing contained in this Agreement is intended to convey upon any person or
entity, other than the parties and their successors in interest and permitted
assigns, any rights or remedies under or by reason of this Agreement unless
expressly stated. All covenants, agreements, representations and warranties of
the parties contained in this Agreement are binding on and will inure to the
benefit of Purchaser and Seller, as applicable, and their respective successors
and permitted assigns.

 

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Section 11.2 Expenses. Each of the parties hereto shall pay its own expenses and
costs incurred or to be incurred by it in negotiating, closing and carrying out
this Agreement.

Section 11.3 Notices. All notices, requests, demands and other communications to
be made under this Agreement must be in writing and will be deemed duly given,
unless otherwise expressly indicated to the contrary in this Agreement, (i) when
personally delivered, (ii) upon receipt of a telephonic facsimile transmission
with a confirmed telephonic transmission answer back, (iii) three (3) Business
Days after having been deposited in the United States mail, certified or
registered, return receipt requested, postage prepaid, or (iv) one (1) Business
Day after having been dispatched by a nationally recognized overnight courier
service, addressed to the parties or their permitted assigns at the following
addresses (or at such other address or number as is given in writing by any
party to the other parties) as follows:

 

(a)    If to Purchaser, to:   

Forge Acquisition, LLC

c/o SIFCO Industries, Inc.

970 East 64th Street

Cleveland, Ohio 44103-1694

Attention: James P. Woidke

Facsimile No.: (216) 881-1828

Email: jwoidke@sifcofg.com

   with a copy to:   

Benesch, Friedlander, Coplan & Aronoff LLP

2300 BP Tower

200 Public Square

Cleveland, Ohio 44114

Attention: John S. Gambaccini, Esq.

Facsimile No.: (216) 363-4588

Email: jgambaccini@beneschlaw.com

(b)

  

If to Seller:

  

GEL Industries, Inc.

c/o Sergio Piva

2137 Kallin Ave.

Long Beach, California 90815

Facsimile No.:                    

Email:                        

  

with a copy to:

  

Law Offices of Roger L. Neu, Inc.

2040 Main Street, Suite 710

Irvine, CA 92614

Attention: Roger L. Neu

Facsimile No.: (949) 863-1701

Email: Rneuoffice@aol.com

 

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Section 11.4 Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original but all of which
together will constitute one and the same document. Any signature to this
Agreement or any Ancillary Agreement delivered via facsimile, electronic mail,
or in pdf format shall be deemed an original for all purposes.

Section 11.5 Captions and Section Headings. Captions and section headings are
for convenience only, are not a part of this Agreement and may not be used in
construing it.

Section 11.6 Possession of Purchased Assets. Possession of and title to the
Purchased Assets will be given to Purchaser effective as of 11:59 p.m. Pacific
time on the Closing Date. Purchaser will not acquire any title to the Purchased
Assets until possession has been given to it in accordance with this
Section 11.6. For purposes of this Section 11.6, possession will be deemed to
have been given to Purchaser when Seller delivers or causes to be delivered to
Purchaser good and sufficient instruments of transfer and conveyance as provided
in this Agreement.

Section 11.7 Waivers. Any failure by any of the parties to comply with any of
the obligations, agreements, or conditions set forth in this Agreement may be
waived by the other party or parties, but any such waiver will not be deemed a
waiver of any other obligation, agreement or condition contained herein.

Section 11.8 Entire Agreement. This Agreement, including any certificate,
schedule, exhibit, or other document delivered pursuant to its terms,
constitutes the entire agreement between the parties relating to the subject
matter hereof. There are no verbal agreements, representations, warranties,
undertakings, or agreements between the parties, and this Agreement may not be
amended or modified in any respect, except by a written instrument signed by all
the parties to this Agreement making specific reference to this Agreement.

Section 11.9 Governing Laws. This Agreement is governed by and construed in
accordance with the internal laws of the State of California, without regard to
conflict of laws principles. For the sole purpose of this Agreement and any
controversy arising hereunder, each party hereby submits itself to the exclusive
jurisdiction of the state or federal courts sitting in Orange County,
California, and waives any objection (on the grounds of each of jurisdiction or
forum non conveniens, or otherwise) to the jurisdiction of any such court.
Seller and Purchaser irrevocably waive any objection that they now have or
hereafter may have to the laying of venue of any suit, action, or proceeding
brought in any such court and further irrevocably waive any claim that any such
suit, action, or proceeding brought in any such court has been brought in an
inconvenient forum.

{Signatures begin on next page. Remainder of page intentionally left blank}

 

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Signature Page to

Asset Purchase Agreement

IN WITNESS WHEREOF, the parties have duly executed this Agreement on the date
first above written.

 

PURCHASER:

 

SELLER:

 

FORGE AQUISITION, LLC

 

By: /s/ Frank Cappello

Name: Frank Cappello

Title: Treasurer

 

 

GEL INDUSTRIES, INC. DBA QUALITY ALUMINUM FORGE

 

By: /s/ Tristano Caracciolo

Name: Tristano Caracciolo

Title: President & CEO

PARENT GUARANTY

SIFCO Industries, Inc., an Ohio corporation and the sole member of Purchaser,
hereby unconditionally guarantees the performance by Purchaser of all its
obligations set forth in this Agreement, including, without limitation, all
obligations under the Promissory Note, in the same manner as though the
undersigned were named as a party in place of Purchaser in this Agreement.

 

SIFCO INDUSTRIES, INC.

 

By: /s/ Frank Cappello

Name: Frank Cappello

Title: V.P. Finance & CFO

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APPENDIX A

DEFINITIONS

For purposes of this Agreement, unless the context otherwise indicates, the
following terms, whether capitalized or not, shall have the meaning set forth
below:

“Affiliate” means with respect to any Person, (a) any officer, director,
manager, or holder of more than ten percent (10%) of the outstanding shares or
equity interest of such Person, (b) such Person’s spouse and the parents,
grandparents, brothers and sisters, children, and grandchildren of such Person
or of such Person’s spouse, or (c) any other Person which directly or indirectly
controls, is controlled by, or is under common control with such Person. A
Person shall be deemed to control another Person if the controlling Person,
directly or indirectly, possesses the power to direct or cause the direction of
the management and policies of the controlled Person, whether through ownership
of voting securities, by contract, or otherwise.

“Ancillary Agreements” means the Promissory Note, the Assignment and Assumption
Agreement, the Bill of Sale, the Restrictive Covenant Agreement, and each
agreement or certificate contemplated by this Agreement to be executed by
Purchaser and/or Seller in connection with the consummation of the transactions
contemplated by this Agreement, in each case only as applicable to the relevant
party or parties to such Ancillary Agreement, as indicated by the context in
which such term is used.

“Business Day” means any day other than a Saturday, Sunday, or day on which
commercial banks are authorized or required by law to close in Cleveland, Ohio.

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

“Contaminant” means any substance or waste containing hazardous or toxic
substances, pollutants, or contaminants, and any other individual or class of
pollutants, contaminants, toxins, chemicals, substances, wastes, or materials in
their solid, liquid, or gaseous phase, defined, listed, designated, regulated,
classified, or identified under any Environmental Law. This definition includes
asbestos and asbestos-containing materials, petroleum or petroleum-based
products or derivatives thereof, radioactive materials, flammable explosives,
and polychlorinated biphenyls.

“Contract” means any agreement, contract, obligation, promise, or undertaking
(whether written or oral) that is legally binding and (a) under which Seller has
or may acquire any rights, (b) under which Seller has or may become subject to
any obligation or liability, or (c) by which Seller or any of the Purchased
Assets may become bound.

“Debt” means (a) all obligations to repay borrowed money, direct or indirect,
incurred, assumed, or guaranteed, (b) all obligations for the deferred purchase
price of capital assets (excluding normal trade terms for capital assets
purchased in the ordinary course of business), (c) all obligations under
conditional sales or other title retention agreements, (d) all reimbursement and
other obligations (contingent or otherwise) under any letter of credit, banker’s
acceptance, currency swap agreement, interest rate swap, cap, collar, or floor
agreement or other interest rate management device.

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“Encumbrance” means any charge, claim, community property interest, condition,
equitable interest, lien, option, pledge, security interest, right of first
refusal, easement, or restriction or reservation of any kind, including any
restriction on use, voting, transfer, receipt of income, or exercise of any
other attribute of ownership.

“Environmental Condition” means any breach of any Environmental Laws, any
Remedial Action, any Release or threatened Release, or the presence of
Contaminants.

“Environmental Laws” means all applicable foreign, federal, state, and local
laws, rules, regulations, codes, policies, guidance, and ordinances, and binding
determinations, orders, permits, licenses, injunctions, writs, decrees or
rulings of any governmental or judicial authority, relative to or that govern or
purport to govern air quality, soil quality, water quality, wetlands, natural
resources, Contaminants, pollution or the protection of the environment,
including, but not limited to, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. § 9601 et seq., as amended)
(“CERCLA”), the Hazardous Materials Transportation Act (49 U.S.C. §1501 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. §1251 et seq.), the
Safe Drinking Water Act (42 U.S.C. §300f et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. §6901 et seq.)(“RCRA”), the Clean Air Act (42 U.S.C.
§7401 et seq.) and the Toxic Substances Control Act (15 U.S.C. §2601 et seq.),
as each of these laws are in existence prior to the date hereof.

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

“Financial Statements” means the following reports of Seller, (a) the Verified
Financial Statements, (b) the unaudited interim balance sheet dated as of
August 31, 2011, and (c) the related unaudited statement of income for the
period ended August 31, 2011.

“GAAP” means United States generally accepted accounting principles,
consistently applied.

“Governmental Authorization” means any approval, consent, ratification, waiver,
license, permit, or authorization issued, granted, given, or otherwise made
available by or under the authority of any Governmental Authority or pursuant to
any Legal Requirement.

“Governmental Authority” means any United States, state, local, foreign, or
other governmental entity or municipality or any subdivision thereof or any
authority, department, commission, board, bureau, agency, court, tribunal,
arbitration panel, or instrumentality.

“Intellectual Property” means all business names (fictitious or otherwise),
trade names, registered and unregistered trademarks and service marks, art work,
packaging, plates, emblems, logos, internet domain names, insignia and
copyrights, and other proprietary rights to various words, slogans, symbols,
logos, designs and trade dress, including all registrations and applications for
the same, and all goodwill associated therewith; all domestic and foreign
patents and patent applications, industrial and utility models, industrial
designs, petty patents, patents of importation, patents of addition,
certificates of invention, and any other indicia of invention ownership issued
or granted by any Governmental Authority including any reissue, re-examination,
extension, division, continuation or continuation-in-part of any of the
foregoing; all copyrights, applications for copyright registration and copyright
registrations, in both published

 

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works and unpublished works; all right, title and interest of Seller in, to and
under licenses, sublicenses or like agreements providing such Seller any right
or concession to use any Third Party Software, or other software or information
or intellectual property; all know-how, trade secrets, and confidential and/or
proprietary information, including, without limitation, customer lists,
technical or business information, including data, process technology, plans
(including business and marketing plans), sketches, drawings, schematics, flow
charts, blue prints, manufacturing processes, formulae, recipes, designs,
systems, forms, specifications, technical manuals, computer and software
programs, product information and development, work-in-progress; all other
intellectual property rights (in whatever form or medium) owned or licensed by
Seller and/or used in connection with the conduct of the Business; and all
documentary evidence of any of the foregoing, including, without limitation,
those items listed on Schedule 2.1(e).

“Inventory” means all inventories of Seller, wherever located, including all
finished goods, work in process, and raw materials to be used or consumed by
Seller in the production of finished goods.

“IRS” means the U.S. Internal Revenue Service.

“Knowledge” means, with respect to Seller, Tristano Caracciolo or Sergio Piva is
actually aware of a particular fact or other matter after reasonable inquiry.

“Legal Requirement” means any federal, state, local, municipal, foreign,
international, multinational, or other constitution, law, ordinance, rule, code,
by-law, principle of common law, regulation, statute, treaty, or requirement,
including, but not limited to, any building, zoning, fire, Environmental Law,
Tax, public health or safety law or code in existence as of the date hereof.

“Material Adverse Effect” means any change, event, effect, or development that
(a) has a materially adverse effect on the financial condition or operating
results of the Business and the assets to be acquired pursuant to this
Agreement, or (b) has a materially adverse effect on the ability of Seller to
perform its obligations under this Agreement; provided that none of the
following shall be deemed to constitute, and none of the following shall be
taken into account in determining whether there has been, a Material Adverse
Effect: (i) any change, event, effect, or development arising from or relating
to (1) any change in United States or foreign economies in general, (2) any
change in general business or economic conditions affecting the industry and/or
markets in which the Business operates, (3) any change in global, national or
regional political conditions (including the outbreak of war or acts of
terrorism) or in general economic, business, regulatory, political or market
conditions or in national or global financial or capital markets, (4) any
changes in GAAP or other applicable accounting regulations, or (5) any actions
taken (or omitted to be taken) at the request of Purchaser; (ii) any matters
related to or caused by the announcement of this Agreement or the Ancillary
Agreements or any of the transactions contemplated hereunder or thereunder or
the effect of the public announcement of the transactions contemplated hereby on
current or prospective customers of the Business; and (iii) any adverse change
in or effect on the Business or the assets to be acquired pursuant to this
Agreement that is cured by Seller before the earlier of (1) the Closing Date and
(2) the date on which this Agreement is terminated pursuant to Section 10.

 

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“Net Working Capital” means (a) accounts receivable and Inventory (which amount
is determined pursuant to Section 3.2(a) hereof) of the Business related to the
Purchased Assets, less (b) trade accounts payable and those accrued expenses set
forth in Section 2.3(a)(ii) (excluding Retained Liabilities) of the Business,
each as accrued in the Ordinary Course of Business, in conformity with GAAP,
using the same accounting methods, policies, practices, and procedures, with
consistent classification, judgments, and estimation methodology, as were used
by Seller and its auditors in preparing the audited Financial Statements
(provided that such methodologies, policies, and procedures were and continue to
be in accordance with GAAP) and not taking into account any changes in
circumstances or events occurring on or after the Closing Date. Net Working
Capital shall not include any prepaid insurance, prepaid taxes, or other prepaid
expenses.

“Ordinary Course of Business” means, with respect to Seller, an action which is:

(a) prudent, consistent with the past practices of Seller and taken in the
ordinary course of the normal day-to-day operations of Seller;

(b) not required to be authorized by the directors, or shareholders of Seller;
and

(c) similar in nature and magnitude to actions customarily taken without any
authorization by the directors or shareholders of Seller in the ordinary course
of the normal day-to-day operations of other prudent Persons that are in the
same line of business as Seller.

“Permitted Liens” means statutory mechanic’s, carrier’s, workmen’s, repairmen’s
or other similar Liens arising or incurred in the Ordinary Course of Business
and not yet due and payable, but solely to the extent any amount owed for the
work giving rise to such Lien is included as a part of the trade payables or
accrued expenses constituting Assumed Liabilities and also deducted from the
calculation of Net Working Capital.

“Person” means a natural person, sole proprietorship, corporation, limited
liability company, firm, partnership, association, joint venture, trust,
unincorporated organization, Governmental Authority or other entity, whether
acting in an individual, fiduciary, or other capacity.

“Real Property” means all real property owned or leased by Seller and used in
connection with the Business, including, without limitation, buildings, outside
storage areas, silos, driveways, walkways, and parking areas thereon or thereof
and all easements, improvements, and all appurtenances thereto, and the rights
and privileges of Seller in all rights of way, licenses or easements.

“Release” means any releasing, spilling, emission, leaking, pumping, pouring,
emptying, disposing, injection, depositing, discharging, dispersion, leaching,
or migration into any media, whether soil, surface water, ground water, air or
any combination of the foregoing of any Contaminant, and the movement of any
Contaminant through any media, and including the abandonment or discarding of
barrels, containers, and other receptacles containing any Contaminant.

 

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“Remedial Action” means any action to: (a) investigate, study, clean up, remove,
treat, dispose of or in any other way address any Contaminant, including, but
not limited to, risk assessments and/or feasibility studies; (b) prevent the
Release or threatened Release, or minimize the further Release of any
Contaminant; and (c) bring the existing operations of Seller in compliance with
Environmental Laws.

“Seller Related Party” means and includes any of the following: all shareholders
of Seller; the spouse of any such Person; any child, grandchild, parent or
sibling of any such Person (without regard to whether such relationship was
created by birth or adoption), or spouse of any such Person; and any entity in
which any of the foregoing has a direct or indirect interest (except through
ownership of less than five percent (5%) of the outstanding shares of any entity
whose securities are listed on a national securities exchange or traded in the
national over-the-counter market).

“Taxes” means any and all taxes, charges, fees, levies or other assessments,
including, without limitation, income, employment, profits, use, alternative
minimum, gross receipts, value added, excise, real or personal property, sales,
withholding, social security, retirement, unemployment, occupation, service,
service use, license, net worth, payroll, franchise, transfer and recording
taxes, fees and charges, imposed by the IRS or any taxing authority (whether
domestic or foreign including, without limitation, any state, county, local or
foreign government or any subdivision or taxing agency thereof (including a
United States possession)), whether computed on a separate, consolidated,
unitary, combined or any other basis; and such term includes (i) any interest
whether paid or received, fines, penalties or additional amounts attributable
to, or imposed upon, or with respect to, any such taxes, charges, fees, levies
or other assessments and (ii) any liability for such amounts as a result of
being a member of a consolidated, combined, unitary or affiliated group or of a
contractual obligation to indemnify any other Person or other entity.

“Tax Return” means any report, return, document, declaration or other
information or filing required to be supplied to any taxing authority or
jurisdiction (foreign or domestic) with respect to Taxes, including, without
limitation, information returns, any documents with respect to or accompanying
payments of estimated Taxes, or with respect to or accompanying requests for the
extension of time in which to file any such report, return, document,
declaration or other information.

“Third Party Software” means any off-the-shelf software program, utility, tool,
or application, or any software program which was not developed at the specific
request or direction of Seller.

“Verified Financial Statements” means the audited balance sheets of Seller dated
as of December 31, 2010, December 31, 2009, and December 31, 2008, and in each
case the related audited statements of income and cash flows of Seller for the
years then ended.

 

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In addition, the following terms have the respective meanings indicated in the
sections of this Agreement listed below:

 

Defined Term

  

Section

Agreement

   Preamble

Assignment and Assumption Agreement

   7.8(e)

Assumed Contracts

   2.3(a)(iii)

Assumed Liabilities

   2.3(a)

Basket

   9.3(b)

Benefit Plan

   5.24

Bill of Sale

   7.8(f)

Business

   Recitals

Cap

   9.3(b)

Claims Notice

   9.2(a)

Closing

   4.1

Closing Date

   4.1

Closing Date Working Capital

   3.2(c)

Closing Date Working Capital Statement

   3.2(c)

Closing Date Payment

   3.1(a)

Controlled Group Member

   5.24

Creditor Payments

   3.1(c)(i)

Differences

   3.2(e)(ii)

Employment Offer

   7.4

Environmental Licenses

   5.5(b)(i)

Estimated Closing Working Capital

   3.2(b)

Estimated Working Capital Statement

   3.2(b)

Excluded Assets

   2.2

Expiration Date

   9.3(a)

Final Determination

   9.4(b)

Final Purchase Price

   3.2(f)

Final Working Capital Schedule

   3.2(e)(iii)

Former Property

   5.5(a)(ii)

Fundamental Representations

   9.3(a)

Holdback Funds

   3.1(c)(iii)

Indemnified Party

   9.2(a)

Indemnifying Party

   9.2(a)

Independent Auditors

   3.2(e)(ii)

Initial Working Capital Adjustment

   3.2(b)

Leased Real Property

   5.4(a)

Leases

   5.4(a)

Liability Claim

   9.2(a)

Losses

   9.1(a)

Material Contracts

   5.17

Mini Basket

   9.3(b)

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Defined Term

  

Section

Notice of Disagreement

   3.2(d)(ii)

Payoff Letters

   3.1(b)

Physical Inventory

   3.2(a)

Private Resolution Period

   3.2(e)(i)

Promissory Note

   3.1(c)(iv)

Purchased Assets

   2.1

Purchase Price

   3.1(a)

Purchaser

   Preamble

Purchaser Indemnified Party

   9.1(a)

Resolved Objections

   3.2(e)(i)

Restrictive Covenant Agreement

   7.8(g)

Retained Liabilities

   2.3(b)

Review Period

   3.2(d)(i)

Seller

   Preamble

Seller Indemnified Party

   9.1(b)

Settlement Date

   3.2(e)(iii)

Shareholder

   Recitals

Statement of Claims

   3.2(e)(ii)

Target Working Capital

   3.2(b)

Transaction

   Recitals

Uncollected Receivables

   5.19(a)

 

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