Document:

Ex-10.3

 

Exhibit 10.3

SEPARATION AGREEMENT

by and between

COHESANT TECHNOLOGIES INC.

and

CIPAR INC.

Dated as of December 3, 2007

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SEPARATION AGREEMENT

     This SEPARATION AGREEMENT, dated as of December 3, 2007 (this “Agreement”), is entered into by
and between Cohesant Technologies Inc., a Delaware corporation (“Cohesant”), and CIPAR Inc., a
Delaware corporation and a wholly owned subsidiary of Cohesant (“Spinco” and, together with
Cohesant, the “Parties” and each, a “Party”).

WITNESSETH

     WHEREAS, Cohesant through its wholly owned direct and indirect Subsidiaries is engaged in (i)
the GlasCraft Business and (ii) the Business (as each is defined below);

     WHEREAS, Cohesant has entered into an Agreement and Plan of Merger, dated as of the date
hereof, (the “Merger Agreement”), by and among Cohesant, GlasCraft Inc., a wholly owned subsidiary
of Cohesant (“GlasCraft”), Spinco, Graco Inc. (“Graco”) and Graco Indiana Inc., a wholly owned
subsidiary of Graco, pursuant to which Cohesant will be acquired by Graco;

     WHEREAS, the parties to the Merger Agreement have agreed that the Restructuring, Distribution
and Separation (as such terms are described in this Agreement) shall occur prior to the closing of
the Merger Agreement;

     WHEREAS, the Cohesant Board of Directors has determined that it would be in the best interests
of Cohesant and its stockholders (i) to engage in the Restructuring, and (ii) to distribute to
holders of Cohesant Common Stock as provided for herein, all of the outstanding shares of Spinco
Common Stock beneficially owned by Cohesant through a pro-rata distribution of Spinco Common Stock
in a spin-off (the “Distribution” and, together with the Restructuring, the “Separation”);

     WHEREAS, to further effect the Separation, Cohesant intends to retain ownership and possession
of all GlasCraft Assets (as defined herein) and Spinco intends to retain ownership of all Business
Assets (as defined herein);

     WHEREAS, to further effect the Separation, Cohesant intends to remain solely liable for all
GlasCraft Liabilities (as defined herein) and Spinco intends to remain solely liable for all
Business Liabilities (as defined herein); and

     WHEREAS, the Parties intend this Agreement, including the exhibits and schedules hereto, to
set forth the arrangements between them regarding the Separation.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements
herein contained, and intending to be legally bound hereby, the Parties hereby agree as follows:

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ARTICLE I

DEFINED TERMS

     Section 1.01 General. When used in this Agreement, the following terms shall have the
respective meanings specified therefor below (such meanings to be equally applicable to both the
singular and plural forms of the terms defined).

     “Action” shall mean any action, claim, charge, grievance, complaint, arbitration, proceeding,
review, audit, hearing, investigation, litigation or suit (whether civil, criminal, administrative,
investigative or informal) commenced, brought or heard by or before any Governmental Authority.

     “Affiliate” shall have the meaning set forth in Rule 12b-2 of the regulations promulgated
under the Exchange Act.

     “Agreement” shall have the meaning set forth in the preamble hereof.

     “Assets” shall mean assets, properties and rights (including goodwill), wherever located,
whether real, personal or mixed, tangible, intangible or contingent, in each case whether or not
recorded or reflected or required to be recorded or reflected on the books and records or financial
statements of any Person, including the following:

     (a) all accounting and other books, records and files whether in paper, electronic or
other form of medium;

     (b) all computers and other electronic data processing equipment, electrical devices,
fixtures, equipment, furniture, office equipment, motor vehicles and other transportation
equipment, special and general tools, and other tangible personal property;

     (c) all inventories of materials, parts, raw materials, supplies, work-in-process and
finished goods and products;

     (d) all interests in real property of whatever nature, including easements and rights
of way, whether as lessee or otherwise, and all buildings, structures, improvements and
fixtures located on such real property and copies of all related documentation;

     (e) all interests in any capital stock or other equity interests of any Subsidiary or
any other Person, all bonds, notes, debentures or other securities issued by any Subsidiary
or any other Person, all loans, advances or other extensions of credit or capital
contributions to any Subsidiary or any other Person and all other investments in securities
of any Person;

     (f) all license agreements, leases of personal property, open purchase orders for
supplies, parts or services, unfilled orders for the sale of products and services and other
Contracts;

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     (g) all deposits, letters of credit and performance and surety bonds;

     (h) all written technical information, data, plans, designs, specifications, research
and development information, engineering drawings, operating and maintenance manuals, and
materials and analyses prepared by consultants and other third parties, inventions,
processes, formulas, concepts, know-how, methods, procedures and technology;

     (i) all Intellectual Property;

     (j) all computer applications, programs and other software, including all code,
operating software, network software, firmware, middleware, design software, design tools,
systems documentation and instructions;

     (k) all cost information, sales and pricing data, customer prospect lists, public
inspection files, programming information and studies, technical information and engineering
data, industry and advertising studies and analyses, marketing and demographic data,
marketing and promotional materials, sales correspondence, lists of advertisers, sponsors
and listeners, credit and sales reports, logs, supplier records, customer and supplier
lists, records pertaining to customer accounts, performance data, and other consumer data,
business plans, strategies, marketing and promotional materials, share price performance,
production data, artwork, design, vendor and customer drawings, and other books, blueprints,
records, studies, surveys, reports, plans and documents, including any of the foregoing
created, developed or prepared by consultants and other third parties;

     (l) all tangible embodiments of any intangible asset, in whatever form or medium;

     (m) all prepaid expenses, trade accounts and other accounts and notes receivable;

     (n) all rights under Contracts, all claims or similar rights against any Person arising
from the ownership of any Asset, in each case, whether accrued or contingent;

     (o) all insurance proceeds and rights under insurance policies and all rights in the
nature of insurance, indemnification or contribution;

     (p) all Licenses that have been issued by any Governmental Authority;

     (q) all cash or cash equivalents, bank accounts, lock boxes and other deposit
arrangements; or

     (r) copies of all documentation related to Insurance Policies.

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     “Benefit Plans” shall mean all “employee benefit plans” (as defined in Section 3(3) of ERISA),
and all other pension, profit-sharing, savings, deferred compensation, bonus, incentive, stock
option (or other equity-based), employment, severance, change in control, welfare (including
post-retirement medical and life insurance) plans, programs, arrangements and fringe benefits,
whether or not subject to ERISA: (i) sponsored, maintained or contributed to or required to be
contributed to by Cohesant or any of its Subsidiaries or (ii) to which Cohesant or any of its
Subsidiaries is a party immediately prior to the Effective Time.

     “Business” shall mean the businesses as historically operated by Spinco and the Spinco Group,
including the business of designing, assembling and selling to their licensees and franchisees (for
their own use and not for resale) specialized equipment systems for dispensing epoxies and other
specialty coatings; provided, however, that the “Business” shall not include the business of
manufacturing any pumps, proportioners or other component parts of such systems.

     “Business Assets” shall mean any Business Shared Assets, in addition to the following Assets:

     (a) any Assets reflected in the Spinco Balance Sheet, unless disposed of to third
parties after the date thereof in the ordinary course of business (and, in the case of any
such Assets disposed of after the date thereof, the proceeds from such disposal);

     (b) any Assets acquired after the date of the Spinco Balance Sheet;

     (c) any Spinco Contracts and any benefits thereunder;

     (d) any capital stock or other ownership interests in Spinco Entities;

     (e) any Spinco Real Property;

     (f) any Licenses or Governmental Approvals held in the name of Cohesant or any of its
Subsidiaries (to the extent any of the foregoing would be required to be transferred
pursuant hereto, such items will be Business Assets only to the extent they are transferable
upon the receipt of any relevant Consent);

     (g) any rights and Liabilities under any Benefit Plan and any funding arrangement in
connection therewith; and

     (h) any cash, other than cash comprising the Option Shares Exercise Cash Amount (as
defined in the Merger Agreement) that Cohesant is entitled to retain in accordance with the
terms and conditions of the Merger Agreement.

     Notwithstanding the foregoing or anything to the contrary herein, Business Assets do not
include any GlasCraft Assets.

     “Business Day” shall mean any day, other than a Saturday, Sunday or one on which banks are
authorized by Law to close in Indianapolis, Indiana.

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     “Business Employee” shall mean any individual who (i) is or was engaged primarily in the
conduct of the Business at any time prior to the Effective Time (including employees who are not
actively at work by reason of illness, vacation, leave of absence or disability); or (ii) is or was
an employee of Cohesant at any time prior to the Effective Time, other than a GlasCraft Employee.

     “Business Liabilities” shall mean those Liabilities listed on Exhibit A and
Exhibit A-1 and all other Liabilities that are not GlasCraft Liabilities, including, but
not limited to, the following additional Liabilities of Cohesant or any of its Subsidiaries:

     (a) any Liabilities reflected on the Spinco Balance Sheet, subject to any discharge of
such Liabilities subsequent to the date of the Spinco Balance Sheet;

     (b) any Liabilities that are expressly set forth in this Agreement or any other
Transaction Agreement (or the exhibits and schedules hereto or thereto) as Liabilities to be
retained or assumed by Spinco or any other Spinco Entity, subject to discharge of such
Liabilities subsequent to the date of the Spinco Balance Sheet, and all agreements,
obligations and Liabilities of any Spinco Entity under this Agreement or any of the other
Transaction Agreements;

     (c) any Liabilities relating to, arising out of or resulting from any Spinco Contract;

     (d) any Liabilities incurred after the date of the Spinco Balance Sheet by any Spinco
Entity;

     (e) any Liabilities relating to, arising out of, or resulting from any Actions
(excluding any Actions related to Taxes) related to, arising out of or resulting from the
Business;

     (f) any Liabilities relating to, arising out of or resulting from:

     (i) the operation of the Business, as conducted at any time prior to, on or
after the Distribution Date (including any Liability relating to, arising out of or
resulting from any act or failure to act by any Representative (whether or not such
act or failure to act is or was within such Person’s authority));

     (ii) the operation of any business conducted by any Spinco Entity at any time
after the Distribution Date (including any Liability relating to, arising out of or
resulting from any act or failure to act by any Representative (whether or not such
act or failure to act is or was within such Person’s authority));

     (iii) any Business Assets; and

     (iv) the Restructuring and the Distribution.

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in any such case whether arising before, on or after the Distribution Date;

     (g) any Liabilities relating to, arising out of or resulting from any Benefit Plan or
any Contract with any Business Employee (collectively, the “Spinco Benefit Liabilities”);
and

     (h) any Liabilities (including, but not limited to, Environmental Liabilities) relating
to, arising out of, or resulting from the operation of any of Cohesant’s former or current
Subsidiaries (other than GlasCraft) on or prior to the Effective Time;

     (i) Liabilities relating to indemnification claims by officers, directors or employees
of Cohesant or its Subsidiaries (other than claims by officers, directors or employees of
GlasCraft, except to the extent relating to any matter set forth on Exhibit A-1)
under any contract, bylaw or other governing document or statutory provision, whether such
claim arises prior to, on or after the Effective Time; and

     (j) any Excess Assumed Transaction Expenses and Debt (as defined in the Merger
Agreement).

     “Business Shared Assets” means any and all Shared Assets not constituting GlasCraft Shared
Assets.

     “Code” shall mean the U.S. Internal Revenue Code of 1986, as amended.

     “Cohesant” shall have the meaning set forth in the preamble hereof.

     “Cohesant Assets” shall have the meaning set forth in Section 2.04(a)(i) hereof.

     “Cohesant Benefits Liabilities” shall mean only the following:

     (a) any contributions due from GlasCraft Employees at the Distribution Date out of the
payroll period in which the Distribution Date occurs;

     (b) amounts accrued on Cohesant’s and GlasCraft’s financial statements at the
Distribution Date for unpaid wages representing vacation, sick leave or other personal time
off for GlasCraft Employees; and

     (c) amounts withheld from payroll of GlasCraft Employees as of the Distribution Date
representing credits under flexible benefit plan for amounts withheld from GlasCraft
Employees’ wages but not paid for benefits, less amounts paid for benefits under the
flexible benefit plans in excess of amounts withheld from wages of GlasCraft Employees.

     “Cohesant Board of Directors” shall mean the Board of Directors of Cohesant.

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     “Cohesant Common Stock” shall mean common stock of Cohesant, par value $0.001 per share.

     “Cohesant Entities” shall mean Cohesant and GlasCraft.

     “Cohesant Group” shall mean the Cohesant Entities and, after the Effective Time, each of their
respective Affiliates and Subsidiaries, and any corporation or entity that may become part of such
group from time to time, other than the Spinco Group.

     “Cohesant Indemnitee” shall mean Cohesant, each Affiliate of Cohesant at any time immediately
after the Effective Time, each of their respective present and former Representatives, each of the
heirs, executors, successors and assigns of any of the foregoing and each Person, if any, who
controls Cohesant within the meaning of Section 15 of the Securities Act or Section 20 of the
Exchange Act.

     “Cohesant Shares Outstanding” shall mean the aggregate number of shares of Cohesant Common
Stock outstanding as of the Record Date (excluding treasury shares held by Cohesant).

     “Cohesant Stockholders” shall have the meaning set forth in Section 3.05(a) hereof.

     “Cohesant Subsidiaries” shall mean the Subsidiaries of Cohesant.

     “Competitive Activity” shall have the meaning set forth in Section 4.09(a).

     “Consents” shall mean any material consents, waivers or approvals from any third parties,
other than Governmental Approvals, as listed on Schedule 1.01 (Consents).

     “Contract” shall mean any written or oral agreement, arrangement, authorization, sale order,
purchase order, open bid, commitment, contract, indenture, mortgage, note, instrument, evidence of
indebtedness, real estate or other lease, loan, license, obligation, restriction, memorandum of
understanding, letter of intent, covenant, or undertaking of any kind or character, or other
document to which any Person is a party or that is binding on any Person or its capital stock,
assets or business, in each case, whether express or implied, including all amendments,
modifications and supplements thereto and waivers and consents thereunder.

     “Delayed Transfer Assets” shall mean any Business Assets that this Agreement or any other
Transaction Agreement provides or contemplates are to be transferred to Spinco in connection with
the Separation and that require the removal of a Legal Impediment or the receipt of a Consent or
Governmental Approval to transfer, which Legal Impediment is not removed or Consent or Governmental
Approval is not obtained on or prior to the Distribution Date.

     “Delayed Transfer Liabilities” shall mean any Business Liabilities that this Agreement or any
other Transaction Agreement provides or contemplates are to be assumed by Spinco in connection with
the Separation and that require the removal of a Legal Impediment or the receipt of a Consent or
Governmental Approval for the transfer and assumption of such Business

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Liabilities, which Legal Impediment is not removed or Consent or Governmental Approval is not
obtained on or prior to the Distribution Date.

     “Distribution” shall have the meaning set forth in the recitals hereof.

     “Distribution Agent” shall mean the distribution agent to be appointed by Cohesant to receive,
on behalf of the holders of Cohesant Common Stock as of the Record Date, the shares of Spinco
Common Stock which such holders are entitled to receive pursuant to the Distribution, who shall be
a bank or trust company appointed by Cohesant.

     “Distribution Agent Agreement” shall have the meaning set forth in Section 3.02.

     “Distribution Date” shall mean the date and time, immediately prior to the Effective Time, as
of which the Distribution shall be effected, to be determined by, or under the authority of, the
Cohesant Board of Directors consistent with the terms and provisions of this Agreement and the
other Transaction Agreements and in compliance with applicable law.

     “Effective Time” shall mean the closing of the transactions contemplated by the Merger
Agreement.

     “Encumbrances” shall mean all liens, security interests, pledges, mortgages, deeds of trusts,
charges, options, encumbrances or other restrictions, including restrictions on the use, voting,
transfer, receipt of income or other exercise of any attributes of ownership, and all other similar
rights of third parties, of any kind or nature.

     “Environmental Claims” shall mean any claim, action, notice, letter, demand or request for
information (in each case in writing) by any Person or entity alleging potential liability
(including potential liability for investigatory costs, cleanup costs, governmental response costs,
natural resources damages, property damages, personal injuries or penalties) arising out of, based
on or resulting from any violation of Environmental Law or the release, emission, discharge,
presence or disposal of any Hazardous Material at any location.

     “Environmental Law” shall mean any Law or Order relating to pollution or the protection,
cleanup or restoration of the environment, or to human health, including the Federal Clean Air Act,
the Federal Clean Water Act, the Federal Resource Conservation and Recovery Act, the Federal
Comprehensive Environmental Response, Compensation, and Liability Act and the Federal Toxic
Substances Control Act, in each case as in effect on, or prior to, or after the date hereof.

     “Environmental Liabilities” shall mean all Liabilities relating to, arising out of or
resulting from any Environmental Law or Contract (whether or not relating to or arising out of a
failure to comply therewith) relating to environmental, health or safety matters (including all
removal, remediation or cleanup costs, investigatory costs, governmental response costs, natural
resources damages, property damages, personal injury damages, costs of compliance with any
settlement, judgment or other determination of Liability and indemnity, contribution or similar

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obligations) and all costs and expenses, interest, fines, penalties or other monetary sanctions in
connection therewith.

     “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

     “Form 10” means the registration statement on Form 10 to be filed by Spinco to effect the
registration of Spinco Common Stock pursuant to the Exchange Act in connection with the
Distribution, as such registration statement may be amended from time to time.

     “GAAP” shall mean generally accepted accounting principles of the United States, as in effect
from time to time.

     “GlasCraft” shall have the meaning set forth in the recitals hereof.

     “GlasCraft Assets” shall mean any and all Assets used in the operation of the GlasCraft
Business, including, but not limited to, (i) any Assets set forth on Schedule 1.01 (Certain
GlasCraft Assets), (ii) any GlasCraft Shared Assets, and (iii) any Assets, other than Business
Shared Assets, that are located at the Indianapolis, Indiana facility of GlasCraft; and (iv) any
cash comprising the Option Shares Exercise Cash Amount (as defined in the Merger Agreement) that
Cohesant is entitled to retain in accordance with the terms and conditions of the Merger Agreement.
In addition, intercompany accounts between Spinco or any Spinco Entity and Cohesant or GlasCraft
shall be treated as GlasCraft Assets.

     “GlasCraft Business” shall mean the business historically operated by GlasCraft, including the
business of designing, assembling, developing, manufacturing and selling specialized dispense
equipment systems, including, without limitation, metering and pumping units, spray, pour and
injection guns, and specialty engineered products, as well as replacement parts, auxillary
components, supplies and accessories for, or used in the operation of, such equipment.

     “GlasCraft Employee” shall mean those employees who will remain employees of Cohesant or
GlasCraft immediately after the Distribution Date, as set forth on Schedule 1.01 (GlasCraft
Employees).

     “GlasCraft Liabilities” shall mean those Liabilities (i) that are expressly set forth in this
Agreement or any other Transaction Agreement (or the exhibits and schedules hereto or thereto) as
retained or assumed by Cohesant or GlasCraft; (ii) relating to, arising out of or resulting from
the operation of the GlasCraft Business or ownership of the GlasCraft Assets and not in any manner
arising out of the Business or the Business Assets; and (iii) relating to, arising out of or
resulting from any Cohesant Benefit Liabilities. Notwithstanding the foregoing, in no event shall
GlasCraft Liabilities include any Liabilities included in the definition of Business Liabilities,
whether by virtue of being set forth on Exhibit A or Exhibit A-1 or otherwise.

     “GlasCraft Shared Assets” means any and all Shared Assets set forth on Exhibit C (as
updated in accordance with Section 8.01(d)).

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     “Governmental Approvals” shall mean any material notices, reports or other filings to be made,
or any consents, registrations, approvals, permits or authorizations to be obtained from, any
Governmental Authority, as listed on Schedule 1.01 (Governmental Approvals).

     “Governmental Authority” shall mean any Federal, state, county, local, provincial, municipal
or other U.S. or foreign governments or governmental or regulatory or legislative agencies,
authorities (including Taxing, antitrust or competition and self-regulatory authorities),
instrumentalities, commissions, departments, boards, bureaus, bodies or other governmental or
quasi-governmental entities having competent jurisdiction over any Party, any of their respective
Subsidiaries, and any other tribunal, court, judicial or quasi-judicial agency, administrative
agency, mediator or arbitrator of competent jurisdiction.

     “Indebtedness” shall mean, with respect to any Person, (a) any obligation of such Person (i)
for borrowed money, (ii) evidenced by a note, debenture or similar instrument (including a purchase
money obligation) given in connection with the acquisition of any property or assets, including
securities, (iii) for the deferred purchase price of property or services, except trade accounts
payable arising in the ordinary course of business, or (iv) under any lease or similar arrangement
that would be required to be accounted for by the lessee as a capital lease in accordance with
GAAP; (b) any guarantee (or keepwell agreement) by such Person of any Indebtedness of others
described in the preceding clause (a); and (c) all obligations to reimburse any bank or other
Person for amounts paid under a letter of credit or similar instrument.

     “Indemnifying Party” shall mean the Person having the obligations to indemnify pursuant to
Article V hereof.

     “Indemnitee” shall mean a Person that has the right to indemnification pursuant to Article V
hereof.

     “Information” shall mean all records, books, work papers, reports, plans, schedules and other
documents, instruments, computer data and other data and information of a Person.

     “Insurance Policy” shall mean the insurance policies written by insurance carriers under
which, prior to the Distribution Date, Cohesant and/or Spinco or one or more of their Subsidiaries
or Affiliates (or their respective officers or directors) are insured parties.

     “Intellectual Property” means any patents (including all divisionals, continuations,
continuations in part, reissues, re-examinations and certificates of inventorship), extensions,
copyrights, trade names, trademarks, service marks and issuances, registrations, applications and
renewals for any of the foregoing, trade secrets, call letters, jingles, slogans, logos, business
symbols, trade dress and other source indicators, Internet domain names, Internet URLs, Internet
websites, content and databases, programs and programming material, other proprietary information
and licenses from any Persons granting the right to use any of the foregoing.

     “Inter-Company Indebtedness” means any intercompany receivables, payables, accounts, advances,
loans, guarantees, commitments and indebtedness for borrowed funds between a member of the Cohesant
Group and a member of the Spinco Group; provided, that “Inter-Group

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Indebtedness” shall not include any contingent Liabilities and accounts payable arising pursuant to
the Transaction Agreements, any agreements with respect to continuing transactions between the
Cohesant Group and the Spinco Group and any other agreements entered into in the ordinary course of
business.

     “Law” shall mean any federal, state, county, local, provincial, municipal or other U.S. or
foreign constitution, code, law (including common law), ordinance, regulation, reporting or
licensing requirement, rule, plan, or statute applicable to a Person or its assets, liabilities, or
business, including those promulgated, interpreted or enforced by any Governmental Authority.

     “Legal Impediment” shall mean a legal impediment preventing or restricting the transfer of a
Business Asset or the assumption of a Business Liability, as the case may be, in the Restructuring
as of the Distribution Date as listed on Schedule 1.01 (Legal Impediments).

     “Liabilities” shall mean any and all losses, charges, debts, demands, Actions, damages,
obligations, payments, costs and expenses, bonds, indemnities and similar obligations, covenants,
controversies, promises, omissions, guarantees, make whole agreements and similar obligations, and
other liabilities, including all contractual obligations, whether absolute or contingent, inchoate
or otherwise, matured or unmatured, liquidated or unliquidated, accrued or unaccrued, known or
unknown, whenever arising, and including those arising under any Action, threatened or contemplated
Action (including the costs and expenses of demands, assessments, judgments, settlements and
compromises relating thereto and attorneys’ fees and any and all costs and expenses, whatsoever
reasonably incurred in investigating, preparing or defending against any such Actions or threatened
or contemplated Actions), order or consent decree of any Governmental Authority or any award of any
arbitrator or mediator of any kind, and those arising under any Contract, including those arising
under this Agreement or any other Transaction Agreement (other than the Tax Matters Agreement) or
incurred by a party hereto or thereto in connection with enforcing its rights to indemnification
hereunder or thereunder, in each case, whether or not recorded or reflected or required to be
recorded or reflected on the books and records or financial statements of any Person. Solely to
the extent such Taxes are expressly dealt with in the Tax Matters Agreement, “Liabilities” shall
not include any liabilities for or in respect of Taxes, which shall be governed exclusively by the
Tax Matters Agreement.

     “License” shall mean any license, ordinance, authorization, permit, certificate, right,
easement, variance, exemption, consent, franchise or approval from any Governmental Authority,
domestic or foreign.

     “Merger Agreement” shall have the meaning set forth in the recitals hereof.

     “Net Proceeds” shall have the meaning set forth in Section 5.05(b) hereof.

     “Notice of Claim” shall have the meaning set forth in Section 5.04(a) hereof.

     “Party” and “Parties” shall have the meaning set forth in the preamble hereof.

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     “Person” shall mean any natural person, firm, individual, business trust, trust, association,
corporation, partnership, limited liability company, joint venture, company, unincorporated entity
or Governmental Authority.

     “Record Date” shall mean the close of business on the date to be determined by the Cohesant
Board of Directors in accordance with applicable law as the record date for determining
stockholders of Cohesant entitled to receive the Distribution.

     “Registration Statement” means the Registration Statement on Form 10 of Spinco relating to the
registration under the Exchange Act of Spinco Common Stock, including any amendments or supplements
thereto.

     “Representative” shall mean with respect to any Person, any of such Person’s directors,
officers, employees, agents, consultants, advisors, accountants, attorneys and representatives.

     “Restructuring” shall mean the internal restructuring undertaken by Cohesant and its
Subsidiaries in connection with the transfer of the Business Assets to, and the assumption of the
Business Liabilities by, the Spinco Entities.

     “Securities Act” shall mean the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

     “Separation” shall have the meaning set forth in the recitals hereof.

     “Shared Assets” means all of the Assets owned by Cohesant.

     “Spinco” shall have the meaning set forth in the preamble hereof.

     “Spinco Balance Sheet” shall mean the balance sheet of Spinco and the Spinco Entities as of
August 31, 2007 prepared on a pro forma basis assuming the Separation was completed as of that
date.

     “Spinco Benefit Liabilities” shall have the meaning set forth in Section 1.01 hereof.

     “Spinco Board of Directors” means the Board of Directors of Spinco.

     “Spinco Certificate of Incorporation” means the amended and restated Certificate of
Incorporation for Spinco that changes Spinco’s name to Cohesant Inc. and increases the number of
authorized shares to 7,000,000 shares of Spinco Common Stock and 1,000,000 shares of preferred
stock, $0.001 per value per share.

     “Spinco Common Stock” shall mean common stock of Spinco, $0.001 par value per share.

     “Spinco Contracts” shall mean:

     (a) any Contract that relates exclusively to the Business;

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     (b) any Contract which is not included in the GlasCraft Assets or the terms of which
create any Business Liabilities; and

     (c) any Contract that is expressly contemplated to be assigned to or retained by Spinco
or any other Spinco Entity pursuant to any provision of this Agreement or any other
Transaction Agreement (including the exhibits and schedules hereto and thereto).

     “Spinco Entities” shall mean Spinco and each of the Spinco Subsidiaries.

     “Spinco Group” means the Spinco Entities and, after the Effective Time, each of their
respective Subsidiaries and Affiliates and any corporation or entity that may become part of such
group from time to time, other than the Cohesant Group.

     “Spinco Indemnitee” shall mean Spinco, the Spinco Subsidiaries, each Affiliate of Spinco
immediately after the Effective Time, each of the respective present and former Representatives,
each of the heirs, executors, successors and assigns of any of the foregoing and each Person, if
any, who, at any time after the Distribution, controls Spinco within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act.

     “Spinco Real Property” shall mean all right, title and interest in real property primarily
used in the Business.

     “Spinco Shares” shall have the meaning set forth in Section 2.6 hereof.

     “Spinco Subsidiaries” shall mean all direct and indirect Subsidiaries of Cohesant immediately
prior to the Distribution other than GlasCraft.

     “Subsidiary” of any Person shall mean any corporation, partnership, joint venture, limited
liability company, trust or estate of which (or in which) more than 50% of (i) the issued and
outstanding capital stock having ordinary voting power to elect a majority of the board of
directors of such corporation (irrespective of whether at the time capital stock of any other class
or classes of such corporation shall or might have voting power upon the occurrence of any
contingency), (ii) the interest in the capital or profits of such limited liability company,
partnership or joint venture or (iii) the beneficial interest in such trust or estate is at the
time directly or indirectly owned or controlled by such Person and one or more of its other
Subsidiaries or by one or more of such Person’s other Subsidiaries. The term “Subsidiary” shall
include all Subsidiaries of any Subsidiary.

     “Taxes” shall mean all federal, state, local or foreign taxes, charges, fees, duties, levies,
imposts, rates or other assessments, including income, gross receipts, payroll, employment,
unemployment, withholding, social security, disability, commercial activity, excise, real property,
personal property, sales, use, license, capital stock, transfer, registration, franchise, value
added, estimated or any other taxes of any kind whatsoever, (including any interest, penalties or
additions attributable thereto, whether disputed or not and including any liability as a

13

 

result of being a person required by law to withhold taxes imposed on another person) and a “Tax”
shall mean any one of such Taxes.

     “Tax Matters Agreement” shall have the meaning assigned to such term in the Merger Agreement.

     “Third Party Claim” shall have the meaning set forth in Section 5.04(b) hereof.

     “Transaction Agreements” shall mean collectively this Agreement, the Tax Matters Agreement,
the Transition Services Agreement, all other documents related to the Transactions, the Merger
Agreement, and all other documents relating to the merger.

     “Transactions” shall mean, collectively, the transactions contemplated by this Agreement, the
Restructuring, the Distribution, and the Transaction Agreements.

     “Transition Services Agreement” shall have the meaning assigned to such term in the Merger
Agreement.

     “Treasury Regulations” shall have the meaning set forth in the Merger Agreement.

ARTICLE II

THE RESTRUCTURING

     Section 2.01 Business Separation.

          (a) Transfer of Assets. On or prior to the Distribution Date and subject to the satisfaction
or waiver of the conditions set forth in Section 7.01, to the extent not already owned by Spinco or
a Spinco Subsidiary, Cohesant shall assign, transfer, convey and deliver to Spinco or a Spinco
Subsidiary, and cause the applicable Cohesant Subsidiaries to assign, transfer, convey and deliver
to Spinco or a Spinco Subsidiary, and Spinco or a Spinco Subsidiary shall accept from Cohesant and
the applicable Cohesant Subsidiaries, all of Cohesant’s and the applicable Cohesant Subsidiaries’
respective right, title and interest in all the Business Assets, other than the Delayed Transfer
Assets.

          (b) Assumption of Liabilities. On or prior to the Distribution Date and subject to the
satisfaction or waiver of the conditions set forth in Section 7.01, Spinco shall, and shall cause
the Spinco Subsidiaries to, assume, pay and agree faithfully to perform and discharge when due all
the Business Liabilities (other than the Delayed Transfer Liabilities) in accordance with their
respective terms. Spinco or a Spinco Subsidiary shall be responsible for all Business Liabilities,
regardless of when or where or against whom such Liabilities are asserted or determined or whether
asserted or determined prior to the Distribution Date, and regardless of whether arising from or
alleged to arise from the negligence, recklessness, strict liability, violation of Law by or of any
Spinco Entity or Cohesant Entity or any of their respective Representatives or Affiliates.

          (c) Delayed Transfer Assets and Liabilities. Notwithstanding anything in this Agreement to
the contrary, neither Cohesant nor GlasCraft is obligated to assign, transfer,

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convey or deliver to Spinco and Spinco is not obligated to assume any of the rights and
obligations under any Delayed Transfer Asset or Delayed Transfer Liability until such time as all
Legal Impediments are removed and/or all Consents or Governmental Approvals necessary for the legal
transfer and/or assumption thereof are obtained. Each of the Parties hereto agrees that the Delayed
Transfer Assets shall be assigned, transferred, conveyed and delivered, and any Delayed Transfer
Liabilities shall be assumed in accordance with the provisions of Sections 2.02 and 2.03. On the
Closing Date, Cohesant shall deliver to Spinco Schedule 2.01(c) setting forth all material Delayed
Transfer Assets and Delayed Transfer Liabilities known to be existing as of the Closing Date.
Cohesant shall thereafter, with respect to any such Business Asset, use reasonable best efforts,
with the costs of Cohesant related thereto to be promptly reimbursed by Spinco, to hold such
Business Asset in trust for the use and benefit of Spinco and, with respect to any such Business
Liability, retain such Business Liability for the account of Spinco; and Spinco shall thereafter,
with respect to any such Cohesant Asset, use reasonable best efforts, with the costs of Spinco
related thereto to be promptly reimbursed by Cohesant, to hold such Cohesant Asset in trust for the
use and benefit of Cohesant and, with respect to any such GlasCraft Liability, to retain such
GlasCraft Liability for the account of Cohesant, in each case in order to place each Party, insofar
as is reasonably possible, in the same position as would have existed had such Delayed Transfer
Asset or Delayed Transfer Liability been contributed, assigned, transferred, conveyed, delivered or
assumed as contemplated hereby (it being understood that neither Cohesant (with respect to any
Business Asset or Business Liability) nor Spinco (with respect to any Cohesant Asset or GlasCraft
Liability) shall be required to take any action pursuant to this clause that would, or could
reasonably be expected to, result in any financial obligation to it or any restriction on its
business or operations. To the extent that Spinco is provided the use or benefit of any Business
Asset or has any Business Liability held for its account pursuant to this Section 2.01(c), Spinco
shall perform, for the benefit of Cohesant and any third Person, the obligations of Cohesant
thereunder or in connection therewith, or as may be directed by Cohesant and if Spinco shall fail
to perform to the extent required herein, Spinco shall hold Cohesant harmless and indemnify
Cohesant therefor. To the extent that Cohesant is provided the use or benefit of any Cohesant Asset
or has any GlasCraft Liability held for its account pursuant to this Section 2.01(c), Cohesant
shall perform, for the benefit of Spinco and any third Person, the obligations of Spinco thereunder
or in connection therewith, or as may be directed by Spinco and if Cohesant shall fail to perform
to the extent required herein, Cohesant shall hold Spinco harmless and indemnify Spinco therefor.
Each Party shall, and shall cause its Affiliates to, as and when any such Delayed Transfer Asset or
Delayed Transfer Liability becomes contributable, assignable, transferable, conveyable, deliverable
or assumable by such Party, effect such contribution, assignment, transfer, conveyance, delivery or
assumption, as applicable, as promptly as practicable thereafter without payment of additional
consideration.

          (d) Subsequent Transfers. In the event that at any time or from time to time after the
Distribution Date any Party hereto (or any Spinco Entity or Cohesant Entity, as applicable) becomes
aware that it possesses any Asset or Liability that is allocated to the other Party pursuant to
this Agreement or any other Transaction Agreement, such Party shall promptly transfer, or cause to
be transferred, such Asset or Liability to the Party so entitled thereto. Prior to any such
transfer, the Party possessing such Asset or Liability shall hold such Asset or Liability in trust
for any such other Party. As of the Distribution Date, each Party hereto (or, as applicable, such
Subsidiary of such Party) shall be deemed to have acquired (or, as applicable,

15

 

retained) complete and sole beneficial ownership over all the Assets, together with all
rights, powers and privileges incident thereto, and shall be deemed to have assumed in accordance
with the terms of this Agreement all the Liabilities, and all duties, obligations and
responsibilities incident thereto, which such Party (or, after giving effect to the Restructuring
and the Distribution, any Subsidiary of such Party) is entitled to acquire or required to assume
pursuant to the terms of this Agreement.

          (e) Inter-Company Agreements and Indebtedness.

     (i) On or prior to the Distribution Date, the Cohesant Entities, on the one hand, and
the Spinco Entities, on the other hand, shall terminate any and all Contracts, between or
among Cohesant and/or any Cohesant Entity, on the one hand, and Spinco and/or any Spinco
Entity, on the other hand, effective as of the Distribution Date. No such terminated
agreement, arrangement, commitment or understanding (including any provision thereof that
purports to survive termination) shall be of any further force or effect after the
Distribution Date and all parties shall be released from all obligations thereunder. Each
Party shall, at the reasonable request of the other Party, take, or cause to be taken, such
other actions as may be necessary to effect the foregoing.

     (ii) On or prior to the Distribution Date, all Inter-Company Indebtedness shall be paid
in full and settled.

     (iii) The provisions of Section 2.01(e)(i) shall not apply to terminate this Agreement,
the other Transaction Agreements, or any agreement contemplated by the Merger Agreement.

          (f) Tax Matters. Except as otherwise specifically set forth in this Agreement, (i) the rights
and obligations of the Parties with respect to Taxes shall be governed exclusively by the Tax
Matters Agreement; and (ii) Taxes shall not be treated as Assets or Liabilities for purposes of, or
otherwise governed by, this Section 2.01.

     Section 2.02 Documents Relating to the Transfer of Business Assets and GlasCraft Assets and
Assumption of Business Liabilities and GlasCraft Liabilities.

          (a) In furtherance of the assignment, transfer and conveyance of Business Assets and the
assumption of Business Liabilities pursuant to this Agreement, on or prior to the Distribution Date
and, with respect to Delayed Transfer Assets and Delayed Transfer Liabilities, at such time after
the Distribution Date as such Delayed Transfer Asset or Delayed Transfer Liability can be
transferred,

          (i) Cohesant shall execute and deliver, and, if applicable, shall cause GlasCraft to
execute and deliver, such bills of sale, deeds, lease assignments and assumptions, leases,
subleases, stock powers, certificates of title, assignments of Contracts and other
instruments of transfer, conveyance and assignment as and to the extent necessary to
evidence the transfer, conveyance and assignment of Cohesant’s right, title and interest in
and to the Business Assets to Spinco; provided, that the

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instruments executed and delivered pursuant to this Section 2.02(a)(i) shall be in a
form reasonably satisfactory to the Parties and consistent with the terms of this Agreement;
and

          (ii) Spinco shall execute and deliver to Cohesant or, if requested, GlasCraft, such
assignments of Contracts and other instruments of assumption as and to the extent necessary
to evidence the valid and effective assumption by Spinco of the Business Liabilities;
provided that any instruments executed and delivered pursuant to this Section 2.02(a)(ii)
shall be in a form reasonably satisfactory to the Parties and consistent with the terms of
this Agreement.

          (b) In furtherance of the retention and exclusion of the GlasCraft Assets and the GlasCraft
Liabilities pursuant to this Agreement, on or prior to the Distribution Date,

          (i) Spinco and each of the Spinco Entities shall execute and deliver to Cohesant or, if
requested, GlasCraft, such assignments of Contracts and other instruments of assumption as
and to the extent necessary to evidence the valid and effective retention by Cohesant or
GlasCraft of the GlasCraft Assets; provided that any instruments executed and delivered
pursuant to this Section 2.02(b)(i) shall be in a form reasonably satisfactory to the
Parties; and

          (ii) Spinco and each of the Spinco Entities shall execute and deliver to Cohesant or,
if requested, GlasCraft, such assignments of Contracts and other instruments of assumption
as and to the extent necessary to evidence the valid and effective retention by Cohesant or
GlasCraft of the GlasCraft Liabilities; provided that any instruments executed and delivered
pursuant to this Section 2.02(b)(ii) shall be in a form reasonably satisfactory to the
Parties.

     Section 2.03 [Intentionally Omitted]

     Section 2.04 Novation of Liabilities.

     (a) (i) Before and after the Distribution Date, Spinco shall use its reasonable efforts
to (x) obtain, or to cause to be obtained, any release, Consent, substitution, approval or
amendment required to novate all Cohesant Entities from and assign all obligations under
Contracts, Licenses, Benefit Plans and other obligations or Liabilities of any nature
whatsoever that constitute Business Liabilities, or to obtain in writing the unconditional
release of all Cohesant Entities to such obligations, so that, in any such case, the Spinco
Entities shall be solely responsible for such Business Liabilities; and (y) terminate, or to
cause Business Assets to be substituted in all respects for any Assets of the GlasCraft
Business (“Cohesant Assets”) in respect of, any Encumbrances on Cohesant Assets which are
securing any Business Liabilities.

          (ii) If Spinco is unable to obtain, or to cause to be obtained, any such required
release, Consent, substitution, approval or amendment pursuant to Section 2.04(a)(i), the
applicable Cohesant Entity shall continue to be bound by such

17

 

Contracts, Licenses and other obligations and, unless not permitted by Law or the terms
thereof, Spinco shall, as agent or subcontractor for such Cohesant Entity, pay, perform and
discharge fully all the obligations or other Liabilities of such Cohesant Entity thereunder
from and after the Distribution Date. Spinco (x) shall indemnify and hold harmless each
Cohesant Indemnitee and hold it harmless against any Liabilities arising in connection
therewith and (y) without the prior written consent of Cohesant, from and after the
Distribution Date, shall not, and shall not permit any Spinco Entity to, amend, renew or
extend the term of, increase its obligations under or transfer any Contract, License or
other obligation for which a Cohesant Entity is or may be liable, which any Cohesant Asset
is or may be encumbered, unless all obligations of the Cohesant Entities and all
Encumbrances on any Cohesant Asset with respect thereto are thereupon released and
terminated by documentation reasonably satisfactory in form and substance to Cohesant.

     (b) (i) Before and after the Distribution Date, Cohesant shall use its reasonable
efforts to (x) obtain, or to cause to be obtained, any release, Consent, substitution,
approval or amendment required to novate all Spinco Entities from and assign all obligations
under Contracts, Licenses and other obligations or Liabilities of any nature whatsoever that
constitute Liabilities of any Cohesant Entity, or to obtain in writing the unconditional
release of all Spinco Entities to such obligations, so that, in any such case, the Cohesant
Entities shall be solely responsible for such GlasCraft Liabilities; and (y) terminate, or
to cause Cohesant Assets to be substituted in all respects for any Business Assets in
respect of, any Encumbrances on Business Assets which are securing any GlasCraft
Liabilities.

          (ii) If Cohesant is unable to obtain, or to cause to be obtained, any such required
release, Consent, approval, substitution or amendment pursuant to Section 2.04(b)(i), the
applicable Spinco Entity shall continue to be bound by such Contracts, Licenses and other
obligations and, unless not permitted by Law or the terms thereof, Cohesant shall, as agent
or subcontractor for such Spinco Entity, pay, perform and discharge fully all the
obligations or other Liabilities of such Spinco Entity thereunder from and after the
Distribution Date. Cohesant (x) shall indemnify and hold harmless each Spinco Indemnitee and
hold each of them harmless against any Liabilities arising in connection therewith and (y)
without the prior written consent of Spinco, from and after the Distribution Date, shall
not, and shall not permit any Cohesant Entity to, amend, renew or extend the term of,
increase its obligations under or transfer any Contract, License or other obligation for
which a Spinco Entity is or may be liable or for which any Business Asset is or may be
encumbered unless all obligations of the Spinco Entities and all Encumbrances on any
Business Asset with respect thereto are thereupon released and terminated by documentation
reasonably satisfactory in form and substance to Spinco.

     Section 2.05 Issuance of Stock. At or prior to the Distribution Date and subject to the
satisfaction or waiver of the conditions set forth in Section 7.01, the Parties shall take all
steps necessary so that on the Distribution Date all of the shares of Spinco Common Stock
outstanding

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and held by Cohesant shall equal that number of shares of Cohesant Common Stock outstanding on the
Record Date (the “Spinco Shares”).

     Section 2.06 Other Transaction Agreements. At or prior to the Distribution Date and subject to
the satisfaction or waiver of the conditions set forth in Section 7.01, each of Cohesant and Spinco
shall execute and deliver the other Transaction Agreements that were not previously executed and
delivered.

     Section 2.07 Spinco Certificate of Incorporation and Bylaws. Prior to the Distribution Date
and prior to the consummation of the transactions contemplated by Section 2.01, (a) the Spinco
Board of Directors will (i) approve the Spinco Certificate of Incorporation and will cause the same
to be filed with the Secretary of State of Delaware; (ii) adopt new bylaws and (b) Cohesant and
Spinco will take such action as is necessary to cause to be approved the Spinco Certificate of
Incorporation in accordance with the Delaware General Corporation Law.

ARTICLE III

THE DISTRIBUTION

     Section 3.01 Record Date and Distribution Date. Prior to the Distribution Date, the Cohesant
Board of Directors, in accordance with applicable Law, shall establish the Record Date and the
Distribution Date and any appropriate procedures in connection with the Distribution, including
authorizing Cohesant to effect the Distribution immediately prior to the Effective Time. Cohesant
will give the NASD not less than ten days’ notice of the Record Date in compliance with Rule 10b-17
under the Exchange Act.

     Section 3.02 The Distribution Agent. Prior to the Distribution Date, Cohesant shall enter
into an agreement with the Distribution Agent (the “Distribution Agent Agreement”), which shall be
on terms that are satisfactory to Spinco, providing for the Distribution of Spinco Shares in
accordance with the terms of this Agreement.

     Section 3.03 Delivery of Share Certificates to the Distribution Agent. Subject to the
satisfaction or waiver of the conditions set forth in Section 7.01 (other than conditions that by
their nature are to be satisfied at the time of the Restructuring or the Distribution and shall in
fact be satisfied at such time), on or prior to the Distribution Date, Cohesant shall deliver to
the Distribution Agent (i) for the benefit of holders of record of Cohesant Common Stock on the
Record Date, book entry transfer authorizations for such number of shares of Spinco Common Stock
equal to the Spinco Shares to be distributed in connection with the Distribution; and (ii) all
information required to complete the Distribution on the basis set forth herein and under the
Distribution Agent Agreement. Following the Distribution Date, upon request of the Distribution
Agent, Spinco shall provide to the Distribution Agent all certificates for shares (or book-entry
transfer authorizations) of Spinco Common Stock that the Distribution Agent shall require in order
to further effect the Distribution.

     Section 3.04 The Distribution. Subject to the satisfaction or waiver of the conditions set
forth in Section 7.01, the Distribution shall be effective on the Distribution Date and

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Cohesant shall instruct the Distribution Agent at or prior to the Effective Time to distribute, on
or as soon as practicable after the Distribution Date, to each holder of record of Cohesant Common
Stock as of the Record Stock, one (1) share of Spinco Common Stock for each one (1) share of
Cohesant Common Stock held by such record holder on the Record Date. Spinco agrees to provide all
book entry registration authorizations for shares of Spinco Common Stock that Cohesant shall
require (after giving affect to Section 2.05) in order to affect the Distribution. Spinco shall
direct the Distribution Agent to distribute on the Distribution Date or as soon as reasonably
practicable thereafter the appropriate number of shares of Spinco Common Stock to each such holder
or designated transferee of such holder.

     Section 3.05 Fractional Interests; Unclaimed Stock.

          (a) No Fractional Shares. Notwithstanding anything herein to the contrary, no certificate or
scrip representing fractional shares of Spinco Common Stock shall be delivered to the Distribution
Agent for the benefit of holders of record of Cohesant Common Stock on the Record Date (“Cohesant
Stockholders”).

          (b) Unclaimed Stock. Any Spinco Common Stock made available to the Distribution Agent that
remains undistributed 180 days after the Distribution Date shall be delivered to Spinco. Spinco
shall hold such Spinco Common Stock for the account of such Cohesant Stockholders and any such
Cohesant Stockholder shall look only to Spinco for such Spinco Common Stock subject to applicable
escheat or other abandoned property Laws.

     Section 3.06 Timing of the Distribution. Cohesant shall consummate the Separation as promptly
as practicable after satisfaction (or waiver to the extent permissible) of all of the conditions to
the Restructuring and the Distribution specified in Section 7.01 (other than conditions that by
their nature are to be satisfied at the time of the Restructuring or Distribution and shall in fact
be satisfied at such time). The Restructuring shall occur on the Distribution Date prior to the
Distribution, which shall occur at a time to be mutually agreed by the Parties on the Distribution
Date.

ARTICLE IV

ADDITIONAL COVENANTS

     Section 4.01 Access to Information.

          (a) Except in the case of an adversarial Action by one Party against the other Party (which
shall be governed by such discovery rules as may be applicable thereto), each of Cohesant and
Spinco, on behalf of the Cohesant Entities and the Spinco Entities, respectively, agrees to
provide, or cause to be provided, to each other as soon as reasonably practicable after written
request therefor, subject to applicable Laws relating to the exchange of information, and only in
such manner that does not cause unreasonable disruption of the business of such Person, any
Information in the possession or under the control of such Person that the requesting party
reasonably needs (i) to comply with reporting, disclosure, filing or other requirements imposed on
the requesting party (including under applicable securities Laws) by a Governmental Authority
having jurisdiction over the requesting party, (ii) for use in any other judicial,

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regulatory, administrative or other proceeding or in order to satisfy audit, accounting,
claims, regulatory, litigation or other similar requirements or (iii) to comply with its
obligations under this Agreement or any other Transaction Agreement; provided, however, that (A)
the requesting Person shall agree in writing to keep any Information that incorporates proprietary,
confidential or privileged information of the providing Person confidential, except to the extent
that such records or documents are required to be disclosed by Law or legal process, (B) each Party
agrees to notify the providing Person of any Action whereby such requesting Person might be
required to disclose proprietary, confidential or privileged information, so that the providing
Person may seek a protective order in any such Action, (C) in the event that any Party determines
that any such provision of information could be commercially detrimental, violate any Law or
provision of any material Contract, or waive any attorney-client privilege, the Parties shall take
all reasonable measures to permit the compliance with such obligations in a manner that avoids any
such harm or consequence, (D) if information other than that pertaining to the Business or the
GlasCraft Business is contained in such records, Cohesant and Spinco shall either agree that such
information may be omitted or redacted by the providing Person, or shall enter into appropriate
secrecy commitments to protect such information and (E) this Article IV shall not apply to matters
relating to Taxes which shall be exclusively governed by the Tax Matters Agreement. Cohesant and
Spinco intend that any transfer of Information that would otherwise be within the attorney-client
privilege shall not operate as a waiver of any potentially applicable privilege.

          (b) Following the Effective Time, each party shall make its employees reasonably available
during normal business hours and on reasonable prior notice to provide an explanation of any
Information provided hereunder.

     Section 4.02 Ownership of Information. Any Information owned by either the Spinco Entities or
the Cohesant Entities that is provided to a requesting party pursuant to Section 4.01 shall be
deemed to remain the confidential property of the providing Party. Unless specifically set forth
herein or in any Transaction Agreement, nothing contained in this Agreement shall be construed as
granting or conferring rights of license or otherwise in any such Information.

     Section 4.03 Compensation for Providing Information. Subject to the terms of the Transition
Services Agreement, the Party requesting such Information agrees to reimburse the other Party for
the reasonable costs, if any, of creating, gathering and copying such Information, and making its
employees available, to the extent that such costs are incurred for the benefit of the requesting
Party. Except as may be otherwise specifically provided elsewhere in this Agreement or in any
other agreement between the Parties, such costs shall be computed in accordance with the providing
Party’s standard methodology and procedures.

     Section 4.04 Record Retention. To facilitate the possible exchange of Information pursuant to
this Article IV and other provisions of this Agreement after the Distribution Date, the Parties
agree to use their reasonable efforts to retain all Information in their respective possession or
control relating to the Business, the GlasCraft Business, Assets or Liabilities on the Distribution
Date in accordance with their respective record retention policies. No Party will destroy, or
permit any of its Subsidiaries to destroy, any Information that the other Party may
have the right to obtain pursuant to this Agreement prior to the sixth anniversary of the date
hereof without first using its reasonable efforts to notify the other Party of the proposed

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destruction and giving the other Party the opportunity to take possession of such Information prior
to such destruction; provided, however, that (i) in the case of any Information relating to Taxes
or to Environmental Claims, such period shall be extended to the expiration of the applicable
statute of limitations (giving effect to any extensions thereof); and (ii) in the case of any
Information relating to Taxes, such Party shall have the opportunity, at their cost and expense, to
remove and retain all or any part of such Information upon the expiration of such statute of
limitations. Spinco and Cohesant intend that any transfer of Information that would otherwise be
within the attorney-client privilege shall not operate as a waiver of any potentially applicable
privilege.

     Section 4.05 Limitation of Liability. No Party shall have any liability to any other Party in
respect of Information exchanged or provided pursuant to this Article IV.

     Section 4.06 Other Agreements Providing for Exchange of Information. The rights and
obligations granted under this Article IV are subject to any specific limitations, qualifications
or additional provisions on the sharing, exchange or confidential treatment of Information set
forth in any Transaction Agreement.

     Section 4.07 Production of Witnesses. Subject to Section 4.04, after the Distribution Date,
except in the case of an adversarial Action by one Party against the other Party (which shall be
governed by such discovery rules as may be applicable thereto), each of Cohesant and Spinco shall
use its reasonable efforts, and shall use its reasonable efforts to cause each Cohesant Entity or
Spinco Entity, as applicable, to make available to the other Party or any Affiliate or Subsidiary
of the other Party, upon written request, such Party’s (and its Affiliates’ and Subsidiaries’)
former (to the extent practicable) and current (to the extent practicable) directors, officers and
employees as witnesses or otherwise to the extent that the requesting Party (giving consideration
to business demands of such directors, officers and employees) reasonably determines that such
Information relates to any such Action, administrative or other proceedings (including preparation
for such matters or proceedings) relating to the Business or the GlasCraft Business on or prior to
the Distribution Date. The costs and expenses incurred in the provision of such witnesses and
information shall be paid by the Party requesting the availability of such Persons.

     Section 4.08 Employees and Employee Benefit Plans.

     (a) As of the Distribution Date, the Business Employees set forth on Schedule 4.08(a) shall
cease to be employees of Cohesant and its Subsidiaries (as applicable) and shall become employees
of Spinco or its Subsidiaries (as applicable). Any employment records maintained by Cohesant
relating to any such Business Employees shall be transferred to Spinco. As of the Distribution
Date, Cohesant shall resign and cease to be the plan sponsor, named fiduciary, plan administrator,
policyholder, and any similar capacity under any governing document, trust, insurance contract,
annuity contract and other funding arrangement and any administrative services agreement and will
no longer have or exercise any rights, privileges, authorities and obligations with respect to any
and all Benefit Plans. As of the Distribution Date, Spinco shall adopt, assume and become the plan
sponsor, named fiduciary, plan administrator, policyholder and hold any similar position with
respect to such Benefit Plans and any and all trusts, insurance

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contracts, annuity contracts and other funding arrangements and any administrative services
agreements related thereto. As of the Distribution Date, each Benefit Plan shall be amended to
provide for the foregoing. As of the Distribution Date and continuing through the Effective Time:

     (i) Cohesant and its Subsidiaries shall become and assume the rights and
authorities as participating employers with respect to each of the Benefit Plans;

     (ii) the GlasCraft Employees and their dependants shall be and remain eligible
participants and shall be entitled to all rights and benefits under each such
Benefit Plan in accordance with the terms of each such Benefit Plans as in effect
immediately prior to the Distribution Date;

     (iii) Cohesant and GlasCraft shall be and remain liable for any Cohesant
Benefits Liabilities as of the Distribution Date; and

     (iv) Cohesant and GlasCraft shall continue to offer, provide and pay for each
Benefit Plan with respect to GlasCraft Employees and their dependants, and Spinco
and its Subsidiaries shall continue to offer, provide and pay for each Benefit Plan
with respect to Business Employees and their dependants and any other Liabilities in
connection with the Benefit Plans.

     (b) From and after the Distribution Date, except with respect to Cohesant Benefits
Liabilities, Spinco, its Subsidiaries and each Benefit Plan shall retain and be solely responsible
for:

     (i) any Spinco Benefits Liabilities and any other Liabilities arising under or
in any way related to the Benefit Plans, whether arising prior to, on, or after the
Distribution Date;

     (ii) coverage and any benefits related thereto for each and any COBRA
beneficiaries and any “M&A qualified beneficiaries” (as such term is defined under
regulations issued pursuant to continuation coverage under Code Section 4980B and
ERISA Section 601, et. seq.);

     (iii) medical, dental and vision plan claims incurred but not paid as of the
Distribution Date; and

     (iv) any expense related to the full vesting of participant accounts as of the
Effective Time of the Merger as set forth in Section 12.2 (c)(i) of the Merger
Agreement.

     (c) Nothing in this Section 4.08 shall reduce or modify any rights or benefits of any
participant or eligible employee under any Benefit Plan, nor shall anything in this Section be
construed as providing any rights to any employee or dependant as a third party beneficiary with
respect to the matters set forth in this Section 4.08. Cohesant and Spinco shall cooperate and take

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any action reasonably requested by the other to document or confirm the actions required by
this Section 4.08.

     Section 4.09 Non-Competition and Non-Solicitation.

     (a) Non-Competition. Except as expressly contemplated by this Agreement or the Transaction
Agreements, during the five-year period immediately following the Effective Time, the Spinco
Entities will not, directly or through another Person, in the United States or in any other
geographical location in which Cohesant or GlasCraft is then doing business, (i) own, manage,
operate, control, participate in, invest in, lend money to, acquire or hold any investment in,
perform services for, or otherwise carry on, a business similar to or competitive with the
GlasCraft Business, (ii) sell equipment that is competitive to Graco or GlasCraft or (iii) sell
specialized equipment systems for dispensing epoxies and other specialty coatings to any Person
other than their licensees and franchisees in connection with the operation of the Business (each
of (i)–(iii) above, a “Competitive Activity”). The ownership by any of the Spinco Entities, as a
passive investment, of less than 5% of the outstanding shares of capital stock of any corporation
listed on a national securities exchange or publicly traded in the over-the-counter market shall
not constitute a violation of this Section 4.09(a).

     (b) Non-Solicitation of Employees. Except as expressly contemplated by this Agreement or the
Transaction Agreements, during the five-year period immediately following the Effective Time, the
Spinco Entities will not, on its own behalf or on behalf of any other Person, directly or
indirectly, hire, engage, solicit or attempt to solicit any person who is then an employee of the
Cohesant Group; provided, however, that the prohibition against solicitation shall not apply to
solicitations made to the general public (e.g. newspaper advertisements) not specifically addressed
at any such employee.

     (c) Non-Solicitation of Others. Except as expressly contemplated by this Agreement or the
Transaction Agreements, during the five-year period immediately following the Effective Time, the
Spinco Entities will not, directly or through another Person, in any manner or capacity, (i)
solicit or attempt to solicit any Person or entity who was a customer of Spinco, Cohesant or
GlasGraft during the eighteen (18) months immediately prior to the date hereof or who becomes a
customer of Cohesant or GlasCraft during the term of the Transition Services Agreement for the
purposes of selling, marketing or engaging in any Competitive Activity, or (ii) solicit, request,
advise or induce any supplier or other business contact of Cohesant or GlasCraft to cancel, curtail
or otherwise adversely change its relationship with Cohesant or GlasCraft.

     Section 4.10 Intellectual Property. In the event that any Intellectual Property constituting
a Business Shared Asset (whether or not set forth on Exhibit B hereto, as updated in
accordance with Section 8.01(d)) has historically been used in connection with the GlasCraft
Business at any time prior to the Distribution Date (any such Intellectual Property being the
“Shared Intellectual Property”), Spinco, for itself and on behalf of the Spinco Group, hereby
grants to the Cohesant Group a perpetual, global, royalty-free license to use the Shared
Intellectual Property for purposes of conducting the GlasCraft Business. Cohesant, for itself and
on behalf of the Cohesant Group, hereby acknowledges and agrees that the license of the Shared

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Intellectual Property granted hereby is limited to the Cohesant Group’s use of the Shared
Intellectual Property for purposes of conducting the GlasCraft Business, and Cohesant, for itself
and on behalf of the Cohesant Group, hereby agrees to use the Shared Intellectual Property only for
such purposes.

     Section 4.11 No Representations or Warranties. EXCEPT AS EXPRESSLY SET FORTH HEREIN: (A)
NEITHER COHESANT NOR GLASCRAFT NOR ANY OTHER PERSON MAKES ANY REPRESENTATION OR WARRANTY OFANY KIND
WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE BUSINESS ASSETS OR THE BUSINESS LIABILITIES,
ANY OF THE TRANSACTIONS (INCLUDING ANY CONSENTS OR APPROVALS REQUIRED IN CONNECTION THEREWITH) OR
THE CONDITION OR PROSPECTS (FINANCIAL OR OTHERWISE) OF, OR ANY OTHER MATTER INVOLVING THE BUSINESS
ASSETS OR BUSINESS LIABILITIES; (B) ALL OF THE BUSINESS ASSETS TO BE TRANSFERRED OR THE BUSINESS
LIABILITIES TO BE ASSUMED OR TRANSFERRED IN ACCORDANCE WITH THIS AGREEMENT OR ANY OTHER TRANSACTION
AGREEMENT SHALL BE TRANSFERRED OR ASSUMED ON AN “AS IS, WHERE IS” BASIS, AND ALL IMPLIED WARRANTIES
OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OTHERWISE ARE HEREBY EXPRESSLY DISCLAIMED;
AND (C) EXCEPT AS MAY BE EXPRESSLY SET FORTH IN ANY TRANSACTION AGREEMENT, NONE OF THE PARTIES
HERETO OR ANY OTHER PERSON MAKES ANY REPRESENTATION OR WARRANTY WITH RESPECT TO ANY INFORMATION
MADE AVAILABLE IN CONNECTION WITH THE RESTRUCTURING, THE DISTRIBUTION OR THE MERGER OR THE ENTERING
INTO OF THIS AGREEMENT, THE OTHER TRANSACTION AGREEMENTS OR THE TRANSACTIONS.

ARTICLE V

MUTUAL RELEASES; INDEMNIFICATION

     Section 5.01 Release of Pre-Closing Claims.

          (a) Except as provided in Section 5.01(c), effective as of the Distribution Date, Cohesant
shall, for itself and each other Cohesant Entity, remise, release and forever discharge each Spinco
Entity from any and all Liabilities whatsoever owing to any Cohesant Entity, whether at law or in
equity (including any right of contribution), whether arising under any Contract, by operation of
law or otherwise, existing or arising from any acts or events occurring or failing to occur or
alleged to have occurred or to have failed to occur or any conditions existing or alleged to have
existed on or before the Distribution Date, whether or not known as of the Distribution Date,
including in connection with the transactions and all other activities to implement the
Restructuring and the Distribution.

          (b) Except as provided in Section 5.01(c), effective as of the Distribution Date, Spinco
shall, for itself and each Spinco Entity, remise, release and forever discharge each Cohesant
Entity from any and all Liabilities whatsoever owing to any Spinco Entity, whether at law or in
equity (including any right of contribution), whether arising under any Contract, by

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operation of law or otherwise, existing or arising from any acts or events occurring or
failing to occur or alleged to have occurred or to have failed to occur or any conditions existing
or alleged to have existed on or before the Distribution Date, whether or not known as of the
Distribution Date, including in connection with the transactions and all other activities to
implement the Restructuring and the Distribution.

          (c) Nothing contained in Sections 5.01(a) or (b) shall impair any right of any Person to
enforce this Agreement, including, without limitation, the indemnification obligation in Sections
5.02 and 5.03 herein, any other Transaction Agreement or any Contract between any Spinco Entity and
any Cohesant Entity that does not terminate as of the Distribution Date, in each case in accordance
with its terms. In addition, nothing contained in Section 5.01(a) or (b) shall release any Person
from:

     (i) any Liability provided in or resulting from any Contract between any Spinco
Entity, on the one hand, and any Cohesant Entity, on the other hand, that does not
terminate as of the Distribution Date;

     (ii) any Liability, contingent or otherwise, assumed, transferred, assigned or
allocated to any Spinco Entity or Cohesant Entity, as the case may be, in accordance
with, or any other Liability of such Person under, this Agreement or any other
Transaction Agreement;

     (iii) any Liability, the release of which would result in the release of any
Person other than a Cohesant Entity or a Spinco Entity; provided that the Parties
agree not to bring suit or permit any of their Subsidiaries to bring suit against
any Person with respect to any Liability to the extent that such Person would be
released with respect to such Liability by this Section 5.01 but for the provisions
of this clause (iii); or

     (iv) any Inter-Company Indebtedness due and owing to the Cohesant Group or the
Spinco Group up to and through the Effective Time.

          (d) No Actions as to Released Claims. Spinco agrees, for itself and as agent for each Spinco
Entity, not to make any claim or demand, or commence any Action asserting any claim or demand,
including any claim of contribution or any indemnification, against Cohesant or any Cohesant
Entity, with respect to any Liabilities released pursuant to this Section 5.01. Cohesant agrees,
for itself and as agent for each Cohesant Entity, not to make any claim or demand, or commence any
Action asserting any claim or demand, including any claim of contribution or any indemnification,
against Spinco or any other Spinco Entity, with respect to any Liabilities released pursuant to
this Section 5.01.

          (e) Further Instruments. At any time, at the request of any other Party, each Party shall
cause each other Spinco Entity or Cohesant Entity, as applicable, to execute and deliver releases
reflecting the provisions of this Section 5.01.

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     Section 5.02 Indemnification by Spinco. Spinco shall, and shall cause each other Spinco
Entity to indemnify, defend (or, where applicable, pay the defense costs for) and hold harmless
Cohesant Indemnitees from, against and in respect of losses, claims, liabilities, damages, costs
and expenses relating to:

     (a) the Business Liabilities (including any Delayed Transfer Liabilities and any
Liabilities listed on Exhibit A or Exhibit A-1);

          (b) any and all Liabilities (including Third Party Claims) imposed on, sustained, incurred or
suffered by any of Cohesant Indemnitees that relate to, arise out of or result from the failure of
Spinco or any other Spinco Entity or any other Person to pay, perform or otherwise promptly
discharge any Business Liabilities in accordance with their terms, whether occurring, arising,
existing or asserted before, on or after the Distribution Date;

          (c) any untrue statement or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact required to be stated therein or necessary to make the statements
therein not misleading, contained in the Registration Statement or the joint proxy and information
statement (together with any amendments or supplements thereto), to be used to solicit proxies in
connection with the Merger Agreement and to provide holders of Cohesant Company Stock with
information relevant to the Separation;

          (d) any breach by Spinco or any Spinco Entity of this Agreement or any of the Transaction
Agreements;

          (e) the failure by Spinco to perform in connection with any Delayed Transfer Asset or Delayed
Transfer Liability held by Cohesant for Spinco’s benefit pursuant to Section 2.01(c); and

          (f) any breach of or inaccuracy in the representation and warranty contained in Section 10.01
hereof.

     Section 5.03 Indemnification by Cohesant. Cohesant shall, and shall cause each other Cohesant
Entity to indemnify, defend (or, where applicable, pay the defense costs for) and hold harmless the
Spinco Indemnitees from, against and in respect of any losses, claims, liabilities, damages, costs
and expenses relating to:

          (a) GlasCraft Liabilities;

          (b) any and all Liabilities (including Third Party Claims) imposed on, sustained, incurred or
suffered by any of the Spinco Indemnitees and that relate to, arise out of or result from the
failure of any other Cohesant Entity or any other Person to pay, perform or otherwise promptly
discharge any GlasCraft Liabilities in accordance with their terms, whether occurring, arising,
existing or asserted before, on or after the Distribution Date;

          (c) any breach by Cohesant or any Cohesant Entity of this Agreement or any of the Transaction
Agreements; and

27

 

          (d) the failure by Cohesant to perform in connection with any Delayed Transfer Asset or
Delayed Transfer Liability held by Spinco for Cohesant’s benefit pursuant to Section 2.01(c).

     Section 5.04 Indemnification Procedures.

          (a) Notice of Claims. An Indemnitee shall give written notice (a “Notice of Claim”) to the
Indemnifying Party within 20 Business Days after the Indemnitee has knowledge of any Third Party
Claim which an Indemnitee has determined has given or could reasonably be expected to give rise to
a right of indemnification under this Agreement. No failure to give such Notice of Claim within the
time period specified above shall affect the indemnification obligations of the Indemnifying Party
hereunder, except to the extent the Indemnifying Party can demonstrate such failure materially
prejudiced such Indemnifying Party’s ability to successfully defend the matter giving rise to the
claim. The Notice of Claim shall state the nature of the claim, the amount of the liability, if
known, and the method of computation thereof, all with reasonable particularity and containing a
reference to the provisions of this Agreement in respect of which such right of indemnification is
claimed or arises.

          (b) Third Party Claims. The obligations and liabilities of an Indemnifying Party under this
Article V with respect to Liabilities arising from claims of any third party that are subject to
the indemnification provisions provided for in this Article V (“Third Party Claims”) shall be
governed by and contingent upon the following additional terms and conditions. The Indemnitee at
the time it gives a Notice of Claim to the Indemnifying Party of the Third Party Claim shall advise
the Indemnifying Party that the Indemnifying Party shall be permitted, at its option, to assume and
control the defense of such Third Party Claim at its expense and through counsel of its choice
reasonably satisfactory to the Indemnitee if (i) it gives written notice of its intention to do so
to the Indemnitee within 20 days of its receipt of the Notice of Claim; (ii) the Third Party Claim
involves only money damages and does not seek an injunction or other equitable relief; (iii)
settlement of, or an adverse judgment with respect to, the Third Party Claim is not, in the good
faith judgment of the Indemnitee, likely to establish a precedential custom or practice materially
adverse to the continuing business interests or the reputation of the Indemnitee; and (iv) the
Indemnifying Party conducts the defense of the Third Party Claim actively and diligently. In the
event the Indemnifying Party exercises its right to undertake the defense against any such Third
Party Claim as provided above, the Indemnitee shall cooperate with the Indemnifying Party in such
defense and make available to the Indemnifying Party all witnesses and Information in its
possession or under its control relating thereto as is reasonably required by the Indemnifying
Party, and the Indemnitee may participate by its own counsel and at the cost and expense of the
Indemnifying Party in defense of such Third Party Claim; provided, however, that if the defendants
in any Action shall include both the Indemnitee and the Indemnifying Party and such Indemnitee
shall have concluded in good faith that counsel selected by the Indemnifying Party has a conflict
of interest because of the availability of different or additional defenses to such Indemnitee,
such Indemnitee shall have the right to select separate counsel reasonably acceptable to the
Indemnifying Party to participate in the defense of such Action on its behalf, at the expense of
the Indemnifying Party; provided, further, that such Indemnifying Party shall not, in connection
with any one such Action or separate but substantially similar or related Actions, be liable for
the reasonable fees and

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expenses of more than one separate firm of attorneys (in addition to any local counsel).
Notwithstanding the foregoing, the Indemnitee, during the period the Indemnifying Party is
determining whether to elect to assume the defense of a matter covered by this Section 5.04(b), may
take such reasonable actions, at the Indemnifying Party’s expense, as it deems necessary to
preserve any and all rights with respect to the matter, without such actions being construed as a
waiver of the Indemnitee’s rights to defense and indemnification pursuant to this Agreement. In
the event the Indemnitee is, directly or indirectly, conducting the defense against any such Third
Party Claim, the Indemnifying Party shall cooperate with the Indemnitee in such defense and make
available to it all such witnesses and Information in its possession or under its control relating
thereto as is reasonably required by the Indemnitee and the Indemnifying Party may participate by
its own counsel and at its own expense in the defense of such Third Party Claim.

          (c) Settlement Procedures. Unless otherwise required by Law, in no event shall an Indemnitee
admit any liability with respect to, or settle, compromise or discharge, any Third Party Claim
without the Indemnifying Party’s prior written consent (such consent not to be unreasonably
withheld); provided, however, that the Indemnitee shall have the right to settle, compromise or
discharge such Third Party Claim without the consent of the Indemnifying Party if the Indemnitee
releases the Indemnifying Party from its indemnification obligation hereunder with respect to such
Third Party Claim and such settlement, compromise or discharge would not otherwise adversely affect
the Indemnifying Party. If the Indemnifying Party acknowledges in writing liability for a Third
Party Claim (as between the Indemnifying Party and the Indemnitee), the Indemnifying Party shall be
permitted to enter into, and the Indemnitee shall agree to, any settlement, compromise or discharge
of a Third Party Claim that the Indemnifying Party may recommend and that by its terms obligates
the Indemnifying Party to pay the full amount of the liability in connection with such Third Party
Claim and releases the Indemnitee completely in connection with such Third Party Claim and that
would not otherwise adversely affect the Indemnitee; provided, further, that the Indemnifying Party
shall not agree to any other settlement, compromise or discharge of a Third Party Claim not
described above without the prior written consent of the Indemnitee (such consent not to be
unreasonably withheld).

          (d) Direct Claims. Any claim on account of a Liability that does not result from a Third Party
Claim shall be asserted by written notice given by the Indemnitee to the Indemnifying Party. Such
Indemnifying Party shall have a period of 30 days after the receipt of such notice within which to
respond thereto. If such Indemnifying Party does not respond within such 30-day period, such
Indemnifying Party shall be deemed to have refused to accept responsibility to make payment. If
such Indemnifying Party does not respond within such 30-day period or rejects such claim in whole
or in part, such Indemnitee shall be free to pursue such remedies as may be available to such party
as contemplated by this Agreement and the other Transaction Agreements.

     Section 5.05 Indemnification Obligations Net of Insurance Proceeds and Other Amounts.

          (a) The amount of any loss shall be: (i) increased (retroactively or prospectively) to take
into account any net Tax cost actually incurred by an Indemnitee arising from any payments received
from the Indemnifying Party (grossed up for such increase); and

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(ii) reduced (retroactively or prospectively) to take into account any net Tax benefit
actually realized by an Indemnitee arising from the incurrence or payment of any such loss. In
computing the amount of such Tax cost or Tax benefit, an Indemnitee shall be deemed to recognize
all other items of income, gain, loss, deduction or credit before recognizing any item arising from
the receipt or accrual of any payment with respect to any such loss or the incurrence or payment of
any such loss. If an Indemnitee shall have received or accrued the payment required by this
Agreement from an Indemnifying Party and shall subsequently actually realize any net Tax benefit
arising from the incurrence or payment of such loss, then such Indemnitee promptly shall pay to
such Indemnifying Party a sum equal to the amount of such net Tax benefit, up to the aggregate
amount of any payments received from such Indemnifying Party pursuant to this Agreement in respect
of such loss.

          (b) To the extent that any Liability that is subject to indemnification under this Agreement
is covered by insurance, the amount of any indemnity payment shall be reduced by the Net Proceeds
of any insurance policy paid to the Indemnitee with respect to such Liability. For purposes of
this Section 5.05, “Net Proceeds” shall mean the insurance proceeds actually received, less any
actual, additional, or increased premium, deductibles, co-payments, other payment obligations
(including attorneys’ fees and other costs of collection) or the present value of any future cost
which is quantifiable with reasonable certainty, that relates to or arises from the making of the
claim for indemnification. If any Indemnitee recovers an amount from a third Person in respect of
any Liability for which indemnification is provided in this Agreement after the full amount of such
indemnifiable Liability has been paid by an Indemnifying Party or after an Indemnifying Party has
made a payment of such indemnifiable Liability and the amount received from the third Person
exceeds the remaining unpaid balance of such indemnifiable Liability, then the Indemnitee will
promptly remit to the Indemnifying Party the excess (if any) of (i) the sum of the amount
previously paid by such Indemnifying Party in respect of such indemnifiable Liability plus the
amount received by such Indemnified Party from such third Person in respect of such indemnifiable
Liability (after deducting any costs and expenses that have not yet been paid or reimbursed by the
Indemnifying Party); minus (ii) the full amount of such indemnifiable Liability. An insurer or
other third Person who would otherwise be obligated to pay any Liability shall not be relieved of
the responsibility with respect thereto or, solely by virtue of the indemnification and
contribution provisions hereof, have any subrogation rights with respect thereto, it being
understood and agreed that no insurer or any third Person shall be entitled to a “windfall” (i.e.,
a benefit it would not be entitled to receive in the absence of the indemnification and
contribution provisions) by virtue of the indemnification and contribution provisions hereof.

          (c) In no event shall an Indemnifying Party be liable for special, punitive, exemplary,
incidental, consequential or indirect damages, or lost profits of an Indemnitee, whether based on
contract, tort, strict liability, other Law or otherwise, provided such exclusion of damages shall
not apply to claims for such damages made as part of a Third Party Claim. An Indemnitee shall take
all reasonable steps to mitigate a Liability upon becoming aware of any event, which could
reasonably be expected to give rise to such Liabilities. Liabilities shall be determined after
taking into account any indemnity, contribution or other similar payment received by the Indemnitee
from any third party with respect thereto.

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     Section 5.06 Additional Matters.

          (a) No Relief of Insurer Obligations. An insurer who would otherwise be obligated to defend
or make payment in response to any claim shall not be relieved of the responsibility with respect
thereto or, solely by virtue of the indemnification provisions hereof, have any subrogation rights
with respect thereto, it being expressly understood and agreed that no insurer or any other third
party shall be entitled to a “windfall” (i.e., a benefit it would not be entitled to receive in the
absence of the indemnification provisions hereof) by virtue of the indemnification provisions
hereof.

          (b) Subrogation. In the event of payment by or on behalf of any Indemnifying Party to any
Indemnitee in connection with any Third Party Claim, such Indemnifying Party shall be subrogated to
and shall stand in the place of such Indemnitee as to any events or circumstances in respect of
which such Indemnitee may have any right, defense or claim relating to such Third Party Claim. Such
Indemnitee shall cooperate with such Indemnifying Party in a reasonable manner, and at the cost and
expense of such Indemnifying Party, in prosecuting any subrogated right, defense or claim.

          (c) Not Applicable to Taxes. The provisions of this Article V shall not apply to Taxes or any
related matters (which are covered by the Tax Matters Agreement).

          (d) Joint Defense and Cooperation. With respect to any Third Party Claim in which both
Cohesant and Spinco are, or reasonably may be expected to be, named as parties, or that otherwise
implicates both Cohesant and Spinco in a material fashion, the Parties shall reasonably cooperate
with respect to such Third Party Claim and if the Parties agree, maintain a joint defense in a
manner that will preserve applicable privileges.

          (e) Survival. All covenants and agreements of the parties contained in this Agreement shall
survive each of the Separation, the Distribution and the Restructuring.

ARTICLE VI

INSURANCE

     Section 6.01 Insurance Coverage; Cooperation. All insurance policies of Cohesant shall
constitute Cohesant Assets and shall be retained by Cohesant and the other Cohesant Entities,
together with all rights, benefits and privileges thereunder (including the right to receive any
and all return premiums with respect thereto), except that Spinco will have the rights in respect
of Insurance Policies to the extent described in Section 6.02. Each of Cohesant and Spinco shall
use reasonable efforts to share such information as is reasonably necessary in order to permit the
other to manage and conduct its insurance matters in an orderly fashion. Each of Cohesant and
Spinco, at the request of the other, shall use reasonable efforts to cooperate with and assist the
other in recoveries for claims made under any insurance policy for the benefit of any Spinco Entity
or Cohesant Entity, as applicable, and neither Cohesant nor Spinco, nor any Spinco Entity or
Cohesant Entity, as applicable, shall take any action which would be reasonably likely to
jeopardize or otherwise interfere with the ability of any Spinco Entity or Cohesant Entity, as
applicable, to collect any proceeds payable pursuant to any insurance policy. Nothing

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in this Section 6.01 shall (x) preclude any Spinco Entity or Cohesant Entity, as applicable from
presenting any claim or from exhausting any policy limit, (y) require any Spinco Entity or Cohesant
Entity, as applicable, to pay any premium or other amount or to incur any Liability or (z) require
any Spinco Entity or Cohesant Entity, as applicable, to renew, extend or continue any policy in
force.

     Section 6.02 Rights Under Insurance Policies. Except as otherwise specified in this Article
VI or any other Transaction Agreement, the Spinco Entities shall have no rights with respect to any
insurance policies of Cohesant, except that Spinco will have the right to (x) assert claims and to
resolve existing and pending claims under Insurance Policies for any loss, liability or damage
arising out of insured incidents to the extent relating to the Business occurring from the date
coverage thereunder first commenced until the Distribution Date and (y) acquire all rights,
privileges and proceeds of such Insurance Policies relating to the claims specified in clause (x);
provided that, (i) all of Cohesant’s and each Cohesant Entity’s reasonable out-of-pocket costs and
expenses, if any, incurred in connection with the foregoing shall be promptly paid by Spinco and
(ii) Cohesant and the Cohesant Entities may, at any time, without liability or obligation to any
Spinco Entity, amend, commute, terminate, buy-out, extinguish liability under or otherwise modify
any Insurance Policy (and such Insurance Policy shall be subject to any such amendments,
commutations, terminations, buy-outs, extinguishments and modifications). No Cohesant Entity shall
bear any Liability for the failure of an insurer to pay any claim under any Insurance Policy.
Notwithstanding anything to the contrary herein, Spinco may at any time, and from time to time,
inform Cohesant by written notice that it desires to terminate its rights to assert claims under
any or all Insurance Policies, in which case Spinco’s rights to assert claims relating to Business
Liabilities under such Insurance Policy or Policies shall terminate immediately. In the case of
any amendments, commutations, terminations, buy-outs, extinguishments and modifications of an
Insurance Policy, Cohesant shall provide reasonable advance notice thereof to Spinco and shall
reasonably cooperate with Spinco to assist Spinco in obtaining insurance policies under which
Spinco is an insured party.

     Section 6.03 Spinco Insurance Coverage After the Distribution Date. From and after the
Distribution Date, Spinco, and Spinco alone, shall be responsible for obtaining and maintaining
insurance programs for its risk of loss and such insurance arrangements shall be separate and apart
from Cohesant’s insurance programs.

     Section 6.04 Responsibilities for Self-Insured Obligations and Other Obligations.

          (a) Spinco will reimburse Cohesant for Spinco’s pro rata share (based on the aggregate amount
of proceeds received in respect of claims relating to Business Liabilities under such Insurance
Policy by the Spinco Entities) of all amounts necessary to exhaust or otherwise satisfy all
applicable self-insured retentions and Spinco’s pro rata share of all amounts for fronted policies,
overages, deductibles and retrospective or prospective premium adjustments and similar amounts not
covered by Insurance Policies.

          (b) Each of Cohesant and Spinco does hereby, for itself and each other Cohesant Entity and
Spinco Entity, agree that all duties and obligations under any Insurance Policy, including the
fulfillment of any conditions and the payment of any deductibles,

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retentions, co-insurance payment or retrospective premiums, that correspond in any way with or
may be necessary to perfect, preserve or maintain an insured’s right to obtain benefits under that
Insurance Policy, will be performed by the insured that is seeking the benefits under that
Insurance Policy, subject to the indemnification provisions herein.

     Section 6.05 Claims Administration. Cohesant or its designee shall be responsible for the
claims administration with respect to claims of any Cohesant Entity under Insurance Policies; and
Spinco or its designee shall be responsible for the claims administration with respect to claims of
Spinco under Insurance Policies.

     Section 6.06 Procedures Regarding Insufficient Limits of Liability. In the event that there
are insufficient limits of liability available under the Insurance Policies in effect prior to the
Distribution Date to cover the Liabilities of the Cohesant Entities and/or the Spinco Entities that
would otherwise be covered by such Insurance Policies, then no Spinco Entity shall be entitled to
recovery for any claims under such Insurance Policies until the claims of all Cohesant Entities
have been satisfied thereunder. If any Spinco Entity has received proceeds under any such
Insurance Policies, Spinco shall reimburse Cohesant all amounts to which any Cohesant Entity would
have been entitled had its claim under such Insurance Policies arisen prior to any recovery
thereunder by any Spinco Entity.

     Section 6.07 Cooperation. Cohesant and Spinco will use their reasonable efforts to cooperate
with each other and execute any additional documents which are reasonably necessary to effectuate
the provisions of this Article VI.

     Section 6.08 No Assignment or Waiver. This Agreement shall not be considered as an attempted
assignment of any rights or interest in violation of any policy of insurance or as a contract of
insurance and shall not be construed to waive any right or remedy of any Cohesant Entity in respect
of any Insurance Policy or any other Contract or policy of insurance.

     Section 6.09 No Liability. Spinco does hereby, for itself and as agent for each Spinco
Entity, agree that no Cohesant Entity or any Cohesant Indemnitee shall have any Liability
whatsoever as a result of the insurance policies and practices of Cohesant and its Subsidiaries as
in effect at any time prior to the Distribution Date, including as a result of the level or scope
of any such insurance, the creditworthiness of any insurance carrier, the terms and conditions of
any policy or the adequacy or timeliness of any notice to any insurance carrier with respect to any
claim or potential claim or otherwise.

     Section 6.10 No Restrictions. Nothing in this Agreement shall be deemed to restrict any
Spinco Entity from acquiring at its own expense any other insurance policy in respect of any
Liabilities or covering any period.

     Section 6.11 Further Agreements. The Parties acknowledge that they intend to allocate
financial obligations without violating any Laws regarding insurance, self-insurance or other
financial responsibility. If it is determined that any action undertaken pursuant to this Agreement
or any other Transaction Agreement is violative of any insurance, self-insurance or related
financial responsibility Law, the Parties agree to work together to do whatever is

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necessary to comply with such Law while trying to accomplish, to the greatest possible extent, the
allocation of financial obligations as intended in this Agreement and any other Transaction
Agreement.

     Section 6.12 Each of Cohesant and Spinco shall use its respective reasonable best efforts to
collect any proceeds under its respective available and applicable third-party insurance policies
(not reinsured by captive insurance Subsidiaries of Cohesant or Spinco, as applicable) to which it
or any of its Subsidiaries is entitled prior to seeking indemnification or contribution under this
Agreement, where allowed; provided, however, that any such actions by an Indemnitee will not
relieve the Indemnifying Party of any of its obligations under this Agreement, including the
Indemnifying Party’s obligation to pay directly or reimburse the Indemnitee for costs and expenses
actually incurred by the Indemnitee.

ARTICLE VII

CONDITIONS TO THE SEPARATION

     Section 7.01 Conditions to the Separation. The obligations of Cohesant pursuant to this
Agreement to effect the Separation shall be subject to the fulfillment (or waiver by Cohesant) at
or prior to the Distribution Date of the following conditions. In no event shall the Separation
occur unless the following conditions shall have been waived by Cohesant or shall have been
satisfied:

          (a) the Form 10 shall have become effective under the Exchange Act;

          (b) the Cohesant Board of Directors shall have approved the Restructuring, Distribution and
Separation and shall not have abandoned, deferred or modified the Restructuring, Distribution and
Separation at any time prior to the Record Date;

          (c) each of the Transaction Agreements shall have been duly executed and delivered by the
parties thereto; and

          (d) all of the closing conditions of the Merger Agreement shall have been met or waived and
the transactions contemplated by the Merger Agreement are set to close immediately following the
Distribution and Separation;

          (e) the Registration Statement shall have been filed with, and declared effective by, the SEC,
and there shall be no stop-order in effect with respect thereto and the joint proxy and information
statement shall have been mailed to Cohesant shareholders;

          (f) Cohesant shall have established the Record Date and shall have given the NASD not less
than ten days’ advance notice of the Record Date in compliance with Rule 10b-17 under the Exchange
Act;

34

 

          (g) all Consents or Governmental Approvals required in connection with the transactions
contemplated hereby shall have been received and be in full force and effect;

          (h) the Restructuring shall have been consummated in accordance with this Agreement;

          (i) all Inter-Company Indebtedness shall have been paid in full and all actions in respect of
liability novation contemplated under Section 2.04 shall have occurred; and

          (j) the Transaction Agreements shall have been duly executed and delivered and such agreements
shall be in full force and effect and the parties thereto shall have performed or complied with all
of their respective covenants, obligations and agreements contained herein and therein and as
required to be performed or complied with prior to the Effective Time.

ARTICLE VIII

FURTHER ASSURANCES AND ADDITIONAL COVENANTS

     Section 8.01 Further Assurances.

          (a) In addition to the actions specifically provided for elsewhere in this Agreement and the
other Transaction Agreements but subject to the provisions hereof and thereof, each of the Parties
hereto shall use its reasonable efforts, prior to, on and after the Distribution Date, to take, or
cause to be taken, all actions, and to do, or cause to be done, all things, reasonably necessary,
proper or advisable under applicable Laws and Contracts to consummate and make effective the
Transactions.

          (b) Without limiting the foregoing, prior to, on and after the Distribution Date, each Party
hereto shall cooperate with the other Party, and without any further consideration, to execute and
deliver, or use its reasonable efforts to cause to be executed and delivered, all instruments,
including instruments of conveyance, assignment and transfer, and to make all filings with, and to
obtain all consents, approvals or authorizations of, any Governmental Authority or any other Person
under any License, Contract, indenture or other instrument (including any Consents or Governmental
Approvals), and to take all such other actions as such Party may reasonably be requested to take by
the other Party hereto from time to time, consistent with the terms of this Agreement and the other
Transaction Agreements, in order to effectuate the provisions and purposes of this Agreement, the
other Transaction Agreements and the transfers of the Business Assets and the assignment and
assumption of the Business Liabilities and the other transactions contemplated hereby and thereby.

          (c) On or prior to the Distribution Date, Cohesant and Spinco in their respective capacities
as direct and indirect stockholders of their respective Subsidiaries, shall each ratify any actions
that are reasonably necessary or desirable to be taken by Cohesant and Spinco or any other
Subsidiary of Cohesant, as the case may be, to effectuate the transactions contemplated by this
Agreement.

35

 

          (d) At least three (3) Business Days prior to the Distribution Date, Spinco shall deliver to
Graco (on behalf of Cohesant) an updated Exhibit B hereto reflecting the Shared Assets as
of the Distribution Date. In the event there are any additional Shared Assets set forth on such
updated Exhibit B that are not set forth on the Exhibit B attached hereto as of the
date hereof, then following Graco’s receipt of such updated Exhibit B, Graco (on behalf of
Cohesant) and Spinco shall negotiate in good-faith and determine prior to the Distribution Date
which, if any, of such additional Shared Assets set forth on such updated Exhibit B are to
constitute GlasCraft Shared Assets and to be set forth on Exhibit C. Any such additional
Shared Assets which are determined to be GlasCraft Shared Assets shall be set forth on an updated
Exhibit C. Any updated Exhibit B and/or Exhibit C shall be attached hereto
and shall amend and restate Exhibit B and/or Exhibit C, as applicable, in the
entirety.

          (e) In the event that an Asset constituting a Shared Asset as of the Distribution Date is not
set forth on Exhibit B (as updated in accordance with Section 8.01(d) above), in breach of
the representation and warranty contained in Section 10.01, and (ii) such Asset was historically
used in connection with the GlasCraft Business prior to the Distribution Date, then from time to
time following the Distribution Date Spinco shall, and shall cause the Spinco Group to, sell,
assign and transfer such Asset to GlasCraft without a payment therefor by the Cohesant Group. The
foregoing shall be in addition to any rights and remedies available to the Cohesant Indemnitees
under Section 5.02(f).

          (f) Following the Distribution Date, Spinco shall, and shall cause the Spinco Group to,
deliver to the Cohesant Group, copies of any and all information and data that is relevant to the
operation of the GlasCraft Business, to the extent such information and data is stored in or part
of any of the Business Assets. In addition, following the Distribution Date, Spinco shall, and
shall cause the Spinco Group to, deliver to the Cohesant Group, copies of any and all information
and data that is relevant to the historical operation of Cohesant as a holding company prior to the
Distribution Date, to the extent such information and data is stored in or part of any of the
Business Assets.

ARTICLE IX

TERMINATION

     Section 9.01 Termination. Notwithstanding any provision hereof, this Agreement may be
terminated by Cohesant and the Separation may be abandoned prior to the Distribution Date at any
time following termination of the Merger Agreement in accordance with its terms.

     Section 9.02 Effect of Termination. In the event of any termination of this Agreement prior to
the Distribution Date pursuant to Section 9.01, no Party to this Agreement (or any of its
Representatives) shall have any Liability or further obligation to any other Party or third party
with respect to this Agreement, except as provided in the Merger Agreement.

ARTICLE X

REPRESENTATIONS AND WARRANTIES; GENERAL PROVISIONS

36

 

     Section 10.01 Shared Assets. Spinco hereby represents and warrants to Cohesant, as follows:

     (a) Exhibit B hereto sets forth a true, accurate and complete list of all Shared
Assets as of August 31, 2007 (the “Shared Asset List Date”); (b) except for such Shared Assets
that, since the Shared Asset List Date, have been written off in the ordinary course of business
prior to the date hereof or are written off prior to the Distribution Date (none of which are or
shall be material, individually or in the aggregate), all of the Shared Assets set forth on
Exhibit B hereto are Shared Assets as of the date hereof and shall be Shared Assets as of
the Distribution Date; and (c) since the Shared Asset List Date, Cohesant has not acquired any
Assets (except for Assets which are not material, individually or in the aggregate).

     (b) Exhibit B, as updated in accordance with Section 8.01(d), shall set forth a true,
accurate and complete list of all Shared Assets as of the Distribution Date.

     Section 10.02 Entire Agreement; No Third-Party Beneficiaries. This Agreement (together with
the other Transaction Agreements, the exhibits and the schedules and the other documents delivered
pursuant to this Agreement) constitutes the entire agreement, and supersedes all prior agreements
and understandings, both written and oral, among the Parties with respect to the subject matter
hereof and, except for the provisions of Sections 2.04, 5.02 and 5.03 hereunder, is not intended to
confer upon any Person other than the Parties any rights or remedies hereunder.

     Section 10.03 Expenses. Except as expressly set forth herein or in the Merger Agreement, all
costs and expenses incurred in connection with this Agreement and the transactions contemplated
hereby shall be paid by the Party incurring such cost and expense.

     Section 10.04 Governing Law. This Agreement will be governed by, and construed in accordance
with, the Laws of the State of Delaware, without regard to any applicable conflicts of law.

     Section 10.05 Notices. All notices, requests, claims, demands and other communications under
this Agreement will be in writing and will be deemed given if delivered personally or sent by
overnight courier (providing proof of delivery) to the Parties at the following addresses (or at
such address for a Party as will be specified by like notice):

37

 

	 	(a)	 	if to Cohesant or any Cohesant Entity prior to the Distribution Date, to:
	 
	 	 	 	Cohesant Technologies Inc.

5845 West 82nd Street

Suite 102

Indianapolis, Indiana 46278

	 	Attention:  	 	Morris H. Wheeler
Chief Executive Officer

with a copy to:

Porter, Wright, Morris & Arthur LLP

925 Euclid Avenue

Suite 1700

Cleveland, Ohio 44115-1483

Attention: Michael A. Ellis

	 	(b)	 	if to Spinco or any Spinco Entity, to:
	 
	 	 	 	CIPAR Inc.

23400 Commerce Park Road

Beachwood, Ohio 44122

Attention: Chairman

with a copy to:

Porter, Wright, Morris & Arthur LLP

925 Euclid Avenue

Suite 1700

Cleveland, Ohio 44115-1483

Attention: Michael A. Ellis

	 	(c)	 	if to Cohesant or any Cohesant Entity on or after the
Distribution Date, to:
	 
	 	 	 	Cohesant Technologies Inc.

c/o Graco Inc.

88 11th Avenue Northeast

Minneapolis, MN 55413

Attn: General Counsel

38

 

with a copy to:

Lindquist & Vennum, P.L.L.P.

80 South 8th St.

Suite 4200

Minneapolis, MN 55404

Attn: Joseph Humke

     Section 10.06 Counterparts. This Agreement may be executed in one or more counterparts, all
of which will be considered one and the same agreement and will become effective when one or more
counterparts have been signed by each Party and delivered to the other Party, it being understood
that each Party need not sign the same counterpart.

     Section 10.07 Assignment. Except as set forth in any other Transaction Agreement , neither
this Agreement nor any of the rights, interests or obligations under this Agreement will be
assigned, in whole or in part, by operation of law or otherwise, by either of the Parties hereto
without the prior written consent of the other Party, except that either Party may assign any or
all of its rights, interests or obligations under this Agreement to any one or more of its direct
or indirect wholly owned Subsidiaries, Cohesant Subsidiaries or Spinco Subsidiaries, as applicable;
provided that no such assignment will relieve the assigning Party from any of its obligations under
this Agreement. Subject to the preceding sentence, this Agreement will be binding upon, inure to
the benefit of, and be enforceable by Cohesant and Spinco and their respective successors and
assigns.

     Section 10.08 Enforcement. The Parties agree that irreparable damage would occur in the event
that any of the provisions of this Agreement were not performed in accordance with their specific
terms or were otherwise breached. It is accordingly agreed that the Parties will be entitled to an
injunction or injunctions to prevent breaches of this Agreement and to enforce specifically the
terms and provisions of this Agreement in any court of the United States located in the State of
Delaware or in Delaware state court, this being in addition to any other remedy to which they are
entitled at law or in equity. In addition, each of the Parties (a) consents to submit itself to
the personal jurisdiction of any federal court located in the State of Delaware or any Delaware
state court in the event any dispute arises out of this Agreement or any of the Transactions, (b)
agrees that it will not attempt to deny or defeat such personal jurisdiction by motion or other
request for leave from any such court and (c) agrees that it will not bring any action relating to
this Agreement or any of the Transactions in any court other than a federal or state court sitting
in the State of Delaware.

     Section 10.09 Severability. Any term or provision of this Agreement which is invalid or
unenforceable in any jurisdiction will, as to that jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without rendering invalid or unenforceable the remaining terms
and provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is
so broad as to be unenforceable, such provision will be interpreted to be only so broad as is
enforceable.

39

 

     Section 10.10 Headings. Headings of the Articles and Sections of this Agreement and the
Transaction Agreements are for convenience of the Parties only and will be given no substantive or
interpretive effect whatsoever.

     Section 10.11 Attorneys’ Fees. If any Action at law or equity, including an Action for
declaratory relief, is brought to enforce or interpret any provision of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys’ fees and expenses from the
other party, which fees and expenses shall be in addition to any other relief which may be awarded.

     Section 10.12 Amendment. This Agreement and the Transaction Agreements may not be waived,
amended or modified in any respect unless such waiver, amendment or modification is in writing and
signed on behalf of the Parties hereto or thereto, and such waiver, amendment or modification is
approved as provided in the Merger Agreement.

     Section 10.13 Limited Liability. Notwithstanding any other provision of this Agreement, no
stockholder or Representative of Spinco or Cohesant, in its capacity as such, shall have any
liability in respect of or relating to the covenants or obligations of such Party under this
Agreement or in respect of any certificate delivered with respect hereto or thereto and, to the
fullest extent legally permissible, each of Spinco and Cohesant, for itself and its stockholders,
directors, officers and Affiliates, waives and agrees not to seek to assert or enforce any such
liability that any such Person otherwise might have pursuant to applicable Law.

     Section 10.14 Taxes. In the case of any inconsistency with respect to matters relating to
Taxes between this Agreement and the Tax Matters Agreement, the Tax Matters Agreement shall govern
such matter.

     Section 10.15 Interpretation. Words in the singular shall be held to include the plural and
vice versa and words of one gender shall be held to include the other genders as the context
requires. The terms “hereof,” “herein,” and “herewith” and words of similar import herein (or in
any Transaction Agreement) shall, unless otherwise stated, be construed to refer to this Agreement
(or the applicable other Transaction Agreement) taken as a whole (including all of the schedules
and exhibits hereto and thereto) and not to any particular provision of this Agreement (or such
other Transaction Agreement). Article, Section, Exhibit, Schedule and Appendix references are
to the Articles, Sections, Exhibits, Schedules and Appendices to this Agreement (or the applicable
other Transaction Agreement) unless otherwise specified. The word “including” and words of similar
import when used in this Agreement (or the applicable other Transaction Agreement) means
“including, without limitation,” unless the context otherwise requires or unless otherwise
specified. Unless expressly stated to the contrary in this Agreement or in any other Transaction
Agreement, all references to “the date hereof,” “the date of this Agreement,” “hereby” and
“hereupon” and words of similar import shall all be references to December 3, 2007 (or the date of
which the relevant Transaction Agreement is first entered into, as the case may be) regardless of
any amendment or restatement hereof (or thereof). The Parties hereto have participated jointly in
the negotiation and drafting of this Agreement, and in the event an ambiguity or question of intent
or interpretation arises, this Agreement shall be construed as if drafted jointly by the Parties
hereto, and no presumption or burden of proof shall

40

 

arise favoring or disfavoring any Party hereto by virtue of the authorship of any provisions of
this Agreement.

[SIGNATURE PAGE FOLLOWS]

41

 

     IN WITNESS WHEREOF, Cohesant and Spinco have caused this Agreement to be signed by their
respective officers thereunto duly authorized, all as of the date first written above.

	 	 	 	 	 
	 	COHESANT TECHNOLOGIES INC.

 	 
	 	By:  	/s/ Morris H. Wheeler
 	 
	 	 	Name:  	Morris H. Wheeler 	 
	 	 	Title:  	Chief Executive Officer 	 
	 
	 	CIPAR INC.

 	 
	 	By:  	/s/ Robert W. Pawlak
 	 
	 	 	Name:  	Robert W. Pawlak 	 
	 	 	Title:  	Chief Financial Officer 	 

42Ex-10.4

 

Exhibit
10.4

FORM OF RECIPROCAL TRANSITION SERVICES AGREEMENT

     THIS RECIPROCAL TRANSITION SERVICES AGREEMENT (this “Agreement”) is entered into as of
                    , 200_, by and between COHESANT TECHNOLOGIES INC., a Delaware corporation
(“Cohesant”), and CIPAR INC., a Delaware corporation (“CIPAR”).

W I T N E S S E T H:

     WHEREAS, CIPAR has been a wholly owned subsidiary of Cohesant;

     WHEREAS, Cohesant and CIPAR are parties to a certain Separation Agreement, dated as of
December 3, 2007 (the “Separation Agreement”), pursuant to which, among other things, Cohesant is
distributing to the holders of outstanding shares of Cohesant capital stock, all of the outstanding
shares of CIPAR’s capital stock beneficially owned by Cohesant through a pro rata distribution of
CIPAR capital stock in a spin-off (the “Separation Transaction”);

     WHEREAS, upon consummation of the Separation Transaction and by virtue thereof, among other
things: (i) GlasCraft (as defined in the Separation Agreement and, as used herein, “GlasCraft”)
shall be a wholly owned subsidiary of Cohesant; (ii) Cohesant and GlasCraft shall own the GlasCraft
Assets (as defined in the Separation Agreement) and shall own and operate the GlasCraft Business
(as defined in the Separation Agreement and, as used herein, the “GlasCraft Business”); (iii) CIPAR
and the Spinco Subsidiaries (as defined in the Separation Agreement and, as used herein, the
“Spinco Subsidiaries”) shall own the Business Assets (as defined in the Separation Agreement) and
shall own and operate the Business (as defined in the Separation Agreement and, as used herein, the
“Business”);

     WHEREAS, following consummation of the Separation Transaction, Cohesant desires that CIPAR and
the Spinco Subsidiaries provide certain transition services to the GlasCraft Business, and CIPAR
desires that Cohesant and GlasCraft provide certain transition services to the Business, upon the
terms and subject to the conditions hereof; and

     WHEREAS, the Separation Transaction is being consummated on the date hereof, and the execution
and delivery of this Agreement is a condition precedent to the consummation of the Separation
Transaction.

     NOW, THEREFORE, in consideration of the foregoing and the mutual agreements, provisions and
covenants contained in this Agreement, the parties hereto agree as follows:

     1. Definitions. Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Separation Agreement.

     2. Term; Transition Services.

     (a) (i) CIPAR shall, and shall cause the Spinco Group to, provide to the Cohesant Group the
services set forth on Exhibit A hereto (together with any additional services provided

 

 

pursuant to subsection (a)(ii) below, the “Spinco Group Services”) during the
twelve-month period commencing on the date hereof (the “Term”), subject to early termination of
this Agreement as provided in Section 5 hereof.

          (ii) CIPAR and Cohesant acknowledge and agree that the transactions contemplated by the
Separation Agreement are, among other things, intended to allow the Cohesant Group to operate the
GlasCraft Business as it has historically been operated by the Cohesant Group. In the event that,
at any time during the Term, the normal operation of the GlasCraft Business is or becomes, in the
reasonable judgment of Cohesant, interrupted or in jeopardy of being interrupted by an
insufficiency in the scope of the Spinco Group Services then being provided by the Spinco Group,
then Cohesant shall have the right to request that the Spinco Group provide, and the Spinco Group
shall be required to provide, such additional services as are required, in Cohesant’s reasonable
judgment, to remove the interruption or threat of interruption, but only to the extent that such
additional services were historically provided by the Spinco Group to the Cohesant Group prior to
the date hereof or were historically provided by the Cohesant Group for its own account using any
of the Business Assets that are owned by the Spinco Group by virtue of the Separation Transaction.
Exhibit A hereto shall be amended to include any additional services that the Spinco Group
is required to provide to the Cohesant Group pursuant to this subsection (a)(ii), and any
such additional services shall be deemed to be “Spinco Group Services” for all purposes of this
Agreement. In the event that any additional services are to be provided by the Spinco Group
pursuant to this subsection (a)(ii), such additional services shall be provided without
cost, unless the provision of such additional services would require the Spinco Group to materially
alter its operations or to incur significant costs, in which event the cost of such additional
services shall be the actual cost to the Spinco Group of providing such additional services.

          (iii) In the event that, at any time during the Term, the Cohesant Group desires to obtain any
additional services from the Spinco Group that are not set forth on Exhibit A hereto and do
not otherwise fall under subsection (a)(ii) above, Cohesant may submit a request to CIPAR
to receive such additional services from the Spinco Group. If CIPAR, on behalf of the Spinco
Group, elects (in its sole discretion) to have the Spinco Group provide such additional services to
the Cohesant Group, Exhibit A hereto shall be amended to include such additional services
and the cost (as mutually agreed upon by Cohesant and CIPAR) to be paid by Cohesant for such
additional services, and any such additional services shall be deemed to be “Spinco Group Services”
for all purposes of this Agreement.

     (b) (i) Cohesant shall, and shall cause the Cohesant Group to, provide to the Spinco Group the
services set forth on Exhibit B hereto (together with any additional services provided
pursuant to subsection (b)(ii) below, the “Cohesant Group Services”) during the Term,
subject to early termination of this Agreement as provided in Section 5 hereof.

          (ii) Cohesant and CIPAR acknowledge and agree that the transactions contemplated by the
Separation Agreement are, among other things, intended to allow the Spinco Group to operate the
Business as it has historically been operated by the Spinco Group. In the event that, at any time
during the Term, the normal operation of the Business is or becomes, in the reasonable judgment of
CIPAR, interrupted or in jeopardy of being interrupted by an

2

 

insufficiency in the scope of the Cohesant Group Services then being provided by the Cohesant
Group, then CIPAR shall have the right to request that the Cohesant Group provide, and the Cohesant
Group shall be required to provide, such additional services as are required, in CIPAR’s reasonable
judgment, to remove the interruption or threat of interruption, but only to the extent that such
additional services were historically provided by the Cohesant Group to the Spinco Group prior to
the date hereof or were historically provided by the Spinco Group for its own account using any of
the GlasCraft Assets that are owned by the Cohesant Group by virtue of the Separation Transaction.
Exhibit B hereto shall be amended to include any additional services that the Cohesant
Group is required to provide to the Spinco Group pursuant to this subsection (b)(ii), and
any such additional services shall be deemed to be “Cohesant Group Services” for all purposes of
this Agreement. In the event that any additional services are to be provided by the Cohesant Group
pursuant to this subsection (b)(ii), such additional services shall be provided without
cost, unless the provision of such additional services would require the Cohesant Group to
materially alter its operations or to incur significant costs, in which event the cost of such
additional services shall be the actual cost to the Cohesant Group of providing such additional
services.

     (iii) In the event that, at any time during the Term, the Spinco Group desires to obtain any
additional services from the Cohesant Group that are not set forth on Exhibit B hereto and
do not otherwise fall under subsection (b)(ii) above, CIPAR may submit a request to
Cohesant to receive such additional services from the Cohesant Group. If Cohesant, on behalf of
the Cohesant Group, elects (in its sole discretion) to have the Cohesant Group provide such
additional services to the Spinco Group, Exhibit B hereto shall be amended to include such
additional services and the cost (as mutually agreed upon by CIPAR and Cohesant) to be paid by
CIPAR for such additional services, and any such additional services shall be deemed to be
“Cohesant Group Services” for all purposes of this Agreement.

     3. Service Fees.

     (a) Exhibit A hereto sets forth the monthly fee payable by Cohesant (or any other
member of the Cohesant Group) to CIPAR for each of the Spinco Group Services. Cohesant shall pay
to CIPAR, on a monthly basis, a fee for each Spinco Group Service as computed in the manner as set
forth on Exhibit A hereto and, at the end of each calendar month during the Term, CIPAR
shall produce and deliver to Cohesant an invoice setting forth in reasonable detail the amount of
the fee due and owing by Cohesant for each Spinco Group Service for the calendar month then ended,
as computed in the manner as set forth on Exhibit A hereto. The amounts due as stated on
an invoice shall be due thirty (30) days from the date of Cohesant’s receipt of such invoice.

     (b) Exhibit B hereto sets forth the monthly fee payable by CIPAR (or any other member
of the Spinco Group) to Cohesant for each of the Cohesant Group Services. CIPAR shall pay to
Cohesant, on a monthly basis, a fee for each Cohesant Group Service as computed in the manner as
set forth on Exhibit B hereto and, at the end of each calendar month during the Term,
Cohesant shall produce and deliver to CIPAR an invoice setting forth in reasonable detail the
amount of the fee due and owing by CIPAR for each Cohesant Group Service for the calendar month
then ended, as computed in the manner as set forth on Exhibit B hereto. The

3

 

amounts due as stated on an invoice shall be due thirty (30) days from the date of CIPAR’s receipt
of such invoice.

     4. Responsibility.

     (a) CIPAR shall, and shall cause the Spinco Group to, use those efforts and that degree of
care in providing the Spinco Group Services that are comparable to those used by the Spinco Group
for its own account in providing services, activities and work the same or similar in nature to the
Spinco Group Services. CIPAR shall, and shall cause the Spinco Group to, use commercially
reasonable efforts under the circumstances to remedy any delays, interruptions, omissions,
mistakes, accidents or errors in the Spinco Group Services and to restore such Spinco Group
Services to comply with the terms of this Agreement.

     (b) Cohesant shall, and shall cause the Cohesant Group to, use those efforts and that degree
of care in providing the Cohesant Group Services that are comparable to those used by the Cohesant
Group for its own account in providing services, activities and work the same or similar in nature
to the Cohesant Group Services. Cohesant shall, and shall cause the Cohesant Group to, use
commercially reasonable efforts under the circumstances to remedy any delays, interruptions,
omissions, mistakes, accidents or errors in the Cohesant Group Services and to restore such
Cohesant Group Services to comply with the terms of this Agreement.

     5. Termination.

     (a) This Agreement is effective as of the date first above written and shall continue in force
and effect until the expiration of the Term or upon the earlier to occur of the following:

     (a) the mutual written consent of CIPAR and Cohesant; or

     (b) either CIPAR or Cohesant provides written notice of termination to the other party,
in the event that the other party commences a case as debtor under Title 11 of the United
States Code or any similar proceeding for the relief of debtors, or has any such case or
proceeding commenced against it, or otherwise ceases to function as a going concern.

     Upon the expiration of the Term or any early termination of this Agreement pursuant to this
Section 5(a): (i) the rights and obligations of CIPAR and Cohesant under this Agreement
shall terminate; (ii) CIPAR and the Spinco Group shall cease to have any obligation to provide
Spinco Group Services to the Cohesant Group, and Cohesant and the Cohesant Group shall cease to
have any obligation to provide Cohesant Group Services to the Spinco Group; (iii) CIPAR shall
promptly deliver to Cohesant all data, programs, software materials, and other properties owned by
the Cohesant Group and held by the Spinco Group in connection with the performance of this
Agreement; and (iv) Cohesant shall promptly deliver to CIPAR all data, programs, software
materials, and other properties owned by the Spinco Group and held by the Cohesant Group in
connection with the performance of this Agreement. Each of CIPAR and Cohesant shall assist the
other at such other party’s request and expense in effecting an orderly termination of this
Agreement.

4

 

     (b) In the event that, prior to expiration of the Term, the Cohesant Group no longer desires
to receive a specific Spinco Group Service, Cohesant may provide written notice thereof to CIPAR,
in which event CIPAR and the Spinco Group shall no longer be required to provide the Spinco Group
Service specified in such written notice and Cohesant shall no longer be required to pay for such
Spinco Group Service; provided, however, that this Agreement shall continue to be
in full force and effect in respect of any Spinco Group Services for which such written notice is
not so provided. In the event that, prior to expiration of the Term, the Spinco Group no longer
desires to receive a specific Cohesant Group Service, CIPAR may provide written notice thereof to
Cohesant, in which event Cohesant and the Cohesant Group shall no longer be required to provide the
Cohesant Group Service specified in such written notice and CIPAR shall no longer be required to
pay for such Cohesant Group Service; provided, however, that this Agreement shall
continue to be in full force and effect in respect of any Cohesant Group Services for which such
written notice is not so provided.

     6. Remedies. In the event of a breach of this Agreement by a party hereto, the
non-breaching party shall have the right to pursue any and all rights and remedies available at law
or in equity for such breach. In addition to and without limiting the foregoing: (a) in the event
of a breach or repeated breach of this Agreement by CIPAR and/or the Spinco Group that results in
any delay, interruption, omission, mistake, accident or error in the Spinco Group Services,
Cohesant may seek and obtain substitute services from a person or entity other than the Spinco
Group, in which event CIPAR shall indemnify and reimburse Cohesant for the cost of obtaining the
substitute services from such person or entity and any losses associated with transitioning the
provision of the Spinco Group Services from the Spinco Group to such person or entity; and (b) in
the event of a breach or repeated breach of this Agreement by Cohesant and/or the Cohesant Group
that results in any delay, interruption, omission, mistake, accident or error in the Cohesant Group
Services, CIPAR may seek and obtain substitute services from a person or entity other than the
Cohesant Group, in which event Cohesant shall indemnify and reimburse CIPAR for the cost of
obtaining the substitute services from such person or entity and any losses associated with
transitioning the provision of the Cohesant Group Services from the Cohesant Group to such person
or entity.

     7. Relationship of Parties. None of the parties shall act or represent or hold itself
out as having authority to act as an agent or partner of the other party, or in any way bind or
commit the other party to any obligations. Nothing contained in this Agreement shall be construed
as creating a partnership, joint venture, agency, trust or other association of any kind, each
party being individually responsible only for its obligations as set forth in this Agreement. The
employees of the Spinco Group performing the Spinco Group Services contemplated by this Agreement
shall remain employees of the Spinco Group, and the Cohesant Group shall not have any
responsibility for such employees. The employees of the Cohesant Group performing the Cohesant
Group Services contemplated by this Agreement shall remain employees of the Cohesant Group, and the
Spinco Group shall not have any responsibility for such employees

     8. Force Majeure. If the Spinco Group is prevented from complying, either totally or
in part, with any of the terms or provisions of this Agreement by reason of war, rebellion, fire,
flood, storm or other acts of God, then upon written notice to Cohesant, the affected provisions

5

 

and requirements of this Agreement shall be suspended during the period of such disability, and
CIPAR shall make all reasonable efforts to remove such disability as soon as practicable and to
carry out is obligations under this Agreement after such disability is removed. If the Cohesant
Group is prevented from complying, either totally or in part, with any of the terms or provisions
of this Agreement by reason of war, rebellion, fire, flood, storm or other acts of God, then upon
written notice to CIPAR, the affected provisions and requirements of this Agreement shall be
suspended during the period of such disability, and Cohesant shall make all reasonable efforts to
remove such disability as soon as practicable and to carry out is obligations under this Agreement
after such disability is removed.

     9. Notices. Any notice, request, demand, waiver, consent, approval or other
communication which is required or permitted to be given to any party hereunder shall be in writing
and shall be deemed given only if delivered to the party personally or sent to the party by
facsimile (followed by hard copy sent by registered or certified mail) or if sent by reputable
overnight courier, addressed to the party at its address set forth below:

     If to CIPAR:

CIPAR Inc.

23400 Commerce Park Road

Beachwood, OH 44122

Attention: Morris H. Wheeler

Facsimile Number: (216) 910-1791

With a copy to:

Porter Wright Morris & Arthur LLP

925 Euclid Avenue

Suite 1700

Cleveland, OH 44115-1483

Attention: Michael A. Ellis

Facsimile Number: (216) 443-9011

     If to Cohesant:

prior
to the consummation of the transactions contemplated by the Merger Agreement:

Cohesant Technologies Inc.

5845 West 82nd Street

Suite 102

Indianapolis, Indiana 46278

Attention:

Facsimile Number:

With a copy to:

6

 

Porter Wright Morris & Arthur LLP

925 Euclid Avenue

Suite 1700

Cleveland, OH 44115-1483

Attention: Michael A. Ellis

Facsimile Number: (216) 443-9011

following
the consummation of the transactions contemplated by the Merger Agreement:

Graco Inc.

88 11th Avenue Northeast

Minneapolis, MN 55413

Attention: General Counsel

Facsimile Number:

With a copy to:

Lindquist & Vennum P.L.L.P.

80 South 8th Street

Suite 4200

Minneapolis, MN 55402

Attention:     Robert Thompson

                      Joseph Humke

Facsimile Number: (612) 371-3207

     10. Successors and Assigns. The provisions of this Agreement shall be binding upon
and inure to the benefit of the parties and their respective successors and assigns.

     11. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware without giving effect to the conflict of laws provisions of
any jurisdiction.

     12. Entire Agreement. This Agreement constitutes the entire understanding of the
parties and supersedes any prior agreements or understandings, written or oral, between the parties
with respect to the subject matter hereof.

     13. Construction; Interpretation; Severability. The parties agree that any rule of
law or any legal decision that would require interpretation of any claimed ambiguities in this
Agreement against the party that drafted it has no application and is expressly waived. If any
provision, clause or part of this Agreement, or the application thereof under certain
circumstances, is held invalid, the remainder of this Agreement, or the application of such
provision, clause or part under other circumstances, shall not be affected thereby.

7

 

     14. Further Assurances. Each party shall cooperate and take such action as may be
reasonably requested by the other party in order to carry out the provisions and purpose of this
Agreement and the transaction contemplated hereby. CIPAR, on the one hand, and Cohesant, on the
other hand, recognize and acknowledge that, from time to time during the Term, their respective
personnel shall need to consult with and ask questions of the other’s personnel about day-to-day
operating issues relating to the GlasCraft Business, the Business, the Spinco Group Services, the
Cohesant Group Services and other transition matters. Each party hereto agrees to make its
personnel reasonably available for such consultations and to make reasonable efforts to respond to
such requests at no charge to the requesting party.

     15. No Third Party Beneficiaries. This Agreement is for the sole benefit of the
parties and their permitted assigns and nothing in this Agreement, expressed or implied, shall give
or be construed to give to any person or entity, other than the parties and such assigns, any legal
or equitable rights hereunder.

     16. Amendment and Waiver. The parties may, by mutual agreement, amend this Agreement
in any respect, and any party, as to such party, may (i) extend the time for the performance of any
of the obligations of the other party; (ii) waive any inaccuracies in representations and
warranties by the other party; (iii) waive compliance by the other party with any of the agreement
contained herein and performance of any obligations by the other party; and; (iv) waive the
fulfillment of any condition that is precedent to the performance by such party of any of its
obligations under this agreement. To be effective, any such amendment or waiver must be in writing
and signed by the party against whom enforcement of the same is sought.

     17. Confidentiality. Except as required by Law or any Governmental Authority, after
the date hereof: (a) CIPAR shall, and shall cause the Spinco Group to, maintain all information
about the Cohesant Group that has not become ascertainable or obtainable from public or published
records in strict confidence in accordance with the procedures CIPAR and the Spinco Group use to
protect their own information of a similar nature and shall not use any such information for any
purpose, other than as provided in this Agreement; and (b) Cohesant shall, and shall cause the
Cohesant Group to, maintain all information about the Spinco Group that has not become
ascertainable or obtainable from public or published records in strict confidence in accordance
with the procedures Cohesant and the Cohesant Group use to protect their own information of a
similar nature and shall not use any such information for any purpose, other than as provided in
this Agreement.

     18. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed an original, but which together shall constitute one and the same instrument.

* * * * *

8

 

     IN WITNESS WHEREOF, the parties have caused this Reciprocal Transition Services Agreement to
be duly executed effective as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	CIPAR INC.	 	 
	 
	 
	 	 	 	 
	 
	 	By:	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 	 	COHESANT TECHNOLOGIES INC.	 	 
	 
	 	 	 	 	 	 
	 
	 	 
	 	 
	 
	 	By:	 	 	 	 
	 
	 	 	 	 
	 	 
	 
	 	Its:	 	 	 	 
	 

	 	 	 	 

	 	 

9

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