EX-10.12



 Exhibit 10.12 
 TAX INDEMNITY AGREEMENT 
 THIS TAX INDEMNITY AGREEMENT (the
“Agreement”) is made and entered into between Technical Consumer Products, Inc., a Delaware corporation (the “Company”), and each of the other signatories hereto (individually, a “Shareholder”, and
collectively, the “Shareholders”). 
 WHEREAS, the Company had elected to be treated as an S Corporation
within the meaning of Sections 1361 and 1362 of the Internal Revenue Code of 1986, as amended (the “Code”), for Federal income tax purposes (the “S Election”); 

WHEREAS, the Company’s S Election was terminated for Federal income tax purposes effective as of December 31, 2010; and

 WHEREAS, on December 31, 2010 the Shareholders each owned the number of shares of common stock of the Company set forth
on Exhibit A, attached hereto, and collectively owned all of the outstanding common stock of the Company. 
 NOW
THEREFORE, the parties mutually agree and covenant as follows: 
 1. After the date of this Agreement, the Company shall
promptly notify the Shareholders of the commencement of any tax audit or other administrative or judicial proceeding affecting the Company with respect to any Federal, state or local income tax return for a taxable year in which the Company was an S
corporation for Federal or applicable state or local income tax purposes (an “S Corporation Return”). The Company shall provide the Shareholders an opportunity to participate in any such tax audit or proceeding at their own expense.

 2. (a) If an audit examination of any S Corporation Return by the Internal Revenue Service or a state or local taxing
authority (each, a “Tax Authority”) results in any adjustment (“Changes”), the effect of which is to decrease deductions, losses or tax credits or increase income, gains or recapture of tax credits reflected on an S
Corporation Return, the Company shall notify the Shareholders and provide them with all necessary information relating to the Changes. 
 (b) Within one hundred twenty (120) days after the date of a “determination” (within the meaning of Section 1377(b)(2) of the Code and Treasury Regulations Section 1.1377-2(c)(1)
and (d)) with respect to any Changes, the Company shall make a cash payment to each Shareholder in an amount equal to the additional Federal, state and local income taxes payable by each such Shareholder as a result of such Changes, together with an
amount equal to any interest, penalties or additions to tax incurred or estimated to be incurred by them as a result of such Changes, less any estimated reduction in Federal, state or local income taxes of each such Shareholder for a subsequent year
while the S Election was still in effect (the net amount of such additional taxes, interest, penalties and additions to tax with respect to each such Shareholder, the “Tax Detriment”). The amount of the Tax Detriment for each
Shareholder shall be determined by the Company in good faith, and shall be binding and conclusive on the parties. The parties agree to treat any such payment as a distribution during a “post-termination transition








 
period” (within the meaning of Section 1377(b)(1)(B) of the Code) to the extent permitted by law. To the extent that any such payment is taxable to a Shareholder by reason of
such payment exceeding the limitation set forth in Section 1377(b)(3)(B) of the Code, then the amount of such payment shall be “grossed up” such that each Shareholder receives a net amount, after payment of any Federal, state or local
income taxes resulting from such payment, equal to such Shareholder’s Tax Detriment. 
 (c) For purposes of calculating the
income taxes payable by the Shareholders, the Shareholders shall be deemed taxable at the highest combined effective Federal, state, and local income tax rate for an individual residing in [Cleveland], Ohio in effect for the taxable year at
issue, taking into account the deductibility of state and local income taxes for Federal income tax purposes. 
 (d) The
Shareholders agree to treat, with respect to their own tax returns, any Changes that are the subject of a “determination” (within the meaning of Section 1377(b)(2) of the Code and Treasury Regulation Section 1.1377-2(c)(1) and
(d)) in a manner consistent with such “determination”. 
 3. The Company and the Shareholders shall cooperate fully
with each other in connection with any tax audit or other administrative or judicial proceeding with respect to an S Corporation Return. 
 4. This Agreement may be executed in multiple, identical counterparts, all of which when taken together shall constitute one document. 

IN WITNESS WHEREOF, the parties have executed this Agreement as of the 30 day of November, 2011. 

 

			
	Technical Consumer Products, Inc.
		
	By:	 	/s/ Ellis Yan
		
	Its:	 	CEO
	
	/s/ Ellis Yan
	Ellis Yan


  

			
	The Lillian Yan Irrevocable Stock Trust
		
	By:	 	/s/ Valarie L. Cambell
		 	      Valarie L. Campbell
	Its: Trustee
		
	By:	 	/s/ Ira Kaplan
		 	      Ira Kaplan
	Its: Trustee









 EXHIBIT A 

 

			
	 Name of Shareholder
	 	 Number of Shares of Common Stock Owed as of 12/31/10

		
	 Ellis Yan
	 	110 Shares of Class A Voting Common Stock
		
	 The Lillian Yan Irrevocable Stock Trust
	 	40 Shares of Class B Non-Voting Common Stock