DEBT CONVERSION AGREEMENT

 

by and among

 

Reliability Incorporated

 

And

 

Lone Star Value Co-Invest I, LP

 

 

 

   

 

 

TABLE OF CONTENTS

 

    PAGE Article I. DEFINITIONS 1   Section 1.01 Definitions. 1   Section 1.02
Interpretive Provisions. 3 Article II. DEBT CONVERSION 4   Section 2.01
Conversion and Exchange. 4   Section 2.02 Closing 4   Section 2.03 Holder’s
Deliverables at the Closing. 4   Section 2.04 Company Deliverables at the
Closing. 4   Section 2.05 Additional Documents. 4   Section 2.06 Merger
Agreement. 4 Article III. REPRESENTATIONS AND WARRANTIES OF THE HOLDER 4  
Section 3.01 Existence and Power. 4   Section 3.02 Due Authorization. 4  
Section 3.03 Valid Obligation 5   Section 3.04 Governmental Authorization. 5  
Section 3.05 Title to and Issuance of the Obligations. 5   Section 3.06
Investment Representations 5 Article IV. REPRESENTATIONS AND WARRANTIES OF THE
COMPANY 7   Section 4.01 Organization 7   Section 4.02 Approval of Agreement 7  
Section 4.03 Valid Obligation. 7   Section 4.04 Validity of Exchange Shares. 7
Article V. MISCELLANEOUS 8   Section 5.01 Brokers 8   Section 5.02 Governing Law
8   Section 5.03 Notices 8   Section 5.04 Confidentiality 8   Section 5.05
Public Announcements and Filings 9   Section 5.06 Third Party Beneficiaries 9  
Section 5.07 Expenses 9   Section 5.08 Entire Agreement 9   Section 5.09
Survival; Termination 9   Section 5.10 Amendment; Waiver 9   Section 5.11
Headings. 10   Section 5.12 No Assignment or Delegation. 10   Section 5.13
Commercially Reasonable Efforts 10   Section 5.14 Further Assurances. 10  
Section 5.15 Specific Performance. 10   Section 5.16 Counterparts 11

 

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Debt Conversion Agreement

 

Dated as of October 28, 2019

 

This Debt Conversion Agreement (subject to amendment as set forth herein, and
together with the exhibits, schedules and other attachments hereto, this
“Agreement”) is entered into as of the date first set forth (such date, the
“Effective Date”) by and among (i) Reliability Incorporated, a Texas corporation
(the “Company”); and (ii) Lone Star Value Co-Invest I, LP, a Delaware limited
partnership (“Holder”). Each of the Company and Holder may be referred to herein
collectively as the “Parties” and separately as a “Party.”

 

WHEREAS, the Holder is a debtholder of the Company, holding the following
outstanding unsecured promissory notes issued by the Company to the Holder
(collectively, the “Obligations”):

 

  1. A promissory note payable to Holder, dated August 2, 2016 of which $40,000
principal amount and $12,521.48 accrued and unpaid interest are outstanding;    
    2. A promissory note payable to Holder, dated August 13, 2018, of which
$15,000 principal amount and $1,628.97 accrued and unpaid interest are
outstanding; and         3. A promissory note payable to Holder, dated May 10,
2019, of which $15,000 principal amount and $530.14 accrued and unpaid interest
are outstanding.

 

WHEREAS, pursuant to a certain Merger Agreement, dated September 18, 2019, by
and among the Company and Maslow Media Group, Inc. (the “Merger Agreement”), for
the acquisition of Maslow Media Group Inc., by a subsidiary of the Company (the
“Merger”), the completion of the Merger is conditioned, among other things, on
the Company having a minimum amount of debt prior to the Merger;

 

WHEREAS, the Company and the Holder now agree that the Obligations shall be
satisfied in full, and shall be deemed converted, pursuant to the terms and
conditions herein, into a number of shares of common stock, no par value per
share of the Company (the “Common Stock”) pursuant to the terms and conditions
set forth herein, and in satisfaction of Company’s obligations under the Merger
Agreement (the “Transactions”);

 

NOW THEREFORE, on the stated premises and for and in consideration of the mutual
covenants and agreements hereinafter set forth and the mutual benefits to the
Parties to be derived herefrom, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, and intending to be
legally bound hereby, the Parties hereby agreed as follows:

 

Article I. DEFINITIONS

 

Section 1.01 Definitions. The following terms, as used herein, have the
following meanings:

 

  (a) “Accredited Investor” has the meaning set forth in Section 3.05(c).      
  (b) “Agreement” has the meaning set forth in the introductory paragraph
hereto.

 

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  (c) “Assignment” has the meaning set forth in Section 2.03.         (d)
“Authority” means any federal, state, local or foreign government or political
subdivision thereof, or any agency or instrumentality of such government or
political subdivision, or any self-regulated organization or other
non-governmental regulatory authority or quasi-governmental authority (to the
extent that the rules, regulations or orders of such organization or authority
have the force of Law), or any arbitrator, court or tribunal of competent
jurisdiction.         (e) “Business Day” means any day that is not a Saturday,
Sunday or other day on which banking institutions in Delaware are authorized or
required by law or executive order to close.         (f) “Closing” has the
meaning set forth in Section 2.02.         (g) “Code” means the U.S. Internal
Revenue Code of 1986, as amended.         (h) “Company” has the meaning set
forth in the introductory paragraph hereto.          (i) “Effective Date” has
the meaning set forth in the introductory paragraph hereto.         (j)
“Exchange Act” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.         (k) “Exchange Shares” has
the meaning set forth in Section 2.01.         (l) “Governmental Authorization”
means any (a) consent, license, registration, or permit issued, granted, given,
or otherwise made available by or under the authority of any Authority or
pursuant to any Law; or (b) right under any Contract with any Authority.        
(m) “Holder” has the meaning set forth in the introductory paragraph hereto.    
    (n) “Law” means any domestic or foreign, federal, state, municipality or
local law, statute, ordinance, code, rule, or regulation.         (o) “Lien”
means any mortgage, lien, pledge, charge, security interest or encumbrance of
any kind in respect of such asset, and any conditional sale or voting agreement
or proxy, including any agreement to give any of the foregoing.         (p)
“Obligations” has the meaning set forth in the recitals hereto.         (q)
“Party” and “Parties” have the meanings set forth in the introductory paragraph
hereto.         (r) “Person” means an individual, corporation, partnership
(including a general partnership, limited partnership or limited liability
partnership), limited liability company, association, trust or other entity or
organization, including an Authority, domestic or foreign, or political
subdivision thereof, or an agency or instrumentality thereof.

 

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  (s) “Representative” means, with respect to any Person, any and all directors,
officers, employees, consultants, financial advisors, counsel, accountants and
other agents of such Person.         (t) “Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations promulgated thereunder.

 

  (u) “Transactions” has the meaning set forth in the recitals hereto.

 

Section 1.02 Interpretive Provisions. Unless the express context otherwise
requires:

 

  (a) the words “hereof,” “herein,” and “hereunder” and words of similar import,
when used in this Agreement, shall refer to this Agreement as a whole and not to
any particular provision of this Agreement;         (b) terms defined in the
singular shall have a comparable meaning when used in the plural, and vice
versa;         (c) the terms “Dollars” and “$” mean United States Dollars;      
  (d) references herein to a specific Section, Subsection, Recital or Exhibit
shall refer, respectively, to Sections, Subsections, Recitals or Exhibits of
this Agreement;         (e) wherever the word “include,” “includes,” or
“including” is used in this Agreement, it shall be deemed to be followed by the
words “without limitation”;         (f) references herein to any gender shall
include each other gender;         (g) references herein to any Person shall
include such Person’s heirs, executors, personal Representatives,
administrators, successors and assigns; provided, however, that nothing
contained in this Section 1.03(g) is intended to authorize any assignment or
transfer not otherwise permitted by this Agreement;         (h) references
herein to a Person in a particular capacity or capacities shall exclude such
Person in any other capacity;         (i) references herein to any contract or
agreement (including this Agreement) mean such contract or agreement as amended,
supplemented or modified from time to time in accordance with the terms thereof;
        (j) with respect to the determination of any period of time, the word
“from” means “from and including” and the words “to” and “until” each means “to
but excluding”;         (k) references herein to any Law or any license mean
such Law or license as amended, modified, codified, reenacted, supplemented or
superseded in whole or in part, and in effect from time to time; and         (l)
references herein to any Law shall be deemed also to refer to all rules and
regulations promulgated thereunder.

 

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Article II. DEBT CONVERSION

 

Section 2.01 Conversion and Exchange. On the terms and subject to the conditions
set forth in this Agreement, at the Closing (as defined below) the Obligations
shall be deemed converted and satisfied in full in return for the issuance to
the Holder of 570,414 shares of Common Stock (the “Exchange Shares”).

 

Section 2.02 Closing The closing of the transactions contemplated by this
Agreement (the “Closing”) shall occur on the Effective Date immediately
following the execution and delivery of this Agreement by the Parties. At the
Closing the Holder shall be recorded in the stock ledger of the Company as the
owners of the applicable portion of the Exchange Shares.

 

Section 2.03 Holder’s Deliverables at the Closing. At the Closing, Holder shall
deliver to the Company:

 

  (a) The promissory notes, between the Company and the Holder evidencing the
Obligations (collectively, the “Notes”) together with duly executed assignment
instruments and other documents as reasonably requested by the Company to
evidence the termination and satisfaction of the Obligations; and

 

  (b) such other documents as the Company may reasonably request for the purpose
facilitating the consummation or performance of any of the Transactions.

 

Section 2.04 Company Deliverables at the Closing. At the Closing, the Company
shall deliver to the Holder the Exchange Shares.

 

Section 2.05 Additional Documents. At and following the Closing, the Parties
shall execute, acknowledge, and deliver (or shall ensure to be executed,
acknowledged, and delivered), any and all certificates, opinions, financial
statements, schedules, agreements, resolutions, rulings or other instruments
required by this Agreement to be so delivered at or prior to Closing together
with such other items as may be reasonably requested by the Parties and their
respective legal counsel in order to effectuate or evidence the transactions
contemplated hereby.

 

Section 2.06 Merger Agreement. Holder acknowledges that the Company entered into
Merger Agreement, which merger thereunder will result in the issuance of a
number of shares of Common Stock which will constitute 94% of all of the issued
and outstanding shares of Common Stock as of the closing of the Merger.

 

Article III. REPRESENTATIONS AND WARRANTIES OF THE HOLDER

 

As an inducement to, and to obtain the reliance of the Company, Holder
represents and warrants to the Company as follows:

 

Section 3.01 Existence and Power. Holder is an individual or is an entity duly
organized, validly existing, and in good standing under the Laws of the state of
its organization, and has the power and is duly authorized under all applicable
Laws, regulations, ordinances, and orders of public authorities to carry on its
business in all material respects as it is now being conducted.

 

Section 3.02 Due Authorization. The execution, delivery and performance of this
Agreement by Holder does not, and the consummation of the transactions
contemplated hereby will not, violate any provision of the organizational
documents of Holder, if applicable. Holder has taken all actions required by
Law, its organizational documents or otherwise to authorize the execution,
delivery and performance of this Agreement and to consummate the transactions
herein contemplated. The execution, delivery and performance by Holder of this
Agreement and the consummation by Holder of the transactions contemplated hereby
will not violate any order to which it is subject or cause its breach of any
contract to which it is a party.

 

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Section 3.03 Valid Obligation. This Agreement has been duly executed and
delivered by Holder and it constitutes, and upon its execution and delivery will
constitute, a valid and legally binding agreement of Holder, enforceable against
Holder in accordance with its terms, except as may be limited by bankruptcy,
insolvency, moratorium or other similar Laws affecting the enforcement of
creditors’ rights generally and subject to the qualification that the
availability of equitable remedies is subject to the discretion of the court
before which any proceeding therefore may be brought.

 

Section 3.04 Governmental Authorization. Neither the execution, delivery nor
performance of this Agreement by Holder requires any consent, approval, license
or other action by or in respect of, or registration, declaration or filing with
any Authority, or any other Governmental Authorization, other than proper
disclosure that may be required under the Securities Act and Exchange Act.

 

Section 3.05 Title to and Issuance of the Obligations. Holder is the record and
beneficial owner and holder of the Obligations free and clear of all Liens. None
of the Obligations held by Holder are subject to pre-emptive or similar rights,
either pursuant to any requirement of Law or any contract, and no Person has any
pre-emptive rights or similar rights to purchase or receive any of the
Obligations from Holder.

 

Section 3.06 Investment Representations

 

  (a) No Binding Obligation to Sell or Transfer. After giving effect to the
Transactions contemplated hereunder, Holder will not be under any binding
obligation or other commitment, arrangement or understanding to sell, transfer
or otherwise dispose of any portion of the Exchange Shares to any other person
other than as permitted under the Securities Act.         (b) Investment
Purpose. Holder understands and agrees that the consummation of this Agreement
including the delivery of the Exchange Shares to the Holder in exchange for the
Obligations as contemplated hereby constitutes the offer and sale of securities
under the Securities Act and applicable state statutes. Holder is acquiring the
Exchange Shares for its own account as principal, not as a nominee or agent, for
investment purposes only, and not with a view to, or for, resale, distribution
or fractionalization thereof in whole or in part and no other person has a
direct or indirect beneficial interest in the Exchange Shares. Further, Holder
does not have any contract, undertaking, agreement or arrangement with any
person to sell, transfer or grant participations to such person or to any third
person, with respect to the Exchange Shares.         (c) Accredited Investor.
Holder is an “accredited investor” as defined in Rule 501(a) of Regulation D
promulgated under the Securities Act (an “Accredited Investor”).

 

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(d) Information. Holder has been furnished with all documents and materials
relating to the business, finances and operations of the Company and its
subsidiaries and information that Holder requested and deemed material to making
an informed decision regarding this Agreement and the underlying transactions.  
  (e) Reliance on Exemptions. Holder understands that the Exchange Shares are
being offered and sold to Holder in reliance upon specific exemptions from the
registration requirements of United States federal and state securities Laws and
that the Company is relying upon the truth and accuracy of, and the Holder’s
compliance with, the representations, warranties, agreements, acknowledgments
and understandings of the Holder set forth herein in order to determine the
availability of such exemptions and the eligibility of the Holder to acquire the
Exchange Shares.     (f) Transfer Restrictions. Holder agrees and warrants to
not sell or otherwise transfer the Exchange Shares without registration under
the Securities Act or an exemption therefrom, and Holder fully understand and
agrees that Holder must bear the economic risk of Holder’s purchase, because,
among other reasons, the Exchange Shares have not been registered under the
securities laws of any state, and therefore, cannot be resold, pledged,
assigned, or otherwise disposed of unless they are subsequently registered under
the Securities Act and under the under the applicable securities laws of such
states, or unless exemptions from such registration requirements are available.
In particular, Holder is aware that the Shares are “restricted securities,” as
such term is defined in Rule 144 promulgated under the Securities Act. Holder
further acknowledges that if an exemption from registration or qualification is
available, it may be conditioned on various requirements, including the time and
manner of sale, the holding period for the Exchange Shares, and requirements
relating to the Company that are outside of Holder’s control, and which the
Company is under no obligation and may not be able to satisfy.     (g)
Information. Holder and Holder’s advisors, if any, have been furnished with all
materials relating to the business, finances and operations of the Company and
materials relating to the offer and sale of the Exchange Shares which have been
requested by Holder or their advisors. Holder and Holder’s advisors, if any,
have been afforded the opportunity to ask questions of the Company. Holder
understands that their investment in the Exchange Shares involves a significant
degree of risk.     (h) No Public Market. Holder understands that no public
market now exists for the Exchange Shares, and that the Company has made no
assurances that a public market will ever exist for the Exchange Shares.

 

(i) Investment Experience. Holder, either alone or together with its
representatives, has such knowledge, sophistication and experience in business
and financial matters so as to be capable of evaluating the merits and risks of
the prospective investment in the Exchange Shares, and has so evaluated the
merits and risks of such investment. Holder is able to bear the economic risk of
an investment in the Exchange Shares and, at the present time, has no need for
liquidity with respect to its investment in the Company.     (j) Potential Loss
of Investment. Holder is aware and acknowledges that the Exchange Shares involve
a substantial degree of risk of loss of its entire investment and that there is
no government or other insurance covering the Exchange Shares; and (b) because
there are substantial restrictions on the transferability of the Exchange Shares
it may not be possible for Holder to liquidate its investment readily

 

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(k) No Advertising. At no time was Holder presented with or solicited by any
leaflet, newspaper or magazine article, radio or television advertisement, or
any other form of general advertising or solicited or invited to attend a
promotional meeting otherwise than in connection and concurrently with such
communicated offer with respect to the Exchange Shares. Holder is not purchasing
the Exchange Shares as a result of any “general solicitation” or “general
advertising,” as such terms are defined in Regulation D under the Securities
Act, which includes, but is not limited to, any advertisement, article, notice
or other communication regarding the Exchange Shares published in any newspaper,
magazine or similar media or on the internet or broadcast over television, radio
or the internet or presented at any seminar or any other general solicitation or
general advertisement. Exchange Shares     (l) Governmental Review. Holder
understands that no United States federal or state agency or any other Authority
has passed upon or made any recommendation or endorsement of the Exchange
Shares.

 

Article IV. REPRESENTATIONS AND WARRANTIES OF THE COMPANY

 

As an inducement to, and to obtain the reliance of the Holder, the Company
represents and warrants to the Holder, as of the Effective Date, as follows:

 

Section 4.01 Organization. The Company is a corporation duly organized, validly
existing, and in good standing under the Laws of the State of Texas and has the
corporate power and is duly authorized under all applicable Laws, regulations,
ordinances, and orders of public authorities to carry on its business in all
material respects as it is now being conducted. The Company has taken all action
required by Law, its Articles of Incorporation, Bylaws or otherwise to authorize
the execution and delivery of this Agreement and the consummation of the
Transactions.

 

Section 4.02 Approval of Agreement. The Board of Directors of the Company has
authorized the execution and delivery of this Agreement by the Company and has
approved this Agreement and the transactions contemplated hereby.

 

Section 4.03 Valid Obligation. This Agreement and all agreements and other
documents executed by the Company in connection herewith constitute the valid
and binding obligation of the Company, enforceable in accordance with its or
their terms, except as may be limited by bankruptcy, insolvency, moratorium or
other similar Laws affecting the enforcement of creditors’ rights generally and
subject to the qualification that the availability of equitable remedies is
subject to the discretion of the court before which any proceeding therefore may
be brought.

 

Section 4.04 Validity of Exchange Shares. Upon their issuance in accordance
with, and subject to, the terms and conditions of this Agreement, the Exchange
Shares shall be validly issued, fully paid and non-assessable.

 

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Article V. MISCELLANEOUS

 

Section 5.01 Brokers. The Parties agree that there were no finders or brokers
involved in bringing the Parties together or who were instrumental in the
negotiation, execution or consummation of this Agreement. Each Party agrees to
indemnify each other Party against any claim by any Person for any commission,
brokerage, or finder’s fee arising from the transactions contemplated hereby
based on any alleged agreement or understanding between the indemnifying Party
and such Person, whether express or implied from the actions of the indemnifying
Party.

 

Section 5.02 Governing Law. This Agreement shall be governed by, enforced, and
construed under and in accordance with the Laws of the State of Texas, without
giving effect to the principles of conflicts of law thereunder. Each of the
Parties (a) irrevocably consents and agrees that any legal or equitable action
or proceedings arising under or in connection with this Agreement shall be
brought exclusively in the state or federal courts of the United States with
jurisdiction in New York. By execution and delivery of this Agreement, each
Party hereto irrevocably submits to and accepts, with respect to any such action
or proceeding, generally and unconditionally, the jurisdiction of the aforesaid
courts, and irrevocably waives any and all rights such Party may now or
hereafter have to object to such jurisdiction.

 

Section 5.03 Notices

 

  (a)

Any notice or other communications required or permitted hereunder shall be in
writing and shall be sufficiently given if personally delivered to it or sent by
email with return receipt requested, overnight courier or registered mail or
certified mail, postage prepaid, addressed as follows:

 

If to the Company:

 

Reliability Incorporated

c/o Lone Star Value Management, LLC

Attn: Jeffrey Eberwein

53 Forest Ave

Old Greenwich, CT 06870

E-mail: hb@lonestarvm.com

 

If to Lone Star Value Co-Invest, LP:

 

Lone Star Value Management, LLC

Attn: Jeffrey Eberwein

53 Forest Ave

Old Greenwich, CT 06870

E-mail: je@lonestarvm.com

 

  (b) Any Party may change its address for notices hereunder upon notice to each
other Party in the manner for giving notices hereunder.         (c) Any notice
hereunder shall be deemed to have been given (i) upon receipt, if personally
delivered, (ii) on the day after dispatch, if sent by overnight courier with
confirmed signed delivery receipt, (iii) upon dispatch, if transmitted by email
with return receipt requested and received and (iv) three (3) days after
mailing, if sent by registered and certified mail.

 

Section 5.04 Confidentiality. Each Party agrees that, unless and until the
transactions contemplated by this Agreement have been consummated, it and its
Representatives will hold in strict confidence all data and information obtained
with respect to another Party or any subsidiary thereof from any Representative,
officer, director or employee, or from any books or records or from personal
inspection, of such other Party, and shall not use such data or information or
disclose the same to others, except (i) to the extent such data or information
is published, is a matter of public knowledge, or is required by Law to be
published; or (ii) to the extent that such data or information must be used or
disclosed in order to consummate the transactions contemplated by this
Agreement. In the event of the termination of this Agreement, each Party shall
return to the applicable other Party all documents and other materials obtained
by it or on its behalf and shall destroy all copies, digests, work papers,
abstracts or other materials relating thereto, and each Party will continue to
comply with the confidentiality provisions set forth herein.

 

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Section 5.05 Public Announcements and Filings. Unless required by applicable Law
or regulatory authority, none of the Parties will issue any report, statement or
press release to the general public, to the trade, to the general trade or trade
press, or to any third party (other than its advisors and Representatives in
connection with the transactions contemplated hereby) or file any document,
relating to this Agreement and the transactions contemplated hereby, except as
may be mutually agreed by the Parties. Copies of any such filings, public
announcements or disclosures, including any announcements or disclosures
mandated by Law or regulatory authorities, shall be delivered to each Party at
least one (1) business day prior to the release thereof.

 

Section 5.06 Third Party Beneficiaries. This contract is strictly between the
Parties and, except as specifically provided, no other Person and no director,
officer, stockholder (other than the Holders), employee, agent, independent
contractor or any other Person shall be deemed to be a third-party beneficiary
of this Agreement.

 

Section 5.07 Expenses. Other than as specifically set forth herein, each Party
will bear its own respective expenses, including legal, accounting and
professional fees, incurred in connection with the Transactions.

 

Section 5.08 Entire Agreement. This Agreement represents the entire agreement
between the Parties relating to the subject matter thereof and supersedes all
prior agreements, understandings and negotiations, written or oral, with respect
to such subject matter.

 

Section 5.09 Survival; Termination. The representations, warranties, and
covenants of the respective Parties shall survive the Effective Date and the
consummation of the transactions herein contemplated for a period of two years.

 

Section 5.10 Amendment; Waiver; Remedies; Agent.

 

  (a) This Agreement may be amended, modified, superseded, terminated or
cancelled, and any of the terms, covenants, representations, warranties or
conditions hereof may be waived, only by a written instrument executed by each
of the Parties.         (b) Every right and remedy provided herein shall be
cumulative with every other right and remedy, whether conferred herein, at law,
or in equity, and may be enforced concurrently herewith, and no waiver by any
Party of the performance of any obligation by the other shall be construed as a
waiver of the same or any other default then, theretofore, or thereafter
occurring or existing.

 

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  (c) Neither any failure or delay in exercising any right or remedy hereunder
or in requiring satisfaction of any condition herein nor any course of dealing
shall constitute a waiver of or prevent any Party from enforcing any right or
remedy or from requiring satisfaction of any condition. No notice to or demand
on a Party waives or otherwise affects any obligation of that Party or impairs
any right of the Party giving such notice or making such demand, including any
right to take any action without notice or demand not otherwise required by this
Agreement. No exercise of any right or remedy with respect to a breach of this
Agreement shall preclude exercise of any other right or remedy, as appropriate
to make the aggrieved Party whole with respect to such breach, or subsequent
exercise of any right or remedy with respect to any other breach.         (d)
Notwithstanding anything else contained herein, no Party shall seek, nor shall
any Party be liable for, consequential, punitive or exemplary damages, under any
tort, contract, equity, or other legal theory, with respect to any breach (or
alleged breach) of this Agreement or any provision hereof or any matter
otherwise relating hereto or arising in connection herewith.

 

Section 5.11 Headings. The headings contained in this Agreement are intended
solely for convenience and shall not affect the rights of the Parties.

 

Section 5.12 No Assignment or Delegation. No Party may assign any right or
delegate any obligation hereunder, including by merger, consolidation, operation
of law, or otherwise, without the written consent of the all of the other
Parties and any purported assignment or delegation without such consent shall be
void, in addition to constituting a material breach of this Agreement. This
Agreement shall be binding on the permitted successors and assigns of the
Parties.

 

Section 5.13 Commercially Reasonable Efforts. Subject to the terms and
conditions herein provided, each Party shall use their respective commercially
reasonable efforts to perform or fulfill all conditions and obligations to be
performed or fulfilled by it under this Agreement so that the transactions
contemplated hereby shall be consummated as soon as practicable, and to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable under applicable Laws and regulations to
consummate and make effective this Agreement and the transactions contemplated
herein.

 

Section 5.14 Further Assurances. Each Party shall execute and deliver such
documents and take such action, as may reasonably be considered within the scope
of such Party’s obligations hereunder, necessary to effectuate the transactions
contemplated by this Agreement.

 

Section 5.15 Specific Performance. The Parties agree that irreparable damage
would occur in the event that any of the provisions of this Agreement were not
performed by them in accordance with the terms hereof or were otherwise breached
and that each Party hereto shall be entitled to an injunction or injunctions,
specific performance and other equitable relief to prevent breaches of the
provisions hereof and to enforce specifically the terms and provisions hereof,
without the proof of actual damages, in addition to any other remedy to which
they are entitled at law or in equity. Each Party agrees to waive any
requirement for the security or posting of any bond in connection with any such
equitable remedy, and agrees that it will not oppose the granting of an
injunction, specific performance or other equitable relief on the basis that (a)
the other Party has an adequate remedy at law, or (b) an award of specific
performance is not an appropriate remedy for any reason at law or equity.

 

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Section 5.16 Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original and all of which taken
together shall be but a single instrument. The execution and delivery of a
facsimile or other electronic transmission of a signature to this Agreement
shall constitute delivery of an executed original and shall be binding upon the
person whose signature appears on the transmitted copy.

 

[Signatures Appear on Following Page]

 

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IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.

 

  Reliability Incorporated         By: /s/ Hannah Bible   Name: Hannah Bible  
Title: CEO

 

  Holder: Lone Star Value Co-Invest I, LP         By: /s/ Jeffrey E. Eberwein  
Name: Jeffrey E. Eberwein   Title: Sole Manager, Lone Star Value GP, LLC, the
general partner of Lone Star Value Co-Invest I, LP

 

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